Stinger Report - 21/06/2021

TSR Newsletter | June 21, 2021

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The Global Digital Out-Of-Home Entertainment (DOE) Sector covered in The Stinger Report .

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Kevin Williams

Publisher, The Stinger Report (TSR)

Entertainment – Go Big or Go Home!

# 1075

Report Skinny

In The Stinger Report #1075 – This issue covers in detail:

1. [BREAKING NEWS] The growth of interest in #Artainment, sees the launch of new immersive exhibit projects from the Royal Opera, the latest Denver gallery installation by Meow Wolf, and new developments from Positron VR.

2. [TRENDING NEWS] New developments in the eSports arena see a new series of venues, as well as the major news that Sony is looking at eSports betting on its console platform.

3. [BREAKING NEWS] eSports new makes its mark in Japanese thinking, with the news that CAPCOM partners with NTT DoCoMo to launch new channel (‘X-MOMENT’) to grow the watching audience for the competitions.

4. [BREAKING NEWS] The major developments of the ‘Streaming War’ continue with news that Amazon is circling MGM; while AT&T instigates WarnerMedia to start the process to merge with Discovery – all this and the news of Wanda exiting AMC cinema business too…

….and much, much more!

To read the full Stinger Report, register for your subscription here.

- The Stinger Report, published by KWP and its director, Kevin Williams, is the leading interactive Out-of-Home Entertainment news-and-views resource, covering the immersive frontier and beyond.

Main Report

We are looking at an audience that has spent more than 12-months in isolation. An isolation that has seen an explosion in online support attempting to create alternatives to previous physical activities, ranging from visits to the restaurant to trips to the cinema. Streaming has exploded on the consumer front, along with the realisation that connectivity to the internet has become an essential, like clean water and electricity.

All this said, there is a realisation amongst investors, property developers and many in the entertainment and hospitality industry, that we are about to experience a major surge in interest for social entertainment, live events, and general out-of-home activities. Whilst vacations, cruises and air travel may not be a factor in this, no amount of speculation can avoid the reality that a “Super Staycation” atmosphere is gripping the general populous as we rush towards Summer. The Stinger Report has previously covered the opportunities of drop-in mobile attractions to fill the need, but now investment is turning to projects that mark the next phase of Out-of-Home Entertainment to address the needs of a highly sophisticated audience, who has access from home to the widest possible selection of streamed content than ever before.

The question must be what the 2021 facility guest is looking for from their entertainment, what is still a proven perennial, but also what has usurped the traditional applications, driving the new trends that must wow and attract this highly sophisticated audience.

- Immersion’s Artistic Period

Recently there has been a lot of discussion about the deployment of digital art installations in various venues, in what has been dubbed “Artainment”. Questions are asked regarding the marriage of an art installation to the entertainment space, or the gamification of an installation within a museum or gallery venue. It is, however, important to make the clear separation between what is an “exhibit” and what is an “attraction” regarding the understanding of both aspects.

The mixing of the achievements of an art installation, especially to be deployed as a revenue stream within a site, needs to be compared to an attraction, which is dedicated to be used as a pay-to-play experience. This can be summed up by recent high-profile examples. The ‘Van Gogh: The Immersive Experience’ has become one of the premier examples of a digital exhibition (in a travelling format). The latest incarnation coming to London covers 15,000-sq.ft and comprises a multitude of projectors offering a immersive experience – best described as “stepping into the paintings” of the Dutch artist. This approach has inspired many other digital installations, marrying the immersive environment with interactive displays, experience areas, and an extensive merchandise store.

The digital art installation was first seen to be more immersive in presenting the work of artists, and follows the style of a travelling art exhibit. However, this has grown into a dedicated medium. The museum and gallery sector is now seeing other attempts to create such experiences as Standalone Attractions. These digital experiences have seen the entry of corporations such as ‘Illuminarium’. The immersive entertainment project cover some 30,000-sq.ft, uses the latest 4K projection systems from partner Panasonic, and offers an immersive experience. The first facility opens in Atlanta, presenting ‘Wild: The World’s First Virtual Safari’ for guests to experience. This the first of numerous Illuminarium experiences planned, with a rollout of the first three sites underway.

