TSR Newsletter | January 11, 2021 |
-- The Stinger Report: Service Message -- |
The Global Digital Out-Of-Home Entertainment (DOE) Sector covered in The Stinger Report .
Wishing all our subscribers, famlies, loved ones, (and those serving) stay safe and well.
Kevin Williams
Publisher, The Stinger Report (TSR)
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The New Roadmap Ahead!
# 1052
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In The Stinger Report #1052 – This issue covers in detail:
1. This first issue of the new style report addresses the big question regarding the immersive entertainment sector regarding “The Great Reset”
2. Looking at “Trend Setting: The New Entertainment Offerings”, the new technology that will be employed to drive audiences back to Out-of-Home Entertainment
3. Considering the “Arising Destination Entertainment Operation”, with regards to the new style of venues that will be created to captivate an audience in need of fun and excitement
4. This report also looks at “Managing the Future Audience”, and how technology is playing its part in promotion, management and entertaining our guests
5. Concluding with the needs of “Managing the Future Venue”, and the “Future Powerbrokers of Location Entertainment”; charting the key players and applications that are shaping the markets #SpringBack
All this, and much, much more!
To keep reading the full Stinger Report, register for your subscription.
- The Stinger Report, published by KWP and its director, Kevin Williams, as the leading interactive out-of-home entertainment news-and-views resource, covering the immersive frontier and beyond.
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Marking the first of the new design and presentation of The Stinger Report, and we are jumping straight into the big issues impacting the industry, and the major questions that will need to be considered moving forward in this brand new era.
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- How Will “The Great Reset” Impact the Amusement and Attraction Scene?
While the concept of “The Great Reset” was a financial and industrial strategy for sustainable improvement, proposed by the World Economic Forum and others at the beginning of the global health crisis, the term has however been hijacked by numerous observers to discuss the implications of the fallout of change that has been forced on industries, especially those industries that were already seen to be in a vulnerable condition due to factors of sterility of investment, protective practices, or incorporating inherent fault lines that were triggered by the impact of an interruption in their business practises.
While some point to the prophesized “Retail” and “Cinema” apocalypse, accelerated by the impact of the international pandemic, there is an equally momentous tidal wave that seems to be about to break across the key entertainment mediums, and that impact has direct ramifications on the amusement, attraction, and entertainment facility businesses. Sectors that have lived a charmed life, attempting to avoid direct association with the entertainment industry and who, because of protective practises, are incredibly vulnerable as liquidity had been decimated by the suspension of operational capital.
Without making this report overly long, we shall focus on the opportunities that this proposed reset will have on key industry segments, and some of the indicators that will help us see the results of these developments.
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1. Trend Setting: The New Entertainment Offerings
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 VOD 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, 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 direction of new investment would previously have been steered, in the whole, by exhibition site visits, interchanged with development groups and spoon feeding from marketing and promotional directions on various show floors.
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 leveller 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.
We have already covered, in The Stinger Report, several minor and major changes to amusement and attraction machine design to address the new COVID measures being applied internationally. From 4DX theater seating shields, partitions between players on Theater Enclosure amusement, and new cleaning and loading systems on theme park attractions. But this part of the feature is looking at the actual new trends that will emerge into the market after the great reset.
A great example of the possible indicators of a new arms race in development was illustrated by the previous Stinger Report feature, “Mixed Reality’s Theme Park Growth”. We highlighted the investment made by Universal Studios in partnership with consumer game giant Nintendo, to adopt MR technology across the entirety of their ambitious ‘Super Nintendo World’ gates for Tokyo and wider rollout. As the feature confirmed, MR Attraction technology was not an innovation, but its expansive utilization went far beyond what previous developers had ever felt comfortable with.
What seemed to have happened previously was, smaller operations originated ideas, larger corporations adopted and importantly patented these ideas, and then the remainder of the industry played catchup, also suffering the issues of having to navigate patent infringement issues. 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 ten months of lockdown reflected into some ten years of actual change in trends and habits.
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2. Arise Destination Entertainment Operation
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. As stated previously, the last ten months of remote working and lockdown have been a hothouse which is seen like an accelerated change in trends and practises, only conceivable over a similar ten-year period.
As we reported recently in The Stinger Report, 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 Corporation 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.
