Lady Gaga Case Study Analysis

Harvard Business School Associate Professor Anita Elberse is currently focused on one "overarching question":

"What are effective marketing strategies for managers in creative industries?"

She does so from the "dominant perspective...of a manager of a firm that produces content" organized around three "sub-questions" that are intended to "capture what are arguably the main challenges that today's content producers face in serving consumers":

  • How can managers in creative industries effectively manage products and product portfolios?
  • How can managers in creative industries effectively manage and market talent?
  • How can managers in creative industries effectively respond to advances in digital technology?

Carmen Nobel recently interviewed Elberse regarding her case studies and her interest in Lady Gaga. Elberse includes Gaga in a second-year MBA course, "Strategic Marketing in Creative Industries".

The initial case study, "Lady Gaga (A)", takes the perspective of manager Troy Carter. Elberse interviewed Carter as well as "Interscope Geffen A&M Vice Chairman Steve Berman, Live Nation's global touring CEO Arthur Fogel, William Morris Endeavor agent Marc Geiger, and producer Vincent Herbert."

This study considers the complex issues involved in a situation in which an emerging star scheduled to open for a superstar on a career-making tour is suddenly faced with cancellation. Having already invested $4 million, the stakes were high for Team Gaga and they had much to consider.

As is apparently the norm for HBS case studies, the final choices are not revealed. Instead, the insider's view of the factors at play and the possible choices are presented in order to stimulate class discussion.

Both case studies are now available:

Though I'm tempted to purchase both inexpensive studies, I am as interested in the outcome and the results as I am in the decision making process. Perhaps I'll send Dr. Elberse some fan mail and encourage her to write the business book about this phase of Lady Gaga's career that many of us would love to read.

Hypebot contributor Clyde Smith is a freelance writer and blogger. He blogs about web business models at Flux Research and the world of dance at All World Dance. To suggest music services and related topics for review at Hypebot, please contact: clyde(at)fluxresearch(dot)com.

Question #1:Which of the three touring options would you pursue for Lady Gaga, and why?Following Kanye West’s withdrawal from the tour, Lady Gaga needed to make adecision that would have a significant impact on her career. Given the 3 proposedoptions, we believe that continuing the arena tour on her own is the alternativethat would yield the most positive results for her career at that moment.Option 1 - Going forward with the tourThis option carries the highest risk. Kanye West was the better established artist at thetime and Gaga was leveraging their partnership to fill up the arenas and increase herfan base. It is very likely that after Kanye pulled out from the tour a significant number offans would have requested a refund for their tickets. In addition, the arena tour wouldcost a minimum of $12 million on start up production cost (in addition to the $4 millionalready invested in the tour). If Lady Gaga fails to sell out the arena performing solo,she can potentially damage her reputation irreversibly and incur significant financiallosses in the process. Having said that from the information provided in the case weassume that lady Gaga could estimate her success based on outstanding reactions onher first album1. This option holds the best value for Lady Gaga. The VMA event generated greatpublicity for her. At that time, she was already having a lot of exposure and benefitingconsiderably by connecting to her fans through social media. Her theatrical personalityis part of her marketing mix and fans were excited to see her performing live. A soloarena tour would allow her to embrace her personality with over the top productions. Itwould also enable her to create a show in her image, sparing no money on theproduction and making sure that every dollar spent on tickets are worth it for her fansand audience - as is her policy2.If she manages to pull it off, she will rapidly build her fan base, take her brand to a newlevel and most likely have a profitable tour - see question 2 for financial analysis.


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