Commentary

OOH entertainment enters a new era driven by divergent forces

Image courtesy of iStock.

January 18, 2021 by Kevin Williams

One of the continuing trends in the theme park attraction and midscale attraction sector has been the creation of highly immersive, compelling and interactive experiences. These offer a unique "unachievable@home" experience for venues over the erosion of disposable income from video on demand streaming, 9thGen console gaming and smartphone apps. And with these immersive interactive experiences, a strong repeat visitation aspect has been engendered into the visiting audience; looking to repeat an experience, rather than the less profitable "ride just once" traditional attraction model.

However, with the failure to hold any dedicated physical trade showcases to promote new thinking, trends and investments on account of COVID-19, there is a lack of the influential trend setting trade conventions, such as the European, Asian and American IAAPA events, a first in a century occurrence. Much of the "trend setting" has been stimulated not only by internal monologue, but also by uncontrolled research using the go-to platform of the Internet.

The influential importance of the show floor cannot be emphasized enough with regards to pulling the covers off and revealing the brand new shiny rollercoaster car, proposed for the latest theme park attraction installation, and this has a significant impact on the industry development process. The marketing and publicity value aside, the revealing of the direction taken by competitive parks is a great leveler of the R&D investment which other parks and developers will spend to stay relevant. Without that barometer, there is a danger that the development arms race could spin out of control, and technologies kept in check would be forced on a market which prefers to control innovation.

A great example of the possible indicators of a new arms race in development was illustrated by Universal Studios in partnership with Nintendo to adopt mixed reality technology across the entirety of their ambitious "Super Nintendo World"' gates for Tokyo and wider rollout. MR attraction technology was not an innovation, but its expansive utilization went far beyond what previous developers had ever felt comfortable with.

With the loss of the 2020 show season and many development executives forced to work in the bubble of remote working, the injection of innovation may be accelerated, but also these ideas and implementations will be very embryonic, and we can expect an accelerated period of growth. Some observers see the trends over 10 months of lockdown reflected into some 10 years of actual change in trends and habits.

Arising destination entertainment

Beyond the global pandemic's unique requirements, from hygiene, capacity, staff training and operation, there has been a massive period of rethinking regarding how the entertainment venue fits into the attraction entertainment industries' makeup. The last 10 months of remote working and lockdown have been a hothouse which is seen like an accelerated change in trends and practice, only conceivable over a similar 10-year period.

The changes from the larger theme park resorts to smaller destinations is a factor of all recessional business. The "staycation" perspective during times of squeeze on audience disposable income has grown by the nature of the post-pandemic landscape, with impacts on air travel, vacations and safety. The future customer will look for entertainment venues that can populate dense urban locations.

The impact on theme park business is obvious with closed parks, and the impact of lost revenue seeing massive layoffs of staff and supporting services. Also, the focus of business has changed, as seen with Walt Disney Corp. pivoting from parks, movies and vacation prominence to a streaming and online premise — investment in Disney+ and their expanded streaming business focus seen at the "Disney Investors 2020" presentation in December, is reflected in a positive stock market reaction to this move.

The new thinking from investors is towards physical entertainment space that is closer to the audience's homes, and that is opened to offering a more packaged and cost-effective/repeatable experience.

History seems to be repeating itself with the investment seen some 25 years ago in regional entertainment, location-based entertainment and indoor theme parks. But this time not only is the thinking being driven by entertainment operations, but also by IP holders and investors with access to recently freed up retail spaces.

The emergence of the "destination entertainment" space seems about to take the ascendance, with available space and strong IP driving behind the scenes investment. Along with this, new concepts that include a strong social entertainment element, married to food and drink offerings, are being rolled out for test across key markets. These are not the amusement theme parks of the 1990s, nor are they the food-drink-play venues of the "naughties." Fueled by new social entertainment developers, a brand new offshoot of the venue business is breaking out and could easily supersede the traditional statuesque.

Managing the future audience

One of the glaring omissions of the amusement and attraction sector has been, for decades, its inability to correctly price its offering and manage the audience it hopes to attract. Not referring to movement through the facility, but more the attraction, entrance and enticement to return elements of the venue operation business. Courtesy of the COVID conditions, all facilities have been forced, kicking and screaming, to adopt one process that many had actively attempted to avoid — that of registration. The need for guests to book before entering has been an issue brushed under the carpet whenever discussed, with previously only one major venue ("Harry Potter Studio Tour") employing a zero walk-up ticketing process.

Part of the reason for still accepting "walk-up" by most of the amusement and attraction trade is nuanced, and it would take its own dedicated feature to discuss this subject. And as always, a subject that seems to be avoided by the traditional attraction industry media.

Now with the need for track-and-trace measures due to the global health crisis, a situation has been forced upon all the entertainment venue industry. This is a situation that has opened a Pandora's Box of issues, that many would prefer remained closed. The deployment of frictionless payment within the facility operation was an inevitable accompaniment to advance booking and has also been followed by the ability for detailed operational and revenue tracking.

While many of the modern entertainment facility projects had incorporated, from day one, this level of guest experience and expenditure tracking, the more traditional operations had shied away from considering it and had, in some cases, actively blocked the consideration.

It is known that with the forcing of the implementation of this process, several operations will be hoping heavily that they can claim the impact of COVID to explain the glaring divergence of their revenue numbers. Many executives are aware of the issues of possible tax implications if grounds are found and are retrospective, in some countries, for considerable periods!

With the shackles broken regarding tracking the guest's expenditure, being able to organize attendance and factor in trends regarding pre-booking (including the benefits on catering, staffing and operation), we should be heading to a new period of actual pricing and profit gauging that will force the industry to take into consideration the price it charges for the experience it offers its guests, and more correctly charge for the fun.

It is obvious that many venue operators have been surprised by what the audience is prepared to spend on "entertainment," with the private hire of facility space finding customers after previously being dismissed. More investors are looking at higher quality social entertainment offerings, encouraging the growth in boutique installations.

The true worth of the industry will surprise many and start serious discussions about the future. This will be even more relevant as more local and state governments have finally come to recognize this valuable and important industry, and fuel questions on the value of lobbying and trade representation internationally.

(Editor's note: Extracts from this blog are from recent coverage in The Stinger Report, published by KWP and its director, Kevin Williams, the leading interactive out-of-home entertainment news service covering the immersive frontier and beyond.)

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About Kevin Williams

Along with advisory positions with other entrants into the market he is founder and publisher of the Stinger Report, “a-must-read” e-zine for those working or investing in the amusement, attractions and entertainment industry. He is a prolific writer and provides regular news columns for main trade publications. He also travels the globe as a keynote speaker, moderator and panelist at numerous industry conferences and events. Author of “The Out-of-Home Immersive Entertainment Frontier: Expanding Interactive Boundaries in Leisure Facilities,” the only book on this aspect of the market, with the second edition scheduled for a 2023 release.

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