BONUS: Iger's take, Dark Nights at Hersheypark, and DARK

Philip Hernandez: From our studios in Los Angeles and Tampa, this is Green Tag Theme park in 30. I'm Philip and I'm joined by my co-host Scott Swenson of Scott Swenson Creative Development.

Scott Swenson: Howdy, howdy. Greetings from Tampa. As we were recording this I'm watching the giant hurricane that's spinning out of control South of us, so keep your fingers crossed that next week I'll still be here and haven't been washed away.

Philip Hernandez: And fingers crossed that I will make it safely to Florida in the middle of the hurricane. Oh gosh, maybe.

Scott Swenson: Yeah, I'm traveling too, so I'm just getting the heck out of Dodge, that's what it boils down to.

Philip Hernandez: Well, we're going to do a little bit of interesting stories today, a little bit of a mix. We're going to do some takeaways from some conversations, from some interviews other people have done, and then I have some takeaways from reporting that I have done both on location and interviews. So, it'll be a nice kind of takeaway show to kind of discuss overall trends and what people are saying and experiencing as we're trying to get through and navigate this fall season.

First up, Bob Iger gave an interview at Code a few weeks ago with Kara Swisher, and I'm going to link to the full panel presentation the video version, but there's also an audio version if you want to watch that. I just thought I would summarize some of the takeaways that are key for our audience.

They talked about a lot of things, they talked about Twitter and just, you know, a lot of stuff. But I think the key takeaways for us is, of course, no surprise, but Iger is doubling down on that Netflix will thrive and that cable is going to die, and that Disney, Apple, and Amazon are going to also dominate streaming. He doesn't think Netflix will disappear, he thinks that they're pretty good at reacting. So, he thinks that, basically, the new cable is going to be Netflix, Disney, Apple, or Amazon and you'll kind of choose which one you want. Which, that all dovetails with his strategy, of course, before leaving Disney, which was to invest in that so you can become one of the main "channels" for the new media, cordless era.

He also thinks that customers will tolerate ad disruptions for cheaper fees. That's, of course, a nod to Disney trying to make an ad-supported, cheaper option for their streaming Disney Plus. We talked about that as well previously, we talked about being unsure about whether they would or not, but it sounds like he's basically trying to paint it where, cable will die and it's essentially the same model as it was with cable, where you get their ads in between your content and oh, what an innovation! Where have we seen that before? Where your content gets interrupted by ads. So, he thinks that customers are going to tolerate that. It'll be fine.

Then the last two things, is he mentioned coming up with a way to get creators paid, basically figuring out a new value metric just because the models are kind of changing.  Essentially, if we are on this pendulum where the pendulum is going back to cable, but it's just going to be like a "new" cable where there are networks that are just in a different model, that's a different payment model than it has been recently. Because the more recent payment model for creators has been like paid via YouTube, paid via the influencer contract, and it's just a different model. So, he thinks that's going to be a big barrier, and we can talk about that because I kind of agree with that. Essentially, it's the dilemma of what's killing local news. The model is going to have to change, and it might go back to a previous model of that.

The last thing there at the end, in the Q&A section, there must have been somebody from our neck of the woods because somebody got up and asked a very pointed question. They specifically mentioned LBE, location-based entertainment but they said it LBE, and they referenced the events that Stranger Things have been doing to bring their IP into the world, and what he saw the future of that being. It was hilarious because he was, basically, completely dismissive of that. He was like, basically, why bother? It's essentially irrelevant because it's not what they do well, there's not going to be capacity, and there's not going to generate enough revenue to be important, so it's basically like, why bother? It's just like a marketing stunt kind of thing. I thought that was a very interesting perspective because, us in LBE, we have been really talking about those experiences a lot, but then when you get the perspective of someone like Bob Iger who's worked at the helm of a media company, they're like, "we don't even care about what Netflix is doing with Stranger Things, because it's irrelevant." I'm like, ah, I see. So, Scott, what do you think?

Scott Swenson: Well, gosh, there's a lot to unpack here. So, first of all, I don't see any of this as new. 

Philip Hernandez: Yeah, that was surprising, yeah.

Scott Swenson: None of this is new. This is a big cycle, we're just calling it different things. The difference between the way cable rolled out from network television, the way cable rolled out and basically, I won't say killed, but yeah, for the most part, killed network television, that's exactly what's happening here. So, when the Show Times and HBO's, the cable versions, came out and you had to have this subscription for this, you had to have this for this, and this for that. Then they realized, "you know what? People get tired of just the two or three things that they can only get from us, so we have to package, we have to bundle, we have to put things together."

