May 3, 2018
Apparently alternate reality has come to the home entertainment industry.
Stephanie Prange’s insightful report from the recent DEG event about Virtual Reality (VR), Alternate Reality (AR) and Mixed Reality (MR) infusing new hope for home entertainment studios underscores the fact that this alphabet soup of hype is definitely not reality.
Industry experts contend that VR – a technology that has always been (and will always be) a component of video games – will now transform into a mall-based attraction, or new acronym: LBE (location-based-entertainment).
“Our hope is certainly that the LBE market will not only be a business in and of itself but also encourage and support the home market,” said Jessica Schell, EVP and GM, Warner Bros. Home Entertainment.
That’s a stretch. Malls are dying in America. Amazon, ecommerce and the Internet is rapidly making the demise of this consumer option an increasing reality.
Greg Maloney, retail CEO at real-estate firm Jones Lang LaSalle , which manages malls nationwide, told The Wall Street Journal shoppers in the rural Midwest are changing their habits faster than others in the U.S.
At its peak, there were 1,500 major malls in the U.S. There are currently about 1,000 left, with about 300 expected to close over the next five years. And that’s being generous.
“When you get into rural America, you’re looking at 35 to 40 minutes of driving” to get to the mall, Maloney said.
Apart from a weekly trip to Sam’s Club or Costco, shoppers in the Midwest do as much shopping as possible online, according to The Journal.
Howard Davidowitz, with investment banking firm Davidowitz & Associates, told CNN Money that when anchor stores – Sears, Macy’s, etc., close, it causes more than headaches for mall owners and other retailers.
“I’d say this problem is only in its second inning,” Davidowitz said.
F.Y.E, one of the last standing home entertainment retail chains, which is mall-based, attributes morbid home entertainment sales to declining mall foot traffic.
But let’s forget logistics and stick to other realities undermining wider consumer adoption of VR, AR and MR. Most consumers aren’t select teenagers willing to embrace vertigo for their next home entertainment experience.
Remember 3D Blu-ray? It’s dead. And it wasn’t cost or competing 3D eyewear that killed the concept. It was the fact most people couldn’t wear 3D glasses long enough to watch a trailer, let alone the movie.
Try watching World War Z in 3D. I did. Wanted to jump off that building with Brad Pitt. And I wasn’t even bitten by a zombie. Just wearing 3D glasses. Turns out, 3D was the same hyped gimmick that came and fizzled in the 1950s.
Despite endless VR goggle/smartphone marketing over the winter holidays, a recent Nielsen study found that 53% of respondents were “just not interested” in the concept, while 43% said it was “too expensive” and 14% worried about “motion sickness.”
Augmented reality has many applications that can work for consumers and retail. Even better, it doesn’t require special glasses, just an app and smartphone can enable a user to see what a home improvement to a bathroom or kitchen could look like.
Watch any home improvement TV show, it’s riddled with AR transforming neighborhood busts into must-have homes before a shedding a single ounce of sweat equity.
Mike Dunn, DEG chair and president, product strategy and consumer business development, 20th Century Fox, perhaps summed it up best.
“The challenge from my perspective is not the technology, but how you apply that technology,” he said. Dunn used to be president of Fox Home Entertainment.