Metaverse opportunities for publishers: Next revolution or waste of money?

Metaverse opportunities for publishers: Next online revolution or waste of money?

Metaverse opportunities for publishers

Publishers have been advised to “dip your toes in” to opportunities related to 3D virtual worlds and metaverses to make sure they don’t miss “out on the next revolution – because it’s coming in and it’s coming in hard”.

But few have done so. South China Morning Post chief executive Gary Liu told Press Gazette this was partly put this down to the fact time and resources are still taken up by figuring out “how to build sustainable digital media businesses” on the current stage of the internet, known as Web 2.0.

Meanwhile others in the industry fear that experiments at this stage could prove a waste of time and money as publishers have so much else to grapple with – including subscription businesses, first-party data strategies, Tiktok, disinformation and safely covering the war in Ukraine.

Either way, it should be noted that it is still “super early” – and if audiences aren’t interested, publishers “might not be serving [them] by running ahead” as Bauer’s director of content and audience development Ian Betteridge warned.

'Huge possibilities' for media

Gerry Smyth and Grant Townshend, directors at business solutions company GAS Commercial, encouraged publishers attending The Publishing Show in March to start looking at the "huge possibilities" they say metaverse technology poses for the media industry.

Potential uses for publishers could include bringing warzones and scenes like the US Capitol riot to life, events in verticals like travel, shopping, cooking and sports, shopping, creating news anchors as holograms to deliver the news from our own breakfast tables, and accessing newspaper archives.

Smyth said the technology, which now includes more affordable VR headsets such as Facebook owner Meta's £300 Oculus Quest 2, was “becoming mainstream” and they have therefore decided to try “to get publishers to understand how you need to adapt and adopt into this ever-changing world”.

He noted that the recent affordability of equipment has been a "game changer" in terms of "bringing it to the average person".

An International News Media Association (INMA) report on opportunities around extended reality noted: "...no, most people reading this won’t have a headset at work or home. But soon you will. The tipping point is coming."

The report added: "...the news industry needs to start preparing for these new technologies and the next phase of the internet. We need to start building the skillsets internally so we can meet the needs and maybe even have a small library of content when that tipping point comes."

Laura Hertzfeld, the former director of Yahoo’s XR partner program and now a freelance storytelling innovation executive, told INMA's masterclass extended reality could be good for reader engagement and provide opportunities for sponsored content and advertising experiences.

Townshend said there is a "slight misunderstanding about how advanced the technology has become", saying it often surprises people how far along it is now. "The merging of the virtual and real worlds is already here," he said.

Smyth asked: "Are advertisers taking advantage of this? I would probably question and say maybe not."

Smyth said there are three questions publishers need to "start asking yourselves very soon or else you’re going to miss out on this revolution once again": how is your content consumed now (for example on iPhone, iPad or Androids), how will it be consumed in the future (possibly game consoles and headsets) and do you or will you have a strategy and a presence in those places?

He added: "Don’t dive in – dip your toes in first... eventually the transition will be to having your own app yourself as a business ready for the increase in hardware sales."

Smyth said publishers had been too slow to adapt to the internet revolution, adding: "We have lived through the internet revolution. Now is the time for publishers to position themselves for the metaverse revolution."

'Building within Web3 is hard'

The South China Morning Post's chief executive Gary Liu told Press Gazette he was not surprised many publishers are not experimenting with metaverse applications yet. In a recent Digiday survey, 80% of publishers surveyed said they did not see a big future for their businesses using the metaverse.

Liu said: "First of all, the present business of news on the internet has still not been figured out so all of us are still struggling every single day to figure out how to build sustainable digital media businesses in web two, and so most news organisations don't have the luxury of time, of resources, of executive focus, to experiment with something that frankly just isn't front of mind right now.

"But the second reason I'm not surprised is that it's difficult. Building within Web3 right now for news media is hard, because it's a complete paradigm shift."

This is because, he went on, there are new programming languages and a  different philosophy based around decentralised ownership.

