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a bankable business

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Hey! I’m still recovering from last night’s Succession episode so you’ll have to bear with me.

Today’s memo is about the companies and artists that want to execute transmedia strategies. I’ve thought about it a lot since last week’s breakdown on HYBE, but I wanted to dive deeper into when these approaches work, and when they don’t. Let’s dive in.

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why multi-hyphenates still need a core business

Chloe Bailey has stayed in the recent headlines. A few weeks ago, she was in Amazon Prime Video’s new series, Swarm. Last week, she released her debut album, In Pieces (which led to questions about its sales numbers). The 24-year-old has EGOT dreams, but what will she be most known for?

There are plenty of young multi-hyphenate-minded entertainers like the Beyonce protege. Saweetie, Lizzo, and Megan Thee Stallion all come to mind. There are also several companies like HYBE that want to execute a full IP-driven, transmedia model for the talent on their rosters.

But this model works best when there’s a bankable core business to build on. Otherwise, brand extensions are tougher to justify and harder to succeed.

where “Disney for X” falls short

Disney is the gold standard for monetizing multimedia storytelling. But whenever I hear that a company is “building the next Disney” or is “building Disney for X,” I take it with a grain of salt. The statement is often more aspirational than realistic. If it was that replicable, then there would be many more examples than the nearly 100-year-old company.

Elements of Disney’s approach are still relevant for individual talent though. The Issa Rae synergy map I drew in 2020 showed how each of her businesses build off of her career as an actress. She’s still a multi-hyphenate—record label owner, music supervisor, writer, creator, producer, and more—but she primarily got that huge overall deal with WarnerMedia to attract audiences with her presence on screen. The same is true for HYBE’s BTS. The company wants to expand the K-pop group in all formats. That’s all possible because BTS’ ability to sell concert tickets and sell records makes everything else possible. It makes HYBE’s overall strategy more promising. Finding the next BTS won’t be easy, but the Quality Control Music acquisition is a move in that direction.

Similarly, Disney’s most successful IP often starts from a billion-dollar hit movie. It gives the company the power to take calculated risks with its content and theme parks because the audience is proven by the strong box office performance.

the need for core content

The challenge for some multi-hyphenates though is the lack of one bankable media format. For both Chloe Bailey and her sister Halle, I wouldn’t be surprised if they make more money from acting than music. Halle will star in the live-action remake movie for The Little Mermaid and the upcoming remake of The Color Purple. Music was their gateway, but if acting becomes the bigger opportunity then their other hyphens can be based on that.

Without a bankable core format, the IP is less predictable which makes it riskier for companies to take big bets. Hollywood loves its sequels and record labels love their proven stars. The upside is high, downside is low, which leads to the highest profits over time.

The additional challenge with music IP is that even if the audience shows up for the core format, they may not show up for other multimedia and brand installments. Beyonce and Adidas parted ways after reports of low sales for Ivy Park. Billie Eilish’s self-titled book sold 64,000 hardcover copies despite her 100 million social media followers. And we’ve talked endlessly on Trapital about celebrity-hosted podcast struggles. Even when superstars have huge audiences, product-market fit isn’t necessarily there for each extension. Audience is a prerequisite, but not an indicator of future success.

The “jack of all trades” approach may work at the individual level. If the artist’s burn rate is low and the opportunities are consistent, they can pick and choose what they need to do to pay the bills, maintain their lifestyle, and keep things moving. But it’s a tough sell for a company that wants to model itself after the best companies in the world at maximizing IP.

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Podcast: The Business of Coachella. We did a full breakdown on the strategy behind the most popular U.S. music festival, with Tati Cirisano from MIDiA Research. Drops on Thursday!

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