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Disney's big start-up bet that could revolutionize film

Jaunt co-founder Arthur van Hoff
Source: Jaunt
Jaunt co-founder Arthur van Hoff

Quietly and without much fanfare, Hollywood is busy working on its next act: virtual reality cinema for the masses. Sound like a fad? Perhaps, but already big companies are betting on its future through companies like Jaunt, a start-up with $101 million in venture backing and a burgeoning collection of hardware, software and apps to produce cinema-quality content in a 360-degree virtual reality format.

Over the last few months the Palo Alto company, launched in May 2013, has been quickly remaking itself into a media company for the virtual reality industry that Google, Facebook, Sony and others are betting will be the next great entertainment play. Much like a Hollywood studio, its game plan is to create a library of VR content that it can distribute to consumers who will strap on goggles and watch short-form TV-like shows on handheld devices or video game consoles.

"We're a four year-old company in a two year-old industry," says George Kliavkoff, the former NBC Universal and Hearst Corporation veteran that Jaunt tapped in September as its president and chief executive.

At NBC, Kliavkoff helped launch the video-streaming service Hulu, which is owned by NBC, Fox, Disney and Time Warner. At Jaunt he says his mission will be to build a network of distribution partners. Those partners will include brands for which Jaunt will produce tailored content, and media companies like Disney and Sony, for which they will produce entertainment, sports and other programming for mass consumption. Disney was among the investors in the company's $66 million Series C round in 2015.

Partnering with filmmakers

Jaunt already has more than 200 pieces of contact in its library, including sports and concert programming, including one it made with former Beatle Paul McCartney. Other films include a 360-degree look at "The Lion King" on Broadway and the bullet-sprayed "Escape of the Living Dead" action film.

On Jan. 19, however, Jaunt took a big step forward in its media ambitions when it unveiled a lineup of five new series at the Sundance Film Festival that included those it will produce following deals with Hollywood talent agencies like William Morris and Creative Artists Agency, which also is an investor through its Evolution Media Capital venture.

The new programs, to be produced from Jaunt's new studio in Santa Monica, California, include a series based on the 1992 cult horror movie "The Lawnmower Man," a six-part stoner comedy series "Bad Trip" and "The Enlightened One," a political science-fiction series written by "X-Men" actor Tye Sheridan. The shows, available on the Jaunt VR App, can be seen by consumers using headsets on Apple's iOS devices, Android devices, Playstation VR, desktop computer browsers and other devices.

"The idea is to drive commercialization and bring VR to the mass market by partnering with really polished filmmakers," says Tom Vance, Jaunt's head of content who oversees a team of producers to create scripted travel documentaries and other programming. Among those making programs for Jaunt are "Divergent" film director Robert Schwentke, TV director Todd Strauss-Schulson and author Daniel H. Wilson, who wrote the best-selling science-fiction novel "Robopocalypse."

In October the company released "Invisible," a supernatural series directed by "Bourne Identity" director Doug Liman. "It's important to tell stories for a broad audience if we're going to grow into a VR media company."

"The idea is to drive commercialization and bring VR to the mass market by partnering with really polished filmmakers." -Tom Vance, Jaunt's head of content

When Jaunt was first created, its founders Jens Christensen and Arthur Van Hoff intended to create a Netflix-like service, luring subscribers for a virtual reality service, recalls Van Hoff, who remains its chief technology officer. Christensen left last year, and the focus has changed, says Van Hoff.

Instead, says Van Hoff, the company intends to feed content to the growing numbers of mobile devices that can be outfitted with headsets such as Samsung's Gear VR or Google Cardboard, for headset-wearing patrons of console devices such as Sony's Playstation and others.

Jaunt's collection of partners allows it to focus on the major distributors who are also plotting to grab folks interested in virtual reality. After showcasing its technology last fall for Disney's Demo Day, it signed with Disney to create VR films for all of Disney's units, including its theme park and ESPN sports empire. "Invisible" was backed by Samsung, which initially had exclusively rights to show it on its Samsung Gear VR headset.

A nascent market 

The company is hardly alone in the fast-growing virtual reality marketplace, however. In December, the Fox film studio signed with Montreal-based Felix and Paul Studio to create VR films and shows based on Fox's movies and its other characters.

Founded by digital filmmakers Felix Lajeunesse and Paul Raphael, the studio was among the first to jump into the VR game and is best known for the virtual reality content it created based on the 2015 blockbuster "Jurassic World" and the Reese Witherspoon drama "Wild." Last year Felix and Paul Studio raised $6.8 million to increase its production, much of it from Comcast, whose assets include the Universal film studio.

Comcast is also the parent company of CNBC.

The Virtual Reality Company, created by Hollywood players such as "Maleficent" director Robert Stromberg and producer Gary Primus, is moving into the Chinese market, where local cafés and kiosks are popping up to offer virtual reality entertainment. Last year it raised nearly $23 million from Hengxin Mobile Business, a Beijing-based mobile services and technology provider. Hengxin will also help distribute The Virtual Reality Co.'s content in the fast-growing Chinese market.

Stromberg last year directed a 20-minute VR version of the Matt Damon film "The Martian," which was produced with the Fox film studio.

— By Ronald Grover, special to CNBC.com