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A Father’s Point of View: Entertainment, Experience, eCommerce

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Aside from covering the devastating health and economic effects of the Coronavirus, most COVID articles I’ve read recently have focused on the impact on businesses and the shift to work from home for a majority of professionals. As the father of three young girls, I see this point in time through a different lens. I see immediate and longer-term lifestyle changes. I’m going to look at a few topics in a series of blogs, with the first one focusing on how COVID has impacted streaming and video on demand (VOD), and how things will look post-pandemic. And, as an eCommerce guy through and through, I see parallels in the trajectory of the two industries – entertainment and eCommerce. In fact, call it the three “E’s” – Entertainment, eCommerce and experience.

So Disney+ has been running almost constantly in my household – yes, I now know the words to every Frozen 2 song. Millennials like myself are unique. We straddle the age of theaters and streaming.  Growing up, if I wanted to see Independence Day or Jurassic Park (insert old guy joke here), I went to a movie theater. If I wanted to watch at home, I had to wait four months, hope Blockbuster had copies and watch it on my low-quality CRT TV on VHS (yes, I am that old). Now that chain is breaking, and my kids will live in a new world of content consumption.

Experiment, retaliate

The pandemic provides a great time for experimentation on how to adjust the current consumption model – not unlike what’s happening in eCommerce, more about that later. Disney released Frozen 2 on Disney+ while they were still in the “selling only the full movie” stage of the lifecycle. They have since done this with Onward and will be doing it with Star Wars Episode IX and probably other titles, too.  Other studios are allowing consumers to rent current in-theater movies for a premium. A notable example is Trolls World Tour, which has brought Universal more revenue in three weeks than the entire run of the original Trolls movie over five months. They have since announced they will continue providing POD (Premium On Demand) movies along with theater releases. In a retaliatory move, mega theater chain AMC (among others) is refusing to screen Universal movies.

So what does this mean for the future?  My kids are in the  golden age of entertainment delivery.  They did not have to transition from VHS to DVD to BluRay to streaming delivery. They were born into a time where everything is at their fingertips.  From Amazon and Disney+ to Netflix , the list of viewing platforms is long and getting longer all the time.

So, what will be the incentive to go to a movie theater?

As theaters begin to open again,  they will have to continue their transformation to an experience venue rather than the traditional “soda and popcorn” place.  Alamo Draft House, Studio Movie Grill and others in that category have already started to drive the main line theaters to adopt their “dinner and a movie” concept.

Theaters may shrink, too, not only to accommodate social distancing, but to drive down overhead costs and offer more food and drink options to act as a one-stop-shop for a date night. While IMAX will continue to be a draw, they will have to invest in new technologies (3D, VR, etc.) to attract younger crowds and to provide something that you can’t get in your household.  There could be “dinner and a movie at home” options where theaters partner with local delivery to give popcorn and candy with a voucher to redeem the movie online, but this could be done really by anyone from Dominoes to 7-11.

I can also see this driving an increase in spend on home theater systems, especially as the pricing on quality audio and video equipment continues to fall.  A $4,000 full home theater would achieve a return on investment with about 50 POD movies (when you factor in the cost of tickets, popcorn, candy, and babysitter).

Experience economy

So, I mentioned I’m an eCommerce guy. I can’t help comparing this transformation with what’s happening in retail. We’ve entered the “experience economy” in retail as more and more consumers shop online. Brands are looking to connect with the customer’s head and heart, and differentiate through experiences offered online and in-store.

At this year’s NRF, for instance, Ben Kaufman, CEO and co-founder of Camp, described his toy stores as “family experience” venues that create a destination for mom, dad and kids – including Friday “date night drop offs.” Sure, merchandise is sold, but it almost seems like an afterthought. American Girl stores, too, are destination shopping locations with doll hospitals, cafes, hair salons and more that create emotional connections with customers.

Even after watching The Cat from Outer Space — my kids choice and a surprisingly good movie — I can’t picture something that would make me want to go back to the theater with my family.  Of course, my kids are all under the age of six, so I’m still calling the shots…or at least as much as my wife lets me.

Author

Matt Cely is a client partner for LiveArea and a long-time eCommerce professional. He’s the proud father of Emma, Claire, and Audrey.

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