Sugar23 Takes Stake In Experiential Firm Blue Revolver

EXCLUSIVE: A little more than a year after teaming up with experiential firm Blue Revolver on technology for virtual events, Michael Sugar’s Sugar23 has bought a stake in the company.

Terms of the investment were not disclosed. Principals in the deal told Deadline it is intended to help deliver more multi-faceted and immersive offerings as the media and entertainment industry emerges from the long shadow of Covid-19.

“It has become clear that a growing audience, especially in younger age ranges, really values experience,” Sugar told Deadline in an interview.

Sugar23 was founded in 2017 by Michael Sugar, who is known as a producer and talent manager with credits including Spotlight, The OA and The Knick. The company’s activities span content creation, books, podcasts and e-gaming, with projects including Dickinson for Apple TV+.

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Blue Revolver, founded by Bree McAlister, works with clients such as Netflix, Disney, Nike, AT&T, Disney, Apple/Beats and Live Nation, specializing in activating the five human senses. Its recent projects for Netflix have included creating a setting tied to the premiere last spring of animated film Mitchells vs. the Machines, an experience featuring actual robots interacting with guests.

“We want to create joy through these one-of-a-kind experiences,” McAlister said. In emphasizing multi-sensory approaches, she noted food can often be a critical element, especially when it is not just added on the side but made a thematic centerpiece.

In the throes of the pandemic in 2020, virtual experiences gained significant traction because they were the only option for a while. Even once events have started to return with in-person aspects, there has been an elevated interest in experience, proponents of the sector say. If anything, the collective immersion in videoconferencing during a time of profound isolation has only served to stoke interests in reconnection.

Citing data from research firms Deloitte and Kantar, Blue Revolver says more than 40% of millennials and members of Gen Z say they feel stressed out all or most of the time. Women in Gen Z, due to disproportionate family care responsibilities and pandemic job losses, showed an even higher level of stress, about 54%.

In addition to prioritizing their own wellbeing and seeking out soothing, younger audiences are prizing experience, Blue Revolver said in a recent research paper. “Psychology research has long supported the notion that life experiences lead to greater happiness than material possessions and recent post-pandemic studies continue to back that up,” the firm said, noting that two-thirds of survey respondents have indicated they are prioritizing experiences over physical items they can own.

“Gen Zs and millennials are emerging from a prolonged period of isolation galvanized to do even more than before,” the report added, noting that 44% of survey respondents said they plan to go out to restaurants more than before the pandemic. Nearly the same number expect to attend entertainment experiences more than they did before.

Experiential entertainment has been booming, both in the physical and virtual worlds. Makers of non-fungible tokens and other features of the multiverse have invested in those means of connecting audiences through digital pathways. But there is also a more tactile side of experiential efforts that has growing support. CAA affiliate Constellation Immersive this month received a sizable investment from finance and advisory firm 30West, and has two projects under its belt with more in the pipeline.

As to the road ahead for developing experience as a discrete business and profit center, Sugar said a blueprint has not yet emerged, nor have any agreed-upon economic formulas. But that adds to the appeal of the emerging area, especially given the underlying appetites in the potential audience. “We’re working on some pretty amazing things already and this investment will enable innovation to happen more quickly,” he said.