Entertainment: The Retail Apocalypse Reverse: From Department Store to Experience Hub

What is the Experience Economy Real Estate Trend: Streaming Giants Re-Anchor Malls

This trend signifies the dramatic shift in commercial real estate, where large, vacant department store anchor spaces are being successfully re-purposed by digital-native, experiential entertainment brands like Netflix to serve as permanent venues for immersive, paid experiences. The opening of Netflix House locations in former 100,000-square-foot department stores (like Lord & Taylor and Marshall Fields/Belk) is a prime example of media and real estate merging to recruit a younger audience and revitalize traditional retail destinations.

• The Anchor Tenant Evolution The trend confirms that the traditional department store is obsolete as a mall anchor. Landlords are now actively seeking large-format "experiential concepts" to replace them, recognizing that these concepts are more effective at drawing high, diversified foot traffic, especially among younger crowds. Alternatives like Round 1, Dick's House of Sports, and now Netflix House, are filling these 100,000+ square foot vacancies.

• The Monetization of Fandom and IP The Netflix House model is based on monetizing established Intellectual Property (IP) through paid, in-person experiences (games, mini golf, VR) inspired by popular streaming titles like Stranger Things and Squid Game. This transforms the passive act of watching into an active, shareable, and profitable consumer event.

• The Permanent Experiential Hub Netflix House represents an evolution from touring, temporary pop-up experiences (which the company experimented with during the pandemic) to a permanent venue model. The goal is to provide a rotation of experiences throughout the year, requiring a large, dedicated, and flexible space—exactly what an old department store "box" offers.

Consumer Insights: Traditional malls are becoming more diversified and interesting destinations, offering paid entertainment options that complement shopping and dining. Insights for Brands: Large-format experiential concepts are the new anchor tenants for revitalized retail properties, offering a high-visibility, year-round platform for IP activation and direct consumer interaction.

Why it is the topic trending: The Convergence of Digital Fandom and Physical Real Estate

This trend is highly visible because it addresses two major, interconnected economic pressures: the need to revitalize struggling brick-and-mortar retail and the need for digital media giants to diversify revenue and deepen fan loyalty.

• Solving the Retail Apocalypse Problem: The closure of department stores has left massive, strategically located retail spaces (100,000 sq ft+) vacant. The rise of entertainment concepts like Netflix House, which occupy this scale, provides a viable, high-draw solution for landlords who need to make their malls "diversified, interesting places" to visit.

• Deepening Fandom and Audience Engagement: For a streaming giant, continuous growth requires more than subscriptions; it requires deepening fan loyalty. In-person experiences that "really tapped into that fandom" and allowed fans to "do more with these titles" serve as a crucial engagement and retention tool, converting digital viewers into high-value physical customers.

• The Perfect Real Estate Fit: Department store boxes are architecturally ideal for the new concept, offering the necessary large, flexible, floorplate for rotating games, VR zones, and food/beverage areas that cater to both families during the day and adults at night.

Consumer Insights: Your desire to physically interact with your favorite TV shows is directly driving the restructuring of commercial real estate. Insights for Brands: Experiential venues offer a valuable opportunity to capture a younger crowd and integrate the brand into the "cultural fabric" of a city, utilizing existing, well-known locations.

Detailed findings: The Blueprint for Experiential Anchor Success

Detailed findings reveal the specific strategic and physical characteristics that make the Netflix House model an effective blueprint for experiential anchors replacing traditional retail.

• Scale and Flexibility: The 100,000-square-foot footprint is critical, providing the space needed for rotating experiences based on different shows, food/beverage areas, and large-scale attractions (VR, mini golf, arcades) that can maintain year-round novelty.

• The Complementary Ecosystem: Netflix House is intentionally located within existing, successful malls (Galleria Dallas, King of Prussia) with an internal entrance. This positioning drives new traffic into the mall ecosystem, making the entertainment offering complementary to existing shopping and dining.

• The Warner Bros. IP Multiplier: The potential acquisition of Warner Bros. significantly amplifies the trend's future, as the concept can now incorporate major legacy IP like Harry Potter, DC Universe, and Wizard of Oz alongside existing hits like Squid Game. This combined IP portfolio makes the experiential venue even more compelling as a destination.

