YouTube's business chief betting on virtual reality to boost platform

LAS VEGAS -- Robert Kyncl, YouTube's chief business officer, said virtual reality will be one of the few key drivers for Google's (NASDAQ: GOOG) video strategy in the coming year. "I don't think digital video will grow linearly, I think it will grow exponentially," Kyncl said.

Kyncl said YouTube is making a major investment in supporting high-quality virtual reality content. Specifically, he pointed to the company's Google Cardboard virtual reality headset (made from cardboard with a place to hold a smartphone) as well as the Google Jump camera rig that consists of 16 camera modules in a circular array designed to capture virtual reality content. He also is working to bring virtual reality support to the company's YouTube iOS app; the company already offers virtual reality support for YouTube on Android.

Importantly, Kyncl urged YouTube video creators to invest in uploading virtual reality content to the platform.

"At every step of the way we're leading this effort," Kyncl boasted during his keynote presentation here at the CES event.

During his keynote, Kyncl discussed the topic of virtual reality with Nick Woodman, the CEO of GoPro, and Chris Milk, the CEO of virtual reality content creation company Vrse.

"It's what's next," Woodman said of virtual reality. Indeed, GoPro offers its own 16-camera virtual reality rig called the Odyssey. "It's not a question of 'if,' it's a question of 'when' this becomes adopted by consumers on a regular basis."

Milk agreed. Milk's Vrse worked with the New York Times to create a series of web videos viewable in virtual reality. "It's a completely new medium," he said. "It really has its own language of storytelling that we're really discovering now. … This is a technology that can really take anyone in the world and make them local to you."

However, both Milk and Woodman pointed to the relative dearth of virtual reality content as a potential hindrance to the market.

"It's something that's experiential," Milk said. "The thing that is missing is content."

Of course, Google isn't the only company beating the virtual reality drum. Here at the CES event, companies ranging from Intel to drone maker Parrot showed off virtual reality setups with the expectation that the technology will reach the mainstream. And Google may face significant challenges on the virtual reality front due to Facebook's notable investment in the space; the company acquired virtual reality company Oculus in 2014 for $2 billion.

Aside from virtual reality, YouTube's Kyncl also discussed his company's efforts in the music business, explaining that YouTube has paid a total of $3 billion to musicians for viewership of their music and videos on the platform. He also said that mobile users are accessing YouTube in growing numbers. "The mobile phone is successfully changing the way we consume video," he said, noting mobile users are watching 40 minutes of video on their phones per day, up 50 percent from last year.

However, Kyncl had surprisingly little to say about YouTube Red, the company's new $10-per-month streaming video subscription service -- which features ad-free access to YouTube as well as some movies and TV shows -- other than to say YouTube plans to invest in acquiring more original content.

"Digital video is exploding," Kyncl said. "It has overtaken social media as the top online activity."

Related articles:
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YouTube hunts for streaming rights from Hollywood studios
YouTube adds virtual reality uploads, Cardboard support to its video portfolio

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