How big can immersive get?

In Saudi Arabia, they are betting on the fact that immersive experiences and technologies are here to stay and can be implanted into the fabric of whole new districts. The best example of this is the announcement of The Mukaab, a new cube-shaped skyscraper that will be the centrepiece of the new Downtown planned for Riyadh. Funded by the sovereign wealth fund, it will offer state-of-the-art entertainment, dining, and retail and is large enough to envelop 20 Empire State Buildings. It will also be the world’s largest modern downtown and is estimated to generate USD $48 billion of revenue.

Content is still king and great storytelling will win out

Some players in this space are looking to build the next IMAX; infrastructure that can house these next-generation immersive projection experiences that currently offer a WOW factor, accessibility and context that some audiences prefer to the real thing. However, there is a danger that the excitement of the new can dissipate and in the wild west of immersive art with a multitude of players where experiences can vary immensely from one provider to the next then not everyone will survive. This race will be won by content as much as the new canvas that these technologies provide and the master storytellers will rise to the top. The immersive technology arms race will continue however and experience creators that can identify the tools that will elevate their content have an edge. Where engaging content and emergent immersive technology intersect then it is possible to create whole new formats such as the ABBA Voyage which has been made possible through a collaboration between Industrial Light and Magic (among others) and the iconic band.

Original versus existing IP

As in other contexts, if you can create your own compelling IP then not only does that increase margin but your story worlds can live across multiple platforms that can extend your community and engagement as well as offer new monetisation opportunities (which has new possibilities in the era of the metaverse beyond the usual tactics of books, movies and games etc.).

Properties like Star Wars and Stranger Things now have both permanent and touring immersive experiences respectively but it is entirely possible to reverse engineer this process. How might visitors to Meow Wolf’s strange ‘multiverse’ continue their connection with it before and after their visit?

Immersive production houses with permanent immersive projection spaces like Lighthouse Immersive are also demonstrating how you can leverage existing IP with ready-made fan communities by offering their expertise and infrastructure to brands such as Disney. They are banking on the star power of this IP to create volume visitation that makes up for a smaller piece of the pie. They clearly believe more and more rights holders will inevitably come into this space if the immersive entertainment sector continues to grow at the same rate, especially as many have already tapped into the booming experience economy in other ways to engage their fans.

Multi-platform opportunities

The direction of travel is two-way here and increasingly original immersive IP can be exploited across multiple platforms, not just the original immersive experience. Meow Wolf increasingly envisage their output as multi-platform, and have just announced that they are developing a game, ‘Jared’s Journey’, which is described as “a standalone arcade game where players guide the main character, Jared and the story is connected to the imaginative multiverse of Meow Wolf as he searches for his family.”

Another example of immersive experiences as source material for content across multiple platforms is the AMC/Amazon Prime series Dispatches From Elsewhere. This series was based on an actual immersive experience and documentary (The Institute, 2013) created by street artist Jeff Hull which served as the inspiration for Dispatches From Elsewhere. Hull developed an immersive game around the fictional Jejune Institute. Players uncovered clues as part of solving the mystery of a missing girl. Thousands of players joined over a three year period (2008-2011).

Interactive versus passive experiences

There is no right and wrong way to do this because immersive is a new genre and audiences have different comfort levels (and some will always want to observe rather than participate). However, this may change as immersive technologies continue to offer new possibilities and immersive entertainment breaks into the mainstream (and audiences become more sophisticated and comfortable). My expectation would be that they will increasingly want agency when they seek out experiences. This is one of the most exciting possibilities that immersive entertainment offers over other more fixed passive entertainment formats such as IMAX. This does not mean that passive immersive experiences will disappear but they at least need to think about where there could be moments for particular audience segments to dial up (or down) their participation. Tyama, an immersive projection-based experience developed in collaboration with S1T2 for Melbourne Museum (part of Museums Victoria) is a good example of adding interactivity to the immersive projection format. This experience transports you to Victoria’s nocturnal worlds where the experience allows you to chase pheromones with moths, use sound to see like a bat and learn from fish to sense without touch. It also integrates real objects from the museum’s collection)

Big tech – a new player in the experience economy?

