McKinsey’s recent article on “location based entertainment” makes a solid case for smaller, flexible experiential formats as a way to deepen IP engagement and activate underutilized real estate.

Yet I think McKinsey misses a bigger picture, considering the history of traveling events and the platform opportunities for the technologies and investments behind experiential entertainment.

• History

McKinsey seems to forget that traveling carnivals a century ago already solved many of the challenges they describe. Low fixed costs, flexible adaptability, the attractiveness and emotional engagement of one-time-only events. Modern music festivals continue some of these traditions; so do live touring concerts; so do seasonal holiday attractions.

So the real question is not whether smaller, transient experiences work: It is why have we not reinvented that model with modern IP, modern technologies, and modern logistics?

• Tech Platforms

Although the McKinsey team touches on data gathering and AI, they seem to miss the deeper future of these transitory experiences. When we combine…

1. The guest impact of immersive digital experiences
2. The data management of retail media networks
3. The learning and generation loops of AI

…these environments stop being stale P.T. Barnum-era “attractions” and start behaving like digital platforms. On those platforms is where you will add the narrative, the brand, the IP.

With these immersive digital platforms, every visitor generates insight and with AI constantly learning, the experiences will get smarter and richer as they age. All the digital media can be generative and constantly evolving; meaning no guest will ever see the same experience twice (a scary concept to most theatre and entertainment professionals).

And when guests opt in to brand ecosystems, all the benefits of personalization accrue, offering the potential of personally transformative experiences, a la Joe Pine.

• Investment Platforms

Rather than a bunch of small, poorly capitalized traveling “experiences”, let’s not miss the scale potential of one company operating a rolling circuit of multiple branded experiences, built on common technology platforms, occurring with enough regularity to sustain the local real estate value of flexible spaces.

Sounds to me like a private equity roll-up opportunity – but it’s a challenge for PE managers to build a portfolio in this space. They’re going to have to develop an innovation pipeline of experiential concepts (both commercial and artistic) and the platform itself.

• The Future

The real opportunity in LBE is not building smaller concepts with less CAPEX that simply remix brands, stale theming and weak F&B.

The real opportunity is scaling collections of distinct experiences that travel, adapt in real time, and compound value as they age.

For posterity, here’s a PDF of the original website: