Two ominous pieces of news dropped recently.
First, Disney announced that they’re adjusting their focus from in-theater releases to Disney+ streaming — a shocking development for the company that generated nearly $2.8 billion at the box office with Avengers: Endgame.
The following day, industry giant AMC warned they may run out of cash by December 2020. The century-old company reported nearly $561 million in Q2 losses, with revenue declining 99% from the same period last year.
Both announcements come on the heels of COVID-19’s suffocation of the traditional movie theaters. It’s clear they’re not returning to normal any time soon.
One market, however, will profit from this news: home theaters.
The home theater industry has been growing steadily since well before COVID-19. According to Grand View Research, it was a $7.7 billion market in the US in 2018. In 2017, a Global Market Insights report projected US-based revenue to hit $28 billion by 2023.
The doom-and-gloom from major movie theaters will only accelerate this climb. The longer public theaters are unavailable, the more people will build mini versions in their living room. And by the time everything returns to normal, many may find that they prefer them to crowded public ones.
So now that it’s clear the home theater industry is poised to pop, how can you get a slice of that $28 billion pie? Here are three ways to make some cold hard cash in the upcoming surge.
1. Build an affiliate review site
Home theaters are made up of physical products: screen projectors, sound systems, couches, popcorn machines.
How can consumers tell which brand to buy? Some shop based on value, others prioritize quality. All have the same question: amidst a sea of dubious Amazon reviews, which one best fits their preferences?
That’s where you come in. Create a blog or YouTube channel dedicated to reviewing home theater equipment. Monetize by including affiliate links to Amazon or a product page in each review, then drive traffic through SEO or paid ads.
The goal is to establish your blog as an industry authority, which means you’ll spend hours testing each product and identifying all the details a prospective customer would want to know.
As home theaters get more and more popular, the need for consumers to know exactly what they’re buying will increase. The more nuanced your reviews, the greater the value you provide.
Affiliate review blogs are one of the best ways to make money without selling your own products. They’re also incredibly lucrative. One of the most famous examples is Wirecutter, which generated nine figures in revenue from 2011 to 2016 before the NY Times acquired it for $30 million.
Other examples include thisiswhyimbroke.com, a novelty gifts site pulling five figures a month through the Amazon Affiliate program, and Sleepopolis, a mattress review site acquired by industry leader Casper in 2017 for an undisclosed amount.
2. Launch a home theater equipment brand
A search for “home theater” on Google returns results like crutchfield.com, theaterseatstore.com and htmarket.com. These sites sell home electronics, high-end seats, popcorn machines, and various other home theater equipment.
While all of them appear to be reputable, trustworthy sites, none of them have that slick Shopify aesthetic that’s enabled DTC companies like Warby Parker to command billion-dollar valuations.
That means there’s an opportunity for a hip and trendy home theater brand to capture the market.
To capitalize on this, create a catchy, millennial-savvy name. Some suggestions: Theaterfy, THTR, Coziefy (verbs and vowel-less names are in at the moment). Pair it with a trendy logo, which you can make for free via Shopify’s Hatchful.
Then, set up a website with a modern aesthetic via Shopify. You can also use Squarespace or Wix, but Shopify is better equipped for long-term needs like SEO, and is just easier to use overall.
Finally, market through one or all of the following channels:
- SEO optimization. In the age of the internet, this is a must. Suggestion: create highly useful/linkable blog content around how to set up and optimize a home theater.
- Organic social media content. Build a highly aesthetic Instagram account around stunning, high-end home theaters and small cozy set-ups. Create Gen Z-relevant skits involving home theaters on TikTok. Post DIY tutorials on how to build home theaters on YouTube.
- Influencer partnerships. To reach Gen Z/millennials, identify underrated TikTok stars and send them free products in exchange for posts. To reach boomers and senior citizens, partner with influencers on this list.
- Facebook ads. This is arguably the most effective way to build a DTC brand, as it allows you to reach an audience and scale quickly.
Currently, the competition in this space is relatively low. The existing retailers may have a loyal audience, but none of them are household names, and none of them are maximizing their potential on social media.
Develop a brand that resonates with younger audiences, and you could capture market share very quickly.
3. Create a Postmates for theaters
You and your friends feel like watching a movie. You don’t want to risk contracting COVID-19 at the theaters, and today, you’re in the mood to really immerse yourself in another world, so your living room projector screen just doesn’t feel big enough.
You pull out your phone and cue up an app. In 30 minutes, a moving truck pulls up to your driveway. In the back of the truck is a mini movie theater with a massive screen and ridiculously comfortable couches. Most importantly, it’s pitch black when the sliding door closes, creating an atmosphere identical to a real theater.
In today’s on-demand world, I’m surprised this type of service doesn’t already exist. Movie theaters in my area are currently allowing people to pay $100 to rent out an entire room for the duration of a movie. Why not add convenience to the equation and bring the theaters to the customer?
Quick look at logistics: at the moment, U-Haul charges just $40/day to rent out a 26' moving truck. I’d bet many would happily pay at least $40 a movie for a service that delivers the experience directly to their house, considering it allows them to avoid most pandemic-related risks.
Since the average movie is about two hours long, you’d be able to rent each truck out around five times a day (leave time in between for travel and cleaning). You might even try approaching U-Haul with a partnership proposal rather than investing in your own fleet of trucks.
Home theaters are here to stay
These concepts are just starting points. There are many, many other angles from which to approach this industry (for example, movie food).
Regardless, the fundamental thesis is clear. COVID-19 isn’t letting up any time soon, which means traditional theaters will be out of the picture for a while. In their absence, there will be an increased interest in recreating the theater experience at home.
So if you’re an entrepreneur at heart, put on your thinking cap and start testing the market. This multi-billion dollar industry is ripe for harvest.
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