• Branding and Heritage: The company intelligently redesigned the entries to resemble the iconic DVD-by-mail envelope, providing a nostalgic and instantly recognizable brand touchpoint that connects the company's heritage with its new physical presence.

Consumer Insights: The value of the venue increases dramatically with the inclusion of new, major IP, making future visits even more attractive. Insights for Brands: Large, adaptable spaces in well-established locations are highly valuable. The ability to flexibly incorporate diverse IP (especially through strategic mergers/acquisitions) ensures the venue's longevity and draw.

Key success factors of the Experience Economy Real Estate Trend: IP, Location, and Novelty

The success of the Netflix House model hinges on a strategic combination of world-class intellectual property, superior physical location, and the capacity for continuous renewal.

• World-Class IP Activation: The most crucial factor is the ability to leverage globally recognizable, high-demand IP (Stranger Things, Squid Game) and seamlessly translate it into compelling, paid physical experiences. The IP is the magnetic force drawing the younger crowd.

• Strategic Mall Co-Location: Placing the venues in "very well-established malls" that are "already destinations" ensures convenience and accessibility for fans, leveraging the existing foot traffic and cultural fabric of the city.

• Built-in Novelty and Rotation: Moving away from single, temporary pop-ups to a permanent venue with a rotating slate of experiences is key. This guarantees repeat visits throughout the year, as consumers will return to engage with new titles.

• Integrated Food and Retail: Providing dedicated areas for food, beverages, and retail inspired by the titles creates additional, high-margin revenue streams that enhance the immersive experience and increase the average spend per visit.

Consumer Insights: Choose experiences based on the strength of the IP and the quality of the immersive environment. Insights for Brands: Focus on continuous content renewal and IP integration within the venue to maintain consumer interest and maximize lifetime customer value.

Key Takeaway: The Physical Manifestation of Digital Fandom is the Future of Retail

The core takeaway is that the massive, high-ceiling spaces left vacant by the retail apocalypse are being reclaimed by digital giants who understand that the future of customer loyalty and monetization is the physical manifestation of digital fandom. The model transforms the mall from a shopping center into a Hybrid Entertainment Hub where experiences drive both traffic and spending.

• Streaming Goes Brick-and-Mortar: The physical venue is no longer just a marketing stunt; it is a permanent, high-volume revenue and retention center for the digital-native brand.

• The Shift from Purchase to Pay-to-Play: The primary function of the anchor tenant has shifted from driving product purchase to offering paid entertainment.

Consumer Insights: Your digital viewing habits are increasingly determining the physical landscape of your local shopping centers. Insights for Brands: Physical venues are the ultimate tool for fandom monetization and data collection, offering a direct, high-touch relationship with the most dedicated segment of the audience.

Market and Cultural Signals Supporting the Trend. The Primacy of "Doing" Over "Buying"

The Experience Economy Real Estate Trend is strongly supported by deep market and cultural signals that prioritize shared, memorable activities over passive consumption.

• The Experience Economy Boom: The cultural signal is clear: consumers, especially the younger crowd, are prioritizing spending on experiences and moments that are social and shareable over purely transactional goods, which directly validates the "pay to play games" model.

• The Rise of Fan-Centric Culture: The successful "immersive drive-through event" based on Stranger Things during the pandemic demonstrated the powerful cultural signal that fans "wanted to do more with these titles" than just watch them, driving the need for permanent experiential venues.

• Decline of the Homogenous Mall: The replacement of traditional, generic department stores with diverse, specialized entertainment offerings (Round 1, Netflix House) signals a market demand for differentiated, diversified, and highly localized entertainment destinations.

Consumer Insights: Your desire for shareable, immersive experiences is revitalizing public spaces that were previously declining. Insights for Brands: Align your physical strategy with the cultural value of authenticity and immersive storytelling, using the venue to bring your digital narrative into the real world.

Description of consumers: The Experience-Driven Fan

The core consumer segment driving this trend is the Experience-Driven Fan: a digitally savvy individual who is highly engaged with specific IP and prioritizes spending on interactive, social, and shareable real-world experiences that deepen their connection to the content.

