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The Evolution of the Gircus

Indus+ry (It)

. overall winner of the 2009 European case clearing House Awards

of a 2006 European Case Clearing House Award in the category
' Winner
"Strategy and
General Management"


Matt Williamson, INSEAD MBA 2000, the supervision of Professors

W. Chan Kim,
M' Bensaou, all at INSEAD. It is intended to be *"d
a basis for class discussion rather
tive or ineffective handling of ar administrative situation.

@ 2OO2,

INSEAD-EAC, Fontainebleau, France.

To order copies of INSEAD cases! see details on the back cover. copies may
not be made without permission.

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"Ifyou ask a kid to draw a circus, they draw a tent."

Pam Miller, Big Apple Circus, New York.
Indeed, the circus tent is a unique and evocative icon that has featured prominently in circuses
for centuries. Relying heavily on a flamboyant entry into town, the big top was their primary

tool to attract

to the spectacle taking place inside. Nevertheless, wfiile the

symbolism of the tent is important in the contemporary interpretation of circus, most early
shows, particularly the,Europea4 p{ecursor;,of wha! would be recogqizqd today as circus,
took place in theatres ana aeAicated 6uildings.

The Origins of the Gircus

The circus was created in 1768 by Philip Astley, an Englishman who set up a ring format for
equestrian events, still in use today. Classical circus is considered to consist of four elements,
whether inside a tent or a large arena: equestrian acts, clowns, acrobats and jugglers. The
word circ
competitive arena for horses,

by a horse

cal example.t The circular spa

ary for any other form.2 The c
diameter ring enabled the equestrians in the show to stand
on horseback and perform other similar tricks. Juggling, tumbling and trained animal events
had been popular through the ages, but by adding a clown to the mix to parody the other
events and add some humor, Astley transformed these separate acts into a real show.3

Astley's innovation spread quickly throughout Europe and showed up in America in

substantially the same form in the summer of 1785. Building on the basic equestrian
component, legends such as P.T. Bamum and lesser-known players like W.W. Cole and
George Bailey sponsored elaborate acts from trained zebras to trapeze artists. Around the

core circus, promoters grafted sideshows such as menageries, human and animal 'curiosities,,
and carnival gzrmes to enhance the spectacle of their shows. Bamum, perhaps the most
celebrated huckster of modern times, was so successful that many of his efiortr ha'n" entered
the modern lexicon. He marched Jumbo the Elephant across the newly dedicated Brooklyn
Bridge and proclaimed General Tom Thumb, a midget from Connecticut, the smallest human
ever to have lived.

The Development of the Traditional Gircus

Though an extremely popular form of entertainment during the 19ft and 20tr centu4z, the
circus conjures an image of drifters and dreamers with gaudy clothes, aggressive hawkers and
a standard routine of acts. Whereas whole towns had once tumed out to see historical re\ues
and the latest mechanical marvels along with other events as the circus passed through town,


Personal communication from Fred Dahlinger Jr., Director, Collections and Research, Circus World
Museum, May 9,2001.
Author's interview with Dominique Jando, Associate Artistic Director, Big Apple Circus, May 8, 2001.
John culhane, The American circus (New york, USA: Henry Holt and company, 1990), p. l.




the uninspired circus on offer in post World War
audience ofchildren.

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America catered to the tastes of an

Not surprisingly, for modern North American audiences, circuses are most directly associated
with the masterwork of the legendary showman P.T. Bamum, the proverbial "Greatest Show
on Earth", the Ringling Brothers and Bamum & Bailey's Circus (hereafter referred to as the
Ringling Brothers & Co.). The name itself points to the family origins and twisting path that
the circus has followed over the last cenfury. Starting with his own show, "P.T. Bamum's
Grand_Traveling Mqqeq4, M_erragerie, C4rav4n, 4qd Circusll, Baqusltcamed up- in 1882 with
James A. Bailey to stage "P.T. Barnum's Greatest Show on Earth, and The Great London
Circus, Sanger's Royal British Menagerie and The Grand Intemational Allied Shows United".
In 1907, after both Barnum and Bailey had passed away) the five original Ringling brothers
paid US$400,000 to purchase what they had left behind, i.e., the largest competitor to their
own eponymous circus. The shows, which had toured separately since the purchase, were
combined in 1919, forming a town in itself, with over 1,200 staff and a hain of 100 rail cars.

