Virtual reality is a new absolute way of Simulation and raising Era of analog entertainment and there must be no surprise that VR appeared to be the beloved toy of video-game makers and Hollywood studios. Not so long time ago it was highly evaluated by advertising agencies. And straightway after them on the scene appeared production companies.

Virtual reality is still in its early days and the practical applications of it attracts a lot of attention of brands, in what exactly prod companies have a strong expertise. These pressure makes agencies feel fear of being abandoned and enrich their in-house VR capabilities.


Ad Agencies and Production Companies, where is the difference?

For some reasons the line between Advertising Agencies and Production companies seems to be  blurry, firstly, of course, it’s about non-stoping expanding of the content which must be produced. But in fact both of these entities are aimed on revenue.

The main difference is that production companies collaborate with clients directly which means they complete this conceptual work which agencies used to do. In fact production companies are vendors who service the agencies coming as an agent for commercial directors and a pocket-size movie studio. Physical production of the content – it is what prod co is responsible for.

For example if agency’s creatives write a script, then agency employs production company directors to film it.

Now it can seem that production companies do the biggest part of all product. Yes and No. Even if prod co does a weighty part of it agencies have a valuable and significant input. It’s still agencies who sell the execution to the client. They look for target audience and do everything to reach it, found out where the potential client is and what media he consumes. And only after it’s sold the agency hires the production company to create the content.

However, according to Jonatan Shipman, head of integrated production for Framestore, brands started to reach out to production companies and work with them without a middleman.

How VR Impacts Video Storytelling

How VR Impacts Video Storytelling

To keep abreast of VR space Saatchi & Saatchi’s Team One even created a VR Lab to train its in-house experts. Virtual reality today can be considered as a media storytelling, it provides users with unexampled immersion into the environment with HMD and headphones. And there is no doubts  it will keep gaining popularity. For example, a short VR video for Oreo created by 360i – Digital marketing agency – immediately got 5 million views in one day.

Boo Wong, executive producer at VFX says that there is a difference in skill sets which offer agencies and prod companies. She admitted that the best part of VR projects still comes from agencies.

“Our expertise lies in solving complex creative and technical problems for our partners. But at the same time, we don’t have a lot of things that agencies can bring to the table, like media planning and account management,” – says Ms Wong.

Agencies are good for beginners while production companies have lot’s of creative problems which must be solved rapidly.


Is it all about the money?

Virtual Reality Market Statistics

Virtual Reality Market Statistics

Passing by agencies and going straight to production companies  usually happens because of the budget. Strategic plans and overseeing VR production cost money and see brands do not want to pay for it or just can’t afford these service fees that’s why they start to collaborate with prod companies directly. Nevertheless, Brian Edelman, CEO at Rain, believes that united existence of these tools is just a matter of time and in future agencies and prod companies will work on VR the same way they manage the web.

They say that a huge boom awaits VR, which amazing installations let users to climb the Wall in «Game of Thrones» or travel through Brazil’s Maracena Stadium. And the possibilities are endless. Any smartphone can be turned into a basic VR headset which can playback content from YouTube.   There is a wide variety of VR platforms such as Oculus, HTC Vive, Samsung GearVR and Google Cardboard, which is considered to be the most available way to experience VR.

According to Jupiter Research, VR headset shipments are going to reach 30 million all over the world by 2020, which is ten times more than in 2016. Director of creative technology for agency Erwin Fenland, Curtis Rose describes the relationships between prod co and agency as “co-opetition”, which means that broaden brand’s needs will reinforce its cooperation. Agencies will continue to evolve their role and enrich their resources and expertise meanwhile production companies will continue to depend on the creative idea.

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