Where streaming meets shopping: Netflix unveils first immersive year-round entertainment venue

Streaming giant Netflix is playing tribute to its roots at its first permanent entertainment-and-retail venue at a mall outside Philadelphia.

A huge red envelope, a nod to the company's DVD-by-mail origins, frames the outside entrance to Netflix House at the King of Prussia mall in Pennsylvania. On the wall behind it, there's a colorful mural by a local Philadelphia artist, a mashup of characters from Netflix programming.

Inside, what was once a roughly 100,000-square-foot, two-story Lord & Taylor store has been transformed. The entrance opens into a grand atrium with installations and Instagrammable photo opportunities inspired by Netflix shows. An enormous, disembodied hand — that of Thing from the Addams Family tale "Wednesday" — stands out and immediately draws people looking to be photographed posing with it.

Then the iconic bright blood-red staircase from "Squid Games" brings visitors to a second level overlooking the atrium. That area includes a shop selling Netflix-related merchandise and Netflix Bites, a large restaurant. An entrance connects the eatery to the mall, in addition to the parking lot entrance, making Netflix House a true anchor tenant.

Netflix House Philadelphia officially opened Wednesday to the public, but media and guests days earlier toured the site that's attracting attention in retail real estate circles as a way to draw more visitors to malls. Executives from the streaming service said the project has been long in the making, touting it as a first-of-its-kind venue that aims to give Netflix fans immersive experiences tied to the service's TV shows and movies — including mini-golf, virtual reality, escape rooms and eventually special events.

The entertainment streamer is all-in on the concept, with Netflix House Dallas slated to open in another vacant department store in a mall in a month. The third Netflix House is scheduled to debut in Las Vegas in 2027. Officials want to expand the concept to even more cities.

The foray is risky, but Netflix said it has thoroughly vetted it, by doing over 40 pop-up experiences tied to shows such as "Stranger Things" and other programs to date, reaching more than 10 million fans across 450 openings in 300 cities around the world. They garnered an average 4.6 guest rating out of 5, according to Netflix. Still, that's far different than running a permanent location.

And while naysayers are still talking about the demise of malls, Netflix is a huge advocate for them as Netflix House locations. In part, it's because Gen Z — the digital-native demographic of those born between 1997 and 2012 — are flocking to them. And that's a demographic that Netflix wants to attract.

"We really were looking to be in a place where naturally people are already gathering," Marian Lee, Netflix chief marketing officer, said in a video clip regarding the King of Prussia mall. "It has an incredible amount of foot traffic. It is located in King of Prussia, which is just a stone's throw away from Philadelphia, which is a major metropolitan center. And so it was really important for us to think about where the fans are and deliver them something that we really felt like we could, in the space that we really needed."

Tenants featuring experiential or immersive offerings — often interested in empty big-box space — are a boon for retail landlords. Netflix has a 10-year lease for its space at King of Prussia, according to CoStar data. The retail center is owned by Simon Property Group and the third-largest mall in the nation.

Macerich, a retail real estate investment fund, on its earnings call Friday discussed how Dick's House of Sport — which offers in-store experiences like batting cages, golf simulators and soccer fields for practice — had just opened at a former Lord & Taylor space in the Freehold Raceway Mall in New Jersey.

Venues related to TV-and-movie programing have had a place in malls for some time, albeit not exactly the way that Netflix is doing it. The American Dream megamall in East Rutherford, New Jersey, is home to a Nickelodeon Universe theme park, Angry Birds Mini Golf and a DreamWorks Water Park.

Netflix House, roughly 20 miles from downtown Philadelphia, is open to non-subscribers to the streaming service and features both free and paid ticketed activities.

The venue in part seeks to put visitors in interactive settings based on Netflix shows. "One Piece: Quest for the Devil Fruit" amounts to an escape room experience based on that live-action program, an adaptation of an anime series. Participants are greeted by a live "cadet," who instructs them on what's to come. They break into two pirate teams, tracking down clues and figuring out puzzles related to the show — pulling ropes and hitting buttons — to get out of one room into another. It's a 45-to-60-minute adventure.

A second featured experience, "Wednesday: Eve of the Outcasts," allows visitors to explore the halls of Nevermore Academy and to explore the ground of the Eve of the Outcasts Festival.

At Top 10 Mini Golf, each hole is themed to a Netflix series, including "Bridgerton," "Stranger Things" and "Squid Game."