After surviving the Depression and World War II, the operation was a slightly threadbare
shadow of its former greatness. Changing societal interests, competition from increasingly
available and sophisticated television and movies, and the rising cost of producing a traveling
show were seriously threatening the profitability of 'The Greatest Show on Earth." Open
space near city centers was increasingly taken up with civic and sports arenas. fusing labor
and rail costs further eroded the economics of the traditional traveling tent approach.
The Ringling Brothers & Co. circus performed its last show under the big top in Pittsburgh on
July 16, 1956. By dropping the tent and moving performances to the large civic arenas which
had begun to crop up around the country, they gained a new lease on life for what was
increasingly seen as a relic more adapted to small town life. The show continued to struggle
on until John Ringling North, nephew of the founding brothers, sold it to Irvin Feld in 1968.
While Feld managed to retum the show to profitability, building on his experience booking
the major arenas as a music promotet, the substance of the show remained the same.
The dominant players in the American circus and the frontier spirit of the country at the time
had a significant impact on how the circus developed thereaftei. With only New York large
enough to host a permanent circus similar to those existing in Paris and London, the majority
of circus acts in the country were on permanent tour, with rail travel significantly increasing
the touring abilities of shows after the Union Pacific and Central Pacific railroads met to form
a transcontinental railroad in 1869. Seeking to make the maximum impact during their
whirlwind tours through towns large and small across America, the circus establishment
emphasized the spectacular nahre of the acts and attractions. The circus not only brought
elephants and other exotic animals but also electric lights, moving pictures and a series of
'educational entertainments' featuring people and historical montages from around the world.

The 19tr century emphasis on spectacle continued in the three-ring format of the Ringling
Brothers & Co. circus. Early American circus shows followed the European pattem of single
ring tents and theaters. However, the materials of the time and the requirements of a mobile
circus limited the size of the arena that could surround that ring. Worse still, the number of
people packed around a single ring could not be significantly increased without extending the
distance between the audience and the performer and subsequently diminishing the quality of
the show. With wagon-based traveling shows only able to move a couple of miles between




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stands, small towns had remained the most frequent venues and so this size limitation was not
really a problem. However, a switch to rail travel enabled by the expanding rail network of
the late 19'n century allowed the circus to skip directly to larger towns and the larger potential
audiences they contained. Responding to increasing criticism from the back rows of his
20,000 people tent, P.T. Barnum added first one ring and then another, lengthening the tent
rather than increasing the diameter. In true Barnum fashion, he lelentlessly promoted the

added spectacle of simultaneous events taking place in side-by-side rings. The uniquely
American three-ring circus, originating on the business side of the show, soon came to be
inseparable -from the show itself.

The Traditional Gircus Format - It's a Three Ring Gircus in there

The nature of the three-ring format has placed enornous formative pressures on the circus.
The typical clown in the Ringling Brothers & Co. circus has garish face paint and costumes to
overcome the visual distance from the audience; oversized shoes have a similar objective.
Seen up close, they are actually frightening to the many small children who make up the
target audience."

While moving toward spectacle and, in effect, de-emphasizing the artistry and skill of the
circus performer, the major three-ring circuses continued to pursue the biggest name acts.
Putting on a circus was, to a certain degree, merely piecing together different acts to create a
show that would draw crowds. From 1793, the names of star performers were announced on
the marquee, in newspaper ads an{ by heralds posted in and around the town prior to a show
to indicate the quality of the acts.5 Perforners such as Clyde Beaffy, a wild animal trainer,
Tom Mix, a rodeo rider, and John Robinson, an equestrian, transformed their immense
popularity into circuses of their own.
Individual acts are often hired as subcontractors for a specific totr. An elephant or other wild
animals are frequently owned by their trainers and only leased to the show. While the
Ringling Brothers & Co. circus owns its own elephants, raising them on its own elephant
ranch in Florida, other shows have been known to pay US$6,000 per week for the services of
an elephant and its trainer.6 kving Feld purchased the Williams family circus in 1969 for
US$2 million simply to ensure exclusive rights to feature Gunther Gebel-Wiltiams.
Nevertheless, in this type of circus there is no unifuing theme but rather a rich, almost
bewilderine assorhnent of acts.

