Thursday 25 September 2014

The Business Of Being Beyoncé

"Surprise" Visitors browse the Apple iTunes store just after midnight on December 13, 2013, saw a stunning image flicker across their screens. It was a wonder of the music business by announcing that the fifth solo album by singer Beyonce was available for download.

News of the recording, a self-titled 14-song set with 17 videos of company dubbed a "visual album," trapped veterans music industry and even their diehard fans off guard. Without advance publicity, one on promotion, or any kind of music was leaked to the Internet, Beyoncé managed to keep the project secret until she was ready to make known that through 119 countries.



"Beyoncé has delivered countless surprises in his 15 years at the top of the music world, but she never dropped a bomb of this type," Rob Sheffield of Rolling Stone wrote at the time. "The whole project is a celebration of Beyoncé Philosophy, basically to the fact that Beyonce can do anything that reduces the hell she wants."

Secretly partner with Apple, Facebook, and Instagram, the launch was a great artistic and financial bet for Parkwood Entertainment, the management company that heads of Beyonce and her label, Columbia Records, who share the risks and benefits of their sales of recorded music. As it turned out, the critically acclaimed album debuted at No. 1 on next week, selling over 600,000 copies in its first three days. But the high stakes gamble payables?

A new Harvard Business School (HBS) case study to be published next week examines what it took to start the ambitious and costly campaign, prevailing market conditions, structural and technical obstacles, as well as the many difficult decisions Beyoncé and its management team faced along the way. With views of senior executives of Parkwood Entertainment, Columbia Records, Facebook and Apple, the case asks HBS MBA students to decide what they would have done if they were working for Beyoncé.

"She is clearly among the most powerful people in the music industry at the time ... so to understand the workings behind such a powerful figure is always very interesting," said Anita Elberse, Lincoln Filene Professor of Management HBS Business who co-wrote the case study with a former student, Stacie Smith, MBA '14.

Elberse study marketing strategies in the entertainment, media and sports industries and has written extensively about the growing trend to host "blockbuster events" to capture public attention. She says the launch of unconventional album and the very hands-on role in monitoring Beyoncé its own commercial interests present a series of instructional dilemmas for MBA students to consider. For Elberse teach your course "Strategic Marketing in Creative Industries" early next month. "For example, how do you keep it a secret for so long?'s Pretty amazing that they pulled out."

The only deployment was driven "primarily" by Beyoncé desire for an artistic statement through a complete work, not just one of only 3 ½ minutes, Elberse said. "They could have made life much easier to just go for a conventional launch."

The release of the recording also raises questions about whether it was a smart move for Apple, Facebook, and Columbia Records, and has general implications for other students to consider, Elberse said, for example, how unusual strategy will affect future versions of other musicians. It is a move like this only available for superstar talent? How do record companies together marketing plans and structure alliances with their artists? What impact might release Beyoncé in the relationship with the companies excluded from the start, and their fans?

In fact, major retailers Target and Amazon refused to sell the disc even after exclusive sales window closed a week of iTunes. And unlike most digital versions were required consumers to buy the whole album, not just cherry-pick a song or two.

"I think most people consider this release as a great artistic success, and I am among them. Worth But from a business perspective is for students to learn," said Elberse.

"You could see the album and say, 'How is it done?' But you also have to think long term and say, 'What did that to his ability to control the next release that she is planning? "Or "What do they do to their potential as an artist on tour?" Those are the most difficult questions.

"Luckily, it have very smart students at Harvard," he added, with a smile.

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