Artist’s rending of the Atlanta venue soon to open [Illuminarium]

Along with Illuminarium, there are the ‘Madison Square Garden Sphere’ projects, with London, Las Vegas and New York venues opened, with the offering based on this vast music, movie, and experiential projection environment. The UK also figures in the launch of the new ‘Outernet London’ project, that will see the installation of the world’s largest LED screen, a facility that will accommodate 2,000 guests. These projects blur the line between art exhibit, cinema experience, and live event. They hope to be all things to all men and incorporate a repeat visitation model that will draw a regular audience, the same way that a cinema, theater or music event draws their customers. But they also now see themselves as being able to also include the museum and gallery audience to this engagement. At this point, there will be an inevitable clash of wills – the agelong argument between what is art and what is entertainment.

The ability to offer a completely compelling and immersive art experience has been driven not only by the latest 4K projection platforms, but also by advancements in the new generation of LED displays. This is illustrated by the ‘Antoni Gaudi Exhibition’, held at the Casa Battlo museum in Barcelona. This exhibition takes the massive leap in immersion by deploying the world’s first six-sided LED cube, a complete immersive display environment. The cube environment measures 10 metres long by 9.5 metres wide and 2.75 metres high, presenting almost 70 million pixels generated by panels from Alfalite, with a system integrated by Vitelsa which is presenting the work from the artist. The first of its kind presentation uses LED, offering an amazing experience, and it has opened the door on the way that digital art can be represented – pushing the boundaries between an immersive attraction and installation.

The world’s first immersive LED cube [Alfalite]

It is this blurring of the line that has seen the appearance of Meow Wolf, and the success the company has achieved with recent “Immersive Art Installations”. Originated from an anarchic art collective in Santa Fe, their live music and alternative art exhibitions gained a following and soon, the collective formed into a company that developed these pieces and consulted on immersive instllations. Famous for walk-through exhibitions, the team hides the anarchic narrative within the conventional (‘House of Eternal Return’). Some have likened their work to a fusion of “funhouse meets escape room”. Most recently the company has received critical acclaim for their new installation at the Las Vegas ‘AREA15’ entertainment hub. The exhibit, ‘Omega Mart,’ is a critique on modern consumerism, as well as a fun scavenger hunt through hidden spaces, finding all the secret messages (including immersive displays), an experience that would make Banksy pleased.

Funhouse meets art installation in Santa Fe [Meow Wolf]

Meow Wolf has suffered a conflict of identity, seeing a major management restructuring, and refocusing of their goals. The question of the longevity of the earning power of their installations, and what they hope to achieve (anarchism or profit), plays a part. The new company structure has announced their future plans, with the Fall opening (in downtown Denver) of a new “artist-driven dark ride” exhibition space. First announced in 2018, this will be a collaboration with 110 local artists and is a large anchor space (covering 90,000-sq.ft in a building dubbed the “Sleepy Pizza”). The venue comprises some 79 projects across four floors of the site, with live performances and an expansive café added to the mix.

This is not the only application of this kind into the medium, Otherworld is an immersive art installation in Columbus, OH. First opened in 2019, the 32,000-sq.ft space is populated with over 47 scenes employing MR immersion to enthral the audience. A fusion of funhouse and gallery, the experience offers a surreal science fantasy environment, encapsulating the work of over 40 artists. Projection mapping is used extensively, seeing the installation deploying some 54 projectors along with a perfusion of LED displays and Black Light. Much of the design of Otherworld inspired by a 1930s Haunted House, while other aspects come directly from the artists’ imaginations. And we saw, in San Francisco, the short-lived Onedome exhibition which, along with its many wonders, included the innovative ‘Unreal Garden’ AR exhibit deploying Microsoft Hololens.

Much of the wider discussion about the crossover between immersive theater and art exhibits has also been proffered by the deployment of VR-based installations. With the reopening of exhibition venues, several new projects have been revealed in this field.

One of these recent installations is the new exhibit developed in collaboration between Figment Productions and Royal Holloway, University of London, with funding from the UK Research and Innovation. The Royal Opera House’s Linbury Theatre plays host to the Hyper Reality experience called “Current, Rising”. The free-roaming backpack PC VR experience is based on the new Figment platform, with HP Reverb headset, comprising Ultraleap hand-tracking. The experience offers a 15-minute exploration for four guests, offering the first deployment of full Hyper-Reality into the operatic environment. Figment Productions is working with artistic leads at the Royal Opera House to create a world experience inspired by the liberation of Ariel, at the end of Shakespeare’s Tempest. Open from the 21 of May until the 10 June 2021, this experiment was part of the Royal Opera House’s innovation programme, Audience Labs.

