Best Out-of-Home Opportunities

Part 6

What are the best opportunities in the out-of-home entertainment industry?

One example might be these new smaller centers (15,000 to 25,000 square feet) that have been opening in multiple cities across the United States. These smaller centers are obsessively focused on one or two entertainment experiences that target ADULTS. However, their entertainment experiences are fairly easy to copy.

To avoid entering another bloody red ocean, we need to create entertainment experiences that are dramatically better, unique, defensible against competition, plus addictive and habit forming (i.e. at least 2x, 5x, or even 10x entertainment experiences).

Our entertainment experiences also need to be designed to accommodate a large number of participants, get a higher price point per guest visit, and/or capture a higher annual revenue stream per guest.

Another big opportunity is creating entertainment experiences that require fun physical activity.

In-home entertainment along with social media are significant contributors to the worsening health crisis in the United States due to kids, teens, and adults not getting enough physical exercise.

In June 2017, the C.S. Mott Children’s Hospital National Poll on Children’s Health asked a national sample of adults to identify the Top 10 health topics that are a “big problem” for children and teens. Coming in at number two was Not Enough Exercise – just behind Bullying/Cyberbullying.

If we provide a fun and healthy entertainment experience, as an alternative to in-home (couch potato/chair potato) entertainment, we will have something that truly benefits the health of our guests’ while they are having fun playing with their friends and family. But, it has to be a truly exceptional entertainment experience if we want to get them to consistently leave their homes and visit our venues.

A few additional revenue generators, beyond a single 2x, 5x, or 10x entertainment experience, are also required for success.

The most critical is a good food and bar experience that targets adults. Designing a center for kids today or even families with kids is not going to be a competitive model long-term.

Important note: if our place is cool for adults, it will be more than cool for kids and their families.

Why is targeting kids and families NOT a good idea?

The United States continues to see a downward trend in birth rates. In fact, the birth rate over the last 60 years has shrunk by more than 50%. Kids and birthday parties are becoming a much smaller revenue source due to the over saturation of out-of-home birthday party options as well as the decline in the number of kids.

A few additional revenue sources to food and bar are also beneficial to maximizing the profitability of a smaller center. However, we first need to take a quick look at the competitive facts with respect to out-of-home (OOH) entertainment,

Restaurants with bars are adding arcades and attractions.

Bars are adding arcades, attractions, and better food.

Movie Theaters are adding arcades, attractions, better food, and bars.

Bowling Centers are adding arcades, attractions, better food, and better bars.

Trampoline Parks are adding arcades, attractions, food, and some beer and wine.

Family Entertainment Centers are adding better food, bars, and bowling.

What is the one common denominator shared amongst all the above competitors? They all have or are adding very similar stuff to their one core thing. Sounds like a bloody red ocean – doesn’t it?

As an example, many have or are adding arcades which means the number of arcades is starting to exceed the demand. Is there an arcade apocalypse coming? It may already be here. I’m not saying we can’t still make money by having or adding an arcade. What I am saying is that the arcade may not be one of the most profitable revenue sources in our centers going forward. The arcade is not a competitive advantage that we can defend especially since more arcades keep opening up.

Other options are starting to look more appealing and may even be more profitable than adding an arcade – at least in the short-term. For example, arcades with classic games are growing and seem to be very popular with both adults and kids. Even though they generate less revenue than the typical arcade, they are a different type of entertainment option.

DuckPin bowling is popping up in several new bar and food focused concepts. The ones that have opened are often retro looking. One is called Pins Mechanical currently based in Ohio. These retro style concepts are definitely new OOH competition and are targeting the lucrative 21 to 35 year old adult market. They focus more on the bar & food plus some entertainment elements that are often very retro looking by design. Their entertainment options are often secondary and at a lower cost per minute of play than what entertainment centers typically charge.

Escape rooms and even axe throwing are showing signs of being solid and maybe even long-term revenue generators plus they don’t take up a lot of space.

The problem with all the above entertainment experiences is that they are all pretty easy to copy.

Another important topic to think about when building a new center or upgrading an existing one is the cost of labor and the difficulty of finding quality staff members. Building a quality team is going to continue to be an increasing challenge for ALL of us.

It’s not a surprise that many of these newer centers are providing more of a fast casual dining experience, which is probably the best way to go for smaller, more focused entertainment venues. In addition, more of our guests are becoming acclimated to the fast casual dining experience and often prefer it. Maximizing the effectiveness and efficiency of existing and newer centers is going to be critical to our long-term profitability.

Once again, these new smaller centers are very adult focused! It’s important to note that these types of centers are opening now, expanding, and evolving quickly. The capital costs to build one of these smaller centers is much MUCH less than the cost to build a big box center and they don’t require as much traffic to be profitable.

Most importantly, we have to create and establish what our core entertainment experience is and, if at all possible, make it uncopyable (i.e. our 2x, 5x, or 10x Entertainment Experience).

So, how do we create a unique, proprietary, and defensible entertainment experience?

Below is a list of our 12 Keys to creating a 2x, 5x, or 10x entertainment experience. An entertainment experience doesn’t have to have all of these to be successful, but the more an attraction or entertainment experience has the higher the likelihood of long-term success.

12 Keys to Designing Addictive and Habit Forming Out-of-Home Entertainment Experiences,

Out-of-Home Only
Designed for Adults
Multi-Participant with Maximum Interaction between Participants
Exciting and Competitive
Multiple Games Back to Back
Simple Core Objective
Fun Physical Play
In-Game Variety & Customizable
Each Player Influences the Outcome
Addictive & Habit Forming
Mechanisms that Facilitate Socialization & Repeat Visits
Proprietary, Exclusive, Uncopyable, and Radius Protection

By the way, at our LASERTRON conferences we go into great detail about the 12 Keys and how our team is creating incredibly immersive attraction experiences that are REAL. Most importantly, you can play our most immersive LASERTRON experiences and see for yourself exactly why and how we are creating truly unique 10x attraction experiences.

Thanks for reading,