Meta Scours Hollywood for Exclusive Content on New VR Headset

Meta Platforms (META) is scouring Hollywood’s entertainment giants to create exclusive content for its new premium VR (Virtual Reality) headset, known internally as “Loma,” which is slated for launch next year. The news was first reported by The Wall Street Journal, which noted that Meta is in talks with Walt Disney (DIS), A24, and several smaller production houses.

Meta hopes that exclusive content will attract customers to its new headset. The company is reportedly willing to offer millions of dollars to produce both episodic and stand-alone immersive videos to promote Loma. Meta’s VR headsets compete with rival Apple’s (AAPL) Vision Pro, which has struggled to generate significant enthusiasm.

Loma Vows to Be Better Than its Predecessor

The new Loma headset is expected to provide higher-fidelity video experience compared to its predecessor, the Meta Quest. However, it will also cost more, with the initial price expected to be close to $1,000, much higher than the Quest’s $300 price tag. Even so, it will still be cheaper than rival Apple’s Vision Pro, which is priced at $3,500.

Meta’s discussions with entertainment companies include creating exclusive content as well as licensing existing shows and movies to be streamed on Loma. Additionally, the content initially available for streaming only on Loma could later be sold to other platforms after a pre-specified period. This serves as an added incentive for entertainment companies to generate more revenue from selling 2-D content by reaching to a wider audience.

Meta has invested billions of dollars into its Reality Labs division, which designs and manufactures its virtual reality and augmented reality devices. The segment continues to operate at a loss, but CEO Mark Zuckerberg has full confidence in its future potential. Notably, Meta’s Quest is one of the best-selling headsets in the space, and its artificial intelligence (AI) powered Ray-Ban smart glasses have also sold millions to date.

Is Meta a Long-Term Buy?

Analysts remain highly optimistic about the future of the parent company of WhatsApp and Instagram. On TipRanks, META stock has a Strong Buy consensus rating based on 41 Buys, three Holds, and one Sell rating. Also, the average Meta Platforms price target of $697.55 implies 1.4% upside potential from current levels. Year-to-date, META stock has gained 17.6%.

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