Jumping through hoops: Cirque du Soleil in an era of isolationism
Cirque du Soleil, a live entertainment provider well-known for its acrobatic touring and resident shows, has over 4,000 employees, including 1,300 artists from more than 50 different countries. This diverse set of employees has traveled to over 400 cities in over 60 countries around the world.[1] On average, Cirque du Soleil processes 4,000–5,000 work visas each year.[2] In an era in which leaders of countries can overnight bar specific nationalities through a stroke of a pen, Cirque du Soleil artists’ ability to perform are at the mercy of immigration policies.
Artists, which account for nearly half of a Cirque du Soleil show’s 120-150 member cast often possess rare forms of talent that are not only unique to the show they perform on but also in the world. As a result, if even one of Cirque du Soleil’s artists cannot obtain a work permit because of changes in immigration policies, the show would have be modified to a lower quality version of itself.[3] Today’s entertainment landscape is increasingly competitive; therefore, the pressure to deliver ever more thrilling and unique shows is necessary to effectively compete for the consumers’ entertainment spend.[4] Cirque du Soleil needs to be able to liberally reach out to every corner of the world to source the most unique acts as well as the best performers in each discipline in order to remain cutting-edge. Immigration restrictions could be especially detrimental to Cirque du Soleil’s residential show division, which operates permanent shows in US and Mexico and accounts for nearly half of its total ticket sales. Changes to immigration policies because of isolationism could not only threaten Cirque du Soleil’s ability to maximize its revenue in certain markets, but also hinder its long term competitive advantage in producing pioneering acrobatic performances.
Since its acquisition by TPG in 2015, Cirque du Soleil has announced a number of new strategic initiatives that in part, address the risk associated with isolationism and potential tightening of work permit policies. In the short term, the company has resisted attempts to outsource its visa and immigration department and continued to maintain its team in-house. This decision will ensure that its immigration team can invest in developing expertise for countries that are aligned with the tour plan every year. Similarly, it has begun to operate in markets where a majority of its talent is sourced locally. For example, by 2018, Cirque du Soleil expects to open a permanent show in Hangzhou, China, a country that has historically been key in developing artists for acrobatic shows.[5],[6] Furthermore, Cirque du Soleil has also taken steps that fundamentally change its business model and therefore its risk exposure to isolationism. For example, Cirque du Soleil has made a number of acquisitions over the past years, including investing in a visual mapping company (4U2C), a ticketing platform (Outbox), and a performance arts company (Blue Man Group). These recent investments shift Cirque du Soleil’s dependence on unique artistic talent to skills that can be fulfilled by a larger pool of talent. Furthermore, the company has also expanded its product offering to entertainment products that require little to no artists once operational. Its most recent creation includes NFL Experience Time Square, which is a permanent technology-enabled exhibition co-created with the NFL.[7]
There are other additional actions that Cirque du Soleil could engage in to either minimize its dependence on work permits or to counter the possibility of tightening of work permits. For example, it could invest in accelerating its employees’ path to citizenship in regions where Cirque du Soleil operates permanent shows. While this strategy is not effective in securing work permits for future recruits, it will ensure that its existing workforce in permanent shows will be protected. In addition, Cirque du Soleil could also consider creating partnerships with lobbying organizations such as American Immigration Council, which specialize in promoting pro-immigration laws and policies.
Cirque du Soleil, whose core business relies on sourcing the most unique artistic talent from every corner in the world has a lean ten-person team handling all immigration related issues.[8] Is this enough? Should Cirque du Soleil be further building in its immigration services and lobbying efforts? Or will diversification into other entertainment products generate better returns for its investors?