The Traditional Gircus Industry

Traditional circus performed from early spring to late fall, leaving the tents and arenas dark in
the deepest winter months while a new show was prepaxed in the circus' winter quarters to
tour in the coming year. Although a number of acts were carried over from one year to the


Author's interview with Pam Miller, Director of Special Events, Big Apple Circus, May 2,2001.
Personal communication from Fred Dahlinger Jr., Director, Collections and Research, Circus World

Museum, May 9,2001.

Author's interview with circus historian Fred Pfening, May 15, 2001.


@ 2002




BIue Ocean Strategy Institute

next, in general a given show would only be on tour for a year. Maintaining the exciting aura
of novelty surrounding the circus would not have been possible otherwise. Irvin Feld's
creation of two troupes for the Ringling Brothers & Co. circus, a Red and a Blue, enabled the
show to extend each tour to two years yet maintain the ability to present a new show each
year to its major audiences.
The logistical requirements of setting up and tearing down the sites were a significant success
factor for circuses once they were taken on the road. In their heyday, the troupe traveled
gyenri=gftt.b.c-twge-n ,towns and was ready to perforrn.for an evening show, even an af,ternoon
matinee, on the day of arrival. To supplement the core workforce of roustabouts and
elephants traveling with the show, the circus hired local young people and the unemployed in
exchange for free tickets. Unionization of local workforces and tightening restrictions on the
use of child labor in the post World War II era made this practice increasingly untenable,
forcing higher labor costs and adding to the setting-up and tearing down costs.t The transition
to indoor arenas for the major circuses, such as the Ringling Brothers & Co. circus, not only
cut the need for roustabouts dramatically but also enabled the show to go on through the

winter months.

Shows generally have two main sources



to draw upon: ticket

sales and

concessions. The percentage breakdown from these sources varies depending on the specific
show and the size of the show, with concessions hovering around 20o/o of overall revenues,
Smaller shows seek only to cover costs with tic\et sales, ensruing high attend.ance, and
making their profits on sales of food and novelties.o Hawkers weaving through the aisles to

the seated audience sell drinks, peanuts, cotton candy and other foods. These


supplemented by sales at stands outside the main tent or arena that sell both food and novelty
items such as posters, programs, dolls and other toys.

Seat sales are normally the largest portion of revenue for any circus. Straight general
admission seating is common at smaller circuses. This may be modified with discounted
seating for children or families, Some provide 'free kids' tickets, only charging adults who
accompany them. Larger shows with seats rather than bleachers are able to sell specific seats
with a tiered pricing structure based on proximity and viewing quality. For instance, for the
Madison Square Garden stand of the 131" Edition of the Ringling Brothers & Co. circus,
seats ranged in price from US$48 for a ringside seat down to US$17 for an upper tier seat.
Number of seats and prices vary according to the city and venue, but is usually in the range of
10,000 to 20,000 seats for a given show.

of their small scale and itinerant nature

it is difficult to estimate the number of

circuses and viewers worldwide. US Economic Census data indicate that in 1997 there were
approximately 90 traveling circuses in the US with 27 of those operating on a seasonal basis
(approximately the same number that existed at the tum of the last century). The majority of
these circuses earn between US$50,000 and US$1,000,000 per year. Most touring companies

are regional, privately owned and range

in size from 15 to 80 perfonners. As in

decades, they find their most appreciative audiences

is an industry that is segmented and localized.



in small cities and towns. As a result, this

Culhane, p.213.
Author's interview with circus historian Fred Pfening, May 15, 2001.





