Last monday, me and my class in technology-based entrepreneurship at KTH were given a demo of a new virtual reality music app called Orb. In short, Orb is an app that uses VR-technology to enhance users music listening experiences. The user can navigate through a virtual reality universe where each album in your music collection is its own orb which you can access music-videos, lyrics and visualisations in a 3D-landscape. Its aim is to reinvent the way we enjoy music and promote active listening; a slight nod to how music was enjoyed back when the majority of people actually bought albums and browsed through lyrics and artwork accompanied with the album.

While I was impressed with technology, the way forward was a bit vague and raised a few questions. Bill Schacht, the founder wants to launch this summer and, as far I understood it, will release it is a standalone app in which you can purchase music along with visualizations, music videos and other content. In other words, it is almost like iTunes but with a VR-interface. As I see it, the only thing that really separates Orb from other internet based music services is its interface. While this interface may be the first of its kind, it probably will not be for very long. The market for VR-hardware is estimated to grow with a 99% compound annual growth rate between 2015 and 2020, making the estimated market value 2.6 billion USD at the end of 2020. To me it is absolutely unthinkable that Orb will be alone in providing a VR-interface to music listening within the next few years. Their website states that they have a patent pending, but it will likely not prevent other similar interfaces from emerging from more well established streaming music services such as Apple Music, Spotify and Tidal. When this happens, why would anyone choose to use Orb instead of a service that has a greater catalogue of music and all your personal playlists? And on top of it all, why would anyone buy albums on Orb if they hypothetically stream the albums and have a similar interface?

As far as I see it, Orb must form partnerships with at least one of the big players in the music streaming business in order to be relevant in the future. The question is how Orb should go about doing this. What is the incentive for established streaming services to partner with Orb rather than developing their own interface?

I see two incentives for partnering with Orb.  One could be that the technology is hard to replicate and therefore an established streaming service chooses to partner up with Orb in order to avoid development costs and winning time in being the first to provide a VR-interface to its users. I lack the knowledge in virtual reality programming to tell whether or not it is hard to build a similar interface, but given the enormous budgets that Spotify, Apple Music and Tidal has, development costs is not likely to be the main issue.

The second incentive involves a scenario where Orb is able to generate a great amount of user-based content. If early adopters are able to create content; visualisations, artwork etc. exclusively for Orb it would add value to the service that is hard to replicate. However, finding people that are skilled 3D-programmers that are eager to create visualisations and willing to pay around 12 dollars per album in order see their animations play in Orb may be hard.

Both of the above mentioned incentives involve Orb using its first mover advantage in order to create value in its app before any other service has done so. If they succeed in doing so, the Orb technology may be bought by one of the major streaming services. If not, the major streaming companies will probably use their advantage in development resources to replicate and improve the interface and that would probably be the end for Orb.

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