By the yearend, Altair Digital will launch a Virtual Encyclopedia franchise in the US. In case it is successful, its corporate revenue will quadruple. Earlier, Konstantin Urvantsev, Altair founder, built a network of mobile planetariums in Russia. Invest Foresight asked him about the details of the corporate expansion.
Virtual encyclopedia
The Virtual Encyclopedia project was initiated in 2017 by Altair Digital, a company from Novosibirsk. A 95% stake in the company is held by Konstantin Urvantsev while a 5% share is held by the Internet Initiatives Development Fund. Last year, the company kept growing, its staff increased from four to twenty people and its revenue reached RUR 12.4 mio ($205K) of which the major share were incomes from franchises sales.
Altair Digital shows school children scientific and educational astronomy films with virtual reality (VR) effects. The audience receives VR glasses and an operator uses a computer to start the film. Thus pupils find themselves in a virtual reality of a small copy of a planetarium.
“In Russia, there are just 15 static planetariums, and many kids are unable to visit them. So we make a planetarium come to them with the virtual reality glasses”, Alexei Irkov, CTO at Altair VR says.
The sound comes from speakers so children can hear each other’s emotions while watching a film. That creates some communion, just like in a cinema. In its library, Altair Digital has 35 films purchased from foreign studios Aayushi Fulldome Films, ESO, IlusaMedia, etc.
Virtual Encyclopedia operates on a VR platform, Gear VR. Virtual reality Samsung glasses are rather expensive (RUR 40K or $670), so by next summer Altair intends to buy some new VR glasses, Oculus GO, which are priced at $200 per piece.
Virtual Encyclopedia is distributed as a franchise. The company sells its software which allows the audience to watch movies as well. The lump sum equals RUR 500K ($8.4K) for the cities with multimillion population. The royalty is RUR8 per each sold ticket. The minimum ticket price is RUR150. If a franchisee has 30 VR glasses, the investments may be repaid in 3 to 6 months. Some schools ask portable planetarium to visit them on a monthly basis, others are ready to be visited three or four times a year. Within days, the first Virtual Encyclopedia franchise will start operating in Almaty, Kazakhstan.
In less than a year the Virtual Encyclopedia has been sold to 21 Russian cities (Moscow, Nizhny Novgorod, Ufa, Stavropol, Komsomolsk-on-Amur, Irkutsk, Chelyabinsk, Orenburg, etc.) which is quite a lot. The matter is, prior to releasing its encyclopedia, the company developed a large portable planetariums network in Russia for demonstration of astronomy films. Those planetariums have been visited by over 500,000 children. A planetarium which the company manufactures and sells consists of an inflatable spherical dome where inner surface serves as the screen for the special fulldome video-stream projection. The planetariums were mainly used at schools. Urvantsev started offering his planetariums in his native city of Barnaul, then in the nearby areas, and finally all over Russia. But his business failed to compete with pirated products. Altair Digital was then established to place planetariums in a virtual reality. Altair Digital made agreements with film-makers and became an exclusive distributor of their products. That is how the Virtual Encyclopedia came to existence.
A virtual planetarium is of interest to many people, not just pupils. So Altair Digital released a mobile application, Amazing Cinema. With that application, any user who has VR glasses, can visit a planetarium without leaving his or her home. By now, the application has been downloaded by 350,000 English speaking users. In August 2017 the application was the top product in the global Oculus Gear VR Store. For Altair Digital, that was the second product.
Expanding into US
By the end of the year, Altair intends to launch its Encyclopedia in the USA. It has found a partner there, Global Franchise Exchange (GFE), to handle the Virtual Encyclopedia franchise distribution. GFE will assist Altair with drafting respective documents and organizing a marketing campaign since the Russian company would find it difficult to arrange everything in the US all by itself. The mechanism of the franchise distribution will be very much like in Russia. In every state there will be a master franchisee which will sell the franchise to several partners. The Virtual Encyclopedia will be tested in Las Vegas and New York. In Las Vegas, the encyclopedia will be distributed among schools by Big&Digital studio, for which Altair is one of its films distributors. In New York Altair will have an adviser, Wendy Diamond, the founder of Women’s Entrepreneurship Day Organization. In the US, the price if a franchise will be higher than in Russia. A master franchise may cost $100K to $200K (lump sum), whereas ultimate franchisees will pay $10K. If the project is successful, Altair’s proceeds will quadruple.
“We are very well received in the US. People here understand perfectly well the importance of education and interest kids have in a useful content. In order to compete with games and at times most strange Youtube videos for the attention of a youngster, education must produce a wow-effect and be involving”, Konstantin Urvantsev wrote at his Facebook page.
In the USA the members of Altair team have been invited to take part in a reality show on SharkChain TV, that will happen in late April.
VR platform for world cognition
A virtual planetarium alone is not sufficient since both teachers and school children are interested in an interactive learning of other natural sciences as well. An interactive option will enable a pupil to make a choice of what he or she personally wants and not just watch a single ready-made program. Besides, Oculus web store takes 40% of all Amazing Cinema application sales and often delays the payments due. Altair therefore started thinking about launching its own VR platform for world discovery, or a VR construction kit which allows constructing any sorts of an interactive communication. VR can help walking on the surface of Mars and then building a virtual colony there, or see molecular compositions and assemble a new substance of such molecules, or travelling throughout entire human body, etc. Such a platform will be available to anyone who has VR glasses. The application sale charge for the content providers will not exceed 10% since the platform will be based on a blockchain technology.
“There is a great deal of the learning content available. We will not be able to cope with it all by ourselves. We therefore build a platform open for external developers. We also look for investors”, Alexei Irkov says.
Softmachine will be one of such designers. If the platform is capable to raise $40 mio, school programs will start to integrate VR experiments.
Altair VR is not the first company which released a blockchain based VR construction kit. Decentraland project, for instance, is a virtual world model where everyone who has tokens becomes an owner of a digital land where any VR experiments can be made. The project raised $26 mio in a single hour. There are other such projects as well.
Meanwhile, VR content sales have tripled over the past year and, according to SuperData Research, can reach $40 bln by 2020.
By Natalia Kuznetsova