Even the marketing now through Roku and through the various streaming services is bundles, especially the Disney bundle, you know, that's a biggie right now. So, it's very cyclical to me. It seems very much, "oh, OK, we're back at that point in the process." I don't disagree at all with the Disney, Apple, and Amazon being able to dominate streaming. I will say that just from a consumer standpoint, and I don't know what the numbers are on this but I'm assuming it's pretty darn good. I would have, I would have kept Amazon out of that mix, until such time as I saw what they were capable of producing with the Lord of the Rings series: The Rings of Power, which is some of the most breathtaking cinema I've seen anywhere. So, all of a sudden that, to me, is a game changer from a creative standpoint, from a quality standpoint. 

So, I think that we're going to start to see, "OK how do we bundle streaming services?" And more so than just bundling within the umbrella company, I think that is going to happen because I think, as cable learned, guests' tastes are not pigeonholed. For example, Paramount Plus can use the fact that they have everything Star Trek ever, ever, ever, ever to get you hooked, but then to stay hooked... I mean, "OK, I've binge-watched Voyager three times now, I don't need it anymore. I can get rid of it." So, in order to keep them, they're going to either have to continue to produce compelling stuff at a level that is ahead of how it's being consumed. Or, they're going to have to bundle with other folks so that when you get tired of one thing, you can go to something else, and then you come back to whatever you want. I think this is happening to a certain extent, and I think it's going to have to happen even more.

And, hey, look, there's commercials on television? Wow, what a revolutionary concept! Will they be tolerant of it? Yes, and truth be told, it's a lot more like the BBC was, is, you know? It's like, yes, you pay, and you have commercials, but you pay less if you have commercials, you pay more for the premium experience. Yeah, no, no big surprise there. Everything old is new again, the cycle comes back, and it doesn't surprise me.

It doesn't surprise me at all that he was dismissive of, you know, LBE. He knows based on his past, nobody can do it like Disney, First off, and nobody can do it like the theme parks. I would put Universal in that in that batch as well. So, I hate to say it, but I kind of agree with him. The amount of effort, the amount of money, the amount of planning it takes to do a pop-up Stranger Things, it doesn't translate in the grand scheme of things, it's not going to change the numbers. It may build more devoted fans, it may be something that outside companies will want to license from, but to have Netflix go in and say yes, we're going to do a Stranger Things, pop-up park doesn't make any sense.

We've seen this, we've seen this start to happen now with the Harry Potter model. The Harry Potter: The Exhibition has gone through some radical, radical changes since leaving The Franklin Institute in Philadelphia, or it's about to, it may have by now, in going to Atlanta. But when it goes to Atlanta, it will be a very, very different experience. So, it's interesting to see how this is. 

After all of our discussion about the importance of intellectual property what this says to me is, if you're looking long term, unless you are a major player, a major theme park owner, develop your own IP. We've said that too. We've said to develop your own IP and find ways to go backwards, to work backwards. We'll call it the Disney backwash that happened when they started doing films based on their live attractions, when they started doing Pirates of the Caribbean, when they started doing Haunted Mansion films. I think that you're going to have to kind of look at that.

I don't think we're there yet, but I think long term that's what we're going to see because building an entire Stranger Things theme park, eh, why bother? Because by the time it's built, it's quite possible that it will be passe. I mean it's it's vintage in and of itself because it takes place in the 80s. So, I'm curious to see. I still stand on, intellectual property is important, but I'm not one of those who is died in the wool, we have to pay super high licensing fees, everything has to have an IP attached to it, unless it's something you already own. I mean, that's the Disney model. They're taking Epcot and turning it into Magic Kingdom 2.0 because everything now has a Disney, animated IP connected to it, and that works for them, because they don't have to pay the extra money.

Philip Hernandez: I would push back a tiny bit on that. I think that just so I'm, I'm thinking back to when I went to licensing Expo it was kind of the same thing as Bob where a lot of the brands were dismissive of LBE, even though that was the theme. The theme was LBE, but I remember I talked about that. I think that what I would say the line is, is economies of scale. I think that if you can make something with an IP work at a scale, like Disney does, like Universal does, even like Six Flags does, then I think that could work. I think that the problem is that scalability thing where these pop-up shows, it doesn't make sense because the scale isn't there, and in order to have scale you need infrastructure. Right back to the old pendulum, back and forth. 

