You don’t have to be Disney to turn your hot kids property into a scream-inducing ride or kid-friendly theme park attraction. And the financial pay-off can be just as thrilling.
Just ask Marvel Enterprises, which opened its Super Hero Island mini-park at Universal Studios Orlando in May 1999, showcasing 12 rides themed around blockbuster characters like Spider-Man and the Hulk. And this past June, a six-ride park called Marvel’s Adventure City (MAC) – built and paid for by licensee Canadian Niagara Group – opened in Niagara Falls, Canada. Paul Gitter, Marvel’s VP of consumer products, says MAC’s financial performance is exceeding expectations by 20%, and the company is looking to open three or four similar attractions throughout the U.S. starting in 2004. (San Francisco’s Fisherman’s Wharf, Minneapolis’s Mall of America and New York’s Times Square are all potential sites.)
Last year, the theme park business brought in about US$18.5 billion in revenues. Roughly US$9.9 billion was generated by U.S. theme parks, which saw 324 million people waltz through their gates. A report by PriceWaterhouseCoopers obtained from the International Association of Amusement Parks & Attractions predicts an average annual revenue growth rate of 4.8% for parks worldwide between 2002 and 2007. According to these stats, the Asia/Pacific region will rack up the biggest gains, with an average annual spike of 6.8% in sales over the same time period. (2002 sales in the region hit the US$5.3-billion mark.)
Licensed theme park rides, mini-amusement lands and attractions appeal to licensors like Marvel because the ventures are often structured as straightforward licensing deals, meaning that they usually don’t shoulder any financial risk and stand to reap significant financial and marketing rewards. The licensee routinely pays a fee and then commissions the ride/attraction directly from the manufacturer, paying for it outright.
Howard Smith, senior VP of creation for Nickelodeon (which has key U.S. relationships in this arena with Paramount and Universal Studios theme parks), says Nick typically charges a termed license fee for the use of its characters and generally looks at some kind of participation incentive (or a ‘kicker on a per-head basis’) that’s earned if the Nick attraction boosts park sales. On top of that, there’s often licensed merch created that’s specific to the park and/or ride, and the licensee earns royalties on that as well.
Smith says there are typically three levels of licensing experiences when it comes to the amusement park biz. At the top of the food chain, there’s the construction of an entire themed land within a park that includes multiple attractions, hard rides, retail outlets and food service. While the licensor doesn’t make any capital investment in the park or on the rides, it’s usually quite active on the design and creative end, working to maintain the property’s integrity.
On the next tier, Smith says there’s the creation and construction of individual, one-off rides or experiences. A good example is Nick’s SpongeBob ride/3-D movie, which has been purchased by all five North American Paramount theme parks. Another is Sony’s Men In Black Alien Attack at Universal Studios.
The last level involves the licensing of costumed walk-around characters or attractions, with no supporting rides. But these are only around for a few weeks at a time, says Smith.
Neither Smith, Gitter nor Sesame Workshop VP of themed entertainment Peter Van Roden sees a lot of value in the last two propositions. All three prefer mini-land relationships because of the brand connection potential involved. Van Roden, who oversees themed attractions like Sesame Place in Langhorne, Pennsylvania (licensed by Anheuser-Busch Adventure Parks) and a dedicated Sesame area in San Paulo, Brazil’s Hopi Hari park, explains: ‘Kids are attending the Sesame parks because they’re excited about seeing the characters and rubbing elbows with the physical embodiment of them. Seeing them on TV is great, but for a two- to seven-year-old, seeing Elmo or Big Bird in person is awesome, it’s magic.’
Gitter says Marvel’s other one-off rides just don’t put the consumer ‘under the ether of the Marvel brand’ in the way that MAC in Niagara Falls does; it gives fans a real, visceral experience with the characters and the brand. Interestingly, though, Gitter isn’t ruling out a different route for licensing one-off rides in areas where the building of mini Marvel worlds is not feasible. And there are plenty of manufacturers out there to help him do it.
Premier Rides president Jim Seay says for smaller property owners, licensing directly to the manufacturer might be a more attractive option than attempting to get the attention of the big park players themselves. Premier has built many rides for parks, including the Batman and Robin Chiller coaster for Six Flags Great Adventures park in New Jersey. But the Millersville, Maryland-based company is currently setting up its first set of direct-license agreements and was in negotiations at press time for a major kids property license.
The parks certainly have criteria for licensing. ‘They’re building things made of concrete and steel,’ says Smith. ‘Some of these rides cost millions, if not tens of millions, and they don’t want to have to de-theme them in two years.’ Accordingly, licensors say hot, but proven properties work best in this category – you need something with staying power. ‘You’ll find that most of the rides are evergreen or classic properties,’ says Sony Pictures Consumer Products executive VP Al Ovadia.
As for what’s hot in ride/attraction construction, think interactivity. Nick’s Flying Super Saturator coaster at the Paramount park in North Carolina (which Smith estimates cost the park around US$5 million to build) aims to involve everyone. Each rider has access to a 10-gallon dump tank full of water that they can drop on unsuspecting people in line – who can then retaliate with squirt guns.
Gitter says MAC’s X-Men interactive bumper car attraction also draws more people into the experience, as well as promoting repeat usage. The game is kind of a bumper car/laser tag type of thing where riders shoot at each other to earn points, and the winner gets a medal at the end of the session. Of course, kids who don’t win the first time keep coming back until they do.
Sesame Street’s 4-D movie at Universal Studios in Osaka, Japan immerses kids in Sesame Street with moving seats, rain, bubbles and smell-o-rama sensory elements. For example, audience members can catch a whiff of baking cookies when Cookie Monster makes his entrance. Van Roden says the parks are going the interactive route to give visitors a completely unique experience that will keep them coming back. Sesame Street’s 4-D foray, says Van Roden, is currently one of the Japanese park’s top-two attractions, and he’s working on a plan to import the concept into other Universal parks.
When you do get into a park, it’s important to think about your property’s key demographic as you negotiate for geographical placement. Smith says attractions for younger kids, like the Nick Jr. mini-lands, shouldn’t be too close to the thrill coasters and extreme rides that attract older kids, and compact, ride-dense areas promote high energy and attract more people.