Commentary

OOH entertainment venues explore new business models in face of COVID-19

Amusement venues, including some cinema chains, look to rent their space for private venues to offset COVID-19 losses.

Photo courtesy of Main Event Entertainment.

December 7, 2020 by Kevin Williams

What incredible times, and the scope of how they are impacting the out-of-home entertainment industry.

With regards to venues attempting to create new business models under challenging COVID conditions, several sites have been seen to offer the ability of full "facility rental" for private hire. The concept of the "bubble" (groups of people that feel they can safely hang out together) has been promoted by many governments. And with this, some venues have started to look at private hire as a business opportunity, moving beyond party room business.

Vancouver-based Industry Arcade was one such example, with the facility comprising some 50 amusement pieces, which can now be rented out to groups of up-to-ten players for $200 for two hours. These groups can even bring their own food and drinks.

This trend continued with the announcement that urban entertainment venue chain, Main Event Entertainment, would be making available (for a limited time offer) the ability to rent an entire 40,000-square-foot facility, for between 10-1,500 guests. The operation proposes to offer special drinks and concessions to guests in the party. While the package allows guests the run of the venue, there are variant deals including the Most Valuable Package for a minimum of 50 guests, with a full three hours of unlimited access to activities. Main Event is seeming to double down on attracting audiences back to its venues, with the addition of a "Kids Eat Free Tuesday" offer across their operation.

Cinemas venture forth

While other amusement venues look towards this as a new and interesting business, the cinema industry, in a slightly more dire situation, is also turning towards the concept as a possible money maker. It was revealed that Cinemark was making available rental packages that could see groups of up to 20 rent a screen for $175. Not to be left out, AMC also announced that some 300 of its reopened cinema theaters would also be offering the ability to rent a screen for 20 guests, starting at $99 per audience member (with charges for food and beverages).

Smaller cinema chains were also starting to construct packages to offer this rental plan. Not just entertainment venues, but also visitor attractions are looking at private facility rental, with Colchester Museum in the U.K. also offering "bubbles" of six the chance to rent out the castle crypt for $77 per head. Some see these moves by venues are as a means to "keep the lights on," as many of these operations have been reported as saying they will run out of money by the end of the year, due to the fall off in business.

The cinema scene has been in a constant state of flux, along with the announcements of certain theater chains suspending operation over certain parts of the week, or the complete suspension until the new year, continuing the impact of the studios' migration towards a video on demand movie streaming approach to generate some revenue from the stockpile of new releases. This has added to the fractures in the viability of movie theater business returning to any form of normality, let alone survival.

Video on demand expands

While a trickle of "tentpole" movies broke ranks and look towards a VOD release direct to consumers' homes, other studios have sat on their hands, delaying major releases until the 2021 season. Most notably, the delay of the James Bond latest release was reported to have been a catastrophic blow to several distributors.

Not even waiting a month after the Walt Disney announcement to focus on streaming, film studio MGM was rumored to have been seriously exploring the licensing for streaming its major production of James Bond 25 ('No Time To Die') — evaluating options in abandoning plans for a cinema release. The troubled movie had seen scheduling difficulties, moving from November 2019 to April 2020, and then again to November of this year, and finally pushed back further to April 2021. But, according to media sources, the results of the orchestrated bidding war had been inconclusive, and the studio was staying tight-lipped about its plans going forwards. This news sent shockwaves through the cinema sector, the outcome being a momentous point for a seriously wounded theater distribution sector.

Paramount Pictures is already selling its planned movie release "Coming 2 America" to Amazon for an undisclosed amount to avoid possible loss, and this is expected to be followed by other streaming deals.

Global repercussions

The future of the cinema business, and what will be provided post-2020, due for momentous reform, is coming just as China officially overtook North America in film ticket sales during 2020. But even the Asian cinema sector is feeling the heat, and some of the larger chains are now looking to restructure their operations to better fight the coming war for domination of the market.

CJ CGV announced they would be permanently closing some seven of their multiplex branches, stating this was "due to the financial burden of COVID-19" as reported by the Korean Herald. In the statement, the company also confirmed they were looking to close some 40 of the current 119 branches, within the next three years. This is reflected in tickets sales in the country, with the Korean Film Council reporting a 79.7% drop in sales for the month of September alone. The Asian cinema sector has already started extensive restructuring of business and is looking to support a new rebuild of cinema properties, embracing much of the new Cinema Entertainment Center thinking previously reported.

(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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