Now, big tech – with the resources to reshape industries seemingly overnight – has noticed the opportunity, meaning new competitors and possible collaborators abound. For example, Secret Cinema collaborated with the newly-formed Experiences team at Netflix on an immersive production of Stranger Things in London and produced this in a drive-in format for LA which was seen by around 400,000 people. This follows on from a similar partnership between Secret Cinema and Disney for their Star Wars production of Empire Strikes Back.

Also responding to this demand for one-of-a-kind experiences, Airbnb reported a seven-fold year-on-year increase in seats booked on Airbnb Experiences in 2018, handling 1.5 million bookings per year. It launched in 2016 with roughly 500 experiences and today offers over 30,000 experiences in more than 1,000 cities worldwide. Airbnb recently announced new categories including Concerts, Social Dining, and Adventures, and is expanding its Social Impact Experiences (it has worked with more than 1,000 non-profits since 2018). 65,000 people have connected with a non-profit on an experience so far. The Experiences platform is helping launch the businesses of new creative entrepreneurs with some of the most popular hosts earning more than $200,000. The company has just posted record earnings and according to the BBC, “nearly 104 million nights and experiences were booked on the platform in the April through June period, a record high for the lodging website.”

Digital is also driving people to real world cultural and creative experiences and one of the biggest players in this space might be surprising to some. Airbnb has been described as the largest hotel in the world with more listings than the largest hotel chain has rooms. Could it soon become the biggest cultural experience provider as well? Airbnb Experiences is a marketplace for experiences and already offers hundreds of them in the Arts and Culture category. These include street art tours, heritage walks, photography and jewellery making classes. With millions of guests staying in Airbnb rentals they have a huge audience open to buying experiences from local providers and anyone can offer them (as long as you pay Airbnb a cut and abide by their terms and conditions). Over 30,000 experiences were available in over 100 cities in 2019 (Airbnb). Airbnb also revealed in that year that some of their top earning hosts are making USD $300,000 in a year (although the average is $2,500). During the pandemic, Airbnb launched online experiences and they have since confirmed this will continue. Amazon has also recently entered this space, launching Amazon Explore. This also offers virtual cultural experiences but with the integration of Amazon’s ecommerce platform it allows users to buy creative products as part of their experience. The project is currently a pilot but companies like Amazon focus on the potential size of the market before making moves like this so it seems clear they think there is plenty of money to be made in offering cultural experiences and artisan goods.

Another player, Fever, is using a different more data driven approach which appears to be paying dividends. Launched just over 5-years ago, they recently raised the largest funding round ever for a business of its type (USD $227 million) highlighting the huge growth of the experience economy.

Fever is an events discovery platform and lists and promotes its own events (and other peoples) events via its online media arm that it uses as a marketing megaphone. The network of Secret Media websites (Secret NYC, Secret LDN etc.) It has 6.2 million social fans and 15 million monthly pageviews.

Fever has been called the ’Netflix of events’ as it uses data science to understand what its community of users wants to make recommendations and identify which events to secure and create for the platform. Fever’s city specialists work together with their data scientists to bring the most demanded and curated events to the platform which now number over 10,000.

Fever produces its own events via Fever Originals. It has created, partnered with and promoted events with organisations including Netflix & Secret Cinema. The Fever App has a 4.8* rating on the Apple App Store alone from nearly 36,000 ratings to give a sense of the scale of use and its popularity as a discovery mechanism. It also acts as a ticketing system for Fever events and also as a membership rewards program with different loyalty and reward tiers (encouraging people to use it as their platform of choice and come back again and again).

Immersive story worlds offer unique opportunities for a tiered customer proposition to unlock new revenue streams

The Game, a 1997 movie starring Michael Douglas depicts his character as a millionaire who has everything. So what do you buy the person who has everything for his Birthday. Well it turns out you drop him into the middle of an immersive game experience where he does not know what is real and what is imagined (this movie actually inspired a piece of “pervasive” theatre by UK company CoLab Theatre in 2016). The price point for entry into his immersive playground was beyond the means of most but interestingly the movie was a portent for the high price points that are possible through customised immersive experiences aimed at a variety of customer types.

The traditional model for the cultural sector still revolves around tickets and memberships but there are more and more opportunities to tier the offer for different visitor segments. How do we extract revenue from audiences that are happy to pay more for premium experiences? There are some innovative examples of this in the immersive entertainment sector. These can centre around one-to-one experiences with the cast or access to parts of the story world only available to those with VIP tickets.

