While the digital still camera market continues its smartphone-induced decline and action cameras seem to have collided with their own sales ceiling, the imaging industry is turning to a new potential growth category in 360-degree/virtual reality cameras.
The terms “360 camera” and “virtual reality (VR) camera” are often used interchangeably, but they’re not the same thing, argued Jim Malcolm, General Manager, North America of HumanEyes and formerly President of Ricoh Imaging America, where he brought the Theta 360 camera to market. According to Malcolm, a good rule of thumb is dimensionality. If the camera delivers a 2D image that’s spherical, it’s a 360 camera. If it can deliver a 360-degree image that’s also three dimensional, it’s a virtual reality camera. The former can be distributed on a flat display, but the latter really needs a VR viewer like the Oculus to get the best experience, Malcolm added.
With this rough definition in place, the consumer market in 2016 was dominated exclusively with 360 products from the likes of Ricoh, Nikon, Samsung, 360fly and Kodak. Most of these products were targeted rather narrowly at action sports applications, though models like the Ricoh Theta or Samsung Gear 360 were pitched at general memory making as well.
The market for 360 cameras was rather modest in size in 2016, with Futuresource Consulting’s Senior Market Analyst Arun Gill pegging total unit volume for the year at 0.6 million units. That number is projected to rise to 1.5 million in 2017 and to 4 million by 2020. In contrast, professional and prosumer VR cameras totaled just under 500 units for the 2016 and will grow to under 3,500 in 2020, Gill predicted.
The NPD Group tracked $15 million in 360-degree camera/camcorder sales from November 2015 through October 2016, according to Industry Analyst and Executive Director Ben Arnold. That figure puts 360 degree cameras at about 1 percent of the dollar sales of the digital still camera market during that timeframe and about 1 percent of the camcorder market as well, Arnold added.
At this pace, the total 360/VR camera category will be a “niche within a niche” of the larger action camera market, Gill predicted. Greater adoption is currently inhibited by the cost and hassle of purchasing additional hardware such as memory and storage, Gill said, plus the accessories and software needed to view and edit spherical content.
Consumer familiarity with virtual reality in general is also fairly low. In a recent survey, the research firm Parks Associates found that over 60 percent of U.S. broadband households knew “little or nothing about virtual reality.”
But when consumers are exposed to VR, they seem to dig it. In a recent survey of consumers, Nikon found that 90 percent said that some of the content they currently watch would be better in 360. Nearly three quarters of those surveyed (72 percent) said they were interested in trying 360 degree cameras. “The potential for this is huge,” said Kosuke Kawaura, Director of Marketing, Communications and Planning at Nikon.
In their own consumer survey, Futuresource Consulting found very few consumers who had had a VR experience, “but for those who have tried it, they had a very good experience,” Gill said. This suggests that time and marketing will work their magic on the buying public. “The dealers are starting to figure it out, a lot of consumers learned about it in 2016,” Malcolm said. “This is going to position 2017 for growth.”
For its part, Ricoh has seen strong adoption of its 360 camera from “socially-savvy millennials” said Kaz Eguchi, President of Ricoh Imaging Americas. This demographic is going to be key to driving adoption among the broader population in 2017, he added.
“Now that they have the ability to share their creativity, people are beginning to realize the benefits of watching and capturing 360-degree video too as it provides the chance to tell their whole story,” Kawaura said. “Whereas once it was only attainable by professionals with expensive equipment, early adopters and creative consumers are wanting a camera that can capture their passions in an immersive way.
”Facebook and YouTube supplying platforms for 360 content has been helping drive consumer awareness as well. According to Peter Aloumanis, president of 360fly, Facebook is advancing as the top social platform for 360 content. “Facebook has spent significant dollars and effort in the 360 space, and the speed at which they’re bringing new capabilities online is two to three times at what YouTube is doing.” Facebook is more mobile-focused, he added, while YouTube still thinks of it as a desktop platform.
A Diversifying Market
360 cameras are quickly diversifying and unlike many new technologies, which start at often prohibitively high price points, VR technology is well within the grasp of casual consumers, Arnold noted. Several models launching at CES, such as the Hubblo camera, will offer 360 live-streaming as a prominent feature.
2017 will also see the emergence of less expensive VR cameras aimed at consumers. HumanEyes’ Vuze camera, which was announced at CES 2016 but delayed until March of 2017, will sell for under $1,000. The Sphericam 2, which begins taking preorders in January, also delivers higher-quality spherical video that can be used for professional productions for under $2,000.
While there is plenty of support for sharing 360 videos captured by consumer cameras like Nikon’s KeyMission 360, the success of more sophisticated VR cameras like the Vuze rests on how rapidly the buying public embraces VR headsets, which have the processing power and resolution to render the three dimensional content, Malcolm said.
FutureSource pegs the head-mounted display market at 5 million units for 2016 rising sharply to 12 million in 2017, though the majority of this volume will be generated by phone-based headsets. Parks Associates estimates that 3.4 million U.S. households currently own a VR headset.
While industry forecasters sketch out a fairly conservative growth trajectory for the category, those who believe in the technology speak of it in near ecstatic terms. VR filmmaker Chris Milk, wrote in Medium that VR was ushering in an “extraordinary moment” in tech history on par with the birth of basic sound and picture recording technologies in the 1800s. “I believe virtual reality will eat the Internet in the same way that the Internet has eaten traditional TV content,” Malcolm predicted. “The tide will turn.”