For at least the past couple of years, location-based entertainment (LBE), has stood as a licensing industry growth segment – both for its ability to generate revenue and let consumers “live the brand,” and as a way around the traffic jam on retail shelves. But we’ve run headlong into the question: What happens when the “L” portion of that equation disappears?

That’s the conundrum faced by LBE licensors and licensees amid a global shutdown of many venues in the wake of the COVID-19 outbreak.  It’s forced a radical reordering of the calendar in pushing out nearly every event until the fall –Creation Entertainment’s Star Trek fan convention, however, remains slated for Aug. 5-9 in Las Vegas – and left family entertainment centers (FEC) with no clear schedule for re-opening.

Staying afloat
For the most part, licensees in the sector will dip into funds reserved as a contingency for natural disasters that force postponements, to finance operations until schedules resume. Many, like a lot of retailers, are seeking rent relief.

Brand owners and their licensees are adopting a range of strategies to hopefully ride out the storm.  Creation Entertainment, for example, which operates fan conventions for Star Trek, Supernatural, General Hospital and other properties, has postponed most of its April-May shows to September-November, says that company’s Erin Ferries. Meanwhile, Crayola licensee Mad Science, which operates franchised Image Arts Academy after-school enrichment locations, is moving curriculum online, says Crayola’s Warren Schorr.

What’s the future?
How long will it take business to resume, and what will it look like? Here are a few perspectives:

Charlie Keegan, Head of Hasbro FEC Division at Kilburn Live
“While there will no doubt be a surge in consumer demand when malls and FECs re-open, the snap-back for FECs will likely be slower than for other options like restaurants, because people have to eat [while] experiences are discretionary spending.”

And while there has been a flow of equity funding into experiential concepts, “investors will likely be more cautious in the short-term.  FEC operators that were already thinly financed pre-coronavirus will likely close.  There will be a culling of the herd.”

Erin Ferries, SVP Business Development at Creation Entertainment

“We have great relationships with our venues and are working with them to postpone our events through May at this point to later dates in the year. We will always comply with whatever the state and local mandates might be” with regards to social distancing and other issues to ensure that attendees will feel comfortable. But we are sure fans will return under the new normal and adjust as they are super loyal to their favorite shows.”

Warren Schorr, VP of Licensing, Crayola
“There may be a slow start up” for experiential licensing and there may be changes such as limiting the number of entrances” to control crowds, and those entrances “may be more automated” than before, but consumers will come back.

Malls and FEC operators “will be coming back with promotions to get people spending again” once concerns about coronavirus abate. And whether it’s a restaurant or an FEC, there will pent up demand from consumers.”

Gretchen Schelman, Senior Director of Marketing, personalization platform developer LiveClicker
“People value real life experiences, and for the time being those investments may shift back to digital channels. Experiential marketers may find they have a new element to their job description – creating exclusively online experiences that make people feel as connected as [do] in-person experiences.

“As brands look to create online experiences they should deliver unique value, give people a voice and allow people to interact on their own terms.”

Several brands – particularly in the kids’ space – have worked to create online activities and content as a way to entertain, inform, educate and support people who continue to be stuck in their homes. We’ll take a look at some of those efforts in Friday’s edition of Newslinks.