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The digital death of boredom and its implications for LBEs

I’m bored; let’s do something. Not all that many years ago that is something most people frequently experienced. Back then basically all we had to do at home was listen to radio, watch network TV shows on our cathode ray televisions and play board games. And when we were away from our home electronics, we could really become bored. When you’re bored, you look to do something to relieve that boredom. A visit to a location-based entertainment venue was often the answer back then.

Today that situation has dramatically changed. We are bored far less often due to all the digital content options at home, whether it is watching streaming movies, television shows or sports on our HDTVs, playing video games or immersed in social media or other content on our digital screens. And we are no longer bored when away from our home electronics with the smartphones and sometimes tablets we carry with us everywhere. According to Nielsen’s Third-Quarter 2014 Cross-Platform report, U.S. adults spent an average of 46 hours, 44 minutes per month connected with content through a smartphone app or mobile web browser. That’s almost double the 26 hours, 13 minutes they spent in the same quarter two years earlier. And Nielsen reports that 68% of adults used smartphone apps to relieve boredom or to kill time, 70% of the time while they were by themselves.

Smartphone content time on app or web browser copy

Boredom used to be location-based entertainment’s friend. That has changed today. The bar has been raised to get guests in the front door of entertainment venues, as they’re rarely bored anymore.

Posted in digital, Disruption, FEC, Leisure time, Location based entertainment | Tagged , , , , , , , , | Comments Off

Movie Attendance Continues its 12-Year Decline

Hollywood has reported that North American 2014 movie theater attendance dropped 6% from the previous year and box office revenue declined by 5%. Actually, the decline is greater when we adjust for an increasing population; per capita attendance declined by one-fourteenth (-7.1%). This is the continuation of a twelve-year decline from its peak attendance in 2002 when the average North American went to the movies 4.9 times. In 2014, it was down to 3.6 times. Over those twelve years per capita attendance has declined by more than one-fourth (-27%) and box office ticket revenue has declined by 13%.

movie box office 2000-2014 attendance ticket price copy

We’ve been following cinema’s decline for many years. Every year Hollywood reports declining attendance, they attribute it to the poor quality and draw of movies that year, the lack of blockbuster films. That is rather hard to believe when it’s a decline spanning over a decade. And you can’t really blame it on the Great Recession, as the decline started back in 2003, almost five years before the economic turndown. And although the middle class is becoming more economically squeezed than ever, moviegoing is the most economical form of out-of-home entertainment there is at an average ticket price of just over $8.

Truth be told, there are much more fundamental reasons why moviegoing is on the decline. It has a lot to do with the fast growing digital entertainment and social media competition. Movies are no longer the only game in town. We now have smartphones, tablets, large screen HD TVs and instant video and movie streaming. We have increasingly higher quality television programming. We have instant entertainment anywhere. The lure of digital devices is keeping people away from cinemas.

Brooks Barnes at The New York Times says the real problem is generational, “(In the past) young ticket buyers traditionally turned out weekend after weekend – with the quality of the films mattering less than the opportunity to fraternize. But this group is staying home more often.” Nielsen reports that during the first three quarters of 2014, Americans aged 12 to 24 saw 15% fewer films in theaters compared to the same period in 2013. In 2013, the number of frequent moviegoers between the ages of 18 to 24 fell by 17% according to the Motion Picture Association of America.

Moviegoing has lost a lot of its social currency with the younger generations. It has also lost a lot of its social appeal. The younger generation wants to share the experiences they are having with not only the people they are with, but also with their social media friends. You’re not allowed to talk, text or post on social media at the movies.

What we are seeing is the growing attractiveness of High Convenience – instantly accessible, enjoyable and low and no cost digital entertainment and social media – while the Fidelity of moviegoing has not increased enough to offset that increasingly attractive alternative. The higher the Convenience of digital entertainment and social media becomes, the higher of Fidelity of real world experiences needs to become to be competitive.

A few theater chains are raising the Fidelity of moviegoing. One example is AMC Theatres, which has pulled the standard movie seats out of a number of theaters and replaced them with lush electric recliners to counter the comfort of sitting in lounge chairs at home while you watch a movie or binge-watch a Netflix series. This decreased the theater seating count by two-thirds. AMC also added reserved seating when you buy your ticket on-line. They also added food and beverage, including alcohol. The result is a significant increase in attendance. AMC understands that the moviegoing experience needs to be more than just the film, it’s the Fidelity of the entire experience of devoting around 2.5 hours of your limited leisure time to being in the theater, and that doesn’t count the time to travel there.

