Post by Joe Snack Road on Aug 14, 2005 20:59:43 GMT -5
Originally published in the August 2005 edition of "International Bowling Industry"
The Inside Track: Needles in the Nest
As wrote by Sandy Hansell
Bowling always has had competition. Lots of it. But these days our competition - just like everything else in this business - has changed.
When bowling was percieved to be a sport, our primary concern came from other participatory sports like golf and tennis. Then, as we moved into the recreation and entertainment worlds, movie theaters, theme parks and even restaurants emerged as locations our customers would patronize instead of their neighborhood bowling center.
But now our world has changed again. These days our primary competitor may well be: The Home. Specifically, home-based entertainment options like hand-held video games, TiVo, feature-laden television sets and DVD players are consuming ever larger shares of our consumer's time and money. These stay-at-home activities hurt us in many ways. For beginners, these developments have just about killed the video game arcades and game rooms in most bowling centers. Ouch!
[Joe Note: He actually wrote that. Ew.]
Back in the late 1980's and throughout the 1990's, game rooms were a dependable and lucrative source of profits for most centers. With popular games like "Pac-Man" and "Donkey Kong" leading the way, kids, teens and even adults flocked into the centers to drop quarter after quarter into these machines. While a few brave centers owned their own games, most centers brought an outside vendor to furnish games, which meant the proprietor pocketed 50% of the revenues but did no work except turn on the lights. It was easy money and life was good.
But, those days are gone. Now, with every kid (aged six to 30) flashing hand-held game devices like Play Station Portable[sic], and with games readily available online and on most computers, video games inside bowling centers are becoming rarely used lonely outposts. Indeed, many proprietors have begun to dismantle their game rooms and convert that space to other use. These days, in most centers, only redemption games (which offer tickets or credits redeemable for trinkets), merchandise machines like crane machines, or participatory games like rides or shooting competition retain any noticeable popularity.
But beyond that, all this new flashy home-based technology is hurting us in more significant ways as well.
A dizzying array of entertainment options, from videos, DVDs, video games, personal computers, and the Internet to MP3 players, Ti-Vo and video-on-demand, have invaded homes. Indeed, these new high-tech gizmos are becoming culturally pervasive, stealing time and dollars from other consumer entertainment options like movies, family entertainment centers, dining out, and, ahem, bowling.
Let's consider some scary statistics. In 2004, Americans spent an average of 78 hours watching videos and DVDs, a 53% increase since 2000. DVD sales and rentals skyrocketed 676.5% during that period. Meanwhile, time spent on the internet soared by 76.6% and youths now average over 44.5 hours per week (the equivalent of a full-time job) with electronic gadgets of one kind or another.
How about these numbers: Americans now spend about $21 billion - that's 21 billion with a "B" - on these activities every year. By way of comparison, total bowling center revenues in this country run about $4 billion every year.
[Joe Note: Okay, $4 billion isn't a number to scoff at for an entertainment industry. Some companies close because they couldn't make $200,000.]
Add into this mix the advent of so-called home digital entertainment centers, which combine high-definition TV, huge plasma flat-screen television sets, multi-channel sound systems and even cinema-style seating, and it is not surprising that many people find it cheaper and more convenient to stay at home. They can control their own environment, which is always comfortable and hassle-free, and they can provide their own entertainment when they want it and how they want it.
To be sure, we aren't the only industry impacted by these developments. For example, the movie business is now being radically transformed by the explosion of home entertainment options. Theater owners are bleeding because ticket sales have fallen for the last three years. Indeed, people now are watching more films at home than in theaters. Meanwhile, at the other end of the chain, the major production studios are doing very well because of the boom in sales of DVDs, which routinely generate more than twice the revenue of box-office ticket sales.
Some theater owners are trying to fight back by creating glitzy decor, installing plush furnishings and adding new services such as valet parking, online seating reservations and babysitting. But even for them it re
ns a struggle.
We, too, have to recognize this new competition and find ways to deal with it. And therein lies both our problem and our opportunity.
More and more, our challenge is to find ways to persuade customers to give up playing with their fancy toys and the comforts of staying home and to motivate them to climb into the car and drive to their neighborhood bowling center. But if we do our jobs right, that may not be as hard to do as it sounds.
The reality is that, sooner or later, camping out in a dark basement by oneself or with another family member or two can become boring and dull. And in the end, electronic do-dads, no matter how elaborate, are still just inanimate objects. Even movie theaters offer only the option of sitting passively in a dark room while saying and doing nothing.
Our greatest asset is that we provide our customers the opportunity to socialize, to interact with family and friends, while participating in an activity which is easy to learn and fun for everyone. We have to capitalize on those advantages.
To be sure, we have to recognize the nature of our new competition. That means that we, too, must provide multi-faceted entertainment experiences with expanded visual effects, enhanced sound systems and a range of entertainment options. Our centers have to be clean, colorful, well-lit, modern and nicely furnished.
But most important, we have to make the experience of coming into our centers easy, fun, convenient and stress-free. Our employees must provide sterling service with a smile. Even newcomers should be able to find the center easy to navigate as they figure out how to get a lane, rent shoes, buy a hot dog and locate the restroom.
But once we get that done, and more and more people remember how much fun it is to go bowling, just watch the dust pile up on all those TiVos, DVDs and Game Boys.
An industry consultant, center broker, appraiser and financial advisor, Sandy Hansell is president of Sandy Hansell & Associates, based in Southfield, Michigan. He can be reached at (800) 222-9131.