The wait to get into Netflix Virtuals was two hours on Tuesday. It allows fans to play the main character in the streaming service's shows like "Rebel Moon," strapping on gear to play immersive games from Sandbox VR.

On the retail front, the Netflix Shop is selling exclusive merchandise from the service like apparel, collectibles and lifestyle items. That includes "NetPHLix" sweatshirts and other locally targeted products, in a tip of the hat to the City of Brotherly Love, and T-shirts for director Guillermo del Toro's new "Frankenstein" movie. There are also sections of the store dedicated to specific shows, such as "Stranger Things" and "Bridgerton."

The full-service restaurant Netflix Bites, which has a bar, has several dishes on its menu tied to the streaming service's shows. Those include the Regency Garden Greens and the WWE Smashburger.

Netflix House Philadelphia's Tudum Theater, which can seat up to 229 people, wasn't open on Tuesday. But it is slated to do special showings of the streaming service's programs and movies on the big screen, as well as host fan events.

Meanwhile in Texas, Netflix is getting ready for the Dec. 11 launch of Netflix House Dallas, a similar space in several respects to the Pennsylvania location. It spans over 100,000 square feet across two floors and occupies space that was formerly a Belk department store at Galleria Dallas, a regional mall about 12 miles north of downtown Dallas owned by owned by MetLife Investment Management.

Along with arcade games and food offerings, it will have ticketed vignettes relating to Netflix shows, including "Squid Games." A "Stranger Things" exhibit called "Stranger Things: Escape the Dark" will be specific to the Dallas location, offering visitors an interactive experience within the darkened ruins of the fictional town of Hawkins, Indiana, facing challenges along the way.

Mike Geisler said he still remembers the awe he felt as he walked through a replica of the famed window seen in the Netflix show "Wednesday" in Philadelphia in September as part of a real estate industry event. But he couldn't talk about it, until now.

The founding principal and managing partner of Dallas-based Venture Commercial Real Estate signed a nondisclosure agreement for the real estate tour, prohibiting him from revealing details about the Netflix House experience until this week's grand opening of the Philadelphia Netflix House.

“The Philadelphia location is already performing well,” Geisler told CoStar News, referencing industry conversations ahead of the grand opening. “Netflix House could’ve gone to a lot of venues, and I think it’s great they went to Galleria Dallas. It’s a very centralized location, which is good for Netflix. It will draw people from a farther distance along the Dallas North Tollway and LBJ Freeway.”

Galleria Dallas is one of the regional North Texas malls “putting up a fight” to recruit and retain good tenants, and that reflects in the mall’s well-performing financial performance, Geisler said. To have the second U.S. location for Netflix House coming to Dallas shows how the Dallas-Fort Worth region, the nation’s fourth-largest metropolitan area with more than 8.3 million residents, stacks up to peer cities, said Geisler, who was not involved in bringing Netflix House to Dallas but has been keeping tabs on the high-profile project.

“You might see another one in Houston, but that might be it for Texas,” he said, citing the expense of creating such exhibits. “It’s such a unique collection of experiential retail. We’ll continue to see them, but they are unicorns.”

Netflix officials said that Netflix House will regularly update its offerings based on what’s new and popular on-screen, so there be new things to discover each visit.

"At the heart of Netflix House is this incredible variety that you're going to find throughout the year and how each visit is in essence going to be a new experience," Greg Lombardo, Netflix vice president of experience, said in a video clip on the Philadelphia location. "Almost every aspect of Netflix House is designed to be programmable and changeable."

That's aimed at driving repeat visits, as well as attracting casual browsers who may just want to stop by, according to Netflix.

"Come hang out with your family, come hang out with your friends," Lee said. "It's casual. ... And so we want to be able to deliver the experience that our fans want, and that means giving them the flexibility to spend hours with us."

Netflix held a grand opening red-carpet celebration for dignitaries on Monday in King of Prussia that featured Netflix co-CEOs Ted Sarandos and Greg Peters as well as Pennsylvania Gov. Josh Shapiro. Talent from the streamer's programming, including actor Luis Guzmán of "Wednesday" and "WWE Raw" star Chelsea Green, also attended.

Ticket prices for Netflix House Philadelphia will vary depending on date, time and activity: feature experience tickets start at $39: Netflix Virtuals tickets starting at $25; and mini golf tickets starting at $15.