The declining attendance that is happening to moviegoing is happening to just about every type of out-of-home entertainment. Participation and average household spending on almost all types of location-based entertainment is on a long-term decline that started back in the early 2000s, just like moviegoing. However, just like AMC Theatres, there are players who have learned how to be successful in a smaller market by increasing the Fidelity of their experiences. Examples include TopGolf and Punch Bowl Social that we wrote about in this month’s issue of our Leisure eNewsletter.

Posted in Location based entertainment, Movie box office, movies, Out-of-home | Tagged , , , , , , , , | Comments Off

Exactly Who Are the Affluents?

In our last December 2014 white paper The Perfect Storm: LBE Disruption & Opportunity, we discussed how the upper middle and higher income households, what are called the Affluents that make up more than 20% of all households, are growing and control the majority of location-based entertainment spending. In the White Paper we described Affluents as people with personal incomes in excess of $70,000 who predominately live in households with two or more income earners with total household incomes of $100,000 or greater. We used that simple definition for brevity. However it is really more complicated than that, as household size has an impact of how much money it takes to live comfortably. A four-member household needs more income than a two-member household.

Pew Research just completed an analysis of who the upper-middle and higher income households are, what they call upper-income. They found that 21% of households had upper incomes and 46% had middle incomes in 2013. Here are their findings of what families are upper-income:

Upper Income graphicThis corresponds very closely with an analysis early this year by USA Today of what 2014 income the average family of four needs to live the American Dream.

Cost to live American Dream copy


Pew Research’s analysis found that the only income group that has seen their net worth grow since 2001 are upper-income families whereas lower- and middle-income families’ net worth have declined significantly.

PEW wealth gains since 2001 The wealth gap between upper- and middle-income households has grown to a record high. The median net worth of upper-income families is now 6.6 times greater than the median net worth of middle-income families.

The upper-income, the affluent households are now and should continue to remain into the future as the households with the lion’s share of discretionary income and the propensity to spend it at entertainment venues and restaurants. They are the market to target.

Posted in Consumer expenditures, Demographics, Entertainment, feasibility, Target markets | Tagged , , | Comments Off

35 Million Households Visited an Agritainment Farm this Summer and Fall

Members of over 35 million households (29%) with more than one-third of the U.S. population visited and paid for an activity at an agritainment farm over the summer and fall this year. This is the finding from the first national agritainment survey conducted by the White Hutchinson Leisure & Learning Group consultancy firm. 2,004 people were surveyed about their agritainment farm visits and activities that took place between July 1 and mid-November. Activities they were asked about were multi-activity Fall/Halloween attractions, corn mazes, u-pick pumpkins, u-pick apples and other fruits, haunted attractions and hayrides.

Participation was highest in the Northeast where 38% of households attended an agritainment farm activity and lowest in the South with one-quarter attending.

HH regional agritainment participation graph

In the South, Midwest and West regions of the country, more people attended a multi-activity Fall/Halloween attraction than any other type activity, with the Midwest having the highest participation rate. However, in the Northeast, u-pick apples, cherries and other fruits was the most popular, followed by Fall/Halloween attractions, almost tied with corn mazes as third in popularity. In both the Midwest and South, u-pick pumpkin patches were the second most popular activity followed by corn mazes in third place. In the West corn mazes are the 2nd most popular activity followed by u-pick pumpkin patches.

In our company’s twenty years of working in the agritainment industry, we knew farms were growing in the crowds they attracted, but we never realized how high the household participation rate had become. For entertainment-type destinations, these are incredible market penetration rates. It’s second only to movie theaters and higher than participation at theme parks. Agritainment truly owns the Fall, and especially October.

Posted in Agritainment, Agritourism, Entertainment, Location based entertainment, Out-of-home | Tagged , , , , | Comments Off

Industry Label Reinforces Paradigm Paralysis

At the IAAPA Convention in Orlando this year I was part of what we believe was the first seminar ever given at IAAPA about attracting the adult market, called Growing Your Revenue with Adults. We presented data on why the family market is on the decline and why it is more lucrative to go after the adult market at community entertainment venues compared to the family market and discussed what it takes to be a successful adult center.

This is a completely new idea for most of what is called the family entertainment center (FEC) industry. And that is exactly why it is such a new idea, as for over two decades, community entertainment venues have been labeled as FECs. So everyone assumes centers have to target families, which means adults and children.

This has created a paradigm paralysis in the industry about who the target market needs to be due to the FEC label, basically, a little bit of something for everyone. And that is exactly why so many centers are marginally successful at best.