The Inside Track: Needles in the Nest
As wrote by Sandy Hansell
"There are a lot of distractions. You need to pull them away from their computers. You need to pull them away from their video games." - Jerry Bruckheimer, Hollywood Movie Producer
Bowling always has had competition. Lots of it. But these days our competition - just like everything else in this business - has changed.
When bowling was percieved to be a sport, our primary concern came from other participatory sports like golf and tennis. Then, as we moved into the recreation and entertainment worlds, movie theaters, theme parks and even restaurants emerged as locations our customers would patronize instead of their neighborhood bowling center.
But now our world has changed again. These days our primary competitor may well be: The Home. Specifically, home-based entertainment options like hand-held video games, TiVo, feature-laden television sets and DVD players are consuming ever larger shares of our consumer's time and money. These stay-at-home activities hurt us in many ways. For beginners, these developments have just about killed the video game arcades and game rooms in most bowling centers. Ouch!
[Joe Note: He actually wrote that. Ew.]
Back in the late 1980's and throughout the 1990's, game rooms were a dependable and lucrative source of profits for most centers. With popular games like "Pac-Man" and "Donkey Kong" leading the way, kids, teens and even adults flocked into the centers to drop quarter after quarter into these machines. While a few brave centers owned their own games, most centers brought an outside vendor to furnish games, which meant the proprietor pocketed 50% of the revenues but did no work except turn on the lights. It was easy money and life was good.
But, those days are gone. Now, with every kid (aged six to 30) flashing hand-held game devices like Play Station Portable[sic], and with games readily available online and on most computers, video games inside bowling centers are becoming rarely used lonely outposts. Indeed, many proprietors have begun to dismantle their game rooms and convert that space to other use. These days, in most centers, only redemption games (which offer tickets or credits redeemable for trinkets), merchandise machines like crane machines, or participatory games like rides or shooting competition retain any noticeable popularity.
But beyond that, all this new flashy home-based technology is hurting us in more significant ways as well.
A dizzying array of entertainment options, from videos, DVDs, video games, personal computers, and the Internet to MP3 players, Ti-Vo and video-on-demand, have invaded homes. Indeed, these new high-tech gizmos are becoming culturally pervasive, stealing time and dollars from other consumer entertainment options like movies, family entertainment centers, dining out, and, ahem, bowling.
Statistic: DVD Sales and rentals are up 676.5% between the years of 200-2004.
Let's consider some scary statistics. In 2004, Americans spent an average of 78 hours watching videos and DVDs, a 53% increase since 2000. DVD sales and rentals skyrocketed 676.5% during that period. Meanwhile, time spent on the internet soared by 76.6% and youths now average over 44.5 hours per week (the equivalent of a full-time job) with electronic gadgets of one kind or another.
How about these numbers: Americans now spend about $21 billion - that's 21 billion with a "B" - on these activities every year. By way of comparison, total bowling center revenues in this country run about $4 billion every year.
[Joe Note: Okay, $4 billion isn't a number to scoff at for an entertainment industry. Some companies close because they couldn't make $200,000.]
Add into this mix the advent of so-called home digital entertainment centers, which combine high-definition TV, huge plasma flat-screen television sets, multi-channel sound systems and even cinema-style seating, and it is not surprising that many people find it cheaper and more convenient to stay at home. They can control their own environment, which is always comfortable and hassle-free, and they can provide their own entertainment when they want it and how they want it.
To be sure, we aren't the only industry impacted by these developments. For example, the movie business is now being radically transformed by the explosion of home entertainment options. Theater owners are bleeding because ticket sales have fallen for the last three years. Indeed, people now are watching more films at home than in theaters. Meanwhile, at the other end of the chain, the major production studios are doing very well because of the boom in sales of DVDs, which routinely generate more than twice the revenue of box-office ticket sales.
Some theater owners are trying to fight back by creating glitzy decor, installing plush furnishings and adding new services such as valet parking, online seating reservations and babysitting. But even for them it re
ns a struggle.We, too, have to recognize this new competition and find ways to deal with it. And therein lies both our problem and our opportunity.
More and more, our challenge is to find ways to persuade customers to give up playing with their fancy toys and the comforts of staying home and to motivate them to climb into the car and drive to their neighborhood bowling center. But if we do our jobs right, that may not be as hard to do as it sounds.
The reality is that, sooner or later, camping out in a dark basement by oneself or with another family member or two can become boring and dull. And in the end, electronic do-dads, no matter how elaborate, are still just inanimate objects. Even movie theaters offer only the option of sitting passively in a dark room while saying and doing nothing.
Our greatest asset is that we provide our customers the opportunity to socialize, to interact with family and friends, while participating in an activity which is easy to learn and fun for everyone. We have to capitalize on those advantages.
To be sure, we have to recognize the nature of our new competition. That means that we, too, must provide multi-faceted entertainment experiences with expanded visual effects, enhanced sound systems and a range of entertainment options. Our centers have to be clean, colorful, well-lit, modern and nicely furnished.
But most important, we have to make the experience of coming into our centers easy, fun, convenient and stress-free. Our employees must provide sterling service with a smile. Even newcomers should be able to find the center easy to navigate as they figure out how to get a lane, rent shoes, buy a hot dog and locate the restroom.
But once we get that done, and more and more people remember how much fun it is to go bowling, just watch the dust pile up on all those TiVos, DVDs and Game Boys.
An industry consultant, center broker, appraiser and financial advisor, Sandy Hansell is president of Sandy Hansell & Associates, based in Southfield, Michigan. He can be reached at (800) 222-9131.