The strategy of content companies is to transport users into the world of their favorite characters such as Harry Potter, Star Wars, Stranger Things, The Justice League, Jurassic World, among others, through theme parks, pop-up stores and immersive experiences. This adds value to their audiovisual products, encourages subscriber loyalty, as well as the expansion of their audience base and, especially, encourages more profits.
Disney is the studio that most clearly understands the weight of this strategy for the finances of audiovisual companies. The installation of theme parks has allowed the entire company to boost its revenues at a time when Disney is struggling to make its streaming vertical profitable.
Bob Iger, CEO of the company, said that as of March of this year, the experiences segment – theme parks – was one of the main drivers of its business, representing 10% of its total revenues by capturing 8,393 million dollars. While streaming totaled sales of 5,642 million. The studio, which has been in business for more than 100 years, has 14 theme parks around the world.
The performance of the experience vertical has led the company to explore the possibility of bringing new narrative worlds to its parks. Avatar would be one of the new characters to arrive, according to the executive in a conference with analysts.
“Experiences are an impressive financial engine. We are now focused on driving growth with a series of long-term strategic investments,” said Bob Iger.
Universal Studios is another company that has begun to rely financially on franchise parks, but unlike Disney, this business is not yet as important as streaming. The company, which has five theme parks around the world, had sales of $1.979 billion as of March of this year, while its entertainment vertical reported $17.868 billion, according to its financial report.
Warner Bros. Discovery has also entered the consumer-facing franchise business. Unlike Disney and Universal, the company has focused its initiative, under the name Warner House, on an experience center where visitors can explore a wide selection of iconic items from productions by brands such as DC, Warner Bros. and Cartoon Network. This center is portable and can be dismantled to take to various cities around the world. The company has not yet provided a breakdown of the revenues that this segment represents.
Netflix is another streaming platform that has begun to venture into the world of user experiences. The company has created Netflix House, an entertainment venue with immersive experiences, where consumers can purchase exclusive products and food from several of the company’s franchises such as Stranger Things, but like Warner, the company has not yet broken down the results of the new venture in its financial report.
The economic boost will depend on franchises
Claudia Benassini, a specialist in restricted television and digital platforms and a researcher at La Salle University, says that the integration of theme parks and immersive experiences is necessary in an industry that is constantly evolving. Instead of relying solely on the diversification of content, streaming platforms are bringing their fictional worlds into the reality of audiences.
However, the specialist warned that the success of the new venture by audiovisual companies will depend on two factors: the franchises and the places where they decide to install the exhibitions or parks.
The specialist says that Disney would have a clear advantage over its competitors, especially the younger ones like Netflix, who despite being the leader in subscriptions, still does not have a clear consolidation of franchises. “Going to a Star Wars-based game park is not the same as going to an immersive Stranger Things experience,” says the specialist.
A few months ago, Disney gave an approximate how much it has earned from the George Lucas franchise and its earnings amount to 12 billion dollars, while Stranger Things was worth approximately 1.82 billion dollars in 2022, according to Statista.
The placement of experiences is also strategic. These types of activations are found in markets such as the United States, Japan, China, some European countries, Brazil and even Mexico.
“Although it is a challenging strategy, I believe it is a necessary step that can give a new direction to the competition in this industry where content diversification no longer seems sufficient,” says Benassini.
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