I didn’t fully realize how incredibly powerful labels are to our thinking until over this past weekend I read Adam Alter’s book Drunk Tank Pink: And Other Unexpected Forces that Shape How We Think. There’s an entire chapter about the subconscious, invisible, involuntary ways that labels affect the way we think, feel, and behave. Alter cites extensive research showing how immensely powerful labels are in shaping how we see the world and react to it, how labels craft the images that populate our thoughts. It’s sort of what could be called a linguistic Heisenberg principle: as soon as you label a concept, you change how people perceive it.

So the bottom line is that every industry magazine, every industry trade organization, every industry seminar program that talks about the family entertainment center industry is doing the entire industry a disservice, as the family label is perpetuating the paradigm that centers have to be designed to attract families. The family label is precluding most developers and owners from considering what is now proving to be the more successful approach of developing entertainment centers for adults. We need to change the industry name to something like entertainment centers or community entertainment venues to break the stranglehold the family label has on the industry’s development and future success.

P.S. What most people in the entertainment industry don’t understand is that when you design and operate a center for adults, you still get many families, but when you design and operate for families, you don’t get the adults.

Posted in Entertainment, FEC, Location based entertainment | Tagged , , , , , , | Comments Off

The Tchotchke Index Tracks Location-Based Entertainment Spending

American’s spending on tchotchkes—trinkets, junk, yard sale finds, gift shop items, home decor trinkets and other decorative items for the home—is an excellent measure of their impulse spending, the fluff available in household budgets. It’s a good gauge of American’s economic wellbeing, rising when Americans are feeling economically flush and falling when they are feeling financially pinched. Back in 2007 the American Consumers Newsletter started to name tracking that spending the Tchotchke Index.

We dug into consumer spending data to show you what has been happening to the index since it’s 2000 peak of average household tchotchke spending of $240 (in 2013 dollars). It fell to a low of $158 in 2004 following the 2001 recession, 9/11 and the dotcom bubble, recovered to $226 during the housing boom and has been on the decline ever since to the low in 2013 of $103, 57% below its peak.

tchotchke index

It is no coincidence that we have seen a similar long-term decline in location-based entertainment spending starting in the early 2000s, rising in the mid-2000s and then declining since – a pattern comparable to the Tchotchke Index. Many Americans continue to cut back their spending on not only tchotchkes, but other discretionary items including location-based entertainment.

Posted in Consumer expenditures, Entertainment, Location based entertainment, Recession, Uncategorized | Tagged , , , , , , | Comments Off

The intersection of personal digital technology & bricks-and-mortar entertainment

In this blog and in our company’s Leisure eNewsletter, I write extensively about our company’s research and analysis of the fast evolving and rapidly changing intersection of personal digital technology & bricks-and-mortar entertainment. The Triple Revolution of the Internet, social media and the always-on-connectivity of now ubiquitous mobile devices is disrupting the entertainment venue industry in ways and at a speed that most in industry fail to recognize, let alone take action to stay competitive.

Below is a graph that illustrates the change in spending over the past decade. The average American household has increased their total spending on all types of entertainment, including admissions and fees at bricks-and-mortar entertainment, cultural and sports venues and on all forms of digital entertainment including social media (88% of social media users consider it entertainment), by one-quarter (24%, inflation-adjusted) over the past ten years, increasing from 3.5% of all their spending to 4.4%.

Average household entertainment expenditures 2004 & 2013

But here’s what we see as the real mega-trend that should have entertainment and other venues alarmed. Average household spending on both video game hardware and software and on cellular phones and services (think predominately smartphones and apps) has almost doubled (+96% for both), whereas admission and fee spending at entertainment, cultural and sports venues has decreased by one-quarter (-24%), from 16% of all entertainment expenditures to 10%. And when we look at the data year-by-year, it is apparent that the trend started many years before the Great Recession, indicating that it is a long-term trend.

This digital disruption of where entertainment dollars are being spent is something everyone in the business of attracting customers to any type of leisure destination needs to recognize. In order to assure their future they will need to take action to transform their venue to become competitive with the fast growing siren call of at-home and mobile digital entertainment.

Posted in Consumer expenditures, digital, Disruption, Entertainment, Location based entertainment, Social media, Trends, video games | Tagged , , , , , , , , , , , , , | Comments Off

Open Kitchens in Restaurants Increase Guest & Employee Satisfaction

Recent research findings reported in a September 2014 Harvard Business School Working Paper show the value of open kitchens in foodservice facilities and restaurants (Open kitchens are also referred to as exhibition or display kitchens).

The most surprising research finding was that customer satisfaction with the food increased 10% when the cooks could see the customers, but the customers couldn’t see the cooks. However, when the customers could see the cooks, but the cooks couldn’t see the customers, there was no increase compared to when neither could see each other. Most striking was that when customers and cooks could see one another, satisfaction went up 17% and service was 13% faster. Transparency between customers and providers improves service.

