VR investment logic of Chinese culture: layout content, technology, platform, and hardware with micro-whale as the center

Just like a huge funnel, the content, technology, platform, and hardware gathered by Chinese culture are distributed from top to bottom, continuously outputting VR content to the audience through micro-whales.

The original title explains the Chinese cultural VR puzzle in detail: one main axis, two directions, and six major sections:

"Micro Whales have the ability to broadcast and operate content on the Internet in China. We have also established a VR team. Jaunt is very leading in recording high-quality content, and NextVR is dominant in live streaming. It's a very complete puzzle." On August 9, 2016, NextVR announced the completion of a US$80 million Series B financing involving Chinese Culture Holding Group (hereinafter referred to as "Chinese Culture"). Li Huaiyu, CEO of Micro Whale, who led the investment in Chinese Culture, told reporters.

"When the two sides started to contact, they had not actually started this round of financing yet." In an exclusive interview with reporters, Xu Tao, a strategic development consultant for Chinese culture, revealed that Chinese culture and NextVR had established connections in the fourth quarter of 2015. Chinese culture's emphasis on VR live broadcasts and NextVR's advantages in live broadcasts have become the basis for cooperation between the two parties.

Live broadcast is a form of VR content that Chinese culture with strong media attributes attaches great importance to."In fact, NextVR has accumulated technology for many years. In addition to the capital level, we also have many business cooperation and some follow-up arrangements with them. These technologies can form a very good cooperation and synergy with the micro whale's domestic live broadcast business in China." Li Huaiyu said.

As a company founded in 2009, headquartered in Los Angeles, USA, and with nearly 30 technical patents in the field of VR live broadcasting, NextVR has never concealed its strong interest in the China market."With this new funding, we will Focus on building NextVR's virtual reality platform to broadcast high-quality sports and music content to satisfy the needs of regions with the largest audiences in the world." Brad, executive chairman of NextVR. Allen said,"Our new partner has the strongest content and media distribution capabilities in Asia, which injects great confidence into our expansion plans."

"This round of financing started probably at the end of the first quarter and the beginning of the second quarter of this year. The whole process takes about four to five months, and the time is longer because the investors involved are in different countries and regions. But the communication between us is very smooth." Xu Tao said.

Live broadcasts are one of the VR content that consumers are most interested in. A VR report by Goldman Sachs shows that by 2025, the market space for VR live broadcasts will reach US$2.5 billion.

Also in April, Micro Whale Technology, a subsidiary of Chinese Culture, released its own VR strategy. NextVR announced cooperation with Chinese Culture in VR content at the press conference. After the completion of this round of financing, Chinese Culture and NextVR are communicating more closely at the business level."In addition to investment, operational cooperation and even exploring the establishment of a joint venture company in China, these different ideas are now in progress."

What is certain is that Chinese culture and NextVR have begun to collaborate and adapt at the technical level. Chinese culture hopes to combine NextVR technology with micro-whale technology to create a live broadcast technology that is more suitable for the domestic bandwidth environment and has better results. "We will have live VR broadcasts in every round of the Super League next year, so in these businesses, we will do a good job in relevant cooperation and collaboration. I think there should be very good cooperation results next year." Li Huaiyu is very confident in the cooperation between the two sides.

How to integrate and carry out collaborative cooperation,

whether it is the announcement in April that it will invest 1 billion yuan in innovative industry funds around the world, or the cooperation with Jaunt and NextVR, for Chinese culture, it is a step by step step establishment and improvement of a VR industry chain including content, technology, platform, and hardware. This industrial chain will take micro-whales as the main axis, and through joint efforts in both independent research and development and investment, the main axis will be continuously enriched and improved in terms of content and technology.

In the field of VR technology, Micro-Whale currently independently developed and exclusively owned technologies and equipment include Micro-Whale VR all-in-one machines and solutions, 360-degree panoramic multi-camera switching VR live broadcast technology, virtual live broadcast scenes and visual control camera switching, etc. At the same time, it is cooperating with Tencent Cloud to jointly develop VR cloud services, underwater VR shooting, VR social and shopping technologies.

In the content field, the micro-whale VR platform already has exclusive VR live broadcast and co-production rights for a large number of sports and entertainment IPs. The VR content that has been launched includes "New Songs of China","Good Songs of China","Heroes of the Earth", live broadcasts of top football events such as the national football team and the FA Cup, Zou Shiming Boxing Match,"Kunlun Battle" live broadcasts, SNH48 MV and public performances, and a large number of star concerts and other content.

In terms of investment, in addition to participating in NextVR's Series B financing. As early as September 2015, Chinese Culture, together with Disney and Evolution Media Partners, led the US$65 million investment in JAUNT. On April 25, while Microwhale announced its VR strategy, it also announced that it will invest 1 billion yuan in innovation industry funds worldwide in the next three years and work with partners to produce 10,000 hours of VR content. On May 31, Micro Whale, Shanghai Media Corporation (SMG) and JAUNT announced the establishment of JAUNT China, with a total investment of more than US$100 million.