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s the circus is coming into town, 566ing up its
the area. In fact, the circus tents and the

ents of the marketing mix. Even the most

& Co. circus, makes a show of its enfrance to
hants, camels, lions and zebras from the foain


@ 2OOZ



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for the llfiorld*


Even a Clown Gan Do It:


Cirque du Soleil Recreates

Live Entertainment


Case B

This case won

the 2008 European Case Clearing House Award
in the category "Strategry and General Management"

This case was prepared by Matt Williamson, INSEAD MBA 2000, under the supervision of Professors W. Chan Kim,
Ren6e Mauborgne and Ben M. Bensaou, all at INSEAD. It is intended to be used as a basis for class discussion rather
than to illustrate either effective or ineffective handling of an administrative situation.
Copyright @2002
To oRDR coplEs oF INSEAD cAsEs.


DgtAIIs oN rr{E


covER. Copus t"ttv wor






Le Girque Reinvent6 Girque du Soleil Reinterprets


Performing A,rts
"Cirque du Soleil began with a very simple dream. A group of young entertainers
got together to amuse audiences, see the world, and have fun doing it. Every year,
the audience becomes bigger, we continue to discover new places and ideas, and
we're still having fun. I4te also dream of suffusing our new proiects with the
energy and inspiration that are the essence of our shows. And we want to help
young people express their dreams... and make them come true' "
Guy Lalibertd, President and Chief Executive Officer, Cirque du Soleil.

Lalibertd set out to reinvent the circus industry. This was no small
core of the product was delivering spectacles and surprise on a
daily basis. As with many other industries, this one had its share of white elephants and dogs.
It was rife with promoters, hustlers and fire-breathers of all sorts, but had its impassive ironmen as well. An amalgam of strong traditions and a quest for novelty, it was a circus.


1984, a determined Guy

From its original incarnation as a troupe called

'Le Club des Hauts Talons', so named because
of its host of stilt-walkers, Lalibert6's Cirque
du Soleil rapidly evolved from a pack ofunderemployed kids into one of Canada's largest
cultural exports. Almost 30 million people saw
one of the troupe's productions between 1984
and 2000. In that last year alone, approximately
50,000 people took in the Soleil experience, as
productions appeared in 120 cities around the

Daniel Gauthier (right) and Guy LaLlberte,

Founding Co-Presidents of Cirque du Soleil
(Photo: Cirque du Soleil)

From a production which put on its first show

in an 8OO-seater tent purchased with an Arts
grant from the Quebec government, it now
boasts three separate travelling productions
housed in 2,500-seater tents, and four
permanent shows in purpose-built theatres in
Orlando, Biloxi (Mississippi) and Las Vegas.l

Cirque du Soleil is based in Montreal, Quebec, and runs shows around the
majority of its performances take place in the United States.




Nevertheless. the



The Origins of Girque du Soleil

Cirque du Soleil was created in 1984 by a group of young
street performers who had pooled their talents to form the
'Club des Talons Hauts' two years earlier. Initially part of the
celebrations of the 450tn anniversary of Jacques Cartier's
arrival in Quebec, the brainchild of Guy Lalibertd was based
on a totally new concept: a mix of the circus arts and street
entertainment featuring wild costumes, staged under
'magical' lighting and set to original music. As such, Cirque
du Soleil was part of a movement that many call the New
American Circus.

The Original Cirque du Soleil Troupe

(Photo: Cirque du Soleil)

Cirque du Soleil scrambled the existing traditions of the circus and the performing arts, and
reinvented the wheel. The resulting dream world, populated by operatic, choreographed and
acrobatic sprites was like no other place on earth; a reflection of the arts which inspired it.
Sharing elements of dance, circus and opera, Soleil competes with them all but remains
utterly unique. Nor has Soleil failed to draw attention to its novel position as a non-circus;
early productions such as We Reinvent the Circus and Nouvelle Expdrience gave warning that
the show would be unlike anything ever seen before, under the Big Top or anywhere else.

