It could be the biggest change to movies since sound. If anyone will pay for it.

It could be the biggest change to movies since sound. If anyone will pay for it.

A customer wears a HTC Vive virtual-reality (VR) headset during a green-screen experience at Toronto’s House of VR. Despite Hollywood funding and top industry talent, cinematic VR has yet to yield commercial success or popular acceptance. (James MacDonald/Bloomberg News)

By Steven Zeitchik March 28 at 9:29 PM

LOS ANGELES — The Westfield Century City mall runs a dozen of the latest blockbusters at its modern movie theater here, but recently some of the most cutting-edge entertainment was playing one story below, at a pop-up store across from Bloomingdale’s.

That’s where groups of six could enter a railed-off area, don backpacks and headsets, and wander in the dark around the “Alien Zoo,” a 12-minute virtual-reality outer-space experience with echoes of “Jurassic Park.”

By bringing the piece to the mall, “Zoo” producer Dreamscape Immersive — it counts Steven Spielberg among its investors — hopes it has cracked a major challenge bedeviling the emerging form of entertainment known as cinematic VR.

Cinematic VR allows viewers to live entirely inside a film. They put on goggles and look at the universe around them — behind, above, anywhere they turn their gaze — and still see the world of the movie. Some in the entertainment industry view it as perhaps the greatest advance in entertainment since the addition of sound to movies nearly a century ago, involving the senses in ways they’re not involved when the real world is visible next to a screen.

But while investors in Hollywood and elsewhere have poured in hundreds of millions of dollars, drawing top talent and yielding a creative explosion, cinematic VR has produced little in the way of commercial success or popular acceptance.

“I think a lot of people want to be immersed,” Bruce Vaughn, Dreamscape’s CEO, said in an interview at the pop-up. “But the tech has to get out of the way.”

Cinematic VR seeks to fundamentally change the compact between viewer and director, and its struggles show how little even ultramodern developments like Netflix and computer-generated effects have previously revised that agreement.

The new medium promises to make a static experience more interactive. But to do so it must walk a line between the passive consumption of a movie and the fully immersive experience of a video game, and creators haven’t decided how much control they want to give up and consumers seem ambivalent about how much of it they want.

“One threshold that has not been crossed yet is between stories we watch and stories we live,” said Chris Milk, a former music-video director who is considered a pioneer of VR content. “The right balance is very elusive.”

That hasn’t stopped many creators from pressing ahead. January’s Sundance Film Festival, ground zero for cinematic VR, hinted at a future in which consumers can regularly drop into rich participatory worlds. Creators premiered a wide variety of short-form content, including a Pixar-style adaptation of a Neil Gaiman graphic novel, socially networked science fiction from animator Tyler Hurd, and a plunge into black holes from VR filmmaker Eliza McNitt and Hollywood auteur Darren Aronofsky, the last of which sold for more than $1 million to a start-up company called CityLights.

Yet if the distribution problems aren’t resolved, a nascent industry could contract before many can even sample its product — jeopardizing not only abundant capital but the long-sought ideal of a reinvented cinema itself.

“There is a trough of disillusionment,” said Anthony Batt, co-founder of the VR incubator Wevr, using the phrase that connotes disappointing tech experiments and shakeouts. “Anyone who tells you they’re not feeling the pinch is being disingenuous.” Batt knows this firsthand: Two years ago, Wevr had raised $25 million as it financed a wide variety of content, including “Iron Man” director Jon Favreau’s acclaimed “Gnomes & Goblins.” But with few revenue streams, it has scaled back.

Facebook showed its commitment to cinematic VR when it bought headset-maker Oculus for nearly $2 billion in 2014 and built up Oculus Story Studio, a division where many ex-Pixar artists created original VR animation. But Facebook shuttered the unit last year and has since focused on backing outside providers.

“We think working with independent creators allows us to produce a wider range of content,” said Yelena Rachitsky, executive producer of experiences at Oculus VR, referring to “Spheres” as well as other Sundance debuts, such as an interactive comic book from the musician

One impediment has been the numbers for dedicated headsets, the optimal platform both for creators and viewers. (These are more expensive and technologically intricate than the more common mobile VR platforms, such as Samsung’s Gear VR and Google’s Daydream, which essentially turn phones into makeshift VR-viewers.)

Dedicated headsets can cost $400 or more and often require additional hardware and intensive setup. And the lack of a dominant format means customers must choose between headsets that may not offer everything and may not endure.

“VR is a long-term game. Vendors must be well invested, established a well thought-out strategy to improve, grow and profit,” said Jason Low, a senior analyst at Canalys, a tech-research firm that studies the space.