In another study led by Ryan W. Buell, one of the researchers, customers who preordered a sandwich and could watch it being made, such as at a Subway Sandwich shop, rated the service higher than customers who couldn’t see the sandwich being made, although the sandwiches were identical.

Buell, in a interview in Harvard Business Review, commented, “We’ve learned that seeing the customer can make employees feel more appreciated, more satisfied with their jobs, and more willing to exert effort. It’s important to note that it wasn’t just the perception of quality that improved—the food objectively got better. . . This work highlights the humanity of interactions, or service. There’s something refreshingly human about the idea that just seeing each other [in a work environment] can make us more appreciative and lead to objectively better outcomes.”

The bottom line is that you shouldn’t hide the kitchen, both from an overall employee and customer satisfaction standpoint, but also in terms of the speed of service and quality of the food.

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One-of-a-Kind Survey on National FEC Attraction Preferences

Last month our company completed a national survey of over 4,000 adults on their participation in major attractions at family entertainment centers. According to the results, bowling continues to be the most popular attraction for community-based entertainment venues, with over 60 million adults having bowled at least once during the past twelve months.

As far as we know, this is the first national participation survey that has been conducted about the family entertainment center industry in the last decade.

Our survey found that bowling 18- to 24-year-olds showed the highest participation rate. Over three-quarters of participants were occasionally bowlers, having bowled four or less times during the previous past year.

These results are clearly attributable to the fast changing nature of bowling. At one time, league bowlers dominated bowling. Today, the primary customer base is the casual social bowler. Their numbers are growing as old run down alleys are either closing or being renovated and/or replaced by new upscale hybrid entertainment centers with multiple attractions.”

One of the survey’s surprise results was that miniature golf came in second as the attraction adults participated in at least once during the past year. We believe that the majority of miniature golf play takes place on vacations rather than at local FECs near people’s homes. Billiards came in third as the most popular attraction, followed by go-karts and laser tag.

For all the attractions, there was a strong positive correlation between income and participation, with affluent adults in households generally earning $100,000+ annually having the highest participation rates.

Bowling is popular just not in the U.S., but throughout the world, especially due to its group social dynamic. Our company currently has bowling projects under design in the greater Seattle area and in Amman, Jordan and one nearing completion of construction in Da Nang, Vietnam.


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Evidence of Continuing Long-Term Decline in Marriages & Births

In our company’s May 2014 Leisure eNewsletter, we reported on the declining birth rate in America. Then in last month’s September issue, we reported on the increasing proportion of the population that is single. Now along comes research published three days ago from the Princeton University’s Woodrow Wilson School of Public and International Affairs that finds that these two trends will continue long into the future.

The research analyzed 140 million birth records between 1975 and 2010, a time period that covers five different recessions. It found that women who are in their early 20s during a recession will have fewer children in both the short and long term, driven largely by the number of women who will remain childless at age 40.

In terms of the recent Great Recession, the research estimates that an additional 151,000 women will remain childless at age 40, leading to a long-term loss of 426,800 births, a 2.4% decrease.

The research suggests that the cause will be that men who entered the work force during the Great Recession are likely to have persistently lower earnings as they age, and thus be less attractive mates for women, this resulting in more single women who remain childless.

This was confirmed by recent PEW Research findings that we reported in the September issue. PEW’s research found that the number one and most important quality that three-quarters (78%) of never-married women say they want in a partner is a husband with a secure job.

PEW also projected, “When today’s young adults reach their mid-40s to mid-50s, a record high share (roughly 25%) is likely to have never been married.”

Rebecca Traister, senior editor at The New Republic and author of an upcoming book on single women, says that until recently, getting married marked the beginning of a woman’s adult life. She says that has now changed. “We have now shifted our vision of what a woman’s life path usually entails, and it now entails some period of economic, social and sexual independence.” She also points out that the shift in marriage patterns can possibly be seen as a destabilizing force in society (especially politically).

What this all means for location-based entertainment venues (LBEs), including family entertainment centers, is that there is a long-term trend under way of less births and more singles, including unmarried childless, economically independent women. LBEs will need to adjust to these changing demographics with their mix, design and operations. And when it comes to singles, that segment will include a growing proportion of single women in their late 30s, 40s and 50s, a market with different wants, needs and values than the younger adult market many LBEs now target.

Singles by age 2013To listen to or read an interview with Rebecca Traister on NPR Radio, click here.

Posted in children's entertainment, Demographics, Millennials, Recession, Singles, Target markets, Trends | Tagged , , , , , , , | Comments Off