Why did Walt go to Florida and buy? Because you need space and infrastructure to really make it work. I think that's the problem that we're struggling with. It's like, yes, it's fine as a marketing ploy to do a pop-up experience, or it's fine if you're an independent creator and you're able to do just like a show in a black box, or just like things like that. But again, it comes to scale right? I think that's the thing.

Scott Swenson: Is it going to be more financially viable, looking at your scale? Because, I agree with you, it is an economy of scale. Is it going to be more viable from a pop-up standpoint to take the X amount of dollars that you have to spend just on licensing fees, just to call it the intellectual property, or invest that in the actual quality? I don't know the answers to that, and I think that is going to vary from market to market. I will also say that economies of scale also has to do with the longevity of the IP. There are things that are going to burn hot and burn fast, for example, there is no Tiger King theme park. So that's gone, that's done, that IP is done. 

I think we saw this to a certain extent with the Avatar brand that came out that got, I would say, bungled a little bit, did not have the magnitude that it did. The only reason that it continues to fly as a theme park experience is because it's excellent. So, that is where quality, in my opinion, actually trumps IP. Thank goodness the quality was there, and I think that what we're also seeing is, and I go back to The Harry Potter: The Exhibition example. You can't rely solely on IP. You have to have the quality to back it up. You have to have the quality to back it, because IP gets people in the door, quality gets people back in the door.

Philip Hernandez: I think that also has to do with saturation too. I think that we, again it's a pendulum, and just like with the escape rooms when it was like, oh, everyone has to have an escape room, and then it was like you had to go to that cycle. I think we're getting close to that with pop-ups. There's been a lot of popups, a lot of people trying to bring in that stuff, and then some were just not the quality, like you said. I just wanted to also point out, too, that we were talking about you were surprised Amazon being in there. Actually, Amazon, I don't know how much more they're spending from the other people, but I know they're spending $14 billion this year in 2022 on original content.

Scott Swenson: And 3/4 of that is on The Lord of the Rings. I mean that that's gigantic, that is just epic.

Philip Hernandez: It's a lot, it's a lot of money in original content. When you think about all the tech money that's in there, it's really more money than we've almost, I think, ever had. That's more than studios put into it and it's that's a lot. I think that that dovetails into his point about we're going to have to, content creators are going to shift into a different business model, which I also agree with.

Scott Swenson: The thing with Amazon is they're sitting on a ton of money. I mean, people don't go to brick-and-mortar anymore. I just ordered my new, my new mouse for my computer, I ordered it yesterday morning and by the time I went to bed, it was sitting on my front porch. So, there you go. They've got money coming in round the clock, nonstop, and this is just another opportunity. That's how they can afford to spend this kind of money. I think some of the people who are doing their finances, or perhaps even thinking, "gosh, I hope this fails so we can write it off." I mean because they're making money hand over fist, and they got spend it somehow.

Philip Hernandez: Well, let's transition out. I have some takeaways from either events I've been to, or conversations or interviews that we've done with the Hauntathon. The first, of course, is that I went to Hersheypark for the Hersheypark Halloween experience this year, which is called Dark Nights at Hersheypark. This year was their first foray into trying to do something a little bit more scary, so I wouldn't say that it's like the Universal market, I think it's more targeting like 12 to 15 kind of between that range, but it is supposed to be scary. They're kind of ranked mazes. What I was astounded by was the quality in year one. I think it goes to exactly what Scott just mentioned about, like they're not going to come back. This is one of those things where I was so surprised with the quality that I kept trying to get them to comment on why, they didn't really ever... like, "we're not going to talk to a reporter about that." It's just so unusual. 

So, here's a year one event at a Regional Park and they launched with four haunted houses that were built by Adirondack Studios. So, just imagine the price tag for that, right? RWS handled their casting and staffing for the scares and the costumes, also price tag. Epic wrote some of the storylines for their pieces, again, you know it's very expensive. So, they launched with four out of the gate, then they had scare zones, one of one of which they had a huge midway sign with fire that was going off every 30 seconds, so again a lot of fog. Then they also added a tribute store, and themed food and beverage. So, that's a lot, and there is a lot for a year-one event, very expensive. The fabrication was excellent because Adirondack does excellent work, right? I kind of was like, "why on Earth? I mean this is a lot, you know, you could have tested it with one? Just this is a lot." 

