You know that the hype around virtual reality is heating up when you begin to notice large corporations acquiring or investing in companies within the space. Yesterday we saw that HBO and Discovery took an equity position within the virtual reality creation software company OTOY, and just moments ago news broke that AOL, a subsidiary of Verizon Communications has just acquired RYOT, known for their 360-degree video and VR content. RYOT will now operate as a unit under the Huffington Post division and in fact, the website is already branded with the ‘Huffington Post’ logo and directs to a subdomain at Huffington Post.
“RYOT will work on big editorial projects, but also with brands. It will work across everything we’re doing at The Huffington Post,” said Arianna Huffington, co-founder and editor-in-chief of The Huffington Post.
According to those within the company, the 25 staff members of RYOT will work with many of AOL’s properties, besides just Huffington Post. These properties include TechCrunch, Engadget and Autoblog, among others, and should give Verizon a foot into the door of the rapidly expanding market for VR and 360-degree video content. In fact RYOT’s content may eventually be available on Verizon’s mobile video app go90.
“There are obviously a lot of VR companies across the landscape, and the idea of producing this type of content is one that’s gaining traction. Our goal was not just to acquire a production studio, but to find one that shares our drive and mission,” said Huffington Post CEO Jared Grusd.
With the demand for content creation rising as millions of virtual reality headsets are expected to ship over the next few quarters alone, the value of a company like RYOT has soared. Verizon has not stated what they paid to acquire the company, but they clearly seem to understand its value. While RYOT has produced 360-degree virtual reality content for it’s own properties, the majority of its revenue to date has come from the company’s work with brands. This includes Pepsico, Walgreens, The Associated Press, The New York Times, and even Huffington Post.
As YouTube, Facebook and others fight for eyeballs when it comes to 360-degree video content, this acquisition should provide Verizon with leverage within a rapidly expanding entertainment space. Just how they will use this leverage for future dealmaking and to increase the company’s top and bottom lines is yet to be seen, but the fact that they are also bidding on Yahoo’s internet assets, could set Verizon up an online media giant.
Lets hear your thoughts on this acquisition in the Verizon / AOL / RYOT forum on VRTalk.com.