Why aren’t we practicing Digital Entertainment Distancing?
Out-of-Home Only, Unique to our Venue, Maximize Socialization
Number One: Are we investing in attractions that can only be experienced out-of-home (OOH)?
Anything that is digital or mostly digital is a huge liability to the existence of our OOH entertainment industry – just ask any movie theater operator.
By now we have all heard what a few Movie Studios have already done… They leapt across that imaginary line and released several of their movies direct to the in-home and mobile entertainment market, which means they bypassed out-of-home Movie Theaters. The Movie Studios did this without even blinking an eye!
Yes, the coronavirus was the catalyst that caused the Studios to bypass the Movie Theaters, but what is important to note is how quickly and easily they did it.
When Trolls 2 was released April 10, 2020 on multiple digital platforms it earned much more than anyone expected.
On April 28, 2020 the Wall Street Journal reported the benefits that the studios receive by renting their digital entertainment direct to consumers,
“For studios, the prospect is especially alluring because they retain about 80% of the digital rental or purchase fee—compared with about 50% of box-office sales.
Universal has made more than $77 million in revenue from “Trolls World Tour” domestic customers so far. That means “Trolls World Tour” has generated about $95 million in rental fees from nearly five million customers since its release, based on revenue figures cited by the person familiar with the matter, who didn’t dispute the estimate.
The same amount of revenue during a theatrical run would have required a box-office gross of $154 million, or about the final tally of the original “Trolls” movie. The sequel cost about $90 million to produce. The original “Trolls” collected $153.7 million at the domestic box office. Universal received about $77 million of that total; about half stayed with theaters.”
The release of Trolls 2 directly to the home and mobile consumer market is just another example of why digital entertainment is so dangerous to the OOH entertainment industry. It confirms that Movie Theater operators have little to no control over how Movie Studios decide to monetize their digital content.
All forms of digital in-home and mobile entertainment have been on the rise for many years and will continue to increase at an accelerated rate. Direct to consumer platforms such as Netflix, Amazon Prime, Apple, Disney+, Peacock, HBO, YouTube, X-Box, Nintendo, Sony, and many others need to be fed an ever increasing supply of new digital entertainment content.
And remember, Netflix, Amazon, Apple, Disney, Universal/Peacock, HBO, and others control and/or own their own Movie Studios and the Digital Platforms that can deliver their digital entertainment. How much revenue does Disney keep when they release a movie or TV series they produced on their own digital platform??? 100%!!!!!
It’s important to note that VR is another form of digital entertainment that is already being delivered to the in-home and mobile consumer market and it’s growing rapidly.
We have seen this movie before (pun intended) with video game developers shifting their focus from developing video games for the OOH arcade industry to spending 99.99% of their resources on developing the best video games for the in-home and mobile entertainment market.
Due to the coronavirus, several VR companies have already shifted their focus to figuring out how to exploit the in-home and mobile entertainment market. And why shouldn’t they – especially if their goal is to make more money. Without a doubt, the biggest opportunity for VR content creators and suppliers is the in-home and mobile entertainment market. Since the opportunity is so big, the market is going to be dominated by large multi-billion dollar companies that are focused on selling all forms of entertainment directly to the consumer market.
As reported by TechCrunch on November 26, 2019,
“Facebook buys VR Studio behind Beat Saber… Buying Beat Games and bringing it into the fold of Oculus Studios suggest Facebook may be interested in following the strategies Microsoft and Sony have employed as they’ve bought up small studios and funded new titles.”
OOH VR = Multiple Trojan Horses – Do you have one in your center?
OOH VR is a ‘Digital’ Trojan Horse. If we invest in VR or any other type of digital entertainment, we have to understand that we have no control over how the digital VR content is distributed, monetized, or what entities ultimately control the content and the overall customer relationship.
Even though VR attractions are operated in OOH venues, the venue operators often don’t control the data being collected from their guests.
