The Evolution of the Circus Industry (A)
07/2016-4999 This case was prepared by Matt Williamson, INSEAD MBA 2000, under the supervision of Professors W. Chan Kim, Renée 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. Additional material about INSEAD case studies (e.g., videos, spreadsheets, links) can be accessed at cases.insead.edu. Copyright © 2002 INSEAD COPIES MAY NOT BE MADE WITHOUT PERMISSION. NO PART OF THIS PUBLICATION MAY BE COPIED, STORED, TRANSMITTED, REPRODUCED OR DISTRIBUTED IN ANY FORM OR MEDIUM WHATSOEVER WITHOUT THE PERMISSION OF THE COPYRIGHT OWNER.
“If you 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 audiences to the spectacle taking place inside. Nevertheless, while the symbolism of the tent is important in the contemporary interpretation of circus, most early shows, particularly the European precursors of what would be recognized today as circus, took place in theatres and dedicated buildings.
The Origins of the Circus 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 circus originally denoted a competitive arena for horses, with the Roman Circus 1 Maximus the most imposing classical example. The circular space is perfectly suited to a 2 galloping act, and largely unnecessary for any other form. The centrifugal force generated by a horse galloping around a small 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 3 and add some humor, Astley transformed these separate acts into a real show. 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. Barnum 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 games to enhance the spectacle of their shows. Barnum, perhaps the most celebrated huckster of modern times, was so successful that many of his efforts have 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 Circus Though an extremely popular form of entertainment during the 19th and 20th century, 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 turned out to see historical revues and the latest mechanical marvels along with other events as the circus passed through town,
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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. 1.
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the uninspired circus on offer in post-World War II America catered to the tastes of an audience of children. Not surprisingly, for modern North American audiences, circuses are most directly associated with the masterwork of the legendary showman P.T. Barnum, the proverbial “Greatest Show on Earth”, the Ringling Brothers and Barnum & 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 century. Starting with his own show, “P.T. Barnum’s Grand Traveling Museum, Menagerie, Caravan, and Circus”, Barnum teamed 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 International 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 train 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. Rising 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 return the show to profitability, building on his experience booking the major arenas as a music promoter, 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 thereafter. 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 nature 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 19th century emphasis on spectacle continued in the three-ring format of the Ringling Brothers & Co. circus. Early American circus shows followed the European pattern 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 Copyright © INSEAD
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 19th 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 relentlessly 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 Circus Format – It’s a Three Ring Circus in there The nature of the three-ring format has placed enormous 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 4 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 and by heralds posted in and around the town prior to a show 5 to indicate the quality of the acts. Performers such as Clyde Beatty, 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 tour. 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 6 an elephant and its trainer. Irving Feld purchased the Williams family circus in 1969 for US$2 million simply to ensure exclusive rights to feature Gunther Gebel-Williams. Nevertheless, in this type of circus there is no unifying theme but rather a rich, almost bewildering assortment of acts.
The Traditional Circus 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 prepared in the circus’ winter quarters to tour in the coming year. Although a number of acts were carried over from one year to the next, in general a given show would only be on tour for a year. Maintaining the exciting aura 4 5 6
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.
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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 overnight between towns and was ready to perform for an evening show, even an afternoon 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 7 higher labor costs and adding to the setting-up and tearing down costs. 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 of revenue 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 20% of overall revenues. Smaller shows seek only to cover costs with ticket sales, ensuring high attendance, and 8 making their profits on sales of food and novelties. Hawkers weaving through the aisles to the seated audience sell drinks, peanuts, cotton candy and other foods. These are 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 131st 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. Because 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 turn 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 performers. As in earlier decades, they find their most appreciative audiences in small cities and towns. As a result, this is an industry that is segmented and localized.
Culhane, p. 273. Author’s interview with circus historian Fred Pfening, May 15, 2001.
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Marketing and publicity normally take place as the circus is coming into town, setting up its tents and posting fliers and posters around the area. In fact, the circus tents and the performers themselves are significant components of the marketing mix. Even the most famous American circus, the Ringling Brothers & Co. circus, makes a show of its entrance to town, marching its performing menagerie of elephants, camels, lions and zebras from the train station through town to the performance site.
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