According to this HBR article, in the late 1980s the circus industry was a dying caricature of itself, trudging through small towns and struggling to maintain a foothold nationally as spectacles more convenient and enduring grew in popularity. Philip Astley was the father of the circus, developing an innovative exhibition of feats and creatures that hitherto never existed. P.T. Barnum and George Bailey expanded Astley’s concepts, bringing value to villages and towns across America. However, the excitement and enthusiasm that once existed in the early 20th century, was displaced by ‘moving pictures’, national sports, and theatre/Broadway as more and more American shifted from small towns to metropolis. In 1790 95% of Americans lived in rural areas (<2,500 pop.); industrialization in 1890 brought the percentage of people living in urban areas up to 35%. By 1920, more Americans lived in urban areas than rural, and finally today almost 80% of Americans are living in urban areas.
The question, then, is can the circus continue as a profitable venture through the late 20th century? Given the right frame, it’s easy to figure out what happened. Who stepped into the marketplace in the 1980s and redefined what it meant to be entertained? We’ll get there, but first let’s consider market alternatives by looking at the situation from the lenses provided by Kim and Mauborgne in ‘Creating New Market Space’. In their HBR article, they explain that in flat or slowly growing industries disruptive innovation is required to break free from the pack. This requires you to deconstruct the value you provide and reconfigure the market in which you operate. There are six lenses by which you can evaluate new market options:
- Across substitute industries
- Across strategic groups
- Across buyer groups
- Across complimentary/substitute offerings
- Across functional/emotional orientations
- Across time
If you haven’t figured it out, Cirque du Soleil is the new market entrant that disrupted Barnum and Bailey’s paradigm. They recognized that the real product people desired was entertainment, and that they were already getting it from street performers, musicians, and theater (note the substitute industries). Forbes magazine posits that their Cirque’s success was related to standard brand elements – quality/consistency, creativity, global perspective, and risk taking. Interestingly, most other circuses were already trying to offer these elements. I was able to track down a 1988 review of Cirque by NY Times and in it, they noted how adults would appreciate “the several levels of artistry through which this connective thread of a narrative is maintained.” It’s clear that Cirque saw an opportunity to shift their lens of buyer from children to [wealthy] adults.
Other circuses became more similar and used the popular processes, methods, and strategies of the time and when fighting for market share vied for customer appeal by lowering prices while costs remained stagnant (or rose due to unionization). If “Product is Everything” as Smule co-founder and CEO Jeff Smith says, it was critical that Cirque ensure customer’s actually desired a new option for entertainment. Cirque du Soleil was able to do this by starting with touring festivals and workshops, and iterating their offerings over time. They had positive feedback from audiences and critics early on, so they knew that the product was real and in demand. Over time, they have evolved the show to incorporate varied themes and soundtracks while remaining contemporary in their approach (no animals!). Now, Cirque is an international brand and an entertainment powerhouse, with revenue approaching $1B.