Brand New Places - June 2017

1706_feature_nickelodeon_intro

Nickelodeon Lost Lagoon is Sunway Lagoon’s first time implementing IP. (CREDIT: Sunway Lagoon)

Nickelodeon expands its recreation business globally—first stop: Malaysia

by Michael Switow

Like clockwork, every day at 4 p.m. green liquid begins to fill the massive bucket atop the AquaPlay Rainfortress at Sunway Lagoon. Pool attendants, dressed in orange and white t-shirts with ‘WHO Wants to PLAY?’ written in big letters on the back, herd children and their parents into a wading pool for a daily ritual called the “Great Slime Deluge.” They gather at the base of a structure that evokes images of an ancient Asian temple, albeit with bright pineapple columns and huge homages to one of the world’s most popular and cheeky animated characters, SpongeBob SquarePants. Together, the children, parents, and SpongeBob disciples dance, sing, and count down from 10, until the bucket atop the fortress tips and 1,600 liters of flu-orescent green water descends upon their heads.

The “Great Slime Deluge” is the signature event at Nickelodeon Lost Lagoon, a 10-acre water park with 14 immersive attractions that is a collaboration between Malaysia’s Sunway Group and Viacom International Media Networks. The 100 million-ringgit park, which celebrated its first anniversary in March, is Sunway Lagoon’s first major foray into intellectual property (IP). It’s also Viacom’s first large-scale permanent branded attraction in Asia, and part of an aggressive global expansion of Nickelodeon’s recreation business. Counting Nickelodeon Lost Lagoon and another branded facility that opened in the Americas last year, nearly a dozen Nickelodeon attractions have launched or are in the pipeline, more than doubling the brand’s properties.

While there may be overlap in the future, Viacom’s strategy appears to be three-pronged at the moment: in addition to the U.S. properties, the company will license its IP to water parks, theme parks, and resorts in Asia; family entertainment centers (FECs) in Europe; and branded resorts in Mexico and the Caribbean.

“Our strategy for Asia is unique. Unlike the United States and Europe, it’s a growth market for us, and part of our strategy is to develop new build opportunities, where destinations are being created in large population centers where families are vacationing or recreating,” explains Viacom’s senior vice president for global recreation, Gerald Raines, who adds that Asia is the fastest-growing region for his business. “Our goal isn’t to create the des-tination singularly by having just Nickelodeon there, but to be part of either existing or planned destinations for families in a given market.”

A ‘Pineapple Under the Sea’ on Every Continent?

In January, Viacom broke ground in the southern Chinese city of Foshan on a 250-acre project called the Nickelodeon Cultural Resort that will occupy one-third of the new cultural village being built by Hong Kong’s Elite Global Group. Located less than an hour from Guangdong’s capital city, Guangzhou, the US$1.7 billion resort is projected to attract 6.7 million tourists when it opens in 2020.

Next on the list is an “undersea attraction and resort,” to be built 20 feet below the surface of the sea, in a marine reserve called Coral World Park in the western Philippine province of Coron, Palawan. The resort, which will be nearly 1,000 acres, is to be situated amid a cluster of 16 white-sand islands. Announced in January, the project still has some regulatory hurdles to clear, so the opening date is “a bit fluid,” according to company officials, though media releases indicate it may launch as early as 2020.

While the China and Philippines attractions were the only publicly announced Asian projects at press time, company officials indicate another major announcement is imminent. In the Americas, meanwhile, Nickelodeon launched its first international hotel property in the Dominican Republic. The Pineapple Villa, with beds for up to four adults and two children, is modeled after SpongeBob SquarePants’ home under the sea and lists for nearly US$4,000 a night; other suites list for US$760. Another resort will open in Riviera Maya, Mexico, (across the water from Cozumel) next year.

In Europe, Viacom announced plans for four FECs—two in Spain, one outside London, and another in Lisbon—to open over the next three years. The facilities are being built in collaboration with Parques Reunidos, Viacom’s partner on Nickelodeon attractions at Movie Park Germany and Parque de Atracciones in Madrid.

“We’re creating a new segment for Europe, which is a mature market to provide themed entertainment. But there’s also a desire to create closer-to-home entertainment offerings, and you’re able to do that within malls, with these FECs where you have built-in traffic,” explains Raines, who adds that if the concept proves successful in Europe, Viacom will “definitely try to roll it out throughout Asia,” as well.

A former U.S. Navy officer, Raines applies the focus, drive, and patience he learned in the military to the licensing business. “These deals don’t happen overnight,” he says.