Transporting the audience into a new level of immersion [Royal Opera House]

At the same time, the line between a conventional cinematic experience and an immersive story narrative has begun to blur, with the deployment of more immersive theater experiences. Positron VR, known for its immersive VR theater experience, revealed it will be rolling out five installations of its system in Taiwan, Australia, and North America. One of the first locations will be at the Yosemite Cinema, consisting of a 20-pod VR Theater located near the gateway to Yosemite National Park. The ‘Voyager’ motion pod, comprising fx elements, including scent, haptics, and VR display, running in synchronisation, has been deployed as a pop-up museum/gallery installation (see The Stinger Report coverage of the 2019 ‘Tutankhamun Exhibition’ at the Saatchi Gallery).

The latest installation of the VR cinematic experience by the Positron platform offers a new immersive narrative experience to venues. It was announced, in May, that the company had partnered with Golden Triangle Venture’s division Lavish Entertainment, towards deploying the ‘Voyager’ pods for use at live concerts and to stream live concerts to other pods combining 360 degree video and artist VR content. This is in connection to the organizers of electronic dance music concerts (such as “EpicRave”). The announcement stated that Lavish Entertainment will be incorporating the immersive experience into their concerts and events, and will offer a unique social feature, powered by Vara Now, that will let users experience the events together. Artists customize the virtual performance space during the live performances. The audience is also able to purchase non-fungible tokens (NFTs) of the unique 3D spaces.

Recent installation of the pods at the Saatchi Gallery [KWP]

All these examples of “Artainment” chart the true clash between the art venue and the entertainment space, as ticket sales (rather than just the message), will play a major factor in defining their success, and longevity.

- Betting on Gaming

The eSports landscape has also seen a growth towards the type of “Clicks, Bricks-n-Mortar” venues that it can support. We have seen, especially in Asia, the growth of the ‘eSports Gym or Studio’ – not only a place for eSports gaming, but also a place where emerging players can hone their skills and receive specialist coaching on improving their skills. These venues can also act as a location to scout for promising talent and are in addition to the conventional ‘eSport Center’ and ‘eSports Stadium-Arena’ developments. As seen in Las Vegas, there is also the emergence of the ‘Sports Betting’ venue that includes a dedicated eSports area. Even with the explosion of eSports in the streaming community, and as a replacement during the Global Health Crisis to conventional sports, the location-based approach to eSports has continued the grow in the face of some claims from critics that the venue side of the business would be decimated by lockdown.

Certain consumer game media reported on a US patent filed during May by Sony Interactive Entertainment (SIE), entitled "E-Sports Betting Platform" – an outline of a proposed betting portal that would allow gamers to wager on consumer games. But the important aspect of the patent was its omission to mention the current generation of game consoles (Playstation 5). This seemed to be a testing of the waters, as the corporation looks to strengthen its ecosystem. Consumer game publishers, such as Activision and EA, have actively looked at defining their eSports platforms towards a gaming capability, and it is expected that soon these portals will make a decisive move towards blurring the lines between betting and gaming, possibly in concert with the land-based gaming corporations.

The importance of eSports in the amusement and game scene has been personified by the investments made by publishers such as Tencent, EA and Activision-Blizzard. In Japan, amusement and game publishers are also engaged, with CAPCOM recently announcing its ‘Street Fighter League: Pro-JP 2021’ competition. This will be played across the various versions of the popular brawler, and will see streaming of the competition across YouTube, Twitch and Mildom. Co-sponsor of this tournament comes from Japanese media service NTT DoCoMo. Tournament heats will be played across numerous venues, and a final championship event will be held in October, with extensive prizes and the ‘CAPCOM Cup’ up for grabs. The strength of the Street Fighter IP, and popularity of the competing teams, are acting as a profitable draw.

The NTT DoCoMo partnership on this eSports championship is part of a wider move to encourage a new way for the audience to watch eSports events and heats – creating a dedicated channel for the coverage, called ‘X-MOMENT. It is hoped that this new coverage of events will encourage the lucrative gamer market away from playing and grow a “watching” audience. The penetration of 5G within the Japanese market will also encourage a wider selection of mediums to watch this content, be it on smartphone, console, or PC. The promotion of eSports competition has built on an already-established game competition culture, evolved from the tournament amusement gaming scene. Grudgingly, the amusement factories have started to expand their eSports aspirations; and KONAMI and TAITO also planning to hold their own streamed events based on their lead titles.