Basically, what I finally put together. I have no quotes, so this is me just kind of like summarizing because they wouldn't give me a kind of direct answer. Basically, it's exactly what Scott said, they were afraid that it wouldn't be a good test if they didn't test it in a quality product, A. B, they feel they're known for quality in their area and their pass holders are known for quality. They are just coming off of what, a $200 million renovation of chocolate town? So, they didn't want to put out anything that was kind of like under less investment than their brand. Then when I kind of was like, "well, longevity, or what?" Basically, they're like, "this is a test. If we have to cut it, we'll cut it. If we have to like adjust the scares..." They were still playing with how scared, you know how much do you scare a 12-year-old who has never been to a haunted before? They're still really playing with that, and they're like, "you know, what if it doesn't work, we're going to cut it." I'm like, "you're going to cut this thing that, I'm sure it must have cost millions." They kind of like wouldn't give me a direct answer, but kind of like shrugging. 

I feel like that's what's necessary now. If you're going to test it, test it right. Then, like Scott's also talked about, we talked about a lot on the show, be prepared to kind of kill your darlings, basically. If it turns out terrible and their audience ends up hating, scary, you know, you might need to cut it. They're kind of prepared to do what's what the audience wants, and that's very admirable but also very shocking. 

Now I will say that I was talking to guests while I was there and a lot of them seemed to love it. As with a lot of things, park related, right, I think the older guys that are like middle age, our age or whatever, the older theme park guys that just like coasters and like Universal, they were less impressed, right? Because, again, it's meant for 12-year-olds, right? So, they were like kind of grumpy about it and the lines, and blah blah blah, but the actual 12-year-olds and the families loved it. So, I think it's going to end up being positive, because all the families I talked to who were in the age range, who were, whether or not they were passholders or not, they all seemed to really enjoy it. I went through with one family to watch their reactions and the kids were like... I mean, it might not have been scary for adults, but the kids were falling into walls and trying to find the emergency exits. I was like, "are you pretending?" I don't think they were.

Scott Swenson: So, again, I don't know the current Hershey regime, but I did know the Hershey regime years ago when I was still on the other side of what I do. Hershey has always been known for quality. Hersheypark has always prided themselves on, "we are going to do the best we can do with the assets and the funds that we have." So, it does not surprise me for one moment that they brought in some pretty heavy hitting outside companies to put this together for them. 

I will say that this, to me, sounds like a really smart long-term plan. I think that the idea of targeting your 12- and 13-year-olds, if you're not sure how scary to be, hook them at 12 and 13 and then ramp it up as they grow up. So, as you've already mentioned they're doing what the guests want. I think what's going to happen is next year they're going to find that the 12- and 13-year-olds that they've trained, because you have to recognize, you have to train your audience when you do something new. You can't just all of a sudden go, "here's what I'm doing, love it or leave it." The truth of the matter is, if you can hook in your 12- to 14-year-olds, and then next year they come back as 13- to 15-year-olds, and the next year they come back as 14- to 16-year-olds, pretty soon you're going to have to start including more and more alcoholic beverages involved in your F&B mix, because they're going to be 21, they're going to be drinking age now, and they're still going to want to come back and you want to hook them up with one more year. 

Now, when you add alcohol or when you increase your alcohol sales there are a bunch of other things that go along with that. But my point being, based on your anecdotal observations, they've hooked the right audience at the right time. If they need to know how to continue to get scary, and how to continue to expand the event and make it something new and fresh, they can do that by simply following the target age, the target demographic age, of their guests. What will happen is, the 13-, and 14-year-olds who loved it now will have 6- and 7-year-old brothers and sisters who are too young to do it. So, what they do is they start getting that milestone mentality of, "when I turn 14, I get to go to Hersheypark, and I get to get scared." 

So, it sounds like they've made some very intelligent choices for the long-term aiming in that in that middle zone as opposed to doing we're going to, "we're going to do kid, family-friendly to start out with, and then ramping up as we go," or, "we're going to just slap him in the face with blood, guts, and gore." They didn't. They went very intelligently, which is the tween range, which there's a lot of money to be made there because, with working parents, they will be more than happy to find something they can do with their 12-year-olds. They're looking for ways to say, "hey, sorry I'm not here during the day, but here's something special that we could all do together as a family of tweens and teens."

