Films of Sphere concerts part of company’s future revenue strategy
After just over a year of operations, Sphere Entertainment Inc. is starting to figure out how to program the massive Las Vegas entertainment venue to stem slumping earnings.
What that means for the Sphere's future is more performances each day to maximize the building's use, Executive Chairman and CEO James Dolan told investors in the company's first-quarter earnings call Tuesday.
The company reported an operating loss of $125.1 million on revenue of $127.1 million for the quarter that ended Sept. 30.
Dolan said the Sphere is a big hit with performing acts and the company is having a hard time scheduling all the groups that want to perform there because demand has been so high for some of the acts that have already performed.
The Eagles are in the midst of a 28-show residency, which has been extended multiple times due to demand.
The company also now has two films in its library — Darren Aronofsky's "Postcard from Earth" and "V-U2 An Immersive Concert Film," a film version of U2's Sphere performances, which debuted in September. Dolan indicated that strategy will be a part of the venue's future, developing films of performing groups so they can be played on a rotating basis.
Dolan indicated the next strategy will be to have multiple performances each day interspersed with live concerts with a goal of having at least one performance every day, 365 days a year.
Another revenue stream, Dolan's strategy all along, is to develop more Sphere venues worldwide. That idea grew legs in October when the company and the Department of Culture and Tourism – Abu Dhabi announced plans to make Abu Dhabi in the United Arab Emirates the next Sphere location under a franchise model.
In Tuesday's conference call with investors, Dolan offered no new details about when construction would begin on the Abu Dhabi Sphere or when it is expected to open.
But the prospect of creating new concert films provides the opportunity to use the building and generate revenue multiple times a day.
"You feel like you're at the concert," Dolan said of the new U2 concert film. "So, you know, we have some great bands that are coming in over the next year. And so I think we will continue to capture their concerts using our Big Sky technology. How we then bring it to the public and market it, I think we're still trying to figure out what's the best way."
Dolan said in the future, concert films will be the only way to see the likes of Bono on stage.
"I wish we could go back to 1965 and capture the Beatles, I'm pretty sure you'd all love to see a live Beatles concert like you were really there," he said. "So that's one we probably can't do. But we do have some great products, and creating a library of these kinds of performances. I think it's very valuable. Again, how we market it, how we schedule it, et cetera, that I'm not sure of. But I do think that the product is valuable, and I also think that it's going to be evergreen. You're not going to be able to see Bono 20 years from now live, except this way."