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[1] Cirque du Soleil, “Cirque du Soleil at a Glance,” https://static01.cirquedusoleil.com/en/~/media/press/PDF/cds/cirque-du-soleil-at-glance.pdf, accessed November 2017
[2] Canadian Business, “The astonishing second act of Cirque du Soleil,” http://www.canadianbusiness.com/innovation/cirque-du-soleil-second-act, accessed November 2017
[3] Line Giasson, “Talent Scouts For Cirque du Soleil Walk a Tightrope,” Wall Street Journal, September 8, 2007, https://www.wsj.com/articles/SB118920813668821193, accessed November 2017
[4] Christopher Vollmer, “2017 entertainment media industry trend,” Strategy&/PwC, September 2017, https://www.strategyand.pwc.com/trend/2017-entertainment-and-media-trends, accessed November 2017
[5] Jean Siag, “Cirque du Soleil: les plans pour Hangzhou se précisent,” La Presse, October 30, 2015, http://www.lapresse.ca/arts/spectacles-et-theatre/cirque/201510/30/01-4915549-cirque-du-soleil-les-plans-pour-hangzhou-se-precisent.php, accessed November 2017
[6] Dominique Jando, “The Chinese Acrobatic Theater,” Circopedia.com, http://www.circopedia.org/The_Chinese_Acrobatic_Theater, accessed November 2017
[7] Leslie Picker, “Private equity-backed Cirque du Soleil inks deal for Blue Man Group as it looks to expand beyond circus,” CNBC, July 6, 2017, https://www.cnbc.com/2017/07/06/private-equity-backed-cirque-du-soleil-inks-deal-for-blue-man-group.html, accessed November 2017
[8] Canadian Business, “The astonishing second act of Cirque du Soleil,” http://www.canadianbusiness.com/innovation/cirque-du-soleil-second-act, Accessed November 2017
Great essay Kimia! I have been to many Cirque du Soleil shows but never really realized how unique the talent of individual artists was and how individual productions could now suffer from the recent isolationistic tendencies. Also, it is fascinating to see what Cirque du Soleil has done so far to streamline the visa process and mitigate potential risks that such a global show is exposed to.
However, I believe that there is little that the management could do at this moment to further reduce risks here in the US, as the current administration has declared immigration to one of its priority topics. Consequently, I do not see any path to success using increased lobbying, given that there are companies that suffer significantly under the current political climate but haven’t been able to influence the administration in spite of large investments (Silicon Valley Tech companies in particular: https://www.washingtonpost.com/news/the-switch/wp/2017/03/06/trumps-new-travel-ban-raises-the-same-silicon-valley-objections/?utm_term=.b574e3fe7ed6).
Instead the focus, especially in the short-term until there is a more favorable political climate, should be on domestic productions – ideally with artists that will most certainly not face any visa issues – and further diversification into less “labor-intensive” entertainment products. Given the international network and the breadth of relationships, I see enormous potential in either shows that do not depend so much on capable artists or business models that are adjacent to the current entertainment focus of the company. This could also lead to opening up new market segments and new customers for Cirque du Soleil, who prefer different kinds of shows than productions that are mainly focused on acrobatic acts.
Thank you for shedding light on this topic, Kimia! It never would have occurred to me that immigration policies would have such a large impact on Cirque du Soleil’s business operations.
I think that Cirque du Soleil’s strategy depends on its leaders’ convictions. Do Cirque du Soleil’s leaders believe that one of their obligations is to promote pro-immigration laws and policies, not just for the benefit of the company, but also for the world? Or do they believe that their primary obligation is to fulfill the company mission “to invoke the imagination, provoke the senses and evoke the emotions of people around the world”?
If the former, Cirque du Soleil should build its immigration services and lobbying efforts. If the latter, I agree with Bepo25 that fighting immigration policy is an uphill battle, and thus Cirque du Soleil should direct its efforts towards creating entertainment products that are less vulnerable to the political climate. By doing so, Cirque du Soleil not only protects itself in the present, but also prepares itself for the future by forcing the company to diversify its entertainment portfolio and think creatively about engaging the public in new ways.
Great post, Kimia – a refreshing and unique take on the trend of isolationism, and it’s very interesting to see how Cirque du Soleil is diversifying away from a sole reliance on acrobatics. However, the Cirque du Soleil brand is still synonymous with the traditional acrobatics shows that the company became known for, and as you note, its core business still relies on sourcing artistic talent, so this will not provide a complete short-term solution.
Many of the suggested solutions have been on the demand side, i.e. reducing Cirque du Soleil’s need for these uniquely talented artists. I wonder if supply-side solutions also have a role to play. Cirque du Soleil could expand artist training programs, perhaps hiring additional understudies to expand the artist pipeline or sponsoring a course for talented amateur circus artists. Thinking more long-term, Cirque du Soleil could partner with circus schools to identify talent at a young age and provide development opportunities for these artist-athletes, or even consider broadening its own network of circus schools. While these solutions would undoubtedly incur cost, they could also yield benefits beyond immigration issues by expanding the Cirque du Soleil network and the future pool of talent to draw upon for Cirque du Soleil shows.
