***Conference Report - ICSC - More on Out-of-Home Entertainment
by Malisa Burkeen and John Latta

In about the 1992 - 1995 time frame, Location Based Entertainment(LBE) was
thought to be the draw for those suffering from cabin fever or a good place
to take a date. Yet, the luster of LBE has worn off and today it is being
replaced as the hot entertainment product by entertainment retail, Urban
Entertainment Centers, multiplexed theaters, themed restaurants and a host
of other concepts to attract the public. A key element is that retail with
its high income per square foot can compensate for the low relative earning
potential of exclusive out-of-home entertainment venues. To pick up on the
latest trends we went to the annual International Council on Shopping
Centers (ICSC) meeting to sample the trade show and conference sessions.

Virgin Cinemas

Ian Duffell of Virgin Entertainment was blunt in stating that the Megaplex
theater is essential for long term success of retail entertainment. In
order to capitalize on this need Virgin is creating the Virgin Cinemas with
the usual Virgin twist. The theaters will have from 14 to 24 screens and
will also have a two tier system similar to first class and coach seating
on an aircraft. The first class seats will be larger and have more leg room
but will cost 30% to 40% more (around $3 to $4 more). First class ticket
holders will have access to a bar to enjoy drinks before and during the
movie. They will also be able to reserve seating for the movie when they
buy the ticket. In addition there will be "cry rooms" which are effectively
theater boxes for families with children, and there will also be boxes
reserved as smoking rooms for cigar smokers. Their theaters will have
Virgin Megastores attached as well so that the mere coach ticket holders
will have some way to pass the time.

Ian also stated that attention to detail is extremely important in a retail
environment. For example, he cited their experience that a higher ceiling
in Virgin Superstores relates to higher sales. This level of detail can
also be counter to the trend to attack retail with technology - as he
called "Over Tech." What is more important is a conformable experience with
the corresponding attention to detail and they see this is as key component
of their Virgin Cinema concept.

Irvine Spectrum

The Spectrum in Irvine, CA is the first location of a Sega entertainment
site called Sega City. It is expected that this will be converted to a
Gameworks site. The Spectrum is an entertainment center which features a
Moroccan architecture to frame an open air amusement, shopping and dining
attraction. It contains one of the largest movie operations with 6,400
seats and the second largest IMAX 3D theater. There is also a 300-seat 12-
restaurant food court. Rick Evans of Irvine Retail Properties described how
5M people came last year and while they expected first year revenues of
$35M the actual sales were $55M. When Phase 2 completes in 1998 they expect
the revenues to be $150M (the name will also change to Irvine Spectrum
Center). His view is that a theater is also required to be the
entertainment anchor and 45% of the sales at the Spectrum are from non-
theater goers. It has been their experience at the Spectrum that when
individuals go to the movie they expect a four-hour experience - a movie
and more. The intent of the Spectrum is to offer many options to satisfy
the quest for the "more." They use the term "entertainment hub" to describe
the range of retail and amusement offerings and the draw it has.

Gameworks

Ira Mitchell of IJM Realty provided an overview of Gameworks after a few
months operation in Seattle. Demographically Seattle is 50/50 male/female
with an average age of 26. The facility transition from families in the
afternoon to older individuals as the time of day increases. Located next
to Gameworks in Seattle is a Megaplex which they feel increases the
Gameworks volume, however, even without a theater nearby the Gameworks
concept is self-sustaining. (One of the panelists stated that he felt it
arrogant of Gameworks to feel that they can make it without a movie
anchor.) The number of visitors in Seattle is running from 20,000 to 30,000
per week. Their earning expectations are $300/sq. ft. to $400/sq. ft. In a
key comment it was stated that to sustain these income rates they need to
change content on a regular basis - every 6 weeks or so.


Wave Issue 9712 5/21/97 Article 10-01