• Fandom-First Motivation: Their visit is primarily motivated by their loyalty to the Netflix IP (Squid Game, Wednesday, One Piece), not by traditional retail needs.

• Social and Shareable: They value experiences that are socially rewarding (doing things with friends/family) and highly shareable on social media, using the experience to signal their identity and fandom.

• Willing to Pay for Access: They accept the "pay to play" model because they see the financial transaction as a fair exchange for high-quality, immersive access to their favorite fictional worlds.

Consumer Insights: Your purchase decisions are driven by the opportunity to participate in and share an experience based on content you already love. Insights for Brands: Focus on delivering high-quality, interactive experiences that provide clear social media value and are worth the fee for admission or play.

Consumer Detailed Summary: The Experience-Driven Fan

This consumer segment is seeking entertainment, community, and novelty, and they use their spending to affirm their identity as fans of specific digital content.

• Who are them: Experience-Driven Fans / Digital Pilgrims—Content-loyal consumers who seek physical, interactive manifestations of their favorite streaming IP.

• What is their age?: Primarily Gen Z and Millennials (16-40), who grew up with digital media and prioritize experiential spending and social sharing.

• What is their gender? Broadly distributed, with specific IP drawing specific demographics (Wednesday drawing young women; Stranger Things drawing families/Millennials).

• What is their income? Broadly distributed—the free entry/pay-to-play model makes it accessible, though the high engagement suggests a willingness to spend on premium experiences.

• What is their lifestyle: Active, Social, and Digitally Engaged, spending heavily on entertainment, dining out, and shared experiences that provide strong social media content.

• What type of shopper is (based on motivation): The Experiential Seeker, motivated by the novelty, the quality of the immersive environment, and the desire to be a participant in the narrative, not just a spectator.

What is consumer motivation: The Desire to "Do More" With Digital Content

The core consumer motivation is the desire to transcend the passive consumption of content and actively participate in the world of their favorite TV shows, achieving a deeper, more memorable, and shareable connection to the IP.

• Deepening Fandom: The opportunity to step into the Stranger Things world or play Squid Game-inspired challenges is the ultimate expression and deepening of their fan loyalty.

• Novelty and Sensory Stimulation: Consumers are motivated by the novelty and multisensory stimulation of large-scale, well-designed immersive environments that are unavailable anywhere else.

• Shared Social Memory: The experience generates a shared social memory with friends or family, which is more valuable than a solo purchase.

Consumer Insights: The value of the experience is measured by how deeply and authentically it allows you to participate in the fictional world. Insights for Brands: Focus on the authenticity of the set design and the immersiveness of the games; the experience must genuinely feel like stepping into the show.

Strategic Trend Forecast: Hyper-Local IP Activation and Merged Media Ecosystems

The strategic forecast points toward a complete merger of the digital media and physical real estate industries, with entertainment giants becoming primary retail real estate occupiers.

• Entertainment as Top Real Estate Occupier: Streaming and gaming companies will become a top three occupier of large commercial real estate globally, competing directly with major gym chains and non-traditional retail for 100,000+ square foot vacancies.

• Merged Media Ecosystems: The model will expand to incorporate content from major deals like the Warner Bros. acquisition, creating Merged Media Ecosystems where physical locations serve as hubs for multiple, globally recognized IP portfolios.

• Data-Driven Experience Design: Future venues will use streaming data (what titles are popular, what characters resonate) to algorithmically determine the rotation and design of new experiences, ensuring maximum relevance and draw for the local market.

Consumer Insights: Expect more diverse and high-quality entertainment options to fill empty mall spaces near you, transforming local areas into fan destinations. Insights for Brands: Secure large, flexible real estate now. The strategy is to monetize the entire IP portfolio by building a physical ecosystem that adapts to new content releases.

Areas of innovation : Personalized, Phygital, and Location-Based Storytelling

Innovation will focus on integrating digital technology (VR, AR) into the physical space to create highly personalized and scalable immersive narratives.

