Measuring the impact of IP

James Kennard, Partner & Natalia Bakhlina, Partner

Leisure Development Partners

21st September 2016

Introducing your speakers…

James Kennard: 13 years experience, MA Social and Market Research

Natalia Bakhlina: 12 years experience in leisure and real estate economics

Highly

Specialised

Consultants Unrivalled

Global

Experience

Over 50

Years’

Experience

Objective Analysis

Creative Thinking

Leisure Development Partners LLP (LDP) produces feasibility studies, concept testing, due diligence and performance improvement strategies for the worldwide visitor attraction and leisure industry

Who we are…

EVENT VENUESCroydon, Amsterdam, UAE, Mexico City, London Olympics, Hamburg, Asian Games, Qatar, South Africa, Bahrain, Moscow

MAJOR THEME PARKS Disneyland Resort Paris, Universal Studios, The Tussauds Group, Warner Bros, Star Parks, Parques Reunidos, Six Flags Europe, Port Aventura, Gardaland, Heide Park, Tripsdrill, the Prater, Walibi parks, Tivoli Gardens, SeaWorld Entertainment Group, EarthQuest Adventures etc.

DIVERSE VISITOR ATTRACTIONS KidZania (multiple locations), Tour Eiffel, Cite de Science, Natural History Museum, Volkswagen Autostadt, Astrolab Dubai, the Giant’s Causeway, Ripley’s Believe it or Not London, Dixie Stampede, Le Mans etc.

ENTERTAINMENT AND RETAILVitam Ludique, Geneva: Baneasa, Bucharest, Mitino Park Shopping centre, Moscow, Numerous KidZania sites in Moscow, London, and Athens (all with existing or planned retail centres), Confidential shopping centre in Budapest, Entertainment Retail Zones in the Netherlands, Texas , UAE

MIXED-USE ANCHORED BY LEISUREBahrain, Qatar, Dubai, Ajman, UK, Germany, Cyprus, Spain, Latin America, USA etc.

INVESTMENT GROUPSBarclays, Blackstone, 3i, Advent, Palamon, Charter House, Consortium of Banks for re-financing of Disneyland Resort Paris, BNP Paribas, HR Societe Financiere, Stanhope, ING, Mubadala etc.

What we do…

Brand vs IPBrand IP

Intellectual Property (IP) in attractions is typically represented by a character or a storyline

Simple?

But not all are so clear cut…• Lego is a brand but has developed an IP by introducing characters and a movie (i.e. storyline)

- 3 franchise movies under development including The Lego Batman Movie

• Licenced existing external IPs to create collectable minifigures and to strengthen the brand

But not all are so clear cut…

Angry Birds (Rovio) have developed characters via the movie which have helped the development of the IP

Different uses of IP – pure IP attractionsTheme parks Indoor parks Waterparks

(not yet in Europe)

Different uses of IP – IP areas within attractions

Different uses of IP – Small attractions & experiences

Branded parks vs IP parks

Some brands are as strong or almost as strong as an IP but most branded parks still use IPs

Branded parks IP parks

Impact of IP – tangible

• Attendance upside through increased penetration of some markets

• Revenue growth via:

• Increased pricing

• Increased merchandise spend

Impact of IP – Market penetrationThe biggest impact is on tourists

Impact of IP – Attendance growth

• Impact of IP depends on the scale/ strength of the IP in relation to that of the park

• While impressive, in every case these attractions didn’t just add IP, they invested in rides and attractions and marketing.

Impact of IP – Entertainment Value & Pricing

Theme parks: in Europe, 30% average premium on country-by-country basis

Indoor parks: internationally, 12% premium on PPP basis but higher if Russian attractions are taken out (appear expensive due to currency crash)

EV is the perceived price per hour that consumers are spending on entertainment

Impact of IP – Merchandise spendSignificant increase in merchandise sales

Impact of IP – non-tangible

• Addressing gaps in the offer

• Differentiating a product

• Creating a buzz

• Increasing exposure and potentially marketing effectiveness

Implementation is paramount• Implementing an IP is not just slapping it on a ride

• It requires a full integration: an experience, a well-developed storyline, supported by appropriate merchandise and strong marketing

An IP comes at a cost

• Bringing an IP to your attraction requires additional costs:

• Capital cost

• License fee

• Decision to involve a brand owner in your business

Picked your IP? It’s just the beginning…

Want an IP?

Pick an appropriate IP with the help of in-house team or masterplanner

Negotiate licence deal with the IP owner

Understand the costs/ benefits balance. Is it worth it?

Go ahead with an IP

Yes

NO? Go with dinosaurs

Why are there dinosaurs in

Potato City??

Eeerr…because dinosaurs ate

potatoes?

Leisure Development Partners LLP42 Brook Street

LondonW1K 5DB

telephone: +44 (0) 20 7129 1276 www.leisuredevelopment.co.uk info@leisuredevelopment.co.uk