1706_feature_nickelodeon_3
Though most Nickelodeon products in Asia will be new builds, Sunway Lagoon was chosen to test the IP’s potential for success in the region. (CREDIT: Sunway Lagoon)

A Successful Test Case

Viacom’s partnership with the Sunway Group in Kuala Lumpur is an exception to the rule that Nickelodeon’s Asian projects will be “new builds.” Sunway Lagoon is celebrating its silver anniversary and was the world’s 16th most popular water park in 2015, according to the TEA/AECOM Theme Index. Viacom chose Sunway because it wanted to create a test case for Nickelodeon’s Asian expansion. Plus, the two companies have a history together; between 2009 and 2015, they teamed up six times to produce MTV World Stage concerts, featuring global stars like Katy Perry, Jason Derulo, and Justin Beiber. Viacom wanted to test the appeal of a completely different group of stars—of the animated variety.

From Sunway’s perspective, it needed the tie-in with Nickelodeon to keep up with a changing competitive landscape. In 2012, several international branded attractions opened in Malaysia—KidZania in Kuala Lumpur, plus Legoland and Puteri Harbour (with Hello Kitty Town and Thomas the Tank Engine in Johore to the south). More big players are coming to the market this year, as well; in June, Movie Animation Park Studio (MAPS) opens with the Smurfs and DreamWorks characters in Ipoh, two hours north of Kuala Lumpur, while 20th Century Fox World is set to launch in Genting before year’s end.

“We used to have only lo-cal theme parks in Malaysia, then the past five to six years we had new international parks with big IPs entering the market,” says Sunway Lagoon GM Sean Choo. “Even though we’ve been a household name, to keep up with the competition we needed to have a great international IP. We had to have something of a larger size, with a bigger investment, as compared to just building two new attractions every two years, which was the trend before.”

Choo notes Nickelodeon’s characters—the Teenage Ninja Mutant Turtles, SpongeBob SquarePants, Dora the Explorer, etc.—are popular in Malaysia with young adults as well as children. Similarly, lest you think Nickelodeon Lost Lagoon is only for the little ones, there are plenty of thrills to be had, too. Take for example a slide called “Monsoon 360.” Riders strap a thin “jetpack” onto their backs, step into a pod, cross their arms, and then plummet into a water slide when the floor is released below. The ride can reach speeds of up to 60 kph.

“By putting so much investment into an already good park, it obviously adds a lot of value. I think no one comes to the park and complains that they don’t have enough to do,” Choo says. “They do complain … that they don’t have enough time.”

The results so far are solid. Sunway Lagoon experienced record attendance in 2016, up 15 percent to 1.26 million visitors, de-spite an increase in ticket prices. Company officials expect visitor numbers to rise another 15 per-cent in the year ahead.

For Viacom, creating branded attractions and resorts is a growing high-margin business. On top of licensing fees, partners advertise on Viacom’s local channels and contribute to its consumer products business by sourcing Nickelodeon merchandise and producing customized retail products. But recreation is still a small percentage of Viacom’s overall business, which monetizes content through distribution, ad sales, and retail products.

“The bigger point of return on investment for us is that it goes beyond revenue—it’s how we deepen our rela-tionship with consumers and viewers of our shows. It’s a way to extend the brand,” Raines says. “It’s one thing to put shows on air for the TV product. But more often than not, people want to touch and feel those characters in a way you can’t do on television. That’s the big return on investment for us. The time we invest licensing our IP equates to a deeper relationship with consumers who visit the parks and hotels.” 

1706_feature_nickelodeon_4 
Sunway Lagoon hopes IP will keep the park competitive in an ever-evolving marketplace. (CREDIT: Sunway Lagoon)

Nickelodeon-Branded Attractions

  • Existing Attractions and Hotels
  • Nickelodeon attractions Universal Studios Florida and Hollywood (2000)
  • Nickland Movie Park Germany (2007)
  • Nickelodeon Universe Mall of America (2008)
  • Nickelodeon Land Blackpool Pleasure Beach (2011)
  • Sea World (2011)
  • Nickelodeon Land Parque de Atracciones (2011)
  • Wet‘n’Wild Sydney (2013)
  • Nickelodeon Hotel and Resort Punta Cana, Dominican Republic (2016)
  • Nickelodeon Lost Lagoon Sunway Lagoon (2016)
  • In the Pipeline
  • TMNT Land at Dream Island, Moscow, 2018
  • FEC, Murcia, Spain, 2017
  • Riviera Maya Resort, Mexico, 2018
  • FEC, Madrid or Lisbon, 2018
  • FEC, Essex, London, UK, 2018
  • FEC, Madrid or Lisbon, 2019
  • Nickelodeon Cultural Resort, Foshan, China, 2020
  • Coral World Park, Palawan, Philippines, 2020
  • Nickelodeon Land, IMG Worlds of Legend, Dubai, TBD