• Phygital (Physical-Digital) Integration: Integrating VR games and arcade-style experiences (as seen in the Dallas and King of Prussia locations) with the live, physical sets. This creates a hybrid, "phygital" narrative that increases engagement and allows for easier rotation of digital elements.

• Location-Based Personalized Narratives: Using personal fan data or RFID bracelets to create personalized narrative threads during the experience (e.g., your character in Stranger Things has a storyline based on your preferences), deepening the feeling of ownership.

• Optimized Space Utilization: Innovation in interior design to maximize the flexibility and modularity of the 100,000-square-foot box, allowing for rapid, low-cost turnover between IP experiences.

Consumer Insights: Look for experiences that leverage technology to make your visit unique and personally tailored. Insights for Brands: Invest heavily in modular set design and Phygital technology to ensure the large real estate footprint remains fresh, relevant, and scalable for new IP.

Core Macro Trends: The Experience Economy and Retail Diversification

This trend is a direct result of two powerful macro trends that have been reshaping the consumer landscape for a decade.

• The Experience Economy: The overarching societal shift where consumers globally prioritize spending on memorable, social experiences over accumulating physical goods.

• Retail Diversification: The macro shift in commercial real estate from a pure goods-based model to a diversified, multi-use hub that combines retail, dining, entertainment, and residential uses.

Consumer Insights: Your desire for experiences is driving capital investment into tangible, real-world assets. Insights for Brands: The future is in mixed-use development; entertainment companies are the key to making these spaces financially viable and culturally relevant.

Core Consumer Trend: Fandom Participation

The core consumer trend is Fandom Participation: the desire to move beyond the role of a passive spectator (a subscriber) to an active participant in the fictional world, viewing the purchase of an experience as a form of co-creation.

• The Co-Creator Mentality: The consumer believes they are entitled to "do more" with the titles they love, and they use their spending to purchase that participatory access.

Consumer Insights: Participation is the ultimate expression of your fandom; seek out venues that offer the highest level of interactivity. Insights for Brands: Design experiences that explicitly encourage and reward active participation and social sharing to convert passive viewers into financial participants.

Core Strategy: IP Destination Creation

The core successful strategy is IP Destination Creation: transforming an existing, high-visibility real estate asset (like a vacant department store) into a permanent, high-draw tourist and local destination centered entirely around a portfolio of recognizable intellectual property.

• The Real Estate of Fandom: The strategy turns the mall into a pilgrimage site for fans, guaranteeing foot traffic regardless of seasonal retail performance.

Consumer Insights: Choose destinations that offer a high density of high-quality IP activation for maximum value. Insights for Brands: Secure the physical address of the IP. The permanent physical venue provides tangible, high-quality, and high-margin revenue streams that stabilize the digital subscription business.

Core Industry Trend: Media Company as Real Estate Anchor

The core industry trend is the Media Company as Real Estate Anchor: the recognition that the largest, most successful digital media and streaming companies (Netflix, etc.) possess the brand recognition and IP portfolio necessary to serve as the high-draw anchor tenants that can replace defunct department stores and revitalize commercial properties.

• Brand Transfer: The core value is the transfer of a powerful digital brand's gravity into a physical location to attract crowds.

Consumer Insights: The companies you stream from are now determining the fate of the local mall. Insights for Brands: Brand power is the new collateral. Use your digital brand equity to negotiate favorable, large-scale leases in prime commercial locations.

Core Motivation: Achieving Shared Social Memory

The core motivation driving the consumer to pay for these experiences is the Achievement of Shared Social Memory: the desire to create a highly memorable, unique, and shareable real-world experience based on their favorite content with friends and family.

• Memory as the Product: The experience is valued not for the product purchased, but for the high-quality memory and social content generated.

Consumer Insights: The memory and the photos are the ultimate product; focus on the social aspect of the visit. Insights for Brands: Design the experience for optimal photography and social sharing, ensuring every set piece is an "Instagram moment" to maximize organic promotion.

Final Insight: The IP-Driven Entertainment Hub is the New Department Store

What we learn from this trend is that the IP-Driven Entertainment Hub—exemplified by Netflix House—is the natural, high-value successor to the department store anchor, fundamentally changing the financial and cultural purpose of the regional shopping mall. The future of retail real estate is about selling access and experience, not just goods.

