I bet you didn’t see THIS coming! Neither did I, and my reaction quickly went from surprise to overwhelming curiosity…which I’m sure must be true for a number of you folks, as well.
NEUTRAL ZONE STUDIOS, which houses the TOS sets originally built by STARSHIP FARRAGUT and STAR TREK CONTINUES and is now offered to any Star Trek fan film that wants to use them by current owner RAY TESI, will be moving from Kingsland, GA about 180 miles south to Orlando, FL in late April. (Man, that was a long sentence!) Once relocated, the TOS sets will be repurposed into two sci-fi themed “Escape Room” attractions with video hints recorded by sci-fi celebrities, including NICHELLE NICHOLS, WALTER KOENIG, MARINA SIRTIS, and/or TIM RUSS.
The TOS sets will be divided into two scenarios with three rooms each plus a newly-created bridge control room where players will start their adventure. Customer participants will then experience an hour-long, immersive sci-fi “mission” with puzzles and mysteries to solve. This new business venture will be called GALACTIC ADVENTURES and is set to open on July 1, 2020.
Later on, joining the TOS sets from Kingsland will be the alien bar sets originally constructed in Los Angeles for STAR TREK: RENEGADES and later used for the crowd-funded independent sci-fi comedy COZMO’S from the ATOMIC NETWORK. At some point in the near future, those sets will form a third Escape Room scenario.
(You’re going “WTF” right now, aren’t you?)
To find out some specifics, I went to the source and asked Ray Tesi himself, who told me…
We will not be using the bridge in the escape and instead will keep it in pristine condition. We will be constructing a new bridge with a different look and feel for the escape. We’ll also be re-purposing some of the other sets for the escape and introducing some new sets that are remnants of other productions. Our Escape Room isn’t the Enterprise and instead will feature missions on a new starship (we are creating original stories) because we don’t want it to look like Star Trek.
I can understand why they’d want to change the look, as CBS might not appreciate an unlicensed Star Trek-themed Escape Room…even if the words “Star Trek” don’t appear anywhere.
But where does that leave Neutral Zone Studios and the many fan films that rely on it? Will fan productions still be able to film there? And even though the bridge won’t be a part of the Escape Room scenario, will the rest of the sets still look enough like TOS to be recognizable? Ray responded…
We want it to look like our own starship, but it can change back for fan films. The studio will remain available for fan film productions, and if and when that happens, we will close the Escape Room during filming. But we have a long way to go before any of that happens.
A long way indeed! But they’re off to an impressive start…
In order to fund this ambitious endeavor, on February 13, Galactic Adventures launched a special campaign on WeFunder and raised over $20,000 (of their $100,000 goal) from 52 investors in just one day! Since then, they’ve crossed the $35,000 threshold with 70 investors as I type this.
For those not familiar with WeFunder, it’s similar to other crowd-funding platforms but with one VERY BIG difference. While Kickstarter, Indiegogo, GoFundMe, and other such services simply collect donations, participants on WeFunder purchase SHARES in the ventures they choose to support and become investors. As such, there’s a $100 minimum for anyone wanting to purchase a small piece of Galactic Adventures (which is 20 shares for $5/share).
WeFunder has been used to provide more than $123.5 million in capital for nearly 350 start-ups, including the fan-owned media company Legion M. So yes, this is real. But is it realistic?
The schedule for getting Galactic Adventures up and running is pretty ambitious. Conceived of as recently as this past December, plans are already underway to transport the sets in late April, complete construction and alterations by June 1, and then open one month later on July 1. That’s quite a sprint! Take a look…
Assuming they can raise the full $100,000 with this offering before April, here is how they intend to spend the invested capital (according to their campaign page on WeFunder):
- $5,000 – Designs
- $20,000- Rent ($10,000/month for 16,000 sq. ft. storefront, first and last month’s rent due up front)
- $10,000 – Transportation of Sets (presumably only the TOS sets from Kingsland to Orlando…about 3-4 hours drive)
- $19,000 – Construction
- $22,000 – Puzzle Creation
- $4,000 – Puzzle Installation
- $2,000 – Merchandise Creation
- $7,000 – Employee Wages (1st Month)
- $500 – Utilities
- $300 – Insurance
- $7,500 – WeFunder intermediary fee (7.5%)
Now, if they can raise more than the $100,000, they have additional plans for how to spend up to $500,000:
- Pre-pay monthly expenses (18%)
- Open a third scenario (15%)
- Create a new bridge set (12%)
- Do additional marketing (15%)
- Create additional merchandising products and hire additional staff (20%).