Here’s an important question to ask – If a VR supplier decides to sell their company and all their digital VR content, IP, and player data to Facebook or some other company, will the OOH venue operators get any of that upside they helped to create? Answer = NO!
Many VR companies continue to collect player data from the attractions they sold to OOH entertainment operators. This player data is valuable and can be used to build a loyal following. Again, Facebook and several other companies have bought or have controlling interests in multiple VR companies.
Think of OOH VR as Facebook’s and other VR promoters’ ultimate ‘try it before you buy it’ OOH marketing tool to grow their digital in-home and mobile gaming and entertainment platforms. How much is Facebook paying you for their product placements in your OOH venues? Answer = Zero dollars again!
Here is a recent post discussing the TOP In-Home VR games of 2020 as reported by techradar on June 4, 2020,
“Gone are the days of limited libraries and repetitive experiences—now that virtual reality is sliding into the mainstream, there’s a wide range of VR games to choose from and whether you like high-octane shooters or slow-and-steady puzzlers you’re going to find a world to get lost in.”
In the same article, techradar discussed the rave reviews coming in for Valve’s new VR Half-Life – Alyx,
“Some were afraid that Half-Life: Alyx, one of Valve’s first VR games and the first new entry in the series in over a decade, might not live up to the expectations. But, without a shadow of a doubt, this is a Half-Life game that fills the roomy shoes that Valve left behind in 2007. It’s that good.”
“So grab your PSVR, HTC Vive or Oculus Quest headset, and get ready for the ride of your life with the best VR games of 2020. And, be sure to keep checking back, because as new excellent VR games are released, we’ll be adding them on here.”
Important note: Just like the Movie Studios, VR entertainment providers can easily steer our guests to their current or future online platforms. These platforms will be able to offer our guests a much better overall gaming experience from the comfort of their homes or on their mobile devices 24/7/365 and at a dramatically lower price point. A price point that will be less than 1 penny per minute of game play compared to 100 pennies per minute for out-of-home venues – that’s 100 times more expensive!
If we really want to create more resilient OOH Entertainment Venues, then we should be investing in OOH attractions that are impossible to replicate for the in-home and mobile entertainment market.
Number Two: Are we investing in attractions that are unique in our market area?
If our competitors can buy identical or very similar attractions, then those experiences won’t enable us to gain a competitive advantage. The oversaturation of venues with similar and often identical offerings isn’t going to end until we stop purchasing the same me too entertainment options.
The goal is to work with manufacturers and suppliers who are committed to providing our guests with dramatically better attraction experiences that can only be found out of the home and exclusively within our venues.
Key Attraction Features:
- Out-of-Home Only (OOH) – Real physical experiences that can’t be replicated for the in-home or mobile entertainment market.
- Radical – Our guests are blown away by our attraction, because it’s unique and exponentially superior to anything they can experience in-home or OOH in our market area.
- Social – Attractions that enable our guests to have fun by participating or playing together with family, friends, groups, coworkers, and fellow guests.
- Habit by Design – Our venues provide our guests with a clear benefit, that is truly engaging, effortless, rewarding, and enjoyable to experience. All the parts are designed to enable a strong habit to form – a positive habit that improves our guests’ lives.
- Branded – The goal is to operate a high quality, unique, and recognizable national or international brand within our venues.
- Exclusive – Only our venue in our market area can have it. This means we have to partner with an attraction manufacturer/supplier who will provide us with a radius protection that enables only our venue to operate the attraction.
As an example, how hard and costly would it be to buy a few dozen axes, some wood, chain link fence, some metal posts and use these items to build a six lane axe throwing attraction?
