Three years ago, The Guardian was convinced that virtual reality was about to enter the mainstream. In Oct. 2016, the British news publisher announced that it had launched a two-person team dedicated to exploring the medium. A dedicated VR app, Guardian VR, debuted nearly a year later.

“There are always risks in investing in new technologies,” Francesa Panetta, editor of the Guardian’s VR studio, wrote at the time. “But for me, the risk is not doing this.”

The Guardian was not the only publisher eager to get in front with the emerging technology. The New York Times, which had launched its own VR mobile app back in 2015, had produced a dozen VR projects of its own by the time its content studio, T Brand Studio, won a Cannes Lion for a VR project in 2016. Earlier in 2016, Gannett, parent company of USA Today, began dangling VR in front of advertisers with the help of two dedicated staffers it added to its brand studio, GET Creative.

Today, thanks to low consumer adoption, VR has receded to the fringes, as augmented reality and “voice” have become buzzwords of choice for media futurists, and some of the work that publishers put toward VR has been scaled back. The Guardian has not published a virtual reality project since July 2018, when Panetta, its editorial lead, began pursuing a Nieman Fellowship at Harvard. It is not working on anything currently. Two years after crowing that it had more than tripled the amount of VR projects they’d done for clients, The New York Times did not respond to questions about how many VR projects it had created for advertisers in 2018 or how many staffers it had dedicated to the medium. After producing two seasons of VRtually There, a series designed to showcase VR and 360 video, Gannett decided to abandon the project in 2018.

The reality is that VR remains a niche technology that no longer interests marketers and is getting less push from platforms such as Google and Facebook. Due to these issues, the exuberance that drove so much of the enthusiasm for VR has been replaced by pragmatism today, leaving publishers much more clear-eyed about how much attention VR should get. And much of what publishers learned — and a lot of the talent they amassed — with VR has been carried over into their augmented reality efforts.

“VR has cooled off a little bit,” Michael Kuntz, COO of the USA Today Network, admitted on a recent episode of Digiday podcast. “I think the bet did not pan out the way we wanted it to in terms of audience adoption. If we’re going to experiment, is it just for the sake of experimentation or for some sort of return on it? It’s more so the latter.”

While augmented reality has become available to anybody with a smartphone, VR remains niche. Though some analysts predict that more affordable headsets could provide a boost, global shipments of VR headsets are expected to total just 8.9 million units in 2019, a 54 percent jump year over year, according to the consumer research firm IDC.

Starting in 2015, device manufacturers including Google tried to drive mass consumer adoption with cheaper VR headsets. For Google Cardboard, Google leaned on marketing partners such as The New York Times, which shipped 1.3 million of the devices to subscribers over a five month period. But Google Cardboard was never able to gain much traction among the masses.

Meanwhile, augmented reality doesn’t require customers to buy expensive new equipment — it can be made available on the billions of mobile phones already in the hands of consumers around the world. Over the past six months, the Creative Lab at McClatchy has begun pitching AR rather than VR, said Meghan Sims, the publisher’s director of strategic video initiatives.

“Virtual reality has faced serious headwinds in the advertising world,” said Matt Maher, the vp of innovation at Assembly. “Most marketers stay away because both production costs of a bespoke VR experience and the low adoption rates of consumer headsets like the Oculus Go make it untenable for their current marketing strategy.”

To get around the scale problem, some publishers are finding new ways to bring VR to audiences. McClatchy, for instance, is having conversations about incorporating virtual reality into events, where attendees have the option of trying a VR experience using devices on-site, said Ben Connors, strategic lead of McClatchy’s New Ventures Lab. That’s a good solution because it solves for both sides of the scarcity problem, said Janet Caputo Karp, svp of strategy at the agency MRY.

Publishers have not abandoned VR altogether. The newly independent Time Magazine, for example, announced a pair VR projects at the 2019 Sundance Film Festival; McClatchy produced a VR installment in a documentary series, “All We Got”; Gannett incorporated virtual reality elements into “The Wall,” a Pulitzer Prize-winning package about the U.S.-Mexico border.

But publishing sources also confirmed that they are increasingly focused on AR and other emerging media formats — and in some cases are using the teams they originally hired for VR to focus on these new areas. A cross-functional team at Gannett, which wants all of the dozens of newsrooms in the USA Today Network to develop AR capabilities this year, remains four people; over the past year and a half, McClatchy’s New Ventures Lab group has grown from two people to six.

Those multidisciplinary teams all see augmented reality as the bigger prize in the near term. “AR is in the honeymoon phase VR was in two, three years ago,” Anrik Bregman, founder of the digital content studio ANRK, told Digiday earlier this year.

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