Liu said that although it may seem like a "momentary fad" because the conversation is being led by opportunists and fundamentalists who don't believe in "the man", "that's not true".

"There will be a generational shift that we're already seeing where Gen Z and beyond will care about owning their own digital data, will care about ownership of their digital creations, will care about buying assets in the digital world more so than buying assets in the physical world," Liu said. "And when they do that, the rest of us will not really have a choice."

The SCMP started studying how blockchain could "upend" the media industry almost five years ago and decided after the popularity of NFTs exploded last year that it could have an "immediate impact" for the business.

[Read more: How news publishers made $12m selling NFTs]

It has therefore used its newspaper archive to sell NFTs, which it calls Artifacts, starting last month with depictions of some of its 1997 print front pages.

We can 'tell stories in a very different way'

Separately the SCMP last month launched its first experience in gaming metaverse The Sandbox's Alpha Season 2 update. Again using its historical archives, the news brand created an immersive experience allowing users to explore the Hong Kong Star Ferry Pier as it was in the 1980s and up to the present day.

The Sandbox and Artifact projects are currently minted on separate blockchains, but Liu said it is "just a matter of time" before they are bridged and assets can move from one chain to the other.

Metaverse SCMP
South China Morning Post's Hong Kong Star Ferry Pier on The Sandbox

Liu said the Sandbox experience ranked number three in that round of game releases, just behind rapper Snoop Dogg's experience, and that they now "expect to take it further".

He said: "Our goal with this very large piece of virtual land is to build many experiences, to use it as a new canvas to tell the story of present-day China and Hong Kong as well as the history of China and Hong Kong.

"The virtual world and its 3D space allows us to really paint a compelling picture and tell stories in a very different way than we can on even our digital platforms for the news site.

"And so we're going to learn more and we're going to leverage it and try to build educational experiences, especially at a moment where people are not travelling and they want to visit other parts of the world. Hopefully, we'll be able to offer a glimpse of our part of the world via Sandbox."

Liu added that he sees the metaverse as being important for publishers because it is an "incredible canvas" and a "great way to tell the story", even though it is currently difficult and expensive to build within, but also because "eventually we're not going to have a choice".

"Users are going to choose to spend more and more of their lives, digital lives specifically, in some form of metaverse," he said. "They're going to interact and engage there. They're going to consume information there. They're going to purchase things, trade things there.

"And so if media companies are not involved in establishing what information in the metaverse looks like then once again our business won't be disintermediated and somebody else will come and invent it on our behalf and we're going to have to play by those rules."

What is in it for the audience?

One UK publisher currently thinking about the metaverse, though not as far along as the SCMP, is magazine giant Bauer.

Ian Betteridge, director of content and audience development, told Press Gazette it was "very early days" for adoption of VR among consumers.

But he said: "There are things that you can start thinking about at the moment and start experimenting with and playing with to actually kind of get yourself in the mindset about how you might do really good content in that area."

Betteridge could not share any specifics about the types of products Bauer might be considering, but said: "Bauer, like every publisher, is audience-led and we want to understand what is in it for the audience and how we can best address audience needs first and foremost, so we live by our audiences really more than anything else.

"If audiences gravitate towards metaverses, and it's probably important to say there are likely to be many different ones, then we want to be there."

However he added that "if it's not something that our audiences are interested in adopting then we might not be serving our audiences by running ahead".

Metaverse technology is often touted as potentially useful for reaching younger audiences, but financial firm Piper Sandler's latest annual survey of 7,000 US teenagers found that half were unsure about or had no intention to purchase a device to help them access the metaverse, such as a VR headset. Of the quarter who already owned a device, 82% said they enter the metaverse less than a few times per month.

Betteridge said the areas in which publishers could see success likely all centre around communities - something which many are cultivating already by, for example, building engagement with newsletters and membership programmes- perhaps by building a virtual reality communal space.

"For publishers, what you've got to think about is how can you not only do great content, which is entertaining and informative and all those things, but also it has that community aspect of being people together in one space. That's probably going to be the hardest bit," Betteridge said.