It was not, however, the first to take this new route. Paul Binder and Michael Christiansen,
founders of the Big Apple Circus in 1979, andLarry Pisoni, founder of the Pickle Family
Circus, brought the more classical one-ring circus back to America after over 100 years, when
even the smallest circuses spread their shows over three rings.2 Also in 1979, Guy Caron
established the circus school that would eventually become the Ecole Nationale du Cirque and

train a significant number of the original performers in Cirque du Soleil's initial l3-week
tour. Each of these key players were outsiders in the tradition-bound world of the circus, with
roots more akin to the hippie counterculture than anything else. In contrast to the consciously
intimate scale and deference to skill and artistry above commercialism of the Pickle Family
and Big Apple Circuses, they never hesitated to make theirs a commercial enterprise.
With a US$1.7 million contract from the provincial government of Quebec, the show travelled
the province, attracting some powerful fans that it would later need. Closing the first season
with a surplus of US$50,000, Lalibertd decided to promote his new show and invested heavily
in a new tent and other equipment. Although it finished 1985 to critical acclaim, Cirque du
Soleil was nevertheless US$750,000 in debt from its investments in equipment, despite
extending the run several cities beyond the initial route. Rene Levesque, then the Prime
Minister of Quebec and an avid fan from the 1984 opening show, saw the cultural value in
supporting the enterprise and refinanced the debt.3

The troupe took another huge gamble, spending all its remaining funds after the 1986 season
to join the Los Angeles Arts Festival in 1987, its first serious foray outside of the Quebec
region. This time the gamble paid off: Cirque du Soleil was a huge success and almost
immediately sold out its later shows. Patronage of celebrities like Steve Martin, David Bowie,


Emest Albrecht, The New American Circus (Gainesville, FL: University Press of Florida), p2
Albrecht, p75.




Madonna, Elton John and Francis Ford Coppola helped seal its identity as a sophisticated new
form of entertainment.

The Gontent and Style of Girque du Soleil

Cirque du Soleil has a unique approach to developing its shows, setting it apart from most
other circuses. "A Cirque du Soleil performance is like no other circus ever seen in the United
States or anywhere else. It is relentless in its drive to be nothing shorl of spellbinding." A
thematic line, though frequently rather vague (and intentionally so), is manifested throughout
the show in costumes, music and the types of acts performed. While not rising to the level of a

storyline, the theme brings harmony and an intellectual component to the show, without
imposing limits on its potential for acts. Rather than taking existing acts and compiling them
into a show, Guy Caron, Franco Dragone and the creative teams at Cirque du Soleil who have
followed them, begin with a theme, such as Saltimbanco or Quidam, and build a show to suit.
The result is a seamless entertainment experience for the audience rather than a punctuated
series of acts. Moreover, unlike traditional circus, the company has multiple productions;
shows have distinctive themes allowing the spectator to see Le Cirque several times.
In creating the performance that rocked the Los Angeles Arts Festival, Caron took his team on
a week-long retreat to focus simply on developing the theme and how it would be conveyed
through each component of the show. The theme, rather than simply being a new edition of
the circus, is a performance in itself. It serves as the audience's guarantee of a high quality,
exotic experience.
The most important element of this thematic drive, and the starting point from which the
creative team begins, is an original score. Since the inception of Cirque du Soleil, Rene
Dupere has taken the creative director's expression of the theme and transformed it into a fulllength original score. The music for a Soleil show drives the selection of the visual
performance, lighting and timing of the acts, rather than the reverse.4 Says Caron, "In the
movement you see the music and in the music you hear the movement."5

More than just the theme sequencing of a production, Cirque du Soleil represents a true
mixture of the performing arts. It is not quite a circus, nor is it quite opera or theatre, but it
combines elements from them all. While the signature blue and yellow tent and the circus
acrobatics and clowns that form much of the show's content are clearlv circus. the show takes
place on a stage without a ring and seating on three sides.

In constructing the physical dimensions of the show, the creative team draws heavily upon
circus arts, featuring jugglers, trampolinists, trapeze artists, teeterboard virtuosos and, of
course, clowns. Nevertheless, each act, even each movement, has a purpose within the show
and contributes to the development of the overall thematic element. Owing to this singularity
of purpose, big name acts have no place in Cirque du Soleil. The presence of a Gunther
Gebel-Williams and 40 wild cats or a drum roll leading into a Gaona quadruple somersault
would undercut the dreamlike development of the theme.