Agree with the above about great post, and I will start by saying that as a HUGE fan – I agree with Gabrielle that even as Cirque du Soleil has diversified its offerings, it is still synonymous with its traditional acrobatic shows. So I like the push for both supply and demand side solutions because a plan that solely focuses on diversification inherently involves a shift from their core – something I would be devastated to see. With this in mind, I think their move to open shows in locations that are either closer to their sources of talent or that are more pro-immigration is the best move for them to make in terms of growth. As a small company (outside of the talent), I am not sure they have the resources to really take on a direct legal or lobbying battle – nor am I convinced it would be the best use of their limited resources.
If they have to substitute out performers or offer a “lower quality” show than they should instead push consumers and investors to push for change on their behalf through a low-cost viral marketing campaign rather than lobbying directly.
This is a super interesting take on the issue of isolationism — what do you do when your supply chain is entirely based on not just intellectual capital but literal human capital. One thought I’ve had here is whether or not Cirque could begin to integrate virtual reality in order to have artists “cross borders”. There is a cool TED talk I recently watched on using VR in art (https://www.ted.com/talks/chris_milk_the_birth_of_virtual_reality_as_an_art_form) that could be applicable!
I agree with Ryan and Bepo25 regarding the lobbying issues — larger, more well-funded groups haven’t been able to sway policy on this, so I’m not hopeful for the prospects of Cirque making an impact here.
I agree with other commenters than efforts by Cirque to influence isolationist policies will likely be a waste of resources- the powers and politics at play are too entrenched for a relatively small organization to see the necessary results for the investment of capital/effort. Instead, Cirque will probably be best served by creating performances in the short term with artists who can participate despite the isolationist policies, and take all possible action to prepare for these effects before they directly affect existing shows and plans.
As for Justin’s thoughts, while VR does offer an interesting potential solution, I don’t think it would be an adequate option for Cirque. I feel too much of Cirque’s value proposition relies on the real, physical presence of performers and audience. Otherwise, we’d already see a much larger market for videos of performances.
While it makes perfect sense that Cirque du Soleil would pull talent from across the globe, it never occurred to me that isolationism could have this large of an impact. As noted in a few of the comments above, immigration related issues are a risk that need to be managed using a multi-pronged approach. First is the diversification of the overall business, including more technology examples like partnerships with the NFL as cited in the essay, to lessen the impact to the total business if this portion of Cirque du Soleil is impacted by immigration policies. Second, contingency planning– or making sure the at-risk countries have their spots cross trained and/or that compelling local acts are created with the remaining performers. Lastly, while I think investing in lobbyists would fall on deaf ears as cited from the technology industry, one way the arts have always moved cultures is through their performance to raise awareness on issues. While isolationism drives us inward, everyone benefits from the show when the best product is on display. Performing at key government, political, and culture functions while highlighting the diversity among the performers creates real examples of how sometimes there’s only one person in the world who can achieve this high bar set for performing.
Kimia — super interesting article. I hadn’t thought about how isolationism could affect companies that rely mostly on human talent. You pose an interesting question about how Cirque du Soleil should move forward given their current business model requires them to source unique and incredible artistic talent from all around the world. Unfortunately, despite their incredible brand name, I don’t think Cirque has the power to fight immigration at a policy level like some other companies might. Instead, they should focus on innovative responses. Part of that is new revenue streams like licensing / experiences, etc. But are they thinking about digitally broadcasting their shows? It could be interesting to figure out a way to use technology to develop a show where artists don’t have to be in the physical venue in person to perform — what about something like a hologram only show, similar to what Target did with one if its fashion shows? My concern would be that would detract from the experience and be capital intensive but it’s a thought.
I also think Gabby’s supply-side solution is particularly interesting. One thing she didn’t mention was that this could be a huge PR play for Cirque as well — imagine if they brought these training schools to underprivileged or underserved areas. Could they help change life trajectories for a number of kids while increasing their “supply” of artists? That would be a really interesting CSR angle for Cirque du Soleil. I’m not sure they have many other opportunities to play in that space, so I would recommend they look into that approach. Of course, it would require some upfront investment and likely human capital (i.e. hiring coaches etc.), but it could have a double benefit for the company (both longer and shorter term).
Thank you so much for sharing, Kimia! This is certainly a relevant issue that I had never thought about before. As some of the people said above, I believe that Cirque du Soleil should certainly invest in both solutions as I see them as complementary. Cirque du Soleil brand reputation and point of differentiation come mostly from the skill of its artists. Therefore, I would be concerned on the economic sustainability of the company if it started focusing on other – usually more easily replicable – types of entertainment.