Consumer Insights: Entertainment is the new reason to visit a physical store. Insights for Brands: Own the real estate of your IP. This physical presence is a critical, long-term asset for subscription retention and ancillary revenue generation.

Final Thought (summary): The Streaming-to-Store Pipeline: Fandom Saves the Mall

The Experience Economy Real Estate Trend illustrates a critical, high-impact pivot in both the retail and media industries. The consumer trend is driven by the Experience-Driven Fan whose core motivation is the Achievement of Shared Social Memory and the desire to actively participate in the fictional worlds they love. This demand is successfully resolving the Retail Apocalypse, as streaming and media giants like Netflix are strategically occupying 100,000-square-foot department store vacancies to create IP Destination Creation hubs. The implication is a complete restructuring of the commercial landscape: the Media Company is the New Real Estate Anchor, using its massive IP portfolio (like Stranger Things and potentially Warner Bros. titles) to transform malls from transactional shopping centers into vibrant, permanent Hybrid Entertainment Hubs that are built on recurring revenue from paid, rotating, and immersive experiences.

Trends 2025: Fandom Experiences: Monetizing Loyalty Through Immersive Real-World Portals

What is the IP Immersion Trend: The Transformation of Viewers into Participants

This trend focuses specifically on the commercial strategy of translating passive digital content (streaming shows and movies) into paid, high-value, immersive real-world experiences that allow fans to physically interact with their beloved intellectual property (IP). The opening of Netflix House locations, where fans pay to engage in games, VR, and dining inspired by titles like Squid Game and Stranger Things, epitomizes this trend of monetizing fandom through physical immersion.

• Fandom as the Rationale for Real Estate The core element is the recognition that fandom is the engine that drives physical location viability. Netflix explicitly stated that its successful touring events "tapped into that fandom," and that fans "wanted to do more with these titles," making the need for a permanent venue to bring experiences "in and out of throughout the year" the strategic rationale for securing 100,000-square-foot mall spaces.

• The "Pay-to-Play" Monetization Model The trend relies on a transactional model where access to the immersive experience is monetized through paid games, mini golf, VR, and food/beverage consumption, rather than through mandatory gate entry (the venues are free to walk through). This ensures a high conversion rate of engaged fans who are willing to pay for the experience of participation.

• IP-Driven Rotational Content Fandom experiences succeed by offering continuous novelty tied to the strength of the IP portfolio. Netflix House is designed as a permanent venue with a "rotating selection of games or experiences" based on different shows. This ensures that the venue remains fresh and compels repeat visits from fans whose interests shift with the latest streaming hit.

Consumer Insights: The value of an immersive experience is directly proportional to how authentically it allows you to physically participate in the world of your favorite show. Insights for Entertainment Industry: Physical experiential venues are the ultimate IP activation platform, turning ephemeral content (a streaming subscription) into tangible, high-margin revenue streams.

Implication for Entertainment Industry: The Merger of Digital and Physical Value Chains

The Fandom Experiences trend implies a definitive merger between the digital content creation pipeline and the physical retail value chain, establishing permanent, high-margin revenue centers for digital media companies.

• New Profit Centers for IP: The experience hub becomes a critical, permanent profit center for Intellectual Property. Revenue is decoupled from the subscription fee and linked directly to the fan's willingness to pay a premium for physical interaction, offering a buffer against digital subscription volatility.

• Data Loop for Content Creation: The engagement data collected from physical experiences (which games are most popular, which food items sell best) can be fed back into the content development pipeline to inform future IP creation and merchandising strategies.

• The End of Purely Digital Media: Every piece of successful digital IP will eventually be expected to have a physical, paid, experiential counterpart. Content creation strategy will increasingly focus on the IP's potential for real-world activation and monetization.

• Redefining Distribution and Marketing: The permanent physical venue serves as the ultimate, continuous marketing and brand awareness tool. It is a tangible billboard that actively recruits new subscribers while offering an unparalleled retention tool for existing ones.

Source: https://www.modernretail.co/operations/netflix-transforms-former-mall-department-stores-into-experiential-venues/