Sphere, a spherical arena facing increasing operating losses, appeals to advertisers about its “only one in the world” advertising inventory (DIGIDAY[Japanese version]) – Yahoo! News

Article Points MSG Sphere, built in Las Vegas, has recorded an operating loss of approximately 12.8 billion yen since its opening. Aiming to capture advertising costs as a unique experience-based facility, we are moving forward with advertising contracts with major brands. It is proposed as a new brand marketing medium that takes advantage of its unique characteristics. There is advertising space inside and outside the facility that is more than the size of three soccer fields, and the daily advertising fee is approximately 58.5 million yen. Although some people praise Sphere's uniqueness, it is expensive and there is no certainty that it will succeed, so most marketers are reluctant to do so. Sphere executives have high hopes for success in the advertising business. MSG Sphere, a spherical arena built in Las Vegas with a total construction cost of $2.3 billion (approximately 299 billion yen), has already earned $98.4 million (approx. The company had an operating loss of 12.8 billion yen. Executives at the facility are considering advertising as a way to cover the hefty costs, and are reportedly in talks to appeal to marketers and agencies. And some of them are more than just discussions, including Heineken, Marvel, Microsoft's Xbox, Coca-Cola, Meta, YouTube, the NBA, and 20th Century Fox. In some cases, this has led to substantial advertising purchases. If you look at Sphere's 2021 presentation materials provided exclusively to Digiday in the US, you can get a good idea of ​​their initial intentions. It seems that they want to propose Sphere to marketers as an all-round option, while setting it apart from traditional outdoor advertising.

$450,000 in advertising fees per day

According to this presentation material, there are three types of events held at Sphere: original special events, residency concerts, and sporting events (mixed martial arts, esports, boxing, professional wrestling, etc.) You can post advertisements on. The space is larger than three soccer fields, and inside it is equipped with tactile seats equipped with an ultra-low frequency haptic system and the world's largest beamforming audio system. Through this material, Sphere probably wants to strongly appeal to marketers as a “one-of-a-kind experience facility in the world.'' In September, U2 held a concert as Sphere's opening performance. Additionally, the NBA, which became Sphere's first advertiser, carried out a unique promotion in which the entire spherical building resembled a basketball. Sphere, which has been in operation for two months, is currently facing a significant deficit. Sphere's unique advertising aspect is technically dependent on the brand advertising it. Therefore, it is difficult for brands with limited financial resources to advertise, which is an issue with this model. Details of advertised prices are not included in this presentation material. However, MSG Sphere's advertising fees are said to be as much as $450,000 (approximately 58.5 million yen) per day, so questions are inevitably raised about its return on investment (ROI). Some marketers are already skeptical.