The number of dedicated headsets in circulation has been rising — according to a Canalys report, sales reached the 1 million-units-sold mark in the third quarter of 2017. About half of those units were Sony PlayStation VR headsets, with many of the rest distributed between the Oculus Rift and HTC Vive. But even a few million headsets leave a limited consumer base.

Pop culture will offer perhaps the most persuasive advertisement yet for VR when Warner Bros. opens “Ready Player One,” directed by Spielberg, on March 29. The action-adventure film, based on Ernest Cline’s bestseller, spotlights a 2045 America in which people engage in headset-enabled adventures en masse.

Though the film depicts what is essentially a giant VR video game, it drives home the idea that consumers will eventually turn to headsets as their primary means of entertainment escape. (A tie-in VR experience, viewable at select locations, reinforces the point.)

Whether ideas like this could pave the road for more sampling of VR in the present remains to be seen. “Is this the moment of . . . ignition?” asked Walter Parkes, the former head of DreamWorks who now serves as co-chairman of Dreamscape. “Something is happening,” he added. “But we won’t know for two or three years or longer where it’s going to land.”

Entrepreneurs are trying mightily to push the field. Milk has launched the VR platform Within and the VR production company Here Be Dragons, raising more than $65 million between them. But he cautioned that, as a new medium, VR could take longer to reach profitability than a new platform like streaming.

“ ‘House of Cards’ was an awesome show,” Milk said, alluding to Netflix’s first hit. “But it could have been awesome show on HBO or a cable network. VR is a new model in every way.”

Disagreement over the proper degree of interactivity has also pervaded the space; too much and it becomes a game, too little and consumers wonder why they’re going under the headset.

Milk and partner Aaron Koblin, founder and former chief of Google’s Data Arts team, have attempted to solve that problem by emphasizing VR’s social aspects. After releasing “Life of Us,” in which two users experience evolution firsthand, to strong buzz in 2017, Within at Sundance this year debuted “Chorus,” directed by Hurd.

The piece centers on a battle against a cosmic evil set to a soundtrack from the French electropop duo Justice. Six people experience the piece together and engage in modest interaction. “It’s as if you go to sleep and your friend goes to sleep and then you wake up in the same dream,” said Koblin of the virtues of social VR.

Location-based VR has represented another attempt to solve the adoption problem. This approach, championed by Dreamscape, holds that letting people sample VR where they already eat and shop will make them embrace it sooner at home.

“We liked the fact that we’re not asking you to think of anything more than a tourist would; it’s like if you’re going on a zip line and just putting on the harness,” said Vaughn who, before he became CEO of Dreamscape, designed theme-park attractions as chief creative executive for Walt Disney Imagineering.

He said the “Alien Zoo” pop-up sold out its month-long run right away and was quickly extended by two weeks. Consumers pay $20 to make a 20-minute appointment for one of several dozen daily slots. A deal with the theater chain AMC could also put “Alien Zoo” and future Dreamscape content at stands in multiplexes around the country. The company has raised at least $30 million from backers including 21st Century Fox, Warner Bros., AMC and Spielberg.

The director even visited Dreamscape’s Culver City, Calif., headquarters and gave notes during production of “Alien Zoo.” He declined to comment for this piece.

Another consumer stumbling block, according to VR creators, has been emotional distance; many complain of feeling awkward or voyeuristic in the medium.

But those creators say obstacles can be overcome by shrewdly involving the user. In “The Wolves in the Walls,” the Gaiman adaptation about a plucky young heroine, a start-up called Fable Studio has the character address the viewer and bring them along on her adventure.

“For VR to get there [commercially] we have to solve the intimacy problem,” said Pete Billington, a Fable co-founder and director of “Wolves.” “Every decision we made in crafting this piece was solely for the purpose of connecting to the viewer.”

“Wolves” has the benefit of a recognizable title. Also targeting the market are VR extensions of known screen brands: HBO’s dystopian western “Westworld,” “Ready Player One” and the Wes Anderson film “Isle of Dogs.” While many see them as mere marketing adjuncts, others believe they can acclimate first-time consumers to VR.

The hope is that all these efforts will chip away at consumer hesitancy. While that’s happening slowly, insiders say the history of new technologies gives them hope.

“Remember in the early 2000s, right after the dot-com bubble burst, people said, ‘The Internet might just go away?’ ” said Wevr’s Batt. “And around 2003, it all changed. It just took time for new models to emerge and consumers to be ready. I think VR can soon have its 2003 moment.”


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