- Traveling to begin prepping their next location and purchasing licensing rights for branded properties (12.5%)
- Wefunder intermediary fee (7.5%)
Monthly expenses have been estimated at $25,000, meaning that this one Escape Room location will need to take in (after-tax) net revenue of at least $300,000/year just to break even. Can they do it?
From the Galactic Adventures Summary Deck, they certainly do sound extremely optimistic (as any start-up usually does, of course). They see this venture as being worth $5 million once it’s funded and up and running. And just take a look at this projected growth curve (click to enlarge)…
According to their predictions, monthly revenue will TRIPLE before the end of the first year. New locations will be added every eighteen months until there are three locations total in cities across the U.S. like Las Vegas and Chicago. According to their campaign page, they eventually “…will expand into locations nationwide and internationally with branded and licensed scenarios from film and television properties.”
But wait, there’s more.
They expect 53,800 people to come through their door in year one (an average of 150/day), paying $40 each. The provides a projection of $2 million in gross revenue for the first year…way more than the $300,000 net they need to break even. Sounds like a license to print money, right?
However, note that their maximum capacity for one day is 160 visitors (8 one-hour sessions of 10 players for each of two scenarios). So this means that they are predicting a first year customer volume rate of 93.75% of capacity…pretty much from opening day onward, each day, at all times of the day. The campaign page even says, “There is a high probability that players will flock to the location, immediately upon opening the doors.”
Is this a fair assessment? Are they being overly optimistic? It’s hard to say at this point. Strategically, Orlando is a smart place to put the new start-up. In addition to having a decently-sized local population to draw customers from, Orlando has over 68 million visitors annually, including 6.5 million international visitors…and they come specifically looking for wholesome family entertainment and amusement.
The city already supports twelve Escape Room businesses, although only one is a direct competitor featuring scenarios in a sci-fi genre. So what does this mean for a new thirteenth business? Is Galactic Adventures over-saturating an already-saturated market? Some could argue that, but at the same time, if the city is already supporting so many Escape Room businesses simultaneously—and none has closed its doors yet—one can assume that there is a high demand for such offerings. So when looked at from that perspective, perhaps the high number existing Escape Rooms in Orlando means it’s exactly the right place to open a new one. And as I already mentioned, only one of those competitors has a sci-fi theme.
But then the question becomes: what’s it like out there for the Escape Industry in general? Is business growing or contracting? Here, once again, the Galactic Adventures folks sound extremely optimistic, and with some justification…
Beginning in 2015, the industry had an explosive growth curve that lasted a solid three years, and the industry is still growing—although not as fast in the most recent year on the graph. This suggests a maturing industry, which is not necessarily a bad thing. Think of cell phones. There was a period from about 2004-2010 when the growth in mobile subscribers was taking off like a rocket. And while the rate of growth has certainly slowed in the last decade, the industry is still quite robust and continues an upward trajectory.
All of this is to say that Escape Rooms might indeed still be a good investment right now. It’s hard to know for certain, though.
The bottom line is this. If you’re thinking of investing, do your research. Don’t take advice from a blogger…especially one who doesn’t even write about stocks or finance! I usually cover crowd-funding campaigns where people DONATE their money—not INVEST it.
So why am I covering this story at all, you ask?
Well, first of all because it does involve Star Trek fan films. Ever since Ray Tesi opened up his newly-acquired TOS sets to fan filmmakers a couple of year ago, a growing number of productions have made extensive use of the resource. So anything that affects those sets is major news for this community and something I should cover.
The second reason is because I don’t want to see these sets wind up in a dumpster. And even though Ray didn’t comment to me on the reason for this move and new business venture, I would assume that paying rent in Kingsland each month for something that he can’t monetize in any way eventually starts to take a financial toll…especially when you’re paying those ongoing expenses out of your retirement savings, as Ray has always been honest that he’s doing.
Granted, there’s been a Patreon campaign going on for a couple of years now, bringing in about $2,000/month in donations. But rent at the current location is $3,5000/month, meaning Ray is covering nearly $20K each year out of his own pocket. That can’t last forever.
And so I wish only the best for Ray and this venture. If it works out, lots of good things happen for fan films. The sets stick around, fan films can still use them, and fans involved in those projects can simply fly into Orlando rather than flying in and out of Jacksonville, FL and then driving 45 minutes to Kingsland, GA. Granted, for anyone driving and not flying, chances are you’ve now got an extra three hours added to your trip…unless you’re driving from south Florida. But perhaps this move will open up the sets to even more fan filmmakers from that densely-populated area who otherwise might never have known about the sets all the way across the border in Georgia.
Anyway, I’m rooting for a good outcome. Can they pull it off? I’ll keep you posted!