● Hatchet from Home Depot $45.99 x 24 = $1,104
● 2 x 6 x 12’ lumber for target wall and side walls $8.56 x 100 pcs = $856
● 2 x 4 x 12 foot lumber for framing $5.62 x 84 = $472
● 4’ x 8’ x ½” plywood for lane walls $19.85 x 42 = $834
● 6 ft. x 50 ft. 11.5-Gauge Galvanized Steel Chain link fencing $191 dollars x 2 = $382)
● 6 ft. 16-Gauge Galvanized Metal Post with fasteners, brackets, etc. approximately $65 per post x 14 = $910
● Paint for targets (red, green, and blue) $50
● Miscellaneous Fasteners = $100
Total Cost of Materials = $4,708 plus labor, but can probably be constructed using a few beer drinking buddies in exchange for some free craft beers and some axe throwing time.
Again, how hard is it to open an axe throwing business? The answer is pretty easy and not very expensive either or so it would seem.
In reality, building an axe throwing attraction that is safe and highly durable requires real world experience. In fact, operating an axe throwing attraction safely while simultaneously making the guest experience fun and entertaining is much more complicated than it would appear.
Developing any attraction and taking it to the highest level possible is always a very iterative process. With all the above being said my core point is this; if the barrier to entry appears to be very low and the money generated is high or potentially high, then the number of competitors is likely to ramp up very fast, which will ultimately dilute the long-term opportunity.
It’s important to note that the more difficult an attraction is to replicate and the harder it is to operate the more valuable it can be to the long-term success of a venue. The key is working with the best attraction developers to create superior attraction experiences that are difficult to replicate and require a professional team to operate them.
The alternative is an easy to replicate and operate attraction which inevitably turns into a bloody red ocean of competition.
Number Three: Are our attractions and services designed to maximize socialization?
Our entertainment venue’s core strength needs to be our ability to facilitate the gathering of friends, family, groups, coworkers, and fellow guests on a regular basis. The key is focusing a significant portion of our resources on figuring out the best ways to maximize human interaction and connection within our community venues.
We do this by making sure our attractions and services are designed to enhance and maximize our guests’ ability to play and socialize with each other.
A few examples:
Give our guests lots to talk about
- Multiple games or rounds when participating in an attraction – this will give participants more to talk about
- Actually promote and use the most habit forming game formats during our venue’s primetime hours of operation
- Tournament Events help to build a community of players and fans
- Visibly post game stats for players, squads, teams, and Tournaments on large displays throughout our venue
Facilitate multiple shared experiences
- Attractions that allow our guests to play or participate together on a Team or Squad will maximize the fun and value of our venue’s experiences
- Areas to gather that make it easy to talk, drink, share a meal, and tell stories during and after an attraction experience
- Tournament Events designed for attracting players and fans
Tools to meet up
- Ability to email invitations for parties and group gatherings
- Notifications to Friends and Family when you make a new reservation
- Automated weekly Tournament Qualification Ranking updates
Reasons to return
- Monthly passes which facilitate return visits in less than 30 days
- Email reminders of the value remaining on our guests’ monthly cards that will soon expire
- Notifications to players and squads when they have qualified to play in a Tournament Event or no longer qualify and must play again to requalify.
- Promotion of Social Events
In summary, there is a lot we can do to separate ourselves from the competition, but it takes time and money to make it happen. That is why it’s so critical to learn as much as we can about the different ways we can dramatically differentiate our venues from our competitors.
It’s important to point out that we can’t be dramatically better at all things. We must select the one or two things we have the ability and resources to make 10x or at least 5x better.
It’s unlikely that we will have the skills and knowhow required to make our chosen attraction experience(s) dramatically better from the very beginning. This is a journey and we must pick the path that is within our capacity to become the very best we can be, but then we must do the iterative work required to make our attraction 10x better.
Next article: Multiple Reasons Why Memberships Don’t Work
Following my membership article, for the first time, I plan to share details publicly about our LASERTRON Battle Royale Squad experience which is a dramatic leap forward in game play and is fully integrated into LASERTRON’s Programmable LED Arenas. A branded experience that is totally unique and proprietary to LASERTRON Operators.
Thanks for reading,