• June 1, 2006
  • By Marshall Lager, founder and managing principal, Third Idea Consulting; contributor, CRM magazine

Old-School Entertainment Is Still in Session

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Outdoor sports season is here, and arenas, movie houses, and even the new wave of family entertainment centers are again facing a powerful challenger--digital home entertainment--for entertainment dollars. The massive advances in home entertainment choices in recent years have more folks staying home to have fun. Not since the introduction of TV has there been such a significant change in the way consumers spend their leisure time and dollars. "Everybody has a challenge for gaining entertainment wallet and mindshare, since people have limited time to spend on leisure," says Phil Sugar, CEO of loyalty marketing company SmartButton. "The advent of home theater has bitten into movies, for instance." While the degree of effect is different depending on the type of entertainment, there's no argument that HDTV sports events are cutting into stadium attendance numbers, game consoles are replacing arcades, and a theater ticket is far more expensive than watching and listening at home. Despite these new contenders, old-school entertainment has managed to retain a strong hold on the public's pocket. The reason is more than just inertia or nostalgia. "Old-school venues have the content," says Peter Kim, senior analyst at Forrester Research. "It's not the same listening to a concert, even on a great home theater, as being in the concert hall." Sugar agrees that there is something special about being at a venue. "People are going back to older venues. They're interested in going out and having the physical experience." He notes that this is the case even when said physical experience is not as convenient or comfortable as the modern equivalent. "I've often seen 600 or 700 people crowding a poker room for some of our gaming clients, even though you can play poker online. It's the same thing with Starbucks--they've made it worthwhile to go out to a coffee shop instead of sitting home with much more affordable coffee." The key with any venue, from coffee houses and bars to racetracks and boxing rings, is to provide something of value to the consumer. If the venue suspects it's losing patrons to home entertainment, it can offer loyalty programs, thereby taking advantage of the same technology that threatens it. "To make old-school events more interactive, teams can provide rewards and experiences that have much more value," Sugar says. He gives as a client example the Oakland Raiders. The Raiders worked with SmartButton to develop the Raider Rewards program, which offers everything from memorabilia to access to closed practice sessions. Raider Rewards aren't only dreamed up by the marketing department; according to Sugar, the program is built around fan surveys, ensuring that the available premiums are in line with what will fill seats. "A program like this has to be permission based," Sugar says. The surveys also make rooting for the home team more interactive. "We find out what the people want and we give it to them. As long as there is something real, something tangible the patron gets from the experience, you're adding value whether you take a technological approach or not." Interactivity may seem like a strange thing to bring up when talking about events where spectators are far from the action and can't even control the viewing angle, much less the performers. But while digital media has co-opted the term interactive entertainment for its own, it's precisely the give and take of the real world that keeps old-school venues attractive. "For example, people keep coming back to online role playing games for the sense of community as much as for the game's content," Kim says. "But that's exactly what you get with a concert or sporting event, even going out to a bar. By being there, you are part of a community."
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