Albrecht, p77.
Guy Caron in Albrecht, p77




in Cirque du Soleil, while highly accomplished in their own right, play roles
within the larger show. In part because of the outlandish costumes, but also because of the
lack of a ringmaster announcing the acts, and a printed programme which buries the names of
the individual artists in a cast list at the back, individual performers are essentially anonymous
to the audience. This was not lost on the initial cast of Cirque du Soleil and many were
dismayed to learn that Lalibertd might not always include them in future productions.

A final striking detail of the Cirque du Soleil experience, which sets it apart from most
traditional circuses, is the complete absence of performing animals. This is a dramatic
departure for a medium that originated in a horse ring and has been synonymous with
elephants and other wild animal trainers. Leaving animal acts behind, Lalibert6 has created
something new and different, not quite circus but not quite anything else. Circus historian
Fred Pfening notes, "There's one question that always annoys me: 'But is it circus?' That's
utterly irrelevant. It is what the audience thinks it is. It is Soleil."6
The Business of Cirque du Soleil
Clearly, the initial vision that drove the founders of the various New American circuses was
more artistic than commercial. The family nature of both the Pickle Family Circus and the Big
Apple Circus was more reminiscent of a hippie cornmune than a typical start-up. Somewhat in
contrast, Cirque du Soleil took little time to become immensely profitable after its success at
the Los Angeles Arts Festival. Unlike the others, Soleil pursued the dual goals of artistry and
profit, exemplified in the initial agreement between Caron and Lalibertd to lead these two
components separately.
Over time, Soleil has come up with a lifecycle strategy that features an opening in Montreal
followed by a North American tour, stretching over several years. The show then remains on
tour for up to four more years, travelling first through Europe, usually followed by a jaunt
through Asia. Instead of travelling to audiences, three permanent shows tap into the
continuous flow of potential viewers through such places as Las Vegas and Disney World.
Mystere, La Nouba and "O" have run in such permanent installations from the beginning,
while Alegria, one of Soleil's older touring shows, has performed in the riverboat gambling
casinos of Biloxi, Mississippi on what was to be a permanent engagement, only to begin
touring anew two years later in the spring of 2001. Surprisingly, not since Nouvelle
Experience has a Soleil show stopped touring.

Quidam is exemplary of the typical touring Cirque du Soleil show. It was produced for
approximately US$5.9 million and first staged in Montreal in April 1996. Following a threeyear tour of Norlh America, the show travelled throughout Europe. Expected annual gross
revenues at the start of the tour were US$14.6 million, a figure that has been exceeded year
after year by a significant amount, according to Soleil staff.
Cirque du Soleil draws its revenue in significantly different fashion from the traditional circus
and other shows which take place in civic arenas and sports stadiums. The show derives the
great majority of revenues from ticket sales, though sponsor partners and concession sales
also contribute to profit margins.
Author's interview with circus historian Fred Pfening, May 15, 2001.




Soleil's focus on providing sophisticated entertainment enables a different approach to ticket
pricing. Rather than a family event with free or discounted tickets for children or other age
groups, seats are generally sold at full face value. "Sure there are a couple of kids at a Soleil
performance, but children make up a much smaller share of the audience. With the Ringling
Brothers and Barnum & Bailey's Circus (hereafter referred to as the Ringling Brothers & Co.)
the audience is almost all families or kids."7 Reflecting the adult market for live
entertainment, Soleil tickets are available at a substantially higher price, in line with major
theatre or opera tickets. Tickets for Dralion's 2001 New York engagement sold at US$65-85.
VIP packages including food offered in a separate pre-show gathering tent sell at up to
US$230 per seat. Meanwhile, "O" sported the most expensive seat for Vegas-based
productions after boosting the price to US$110 per seat in November 2000. It remains one of
the hardest tickets to find. Shows are regularly sold out and boast the highest seat occupancy
in the industry, consistently approaching 85-95%.
Soleil keeps a traditionally large source of circus revenues - concessions - at arm's length.
Not surprisingly, less lhan llYo of revenues come from concessions at a Soleil show. In
keeping with the performance-centred ethic of the troupe, nothing is sold during the
performance or inside the tent. For the Ringling Brothers & Co. shows, this figure may be
dramatically higher - closer to 20%o - as the sales effort is substantially stronger. At the
Ringling Brothers & Co. circus, hawkers pass amongst the seated audience selling food and
toys; concession stands are also packed tightly outside the performance space.
Sponsorships are a low-key but significant source of revenue for Soleil. Originally a key
revenue eamer from the days when the show operated as non-profit, many of the travelling
shows have a primary sponsor, usually associated with the VIP tent. Lincoln Automobiles is
the primary sponsor of Dralion, with five other corporations taking minor sponsorship roles
entitling them to discreet mention in the playbill, advertising and banners around the tent.S
For a typical 'shrine' circus, or even a larger show such as the Big Apple Circus, a main
sponsor guarantees a gate to the circus and sells the tickets independently. Sponsors in this

