Celebrated for both her outré style and musical prowess, the recording artist known as Lady Gaga is not only one of the world's biggest pop stars, but also one of the most recognized brands. She's garnered five Grammys, holds two spots in the 2011 Guinness Book of World Records including "Most Searched-For Female," as recorded by Google, and made international headlines for donning a dress made of red meat, which Time Magazine called the top fashion statement of 2010. "Gaga is a marketing phenomenon"
So it's almost shocking to recall that in the autumn of 2008, Lady Gaga, born Stefani Joanne Angelina Germanotta in New York City, was merely a supporting act in a reunion tour of the erstwhile-boy band, New Kids on the Block. "When you tell that to people now they look at you like you must have your dates mixed up," says Harvard Business School Associate Professor Anita Elberse. "That was just three years ago, and now she is, by many measures, the biggest celebrity on the planet. Gaga is a marketing phenomenon." This fall, Elberse will teach a case on Lady Gaga's meteoric career in her popular second-year MBA course, Strategic Marketing in Creative Industries, which focuses entirely on the media and entertainment sector, and which includes sessions on basketball star LeBron James, online video aggregator Hulu, the NFL, and the Metropolitan Opera, among other cases. The first part of the new case, dubbed Lady Gaga(A), places students in the shoes of the pop star's manager, Troy Carter, who faced the daunting and sudden task of launching the performer's first major solo concert tour in 2009. Elberse developed the case based on extensive interviews with Carter and several other executives who are part of team Gaga, including 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. Go big or go home?
In the autumn of 2009, Lady Gaga was set to go on the road with rapper Kanye West for a multimonth coheadlining arena concert tour, "Fame Kills." The event was supposed to launch in November but, on September 13, West famously stormed the stage at the MTV Music Awards, just as the young country star Taylor Swift was accepting the award for Best Female Video. West grabbed the microphone from Swift to announce, "Yo Taylor, I'm really happy for you, and I'mma let you finish, but [fellow nominee] Beyoncé had one of the best videos of all time." Millions of viewers were turned off by his impulsive bullying, and Carter and Lady Gaga, both in the audience, knew instantly that West's actions could threaten their plans for "Fame Kills." Sure enough, a media attack ensued. West pulled out of the painstakingly planned tour. And Carter had to mull a decision that would have major implications for Lady Gaga, for concert promoter Live Nation, and for her publicity arm, the William Morris Endeavor agency. Should the performer continue with the arena tour solo? Should she develop a small tour for smaller venues? Or should she cancel the concert series entirely? The case, which Elberse coauthored with Michael Christensen (HBS MBA '11) and which also benefited from research assistance by Kimball Thomas (HBS MBA '11), prompts an evaluation of the pros and cons of each possibility. "Above all else, I hope the case will help students understand the economics and intricacies of the concert business," Elberse says. "When it comes to touring, the risks increase as the venues get larger, but the potential rewards increase, too." "The risks increase as the size of the venue increases, but the potential revenue goes up as well" With arena performances, the Gaga team was looking at some $12 million in start-up production costs alone. And for someone who had never played such large halls, jumping headfirst into a solo tour would be a huge challenge. On the other hand, with ticket prices averaging $100 to $125 each, the prospect of a...