How to invest in... Virtual reality

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How to invest in... Virtual reality

Virtual reality is one of the hottest areas in technology at the moment as the public finally gets a chance to buy a range of headsets. The equipment allows high-quality, immersive viewing of multimedia or computer-simulated reality. This could be big business for content providers and UK investors already have several ways in which to get exposure.

Fresh from joining AIM on 16 May via a reverse takeover of Armstrong Ventures is a company hoping to bring music concerts to life in your living room. EVR is the holding company for MelodyVR, a fairly new business that claims to have developed technologies, products and services to allow the public to experience live music via virtual reality.

The group wants to use 360 degree cameras to broadcast gigs, backstage activities and interviews with bands via an app. There has been talk of paying £5 to £10 to buy a virtual ticket and watch concerts in real-time but EVR says pricing hasn’t been confirmed.

It all sounds very exciting but this is an early-stage company with no revenue. EVR says it has signed partnerships and/or exclusivity agreements with nine event promoters/venues which represent 21 event brands and festivals. However, the AIM admission document warns that MelodyVR doesn’t have any deals with major record labels that would provide access to the world’s biggest music stars and thus significant fan bases. There are also risks around the requirement for end users to have a high quality internet connection to properly view its planned services.

The company refuses to disclose the cost for equipment and staff per concert, how much it would have to pay the venue and artist to broadcast the event, and how many tickets it would have to sell to break even in a year. It simply says all these issues are commercially sensitive.

The world’s largest live entertainment promoter Live Nation plans to get into the VR broadcasting space via a partnership with start-up business NextVR and streaming provider Hulu. You would have thought this agreement, announced earlier this month, would present a major setback to EVR’s own plans. However, the small cap remains optimistic.

EVR says: ‘We’re incredibly pleased to see that Live Nation has announced a partnership with Hulu. We see the Hulu announcement as a clear indication of the increased demand by consumers for virtual reality content and a sign of growth within the market.’

Other ways to play VR

Investment group Mercia Technologies has a 40% direct shareholding in VR gaming group nDreams. GameAccount Network earlier this year launched a virtual reality casino service for anyone looking to gamble using a VR headset.

FTSE 100 broadcaster Sky has established an in-house virtual production unit called Sky VR Studio. It has already started to film Formula 1 motorsport; boxing and cycling is coming soon; and Sky says it will look to distribute content later this year via a dedicated app.

For investors happy to own overseas-listed stocks, Facebook owns Oculus VR, one of the biggest names in virtual reality technology. It paid $2 billion for the business in March 2014.

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