- Streaming Mergers and Acquisitions Impact Entertainment

Continuing the major upheavals shaping the entertainment landscape, and one of the major questions of recent years was addressed. That question had been if AT&T, the communications giant, would be able to effectively operate the entertainment giant WarnerMedia (previously TimeWarner), when they acquired the operation for an eye-watering $100b in 2016. At a time when Walt Disney was consuming 20thCenturyFox, it seemed to be the vogue for large entertainment corporation acquisition, with the eye on the prize of the vast library of IP that could be deployed across envisaged streaming services.

Jump forward to present day, and for AT&T the experiment seems to have proven problematic. This was seen with the announcement that the communication giant was proposing to off-load its holding, merging the WarnerMedia operation with the cable television program network Discovery Inc. This will combine the likes of Warner Bros. movie studio operation, along with DC Comics, Cartoon Network, HBO and CNN, amongst other operations. This also combines many operations such as Animal Plate, HGTV and the Food Network. Ultimately, these moves have resulted in the corporation becoming the second largest media company in the US – valued at $150b. Meanwhile, the streaming dynamics of this move are at the forefront (creating a new giant on the scene). For the entertainment facility business, many questions will now be raised on how this merger will impact the day-to-day operation of the movie studios business.

This development could also be the beginning the latest spate of turf wars in the entertainment and communication sector, as consolidation continues to impact debt-laden operations. Well-placed sources indicated that WarnerMedia had been seen as an opportunity of interest by NBCUniversal. With this opportunity now gone, the operation is rumored to be considering another prospect for acquisition, namely the much-travailed ViacomCBS corporation. At the same time, some of these vast conversations are starting to divest themselves of unprofitable (or unpalatable) divisions they have acquired, as the industry undergoes the beginning of major restructuring in the face of the movie theater crisis, the “Streaming Wars”, and preparation for spending impacts from their audiences in the face of the Global Health Crisis.

The bloodletting from the “Streaming Wars” continued a pace in May, after the ViacomCBS restructuring, and the news regarding AT&T. Further news followed that suggested Amazon was in deep negotiation towards acquiring MGM, for a sum that sources close to Variety, who broke the story, claimed was $9b. It had already been reported that MGM held high-level meetings last year, regarding looking to sell several film assets, including the latest James Bond movie. Only a matter of days following this reveal, it was confirmed that Amazon would be acquiring MGM Studios for, in fact, $8.45m. In a statement, Amazon was keen to confirm they would be “preserving the heritage” of the MGM library of properties (a treasure trove to repurpose through their streaming platform). Both Amazon and Apple had been linked to these discussions, but it would have seemed that, rather than looking for a buyer for these movies, MGM had been looking for a suitor to acquire the movie and entertainment corporation. How Amazon’s ownership will impact numerous theme park attraction projects licensed from MGM has yet to be revealed, but we can expect these impacts to be considerable.

Speaking of the cinema sector (especially following on from the Artainment coverage), and the shapeups and restructuring that have been reported in the facility business have also been leaving their mark on the theater business.

While the situation between Chinese real estate conglomerate Wanda and the large cinema chain AMC (and their affiliates), has been an ongoing story in the pages of The Stinger Report, the Hollywood Reporter recently broke the latest saga on this ongoing slow motion car crash. They revealed that Wanda Group had decided to finally sell off its entire remaining stake in AMC, selling 10,000 shares over the period, netting some $427m, and so concluding its stake in the US theatrical exhibition business. This comes just as certain theaters in reopening States have reported strong revenue from returning moviegoers, but for Wanda, its flirtation in the American market ends here. The Chinese company is also removing its members from the board, while the operation continues to undergo major restructuring. The departure from US cinema is not a reflection of a loss of interest in the theatrical release industry, and Wanda has made a profit on its nine-year involvement, but this move more radially reflects the need by Wanda Group to restructure, and possibly focus more on Chinese movie business that has exited the Global Health Crisis in a more robust manner.

The continued upheaval in the cinema sector was also illustrated by the breaking news that saw major forces in the theater business, D-BOX and Cinemark Holdings, sign an agreement that will see the driving forward of eight additional venues employing the D-BOX haptic recliner seats. This intends to bring a total of 99 venues under the ‘D-BOX Cinemark’ brand in the US. This marks a move by cinema operations to look at a VIP experience for their future audiences and achieving a strong experience brand has also seen IMAX look towards broadening its large-format cinema chain. VIP cinema and Cinema Entertainment Center (CEC) business is driving the post-lockdown landscape.