Perhaps the best example to show how far this can go is Disney’s immersive hotel experience, the Galactic Starcruiser Adventure which is connected to the Galaxy’s Edge theme park inspired by the Star Wars franchise.

With just 100 rooms and priced around USD $5,000 for a group of 4 (or around $1,200 per person), it was priced at a bucket list level designed to appeal to hardcore Star Wars fans. It was a bold creative experiment and is the first time Disney has offered such a high level of immersion (although they have previously collaborated with Secret Cinema which would have given them some useful insights)

However, it has just been announced that after just 18 months, it will close. Factors such as inflation which have impacted the cost of living are inevitably hitting discretionary spending but it also shows why it is important to get pricing and proposition right. The Galactic Starcruiser Adventure involved a significant cast to operate and from the outside it looked like an expensive endeavour at a time when the company is under pressure on a number of fronts and looking to make savings. Disney got some poor reviews on the hotel element of the experience: Variety said that guests were not happy about ‘the lack of amenities, such as a gym or pool’ and the ‘small, windowless rooms’. Ironically, the latter was a deliberate design choice as they wanted to make guests feel like they were on a spaceship.

From the tone of the closure announcement there have been lessonsfrom the development of the experience so it will be interesting to see if they come back with further offerings in this space. It should also be remembered the experience has earned a prestigious Thea Award and some of the highest guest satisfaction ratings in the history of Walt Disney World (CNBC).

Brands are also increasingly tapping into the experience economy through immersive entertainment

These once in a lifetime experiences are also being facilitated by brand partnerships. Porsche has partnered with Punchdrunk to deliver a premium experience to the lucky winners of a monthly draw. The prize is the ultimate ticket to their new latest London show, The Burnt City where you are chauffeur driven (in a Porsche of course) to and from the show. You arrive at a private entrance for a ‘money-can’t-buy start to your journey’ into Punchdrunk’s version of Troy. You will find a reserved table in the VIP lounge ‘where you can have a complimentary Dewar’s Kykeon cocktail (courtesy of another brand tie in) and enjoy some cabaret’. With 80,000 people already having stepped foot into the Burnt City these types of partnerships are beginning to gain more and more traction with brands.

Immersive Super Brands

Part of the appeal is the growing brand value of the leading immersive players. Some of the original movers in the immersive entertainment sector such as Punchdrunk and Secret Cinema quickly developed superfans (there is a group who have each clocked up 200+ visits to Punchdrunk’s Shanghai production of Sleep No More) who want to remain connected to the immersive story world that they have created. These organisations live or die by the social media communities that coalesce around and share their work. In the case of Secret Cinema that trust and buy-in were so significant that it translated into nearly $10 million dollars in a crowd equity fundraising campaign in part driven by audiences who wanted to invest in something they loved and share in the rewards and the journey. In their investment prospectus, Secret Cinema revealed they had a customer satisfaction score that sat between Apple and Tesla, two brands that inspire almost cult-like devotion.

Meow Wolf is perhaps the best example of brand building in this space reaching a level of interest where the New York Times recently asked the question, “Can an Art Collective Become the Disney of the Experience Economy?” and Forbes speculated on whether or not they might become the next ‘billion dollar’ entertainment company (the answer seems to be yes).

No longer the rag-tag artist collective that you see in the documentary ‘Origin Story’, they have brought in experienced executives to help steer their growth (including from Disney) and this new phase could alienate some of their original followers. However, it is clear they still maintain the alternative creative brand that inspires passion and loyalty in their fan base. This community identifies with Meow Wolf and their story over faceless brands which gives them a point of difference over more generic and commercially packaged immersive experience providers if the market begins to saturate with more and more new entrants. That trust and tribal engagement have allowed them to take their audience on a journey that has incorporated other ventures such as Festivals and even a theme park ride which can be harder for brands that are not native to the ‘creative’ led experience economy. Meow Wolf is also a BCorp signifying to its audience that it is a business that intends to create social benefits and be responsible and sustainable in relation to issues such as the environment. It often quotes the number of local artists commissioned and employed around each new development pointing out that its commercially successful model ensures sustainable employment and revenue for the creative community (as opposed to one-off-grants or underpayment or underemployment which can often be the case in this sector).