Philip Hernandez: That was something I was thinking of too, is I was like, "oh, there's a lot of generations here at the event together," also the meters of scary. Also, when you mentioned blood and gore, they made the definitive decision not to include any blood or gore because they thought it was off brand, which is difficult to do to make four houses without blood. I think they did a good job. I mean, you know what I mean? Again, very in-depth storylines, and everything kind of fits. Again, we talked previously when the event was announced about how I got a lot of questions from people about why they couldn't just do like evil candy. Obviously, you don't want to do that because that's going to hurt the brand. But what they did do is they tried to create stories that could kind of live in the IP, like Scott was talking about too, live in the Hershey ecosystem that could live there adjacently, but just weren't about candy.

The scariest one, you are venturing in the tunnels underneath Hersheypark. You're encountering, it's like an underwater/cave type thing, and there's creatures in there. Then one, they've tied in some wildlife from the area and been like a creature experiment. So, they're all like tangentially related. There's one that's about a haunted mine because there used to be mines in the area. So, they, I mean, they've tried to tangentially fit them into that local ecosystem. Which, I think, also helps because, again, it's a Regional Park and regional parks people care more about the local stuff.  So anyway, I think that that was a very interesting experience to see that they're all doing that correctly.

Another one I spoke with was our friend Teresa over at Dark at Fort Edmonton Park, and there this is year 5 for them. What struck me about our conversation was, really again, always with Teresa, but just their forethought, their thought in planning, and long-term planning. They're now really moving into trying to flesh out the festival environment, which they couldn't do the first few years they were open because they were under construction. 

So, they're working on that. 

Some key things is they're thinking about expanding their festival environment so that, in the future, they could potentially add just a general mission midway ticket that would be a lower, again cheaper, option for people to get access to it if they don't want to do the mazes, if they're too scared. Think about these areas, regional parks or areas where there is not Universal around you, the people are much more scared, and that's what they're finding is that they may not want to do this haunt. So, having that general admission, if there are enough offerings, again, if there's a quality to it, there's enough to do, it could be an alternative to let the entire family come for cheaper, then some people who don't want to get scared, don't have to get scared. I think that's brilliant.

She mentioned too, that services have really gone up, which is not something we've talked about. But the inflation on services for them has been huge, and that's generally not something you get a quote for until later in the game. So, I thought that was a big thing. Then I loved her line, "creativity doesn't just live within haunt design." You know, mentioning about how their team had been creative about when the services contracts were higher than they expected, moving things around and really trying to make it work, because you need services, you need security. So, you have to make it work. I just thought that was really interesting.

They've also kept some of their offerings, they've kept the most popular offerings from the pandemic when they were remote. So, now they have a whole other revenue item that they wouldn't even have known about, if it wasn't for the pandemic. 

Scott Swenson: This particular event lives very much in my heart, because I was very much involved with the first year and involved to a certain extent in the second year. But the true gem of this event is their internal team.

Philip Hernandez: Yeah, I agree.

Scott Swenson: Teresa is brilliant, and her team, they're just all so smart and so willing to try, and so eager, kind of in line with what we were talking about with Hershey. They want to do it right, they want to make sure that they dive in, do it right, test it appropriately, and then adjust from there. They're not trying to test soft. I think it's interesting that they're going more to a festival feel, which makes total sense in Edmonton, Alberta, Canada because Edmonton is the festival capital of the world. If you look at the calendar, there is not a single day on the calendar that some festivals not going on in Edmonton. That's true. So, this makes total sense for their locale, and it also means that guests don't have to wait in queue.

The biggest challenge that I think they have with their, with their outside stuff is it's cold. Now, I realize that Canadians in that area are used to this, the Floridian guy was freezing. But they also find the fun in these giant bonfires, and these giant ways to warm around, and it becomes very communal. I think that also plays into the magic of the Halloween season and the fall season. If you have a chance and you're in or near Edmonton, AB, go see Dark at Fort Edmonton Park, because it really is a very special event and it will continue to grow into something even more special year after year.

The reason I kind of rushed through that is because, guess what? We're out of time. So, thank you guys again for listening. As I always say, spread the word, let people know about us, and if you don't enjoy us, then just keep your mouth shut. On behalf of Philip and myself, thank you so much, and we'll see you next week.