Shedding over 10,000 jobs and seeing his company lose 25% of its value is no mean feat for a CEO who regards himself as a visionary. Its stock is down more than 70% so far this year since rebranding Facebook to Meta, and Zuckerberg’s own net worth has collapsed by more than $81 billion, down 68%.
Meta will lose more than $10 billion this year alone on its VR Reality Labs and it plans to double down and invest even more in the concept in 2023. So, what makes the investment worth the risk? Why is Zuckerberg chancing it all when financiers and stock markets deride his passion for the Metaverse? The answer… It’s all about the data and owning it outright. The Metaverse is his playground and will shift Meta’s data sets from the behavioural to the transactional.
What is the problem?
Meta faces two overwhelming challenges within its current policy intent. Younger users are turning their backs on, or not even signing up to Instagram or Facebook. The platforms are jaded and offer little in the instant gratification experienced on TikTok. Advertisers recognise that with Gen Zer’s, there is decades of loyalty to be mined, which means that Facebook is becoming less valuable.
That buys into the second challenge which blindsided Meta. People increasingly access Facebook through mobile apps and Apple changed the game when they made it harder to track users. That makes Facebook much less valuable to advertisers, which can no longer target their ads so precisely. This has already cost Facebook more than $10 billion which is precisely the amount they have also funnelled into VR.
One of the leading VR headset manufacturers, the company is a lot less vulnerable than others to a hardware company making software changes that undermines Meta’s business model. The expense however of the Meta Quest Pro currently sitting at around $2,500 may prove a challenge for the everyday user to overcome, but Meta has no option to pin the lot on the end game.
Long Term Investment
People forget that Facebook and Amazon took years to turn a profit and conceptually the Metaverse or other platforms are the future that everyone has been dreaming of. Augmented reality in particular is a place where many businesses are already focussing their efforts and a space that does not need a Metaverse or any other type of universe to operate in.
According to the 2021-2022 Consumer Tech Preferences survey by GroupM, nearly one in three respondents said they own an AR or VR device, and 15% plan to buy one in the next 12 months. Customers were also extremely open to advertising-enabled content.
73% of people were happy to see regular ads if it lowers the cost of access to content. This leads to a binary conclusion. As larger audiences consume content in VR and AR, their exposure to ad consumption increases, thereby giving very real opportunities for brands. With VR becoming the fastest growing content type with a compound annual growth of 30%, you can see why companies are crawling over each other to get involved.
How do you engage early adopters?
The younger market is the key economic driver in this fight for the future. The worlds they live in are games and music, the latter being the transformational environment that Aussie Sounds Live inhabits. Vertically integrated advertising models that scale revenue to business partners and musicians alike, the uptick on earnings will be on levels never previously experienced. With immersive and exclusive access to content that will drive many a fan to a state of delirium, this is the frontier in which artists are clamouring to be a part of.
Interactive advertisements will allow customers to engage with different products or offerings to create a higher conversion rate. They will reduce the barriers businesses face in persuading prospective customers to use their product or service, and this is undoubtedly the next generation of integrated revenue raising.
According to Mobile Marketer, over 50% of Internet users say they never click on banner ads, finding them disruptive and intrusive. Using AR for advertising enables marketers who want to create more engaging ads and build an emotional connection. This emerging technology has been used by companies as diverse as Sephora, M&M’s, Burberry, Gucci, Nike, Toyota, and Jack Daniels.
Aussie Sounds Live Understands the Synergy
Here at Aussie Sounds Live we understand that using the medium of music to generate and sustain that connection is vital to engaging that younger market. AR technology is becoming a part of everyday life for younger audiences. Their interaction with the technology is unquestionably going to increase in the coming years. If brands want to reach younger audiences, they need to integrate AR/VR into their marketing strategy today and not wait for their competitors to seize the day.
That day has arrived for musicians who have failed to get market value for their content as their profits are whittled away by the conditions of servitude imposed on them by the corporate giants. Promoting an earnings model that leaves more money in performers’ pockets than ever before, this is the revenue environment that artists can return to before Napster reared its ugly head and the love of music was replaced by tech platforms intent on replacing passion with algorithms.
So Is Zuckerberg Right?
Despite all its challenges with being brought before international regulators, the metaverse is probably the only play he can make. With all the headwinds that his business model is facing, his ambition may never be realised before the well runs dry of cash. But we all know that AR and VR are not going away, so in the long term, someone is going to eventually own this space, if not Apple or Sony, then who else?
Investors certainly have issues with his business plan and maybe an end-to-end solution will not speak to the billions of potential customers ready to take up the charge. One thing is certain though, the experience is here to stay and with Australian Sounds Live leading the way, music will change forever.
Looking for a virtual concert streaming company in Australia? Look no further than Australian Sounds! We offer a wide range of services to help you get the most out of your live music experience, including streaming concerts and events, so you can enjoy the music from the comfort of your own home.
Heath is the founder of Australian Sounds Live and is a dynamic and innovative business strategist with the talent, experience and drive to recognise good ideas across a range of industries and rapidly transform these into market-busting offerings. Combined with a deep understanding of what it takes for a digital-age business to thrive, and a rare ability to energise the teams propelling those businesses into the future, Heath’s passion for creating and developing new ventures unlocks potential and yields high returns.