Is your brand ready for the location-based entertainment licensing takeover?

Brand engagement has been on a rollercoaster ride lately, particularly in location-based entertainment (LBE). Millennial and Gen Z consumers now prioritize such experiences as theme parks, water parks, rides, hotels, walk-through attractions, escape rooms, pop-ups and indoor and outdoor experiences over material possessions. They crave immersive, interactive and shareable experiences that transcend content. And in the aftermath of pandemic lockdowns, venues and locations seek innovative experiences to bring to new and existing audiences.

Meanwhile, advancements in virtual reality (VR), augmented reality (AR) and artificial intelligence (AI) create immersive and interactive experiences traditional entertainment mediums struggle to replicate.

These factors have fueled the rise of the LBE market, poised to reach $30.29 billion by 2028, with a compound annual growth rate (CAGR) of 34.4%. License agreements with film studios, entertainment companies and game developers catalyze the creation of immersive, interactive experiences and themed attractions based on well-known brands and characters.

While this presents a golden opportunity for the brand licensing industry, it demands a strategic shift in approach. I believe LBE will become a standard means by which IP is absorbed by consumers, in the same way online purchasing became part of the brand merchandise landscape.

Licensing goldmine

Opportunities for IP holders, content creators and brand owners include:

• Brand activation
  Tangibly activating brands and their IP allows for deeper brand loyalty, engagement and emotional connections with consumers.

• Enhanced brand image
  Connecting with a well-designed and executed LBE experience can elevate a brand’s image and create positive brand associations, especially with younger demographics.

• Audience engagement
  Fostering deeper emotional connections with brands and franchises creates enhanced audience engagement and brand loyalty among consumers.

• Market expansion
  If you’re a brand owner, licensing IP for use in LBE venues lets you tap into new markets and demographics, reaching audiences beyond traditional media channels and retail outlets.

• New revenue streams
  If you’re a content creator or brand owner, licensing agreements generate royalties based on ticket sales and merchandise within the LBE venue or with co-branded products.

• Data and insights
  LBE experiences can provide valuable data on consumer behavior and preferences within the physical space. Data can refine licensing strategies, develop targeted product lines and gain deeper insights into audience preferences.

• New demographics
  Events draw in audiences already loyal to a brand, but those audiences rarely arrive alone or with only like-minded people. Brand loyalists draw new people to the brand by getting them to participate in the paid experience. It’s a brilliant revenue model that moves customer referrals into a new realm.

A slippery slope

While I believe the potential of LBE is undeniable, it comes with a few challenges:

• High development costs
  Creating high-quality LBE experiences requires significant upfront investment in real estate/location, technology, infrastructure and content creation.

• Maintaining relevance
  The fast-paced nature of consumer trends requires LBE experiences to stay relevant and adapt to ever-changing consumer preferences. As an IP owner, you need a strategy to ensure you recoup your investment before your LBE experience becomes yesterday’s news.

• Deep licensing expertise
  Managing the complexities of licensing agreements for LBE projects requires specialized knowledge and deep licensing expertise to ensure mutually beneficial partnerships. A master licensing strategist can combine merchandise, promotions, activities, live events and immersive experiences.

Data-driven dreamland

I can’t emphasize enough that a successful LBE experience must be planned using as much data-driven evidence as possible to create the optimal experience. By embracing data-driven solutions, licensors and licensees can build successful partnerships in the evolving LBE space.

Integrating data analytics is paramount to creating immersive, personalized and profitable experiences. Such an approach strengthens brand engagement and loyalty while reaching the full potential of LBE as a powerful platform for brand licensing.

Here’s how data empowers LBE’s success:

• Optimizing brand activation
  If you’re a licensor, visitor demographics, dwell times within branded areas and concession purchases can help you optimize brand activation strategies and create targeted experiences that resonate better with specific audiences for maximum brand impact.

• Location intelligence
  If you’re a licensee, you can leverage data on foot traffic patterns, visitor numbers, competitor analysis and local demographics to identify optimal locations for LBE venues and increase the chance of attracting the right consumer audience.

• Content personalization
  Data can help you personalize content and offerings for individual visitors. In my opinion, personalization is at the core of what makes LBE successful, building on emotional attachment, increasing the importance of the brand for the consumer, enhancing the visitor experience and fostering deeper brand loyalty.

• Measuring success
  Valuable insights into the effectiveness of brand activation allow for adjustments and continuous improvement of the experience.

Catch the next wave

I firmly believe that the rise of LBE presents a transformative opportunity for the brand licensing industry, with benefits that can last beyond the actual immersive experience. As the industry evolves, collaboration between technology giants and entertainment companies will shape its future.

By embracing innovative experiences, leveraging data-driven solutions and fostering strategic partnerships, you can develop the next wave of immersive entertainment attractions, establish deeper connections with consumers, open up major revenue streams and deliver considerable staying power.