He added: "A lot of what we do is around trying to build communities. The metaverse is a space where you can build community. And are all the tools there, and all of the systems there and scale there to actually do that at the moment? Probably not, it's very early days in terms of what the metaverse is - but will it be there in a few years' time, probably.

"So that's the point: at that point we've got to have done the thinking and done the work of understanding how we can relate that to the communities we want to cultivate and how we can bring people together on that sort of journey."

It would differ from the likes of Twitter Spaces and Clubhouse in this way, he said, which are "very broadcast-y" even though they do allow for communal events.

"That's the big difference between metaverses and just plain old VR," he said. "Can you interact with the audience around you? Can you talk to them? Can you point to things? Can you share it with friends around you? Those are things which kind of define it as a metaverse experience rather than just a VR experience."

The metaverse could potentially be a bigger opportunity for magazines than for newspapers, Betteridge also said, because magazines "are often very close to communities small or large".

"Magazines tend to be built around communities of like-minded people with similar sorts of interests. That can give them a bit more of an advantage over newspapers in terms of working out what their strategies might be."

One UK publisher has already experimented: at the end of March, Haymarket's Management Today claimed to be the first English-language magazine to go into the metaverse by creating its cover in the platform Decentraland, chosen because it is "the most flexible and open of the decentralised spaces".

The magazine's editor Kate Magee noted that Decentraland has a "ready audience – 500,000 active monthly users" and agreed with the idea that "key to a successful entry into the metaverse is to offer something useful for the community".

Management Today therefore added the ability to add clickable portals to the cover to send visitors to some of Decentraland's "most hyped experiences" and its magazine content, allowing metaverse users to read its latest edition for free during its three weeks on the platform (its content is usually behind a paywall).

'Waste of money'

But not everyone is so optimistic. James Whatley, chief strategy officer at gaming specialist creative agency Diva, told Press Gazette investing in the metaverse was a "waste of money" and said he fears "smaller businesses are getting caught up in the wash and will go out of business because they're investing the money in the wrong places".

Whatley said: "The first thing I would say about publishers jumping on a bandwagon is don't you all remember when you had to lose loads of money and loads of employees when Facebook told you to pivot to video? And yet, here we are, and Facebook is telling you to pivot to the metaverse and we're following the same thing without realising what happened a few years ago.

"So there's the first red flag that everybody's ignoring because they're wearing rose-tinted glasses."

He added: "I don't know why anybody would focus on Web3 when for some publishers you literally have to pick up a telephone to cancel your subscription and phone their customer service. They haven't even got their web one right, let alone their web two."

In response to Betteridge's point about publishers making sure they are wherever audiences are gravitating, Whatley pointed out that Decentraland currently has fewer than 10,000 daily active users.

"I have more Twitter followers than that, which is a joke, and yet people and brands are pouring more and more money into it going, oh, this is the future because all they're going to get is a headline in their trade press tomorrow and then that will be it, then they'll be wondering where the money's gone," he said.

Whatley added that rather than publishers spending money on creating versions of their websites on Roblox to bring "readers closer", they would be "better off spending that money on working on how to edge people down the funnel for getting into subscription using smarter notifications.

"It's a lot of hype and excitement over something that's delivering very, very little return on investment especially to small to medium-sized publishers."

Whatley added that understanding the technology and trends was important, but said the metaverse as a single unified world that we live in was ten years away at least.

"When we went into lockdown one... by the end of literally week one we'd all had enough of being in front of our screens all day. Strapping a helmet to your head and having that screen three inches from your eyes all day long sounds like hell on earth."

Similarly Zillah Watson, an immersive consultant who has worked with the BBC, told an INMA masterclass headsets are a "pain" for users: "Our conclusion was that VR content had to be pretty amazing to be worth the bother of dealing with the headset. If you could tell [the story] better on TV, you shouldn’t bother with VR."

Picture: Bing Guan/Bloomberg via Getty Images

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