I agree with Gabrielle’s proposal of investing in supply and see it as crucial. However, I believe it is more a strategic initiative to decrease the company’s exposure to similar issues in the long-term than a way to solve the current challenges. First, it would take years to train amateurs to the skill level required by Cirque du Soleil. Second, it would only work if there were enough potential artists within the main markets, which is not necessarily true and may imply extra time to incentivize local population to consider this career. Finally, unless the company is able to increase the number of performances, this would certainly impact Cirque’s du Soleil costs due to a decrease in artists’ utilization.
Interesting challenge.
In response to your questions about is this enough and what else should we do….
If we think about every country around the world as a supplier of talent and also as a potential consumer / show destination / policy challenge, I wonder if we should be thinking about how we source supply instead of focusing as much on beefing up the muscle of the immigration department or adjusting where we put place shows. For example, is it possible to pursue a dual pronged approach, where we focus on building a training school in countries that have relatively “safe” passports when it comes to worldwide travel – this would be places like the U.S., Canada, etc. And then supplement that with the talent that we pull from all over the world? Ideally there would be a sharing of talent in skills through training so those with more flexible passports could travel to the harder to reach areas but through training learn from those with the unique skills who may also have difficult passports. Then as a whole we would have a more diversified supply that can ensure we have duplication as necessary if some markets are closed off. I imagine we may have more than 1 show running concurrently so this duplication ideally wouldn’t be too much of an excess cost but would require some additional management of who is going to which show. In markets that seem to be long term growth opportunities but that also have challenging entry visa restrictions (like China perhaps?) it might be helpful to build a “school” to ensure continuous supply of new local talent (and again supplement this with international talent that is able to get into the country). Ultimately though how much do you think the mystique of the show is the acrobatics or the international background – because if it truly is the latter, then the approach of building training departments and improving local talent in these markets would not be a successful supply chain solution.
This is super interesting! Often times, organizations that require a large number of unique talent from all over the world tend to be nonprofit organizations, for example, a university lab, which have their own work visa category that is more relaxed than typical work visas for for profit organizations. Cirque du Soleil is quite unique in that it both requires a large number of foreign talent, and is a for-profit organization (C-corp, not S-corp!). I am quite surprised that given Cirque du Soleil’s profitability, the legal team is so small. I’d invest money in the best immigration lawyers. There’s probably enough margin in the ticket price to cover both that as well as the higher cost of sourcing talent. In terms of additional solutions, I like Jojo’s idea of a PR play. Given the loyalty of the audience, and how much they appreciate the artists, Cirque du Soleil could potentially print something like “Part of the ticket price is going into helping our artists legally work here in the US. Despite increasing cost, Cirque du Soleil is committed to bringing you the best artists from all over the world.”
Kimia, I truly enjoyed your analysis and insights on the effect of isolationism on Cirque du Soleil, thank you for sharing! I agree that the effect of isolationism is extremely huge for the company, the staffing will face a shortage of the talented artists, the company’s most critical asset. Unexpected events such as political risk and diplomatic risk are to be avoided, and I agree that Cirque du Soleil can do more to protect the staffs. I found it interesting that the visa-team works in-house to facilitate works around immigration for staffs. This way, company can operate quickly to take care of visa issues, and data/information that the company can gain from artists and immigration offices are more transparent.
To your question about if the work Cirque du Soleil currently does is enough to protect immigration risks, I think that the company can do more to prevent future risk. Adding to your suggestions, I think that Cirque du Soleil can consider opening regional offices, and temporarily send artists to the regions in which shows take place. This way, immigration is not necessary, and the isolation risk is mitigated. Also, Cirque du Soleil should develop artists in-house and not fully depend on external hiring. The company can found an artist school in Canada or regional HQ countries, develop talents domestically, so that isolation risk isn’t a problem in supply of the staffs.
Another point about Cirque du Soleil partnering with immigration support organizations to increase lobbying efforts – I think this should be an area that company should be careful about. In my opinion, Cirque du Soleil artists are professionals, and they should brand their immigration packages as so. To achieve this, I think that Cirque du Soleil can be careful about which partnering organizations to work with, and what message to convey. Shifting to focus on another area of entertainment is a way for Cirque du Soleil to increase its business however, it does increase more risk of isolation in staffing as the volume of people will increase.
Cirque du Soleil truly represents diversity of people and entertainment. Brexit and other diplomatic situations make it difficult for the company to maintain and retain the outstanding artists, but more can be done for Cirque du Soleil to operate like a private sector to secure the talents.