While not totally abandoned, 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 twenty-five 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 (ATP) of the 1990s, nor are they the food-drink-play venues of the naughties. Fuelled by new social entertainment developers, a brand new off shoot of the venue business is breaking out and could easily supersede the traditional statuesque.
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3. 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 in The Stinger Report 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 organise 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 fuelling questions on previous and current value of lobbying, and trade representation internationally.
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4. Managing the Future Venue
While we look at the players, we also need to look at the venues that are going to attract them to get off their comfy sofas, leave their expensive consoles and come and play. The audience has been in isolation for such a period that there is a need to not only promote what is on offer, but also remind the guests that they love to hang out together.
The “Great Reset” may not only redefine the perspective of the audience, but also force a total rethink in the way the industry presents its offerings. For some time, the amusement trade had felt uncomfortable with the consideration of FECs favouring the more traditional street route business model. Time has changed and FECs represented, before COVID, a major share of the future ambition of the industry, seeing expediential growth that was reflected in the always well attended investor events such as the Foundations Entertainment University (which Stinger owners KWP supports).
Sadly, post-COVID, the attrition rate is expected to be high from the transitional and vulnerable entertainment venues. But at the same time, while in lockdown, immense investment and development have been taking place in the background. Several major new “Urban Entertainment” venue projects have been started, with many looking to open in the next 24 months. These are serious investments across the UAE, Europe, and North America, and represent “The Third Wave” of investment in the modern entertainment ethos.
The term “The Third Wave” was coined to describe the migration in offerings from the 1980s video arcade, the 1990s Family Entertainment Center, and now to describe the 2020 development of “Urban Entertainment Destinations”. New projects ranging from ‘Topgolf Swing Suites’, ‘Puttshack’, ‘Electronic Gamebox’, and a hoard of other standalone concepts have paved the way for a move towards fulfilling the need for true ‘Mixed Use Leisure Entertainment” venues that offer a wide landscape of entertainment offerings, in a package that will be closer to home than theme parks and resorts – populating the newly available dense urban location spaces provided by the changing retail landscape.
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5. The Future Powerbrokers of Location Entertainment
This last topic is an exceedingly difficult one to address. For many, the political machinations of who runs, directs, and controls the development and investment within the amusement, attraction and entertainment venue business has been a nebulous and complicated consideration. And many prefer to just see the industry as a whole and not look at the finer political posturing.
One thing is for sure, this will be for the first time in the associated attraction and amusement industries’ 102 years, that a centralized gathering of executives has not convened in person at the end of the year. Beyond the impact on new design and development adoption that the lack of an industry showcase gala has had on the respective industries, there is also the impact of the failing for direct face-to-face discussion between key powerbrokers and influencer, and their respective “gatekeepers”.
As stated previously, the R&D and development aspects of the amusement and attraction sector have been forced into remote working and lockdown, and with that have taken on board a level of autonomy that has concerned some who felt that they were the harbingers of taste within the industry. At the same time, the need by large corporations to address limited cash reserves, has seen the scaling back and actual pruning of prominent executives. The attraction and theme park sectors have been rocked by the “retirement” and “departures” of several influential executives, and this is only the beginning. Smaller, leaner, faster moving development groups are always a result of “Black Swan” moments in the industry.
Along with the developers, the operators and investors are being totally restructured. As we stated previously, Walt Disney is pivoting to a streaming-centric business, is obviously not abandoning theme parks, but will place this in a new perspective. And likewise, entertainment corporations’ parent companies will be looking to cut overheads and streamline – focusing on the future profit centers. To liberate these new opportunities, new thinking is needed, and some traditional and safer voices will fall be the wayside.
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That covers some of the major upheavals that are speculated to impact the amusement and attraction trade. As The Stinger Report has constantly trumpeted, mergers and acquisitions will also be permanent bedfellows for the trade, as this period of reset also sees investors and executive boards position their operations. Once-established brands will be vulnerable, having seen months of closure, while others who depend on Chinese investment will also be vulnerable as these sources of influence are cut off.
We wait with interest to bring our readers the first tangible examples of this brave new world, and how it will shape our future business.
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This concludes our first in a new era of Stinger Reports. We thank all our subscribers for their support, and the next report will follow shortly. |
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January
POSTPONED
June 29 - July 1, 2021
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January 24-26
POSTPONED
June, 2021
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March / May
POSTPONED
June 28-30
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