In these layouts, micro whales have become a central link connecting all aspects. More importantly, the micro-whale provides a platform for Chinese culture to integrate the entire industry chain, including technology. The micro-whale can improve the entire strategic puzzle and empower itself with more technical capabilities. Through Li Huaiyu and Xu Tao's introductions, the reporter concluded that Chinese culture and micro whales will promote the layout of VR in the following aspects.

1. VR live broadcast and recording. Micro Whale will also cooperate with many content IPs under Chinese Culture to conduct VR live broadcasts. "I estimate that this is the most important level in the entire VR chain, because in the development of VR nowadays, content is very important, and it requires a very good live broadcast of the corresponding content. It breaks through a very large barrier to the entire industry at the source and is also a very core area of micro-whales." Li Huaiyu emphasized.

2. Micro whale VR application platform. Micro Whale attempts to increase the awareness of micro whales among more C-terminal VR glasses users through the establishment of this platform. This platform is suitable for all mobile phones that meet the needs of VR content playback. Users who have purchased VR glasses can easily experience the high-quality VR content provided by Micro Whale,"so that he can have a better understanding of VR and have more viewing and interaction in the future."

3. Creative content production. "You can use some technologies, including drones, to shoot scenes that are difficult for ordinary people or under normal circumstances." Li Huaiyu believes that such shooting can reflect the creative skills and shooting technology of the micro whale."Many scenes are outdoor environments with minus ten degrees. With this camera position, we can ensure that it is in a stable shooting state and also reflects our leading differences in technology."

4. Hardware. "The advantage of these very cheap glasses now is that they can allow more consumers to experience the charm of VR, but after all, these glasses are not suitable for long-term use and have many pain points. So we are committed to making a piece of high-quality hardware that is easy to use, smoothest and most stable from the same perspective. It is expected that it will be released in the fourth quarter."

5. VR offline entertainment. "The VR experience is richer, more entertaining and more valuable. We think VR will likely generate some exclusive content." Xu Tao felt that VR offline experience would have unlimited imagination, and also cooperated with CMC's strategic layout for offline entertainment."There are some companies that are trying different business models, and we will also pay close attention to this aspect. Maybe there will be some layout in the short term."

6. Investment. Xu Tao said that Chinese culture will continue to pay attention to new technologies and new content at home and abroad. "I think the VR industry is now, especially on the content side. No matter what type of content it is or what the method of generating content is, there is still a lot of room for imagination and development in the future. Hardware also needs to be popularized."

VR Investment Logic of Chinese Culture

"For now, the entire market is not too mature, and I don't think it has yet reached the stage of real development. The attention of this market is on the high side compared with current products, product development, and hardware popularity. In other words, although a lot of money is pouring in, there are still many people who are looking at how far this field can go."

In Xu Tao's introduction, the Chinese culture's strategy to deal with this situation is to grasp the top content and the most core leading technologies, which will be the core competitiveness of Chinese culture in a certain field."No matter how fast this market develops, or if the direction of its development changes, our strategic position is actually quite flexible and occupies the commanding heights."

At the same time, in the investment logic of Chinese culture, while optimistic about the future development potential of these companies with top content and core technologies, we will also attach equal importance to the development concept of this company."We have long-term exchanges with these companies, and their concepts, the direction of China's development, and other aspects can be effectively linked with Chinese culture and micro-whales. These linkages may be the establishment of joint ventures or business cooperation."

There is no doubt that both Junt and NextVR are in line with the investment principles of Chinese culture. When NextVR co-founder DJ Roller came to China in April, he said that China has a vast territory and many places of interest. What NextVR needs to do is to make these content into VR documentaries or broadcast VR live broadcasts. This idea is in line with the production of high-quality and creative content that the micro whale has been emphasizing.

In the Series B financing that NextVR has just completed, Netease, CITIC Guoan and Chinese Culture have become the main participants in this round of financing. More and more China capital is becoming competitors for Chinese culture to invest and merge in the international market. However, in Xu Tao's view,"As long as VR is made big enough, it is still enough for many people to share. What is more important is to polish products and technologies well and fully unleash the potential of the market."

The current situation in China is that the cultural and entertainment consumer market is constantly growing. However, in the Internet age, the demand for culture and entertainment is global, and China will also want to see more international content. Moreover, with the development of the country's economy, China companies with large amounts of cash flow will inevitably participate more in foreign investment, acquisitions, and mergers. In this case, the three investment logics mentioned by Xu Tao emerged: the first one will buy overseas content and enjoy domestic control; the second is to buy companies with advanced technologies and IP., operate these IPs; the third is to master production technology.

"VR is very popular nowadays, and many entrepreneurs are flocking to this industry. We have seen in the industry that many entrepreneurs have a longing for the prospects of the industry, but they have not conducted comprehensive and in-depth research and understanding. Technology and creativity are important factors affecting the direction of the industry." Li Huaiyu said this to reporters at the end of the interview.

Editor: Nancy