VR - The Rewards ... The Risks -- EXCLUSIVE Interview with Mike Rothenberg of River VR Accelerator

[My interview below first appeared yesterday in VideoInk .]  

Virtual Reality (VR) and Augmented Reality (VR), together “Immersive” technologies are increasingly meaningful actual realities for the business world and not just media and entertainment.  Much is written about the incredible promise and potential power of Immersive technologies for all of us (I too have written several times on that subject).  But, much less is written – at least in the industry press – about the known and, even more importantly, unknown risks associated with full sensory immersion. 

I became intrigued about this topic a few months back when I moderated a VR panel that featured Mike Rothenberg, a VR pioneer who runs the first VR accelerator, the “River Accelerator.”  (Here is a TechCrunch feature story of Mike from a couple years back -- am proud to say that my company's Manatt Venture Fund is an investor in Mike and his VC and Manatt Digital Media is heavily involved in the VR/AR Immersive space).  I recently interviewed Mike on this highly complex, fascinating topic.  Mike is one of VR’s strongest champions – and puts his money directly where his mouth is by financing VR startups through his venture capital firm Rothenberg Ventures.  Here is my interview.

Question (Csathy): Tell me at a high level what led you to not only be champion of VR’s amazing potential, but also a voice of caution with the cause?

Answer (Rothenberg):  I feel a social responsibility to address all aspects of VR given my role within the industry.  Like all great leaps in technology, there are really powerful things that could be positive or negative. VR is an entirely different type of visual medium because it bypasses your biological system to directly affect your memory.  It is not just visual; it is the difference in thinking that you are watching something and thinking you are there, which we call “presence”.

Csathy: Give me some non-obvious examples of Immersive’s potential to do great good.

Rothenberg: Definitely.  DeepStreamVR is a VR startup that helps cope with pain by refocusing attention. Some Washington hospitals have found that they can dramatically reduce the pain that child burn victims experience when changing bandages by immersing them in a VR world of snow.  In the snow world, the mind refocuses and the children report pain reductions comparable that of opiates.  It’s incredible.  Another example is FOVE, a company building a hardware system with eye-tracking software that translates a user’s eye movements to specific action.  An inspirational example of FOVE’s ability to change lives can be seen on its website, where a university student with muscular dystrophy in Japan plays a piano in a live performance using his eyes in a VR headset by looking at the piano keys with eye-tracking software.  Psious is another amazing startup changing lives. Its immersive technology helps people practice coping with fear, whatever they may be.  Fear of flying, fear of heights, etc.  If you can experience that fear in a controlled environment, you can learn to overcome it.  And think of the elderly and others who are immobile and confined to beds.  Now they can be transported anywhere in the world from their bedroom and be constrained only by our imaginations.

Ultimately the power of virtual reality is in its ability enable a permanently higher quality of life.

Csathy: How about on the other end of the spectrum.  What are some non-obvious examples of Immersive’s potential to cause great harm?

Rothenberg:  Watching a war movie makes you think you watched a war movie.  Inside a virtual reality war experience, you may feel like you are actually in a war.  VR could make a very different imprint on your memory and your brain that could lead to actual post-traumatic stress disorder.  If “Pirates of the Caribbean” is rated PG13 just due to the sight of blood, then how do we even begin to rate the potential impact of feeling what it’s like be there if someone cuts off a pirate’s leg right in front of us? We do not yet understand the implications there.  The ability to scar people is greater, and researchers will conduct studies to gauge how real those risks are.  I am not a proponent of blind censorship, but I’m afraid of what we don’t know.  That’s why we are not investing in potentially traumatizing VR.  We simply don’t know the real-life implications of experiencing terrifying content in VR.

Csathy:  In the panel I moderated, you used an example of how VR potentially could be used by terrorists like ISIS to create unimaginable impacts.  Are you aware of anyone yet – any group or company -- who has created VR content specifically designed to harm and cause pain?

Rothenberg:  Not yet, but they will come.

Csathy:  River seems to be mentioned in just about every VR investment conversation.  What is your investment strategy?

Rothenberg:  We invest in the intersection of where the world is going and where we want it to go We form proactive theses around next generation technology like VR, AR, and Artificial Intelligence, as well as invest actively in enterprise software and reactively in consumer.  Then we work with our network of hundreds of founders and startup CEOs to find and invest in the fastest-growing technology startups, most often as their first institutional investor, and help them get to the next stage with the right people for their company.

Csathy:  How would you describe the Immersive world as it is today, compared to where it will be?


Rothenberg:  I think VR in 2015 is like the Internet in 1994 or mobile in 2007.  It’s been in the preseason for decades but now it’s in the first inning.  There’s still so much exploration to be done!  So, although I don’t anticipate society’s immediate mass adoption of VR and AR technology, ultimately it is inevitable.