vein are normally powerful local non-profit organisations who use the event as a major
fundraising opportunity. They view it as a chance to associate themselves with the panache of
Soleil and the upscale consumers attending the show. The arrangement is much more like a
sponsor at a sporting event such as the Masters or the US Open.

Using its fantastic creative team and seeking to build on the brand the live shows have
created, in recent years Soleil has somersaulted into film and other ventures. Beginning with
videos of live performances and behind-the-scenes documentaries, the troupe has graduated to
film, creating Journey of Man in the IMAX format. Pieced together using performers from
several of the different productions, the frlm creates a dreamlike vision of the trajectory of one
man's life using the brushstrokes of Soleil's signature costuming and circus arts. Though the
IMAX format limits the potential box office take - both the projection equipment and special
dimension screens are extremely expensive and limited in numbers - longer term
engagements at the science museums that often host these films enable Soleil to bridge the
film barrier by adding a physical dimension through rides and interactive displays that would
not be available at a normal cinema. At the Franklin Institute in Philadelphia, for instance,


Author's interview with circus historian Fred Pfening May 15, 2001
Author's personal observation, May 30, 2001.




movie-goers willing to pay an additional US$2 can bicycle on a high-wire 10 metres above
the heads of other patrons standing in the ticket 1ine.9

One might think that in the performing arts and the circus the need for innovation is obvious.

Yet even in such an innovation-friendly environment, the circus industry had become
stagnant, generating 'new' acts by dressing up what already existed. Circus families and
individual artists created highly developed and ever more challenging variations on the same
formula of trained animals and 'death-deffing' stunts that had been popular in the past
century. Irving Feld was well known for pressing performers to add yet another somersault off
the flying trapeze or one more tiger to a simultaneous roll-over act. Yet the added difficulty
and danger faced by the performers was all but lost on the vast majority of the audience. This
was novelty but not innovation, adding little of value to the audience's experience yet
requiring significant expenditure by the circus company. By reinventing the circus industry,
Cirque du Soleil created a phenomenon that has inspired and amazed millions of fans. In the
process it has produced an exciting line of shows that have attracted millions of people, and
generated revenues that would have made P.T. Barnum blush (See Exhibits I arfi2).

Author's personal observation, May 5, 2001.

Copyright@ 2002 INSEAD


Exhibit I
Circus Revenues

Major Circus Revenues








Cirque du Soleil



g+ 9.p {).t g'F f$

Estimaes hased on


data of Hoovers Online. NotqRBB&B is a major division of feld


Cirque du Soleil Attendance Figures

Cirque du Soleil Attendance

Estimates based on ar,ailable cdnpany information





























How would you assess the attractiveness of the circus industry in the early 1980s? What
would you conclude from your industry analysis?

'2'-'-\AAa+-were+hefaeters+hetraditiffal-circusconiparlies-compEtefon?Whet dtttou like or

dislike about the traditional circus?
3. When you compare Cirque Du Soleil with the conventional circus, which are the factors kept


by Le Cirque? Which ones were downplayed and which ones were played up?
Which factors were totally eliminated by Le Cirque and what are the operational and

financial implications?
Which factors were newly created by Le Cirque and where do you think the inspiration for
these factors came from?
How does Cirque du Soleil create superior profits? How does it improve industry growth and
generate Sreater revenues? How does it raise profitability and reduce it cost structure?