The Boomtown Festival is another example of how ‘creative’ entrepreneurs are leveraging their brand power to launch new experience ventures. Boomtown is an immersive festival based in a ‘parallel fictional world’ that changes with each edition. The Festival has been ranked as one of the best in the world which has seen it grow from 1,500 attendees to 70,000 in 15 years. The team behind the festival leveraged this community combined with their skill set of building incredible story worlds to develop a permanent immersive experience in the form of Wake the Tiger in Bristol. This has both allowed them to engage with their existing community year-round in a different way. The team describe Wake the Tiger as the ‘world’s first Amazement Park’ and they have developed a story-driven fictional world for audiences to explore. The early thinking on the project started in 2015 but the inability to stage the Boomtown Festival during the global Covid-19 pandemic really lit the fire under the development as the team both needed to pivot their activities and had the bandwidth to deliver the project in these unique circumstances. The team funded the project through a mixture of private investment and also used crowd equity funding to leverage both support and engagement from their extensive community.

Profit blended with Purpose is a brand differentiator that has benefitted community-driven immersive experiences

The notion of business for good where social impact and commercial success go hand in hand is not new and companies such as Patagonia are defined by their ethical choices, openness and investment in making our planet more sustainable through their work to combat the climate emergency. Their purpose and brand therefore is in line with both their products (which focus on the outdoors) and the motivations of the community that buys them.

Unsurprisingly, many creative entrepreneurs are driven by the same passions and principles. Given the nature of the immersive industry have sought to invest in creatives and their local creative communities. Naturally many of the customers (or fans) of these organisations are creatives themselves or want to support organisations with motivations beyond profit in itself. With consumers better informed than ever before and actively seeking out and identify themselves with brands with social impact, this is also a strategy for growth in its own right as these factors can drive adoption and loyalty (but the flip side is the drop off can be far greater if they are ever seen to have feet of clay).

For example, Meow Wolf’s strong alignment with the independent artistic and creative community is a critical part of their ‘creative and authentic’ brand that they see as a point of difference to large entertainment giants (although this will be increasingly tested if they continue to expand at their current rate).

Meow Wolf is certified as a B Corporation to reflect their commitment as a business to social impact and a desire to build a more sustainable and inclusive form of capitalism which blurs the line between business and not-for-profit mission driven organisations. Their commercial success has enabled them to provide $635,000 to non-profit arts organisations in 2019 and they now employ, support or collaborate with more than 500 interdisciplinary creatives and artists.

From temporary to permanent

Immersive theatre company Punchdrunk is one of the original examples of the transition from temporary shows to permanent attractions. Their ‘Sleep No More’ show in New York has run for over 10-years and has also recently opened in Shanghai breaking box office records in the city. As covered earlier the more recent journey of Meow Wolf has replicated this strategy and The LUME is another example of how immersive producers that have previously created touring shows have generated much greater revenue through a move to a permanent venue. This trend is here to stay and as well as the individual organisations building a broad range of permanent immersive experiences, there are a number of platform and infrastructure providers emerging.

One is Superblue mentioned elsewhere which is targeted at experiential artists and is partnered with the likes of teamLab and James Turrell. Area15 perhaps the best known example, a 166,000-square-foot project in Las Vegas which “weaves together immersive experiences, themed events, art installations, workshops, pop ups, restaurants, bars and nightlife.” The site is anchored by Meow Wolf’s Omega Mart. Its success has led to expansion of the original site and announcement of a second in Florida. As immersive techniques and experiences seep into other industries such as retail and F&B this has only increased the possibilities in this space.

• Dig Deeper – REMIX Talk – Michael Beneville, Chief Creative Officer, Area15 (Las Vegas) & CEO, Beneville Studios (NYC)

There’s no going back!

The immersive genie is well and truly out of the bottle. Whether it is the unrelenting pace of technological progress driving the creation of more and more realistic immersive environments (digital, physical and hybrid) or the changes in audience taste the trend appears set in stone. The question is how you or your organisation will adapt to the rise and rise of the experience economy and immersive entertainment as a subset of this. I hope this thought piece helps provides some ideas.

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