Scenes From MDM's Nordic Tech Showcase - 10 Hot Companies From That Cool Region

Yesterday, my company, Manatt Digital Media, hosted a Nordic tech showcase lunch in NYC for 10 top start-ups hand-picked by SLUSH (the major tech/digital media organization about which I have written several times).  Two "hot" tech companies/entrepreneurs from each very cool Nordic country -- Finland, Sweden, Norway, Denmark, and Iceland -- presented their stories to investors and others who may be able to accelerate their growth in the U.S. and globally.  Was an impressive group.  And an impressive event -- one which underscores the tremendous innovation flowing out that "under-the-radar" region (well, under-the-radar perhaps for those in the U.S.).  And one that underscores Manatt Digital Media's commitment to working with the most innovative companies and entrepreneurs in the Nordic region.

Here are some scenes from the event.  See you next at SLUSH in Helsinki, Finland in early November -- what I call a "must attend" tech event.

(Below, to the right, CEO/founder Katariina Rantanen of CosmEthics (from Finland) -- a tech company focused on the beauty space (and identifying toxins and other chemicals in products within it) presents.  Below Katariina, CEO/founder Didrik Steinsson of VR company Breakroom presents his case.  And, below Didrik, CEO/founder Jeanette Dhyre Kvisvik of social media-focused ad-tech company Faceforce presents.  All of these are companies to watch ... closely.)








MDM August Newsletter - The MUSIC Issue

Manatt Digital Media – August Newsletter: Music Edition

In this edition, we focus on the world of music, exploring the opportunities for artist-fan engagement, examining the conflicts between piracy and artist livelihood, and, for creators, providing guidance on navigating the use of music in your own work.

So You Want Music in Your Video: 5 Things to Remember so You Don't Get Sued

This article was originally published in Newsweek.
Last month we received a call from a woman who made an unassuming video of her daughter's wedding and added her favorite song as the musical bed. She was frightened, a little angry and perplexed by the copyright infringement letter she received from a major music publisher. Read more

Streaming Can EXPAND Artist Revenues—BandPage & Rhapsody Point the Way

Conventional wisdom is that subscription music streaming services like Spotify—which now drive more overall music revenues than direct downloads—drive significantly less revenues to artists themselves. That's true if streaming service revenues are considered in isolation. Read more

Media's Online-Offline Nexus: Connecting Virtual, Physical Worlds

This article was originally published in Wired Insights.
We always write and read about the virtual world of online media in Wired, but not so much about the physical world of live media experiences. But the virtual and physical worlds absolutely should be connected in this increasingly disconnected world in which we can all communicate with one another, but rarely really meaningfully communicate and feel that we are part of a real community. Read more

Restoring the Value of Art and Enforcing Creator Rights—Unapologetically

We live in a world where many share the belief that content is "free" and of fast-growing piracy of music and media. Yet, most of us don't know that. In fact, most believe that earlier rampant piracy has been significantly curtailed by new legitimate services and business models (like subscription streaming). But, it just ain't so. Cisco forecasts that file sharing in North America will grow a massive 51% from 2014-2019 and analyst firm NetNames, in a study commissioned by NBCUniversal, concludes that virtually all P2P file sharing violates copyright. And, leading consulting firm Bain & Company is reported to have concluded that recorded music sales would be 17 times higher in a piracy-free world. Read more

Digital Music Updates

About a month after launching Apple Music, Apple has announced that 11 million users have signed on for the three-month trial. While this number carries Apple a tenth of the way to its goal of 100 million subscribers, the true test will come after the trial period. Apple still has some time to win users over, but so do other players, who are continuing to up their game. Read more

Market's Media Melt-Down - Exhibit A

Media stocks drop again.  Shock and awe?  Really?  Some will brush it off as being a market over-reaction.  But, Viacom's shareholders apparently don't think so.  Its stock has plummeted more than any other major media company (about 45% in the past six months).  And, the company is amongst those that have moved most slowly to address the new transformative market forces of voracious OTT and mobile consumption.  After all, just look at any young person around you.  What do they have in their hands and where are they looking?  Down, that's where -- at that thing in the picture to the right.  So, big media, that's where you need to be.  And not timidly either.

But, are you?  Are you boldly going ... or going, boldly?  Make no mistake -- it's "go" time.  In fact, it has been "go" time -- as in, all-in "go time" -- for a long time.  That's why Disney's Maker move 18 months ago was both bold and smart (very smart) (as I discussed in my recent Variety article "It's OK to be Bullish on MCNs").  Disney recognized that it needed a jolt of new DNA and immediate mobile reach to thrive in media's new world order.   But many are still just waking up to that fact.  Many more continue to reject it.

Mobile is Exhibit A in this fundamental media transformation.  It's absolutely the first screen for millennials (and increasingly for non-millennials).  It's not the only ingredient -- after all, let's not forget that this is a MULTI-platform world that is hungry for the most powerful stories told by the most compelling story-tellers who know how to play in it -- but it is absolutely vital.

So, media companies, which ones of you are going shopping for the multi-platform ingredients you need?  

I'd grab a cart now while the shelves are still relatively well stocked and some gourmet brands exist ....

Why I'm Still Bullish On MCNs - My Guest Article in Variety

[My article below was first published in Variety yesterday -- this is an excerpt from that article -- click here to read it in its entirety.]

