Meta acquires optics startup to build better VR headsets

Welcome to Lowpass, a newsletter about the future of entertainment and the next big hardware platforms, including smart TVs, ambient computing and AR / VR. This week’s issue is about a previously unreported Meta VR acquisition, and PBS embracing FAST streaming channels.

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Meta has acquired optics startup Gary Sharp Innovations

Meta has bought a small Colorado-based optics R&D startup, which could help the company build better VR headsets as well as AR glasses: Meta entered a share purchase agreement with Gary Sharp Innovations in June, according to documents filed with the U.S. Patent and Trademark Office.

A Meta spokesperson confirmed the acquisition when contacted for this story, writing: “Gary Sharp Innovations is helping us develop better viewing optics for our AR and VR devices.”

As part of the acquisition, Meta also got its hands on multiple patents and patent applications, including some that describe ways to improve the optics of VR headsets. In addition to IP, Meta also brought on at least some of the startup’s staff. One employee revealed in a LinkedIn post last month that he is now working as a virtual reality optical engineering technician at Meta; his LinkedIn profile indicates that his job actually started in June.

It’s unclear how much Meta spent on Gary Sharp Innovations. The company shelled out a total of $301 million to purchase companies for its Reality Labs organization in Q2 of 2022; it announced the acquisition of Downpour Interactive, the studio behind the VR game Onward, in April, followed by the acquisition of BigBox VR, the maker of Population: One, in June.

Gary Sharp Innovations is a far less flashy acquisition, but it could help Meta fine-tune the optics of its VR headsets, and lay the groundwork for future AR glasses.

• Gary Sharp Innovations was founded by veterans of RealD, the pioneering 3D cinema company. The startup's co-founder Gary Sharp served as RealD’s CTO, and Gary Sharp Innovations Principal Engineer Dave Coleman was RealD’s chief scientist.

• Since its launch in 2017, Gary Sharp Innovations has been working on a variety of optical filters for applications ranging from photography to AR and VR glasses.

• Among the company’s more notable patent filings is one for a pancake lens for VR headsets designed to minimize stray light.

• From the patent application: “Unfortunately, light reflected between the various optical elements within the HMD may generate parasitic light in the process. This may lead to reduced contrast in the content being presented to the user. In particular, systems with polarizing elements may introduce parasitic light and/or ghost images that may reduce image quality and, thus, the user's overall experience.”

• In a nutshell and extremely simplified, Gary Sharp’s team solved this problem by adding extra layers meant to block such reflections.

Meta recently transitioned to pancake lenses for the Quest Pro, and some have speculated that the company may use these types of lenses for its upcoming Quest 3 consumer headset as well.

• Meta isn’t the first company to use pancake lenses in VR headsets. Pico and HTC also rely on these kinds of lenses for some of their products, including the recently-announced Vive XR Elite headset.

• VR headset makers like pancake lenses because they allow for higher-resolution optics with a shorter optical path, meaning that the headset itself doesn’t have to be as big.

• Instead of relying on off-the-shelf lenses, Meta developed its own optical stack for the Quest Pro.

• “Meta Quest Pro’s pancake optics use a unique design of three polarization-film stacks — one on the display and one on each of the two lens elements — to minimize ghost images, especially from the mid-periphery to the edge of the FOV,” the company recently detailed in a blog post.

• This does sound a bit like the approach Gary Sharp Innovations has been taking, but it’s unclear whether the startup contributed to the development of the Quest Pro optics before Meta acquired it.

Developing custom optics will be even more important for AR. We’ll likely see a flood of smart and AR glasses using off-the-shelf components in the coming years. If Meta wants to stand out from the crowd, it needs to build best-in-class optics, and recent acquisitions indicate that the company wants to do just that: In addition to buying Gary Sharp Innovations, Meta also recently purchased Dutch eyewear company Luxexcel, which has been working on 3D-printed lenses for smart glasses.

Here’s a number: 12%

That’s the conversion rate PBS is seeing for people who hit its donation page on Amazon Fire TVs, according to PBS Chief Digital and Marketing Officer Ira Rubenstein. “Anyone who has done any kind of donations (knows) that’s crazy high,” Rubenstein said during a CES panel last week.

• PBS began streaming free, ad-supported streaming channels (FAST channels) on a number of different platforms, including those operated by Amazon and Samsung, in recent months. The non-profit struck a deal with LocalNow to stream local linear feeds in December.

• Some PBS FAST channels have been monetized with ads, while others, including those dedicated to kids programming, are completely ad-free.

• I’ve written about this issue before: Producers of films and shows that air on PBS used to rely on DVD sales to fund some of their work, and local affiliates rely on donations for the majority of their budgets. If PBS were to just stream everything for free, those vital partners would be left empty-handed.

• To make up for this, PBS partnered with Amazon for a donation system that funnels money directly to local affiliates. What’s more, donating is even easier than during the typical pledge drive, as Amazon already has a viewer’s billing information.

• PBS is now looking to launch similar donation mechanisms with other FAST channel partners.

“I’m really optimistic (about) the future for public media as we talk to our partners at Samsung and others about how to integrate that kind of donation mechanism,” Rubenstein said.

What else

Apple’s top services exec is leaving. Peter Stern is leaving the company at the end of January as Apple is restructuring its services division.

YouTube creators can cash in on shorts starting next month. Creators have to have 10 million YouTube Shorts views over 90 days to be eligible.

Roblox is looking to launch a Quest app this year. The popular metaverse platform could make its VR debut after Meta introduces the Quest 3 in Q4.

Sports video subscriptions could be worth $22.6 billion by 2027. Sports generated $13.1 billion for video subscription services in 2022, according to a new Parks Associates report.

Meta’s Quest 1 is on the way out. The pioneering standalone VR headset isn’t getting any new features, and will only receive security updates until the end of this year.

Netflix starts streaming the SAG Awards. The Screen Actors Guild Awards will stream on Netflix’s YouTube channel this year, and debut on the service in 2024 — which also means that Netflix expects live streaming to work properly a year from now.

What CES taught us about this year’s TVs. Great summary from The Verge’s Chris Welch.

That’s it

Congratulations, you’ve made it to the end of this newsletter, and, let’s face it, another pretty weird week. I’m writing these lines in Oakland, California, where we’ve had torrential rain and boba-sized hail this week.

Oh, I almost forgot to introduce myself. I’m Janko Roettgers, formerly with Protocol, now looking for new opportunities, and experimenting with this whole doing-my-own-newsletter thing. I’m still trying to figure out where exactly I plan to take Lowpass, but I’ve been having a lot of fun writing the first two issues (issue number one is here, in case you missed it). Please let me know what you think by replying to this email, and feel free to forward it to anyone who might enjoy it as well. Thanks, and stay dry!