MCNs (or, more accurately MPNs these days) have been getting a bad rap this past week as a result of reports surfacing that Maker Studios' "earn-out" from its M&A mega-deal with Disney will be less than the maximum $450 million (and apparently closer to 1/2 that) -- which still gives Maker execs and investors a nice little $700+ million "win."  Not bad.

The "haters," however, are using this news as Exhibit A in their case slamming the value of MCNs/MPNs -- and slamming what they say are inappropriately lofty valuations to date for relevant acquisitions (which include Otter Media/Ellation's acquisition of Fullscreen for up to $300 million, RTL Entertainment's acquisition of StyleHaul which valued the company at up to $200 million, and ProSieben's recent acquisition of Collective Digital Studio which valued the overall package at about $240 million).

But, as a person closely immersed in the overall video ecosystem who has access to numerous "insiders," I strongly disagree.  Believe they are completely missing the fundamental point (and justification for those deals).  And remain bullish.  Very.

[Click here to read my entire article/analysis in Variety ....]

"Straight Outta" N.W.A. - Launched My Career, Led to My Wife (and It's All True ...)

Straight Outta Compton is killing it at the box office.  And that is gratifying on many levels, including the personal.

You see, I started my career in media and entertainment 25+ years ago -- and N.W.A. was my most significant client as a young entertainment lawyer (and before I entered the studio life and business world).  Among other things, I defended the group in a major 1st Amendment battle -- which we won.  Obviously, N.W.A. pushed all boundaries -- especially with its lyrics.  But, that didn't mean those lyrics should be banned -- and that was the end proper conclusion by the courts.  After all, rock and roll has a long history of artists accused of inciting violence (a topic I wrote about in a 1992 article titled, "Takin' the Rap - Should Artists Be Held Accountable for Their Violent Recorded Speech?"  -- that I was able to dig up in a bit of online archeology; kind of my own personal blast from the past).

In a strange twist of fate (aren't they all, looking back?), N.W.A. also led me to my wife of nearly 20 years, Luisa.  N.W.A.'s manager, Jerry Heller (a prominent and highly controversial figure in the new movie) just happened to ask me to have dinner and drinks with him on a Tuesday night I'll never forget (February 23, 1993) at the Mezzaluna Cafe in Beverly Hills to discuss the case -- and I just happened to accept (a rare thing on a work night) -- and Luisa just happened to be working at Mezzaluna that night while going to USC -- and I just happened to build up the right amount of courage to introduce myself and invite her to a lunch with me later that week -- and she just happened to accept (somewhat grudgingly, I might add) -- and we just happened to go to dinner instead of lunch that weekend -- and, as they say, the rest is history and we have been together ever since.

Obviously, this post is personal.  And, our kids still don't "get" why N.W.A. is near and dear to us at a personal level.

But, at least Hollywood got it right by featuring a compelling story of key creative forces in the music world (Dre, Cube whose influence lasts today) and the overall crazy "times" in LA that birthed N.W.A. in the first place.  Hard to see now, but those crazy times -- in the LA world of consecutive cataclysmic events such as Rodney King, the major Earthquake, the massive Malibu fires, O.J. -- led many to question the long-term viability of the City of Angels.  Wasn't a particularly angelic time back then.

But, the times were extremely special to me in many personal ways ....

SLUSH's New York State of Mind - Major Nordic Start-up Showcase Next Week

SLUSH -- a tech and increasingly digital media mega-conference that takes place each November in Helsinki, Finland -- has fast become one of the premiere events in Europe ... and increasingly important for investors and entrepreneurs in the U.S.  I attended my first SLUSH last November (here is my overview and review of the event) -- have come to know some of its top execs -- moderated a VR panel in June at a SLUSH LA event -- and will, of course, attend Helsinki again this coming November (at which time I will moderate a top panel about the state of the digital video/OTT/MCN business that features some of the top players in the MCN/OTT world, including Allen DeBevoise, Urs Cete of BDMI, Tom Sauer of AT&T (joint venture partner in Ellation with The Chernin Group), and Christian Meinberger of Studio71(which just recently merged with Collective Digital Studio)).

The SLUSH team is both ambitious and smart.  Very smart.  I mentioned their June LA-based VR event above.  Now, SLUSH hits the other coast and focuses on NYC -- hosting an exclusive event next Tuesday in NYC at which it will showcase 10 top Nordic startups (and the entrepreneurs behind them) (here is the list of those companies to watch).

Manatt Digital Media will proudly, once again, underscore its commitment to the vibrant tech/digital media startup community in Northern Europe -- and to SLUSH itself -- by sponsoring a related lunch next Monday with those top companies and investors who may (and should) be interested in investing in them.

Full list of the "Top 10" selected by the SLUSH team for their spotlight moment is below:

FaceForce -- Finland
CosmEthics -- Finland
Toborrow -- Sweden
Soundtrap -- Sweden
SOBAZAAR -- Norway
AIMS Innovation -- Norway
Breakroom -- Iceland
Tagplay -- Iceland
Vaavud -- Denmark
EasySize -- Denmark