Cirque du Soleil Business Model: How To Reengineer Value To Scale

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The Cirque du Soleil business model transformed and reimagined the concept of a circus and in so doing became a globally recognised entertainment brand.

In this article, I’ll explain how they used the principles of blue ocean strategy to change the value proposition of what a circus offers.

How Does The Cirque du Soleil Business Model Work

Cirque du Soleil is an entertainment model that creates, produces, and performs live shows featuring acrobatics, dance, music, and storytelling.

The company develops unique, high-quality productions that blend various art forms to create immersive experiences for audiences.

Cirque du Soleil’s shows are performed in permanent theatres, touring big-top tents, and through partnerships with venues such as hotels and resorts.

The company generates revenue primarily through ticket sales, merchandising, sponsorships, and licensing agreements.

The company differentiates itself from traditional circuses by focusing on artistic innovation, storytelling, and human performance while eliminating animal acts. Cirque du Soleil’s productions are known for their high-quality, avant-garde approach to live entertainment, which sets them apart from competitors in the industry.

This shift allows the company to hire remarkably talented individuals and train them to perform a standard set of shows, thus making it highly scalable. Not having one performer as the spotlight means people come to the show, not for the individual.

Key Features of the Cirque du Soleil Business model

• A unique blend of circus arts, theatre, and live entertainment
• Focus on artistic innovation and pushing creative boundaries
• Emphasis on human performance and multidisciplinary talent
• Partnerships with venues and sponsors to expand reach and revenue

A brief history of Cirque du Soleil

Cirque du Soleil was founded in 1984 by Guy Laliberte and Gilles Ste-Croix, two former street performers from Quebec, Canada.

The company began as a small troupe of performers and quickly gained recognition for its unique approach to circus arts.

In 1987, Cirque du Soleil received a grant from the Quebec government, which allowed it to create its first major production, “Le Cirque Réinventé” (We Reinvent the Circus).

Cirque du Soleil expanded rapidly in the 1990s, launching new productions and touring internationally.

The first permanent theatre, Treasure Island, opened in Las Vegas in 1993. This marked the beginning of Cirque du Soleil’s partnership with hotels and resorts, which would become a key aspect of the Cirque du Soleil business model.

Key milestones and dates:

• 1984: Cirque du Soleil is founded by Guy Laliberte and Gilles Ste-Croix
• 1987: The company creates its first major production, “Le Cirque Reinvente”
• 1993: Cirque du Soleil opens its first permanent theatre, Treasure Island, in Las Vegas
• 1998: The company launches “O,” its first aquatic show, at the Bellagio in Las Vegas
• 2005: Cirque du Soleil expands into Asia with the opening of “ZAIA” in Macau
• 2015: The company celebrates its 30th anniversary with the launch of “Toruk – The First Flight” inspired by James Cameron’s film “Avatar”
• 2020: Cirque du Soleil files for bankruptcy protection due to the COVID-19 pandemic
• 2021: The company emerges from bankruptcy under new ownership and resumes performances

Key Facts About Cirque du Soleil

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Who owns Cirque du Soleil

As of 2021, Cirque du Soleil is owned by a group of investors led by Catalyst Capital Group, a Canadian private equity firm.

The ownership group includes Soundpoint Capital, George Matteo, and Charles Champagne.

Before the COVID-19 pandemic, the company was owned by a consortium led by TPG Capital, which acquired a majority stake in Cirque du Soleil in 2015. However, due to the financial impact of the pandemic, the company filed for bankruptcy protection in 2020 and underwent a restructuring process that resulted in the current ownership structure.

Cirque du Soleil Mission statement

“Invoke the imagination, provoke the senses and evoke the emotions of people around the world.” (Official Cirque du Soleil mission statement)

How Cirque du Soleil works

The Cirque du Soleil business model revolves around creating and performing unique, high-quality live entertainment experiences. The company’s creative process begins with developing a concept or theme for a new show. A team of designers, directors, and artists then collaborate to bring the concept to life, incorporating circus arts, theatre, music, and storytelling elements.

Once a show is created, Cirque du Soleil markets and promotes it through channels such as YouTube, local and global advertising, and partnerships with travel agencies and tourism boards.

Depending on the production and location, the company performs the show in a permanent theatre or a touring big-top tent.

The Cirque du Soleil business model also relies heavily on partnerships and collaborations. The company partners with hotels, resorts, and event spaces to host its shows, which provides additional revenue streams and exposure to new audiences.

Cirque du Soleil also collaborates with sponsors and corporate clients to create custom performances and events, further diversifying its revenue sources.

In addition to its live performances, Cirque du Soleil generates revenue through merchandising, licensing, and other products.

The company sells branded merchandise at its shows as well as through its online store. It also licenses its intellectual property for various products and media, such as video games and films.

The Revenue Model of Cirque du Soleil

The Cirque du Soleil business model generates the following:

• Ticket sales: The primary source of revenue for the company, generated through sales of individual tickets and group packages for its live performances
• Merchandising: Sales of branded products, such as apparel, accessories, and souvenirs, at its shows and through its online store
• Sponsorships: Partnerships with corporate sponsors who provide financial support in exchange for brand exposure and marketing opportunities
• Licensing: Granting rights to use Cirque du Soleil’s intellectual property, such as its logos, characters, and show themes, in products and media
• Special events: Hosting private performances and corporate events, which provide additional revenue and exposure for the company

Cirque du Soleil’s revenue model is profitable due to its ability to command high ticket prices for its unique, high-quality productions and multiple revenue streams such as merchandising, sponsorships, and licensing.

Additionally, the company’s partnerships with hotels, resorts, and event spaces help to reduce costs and provide stable, long-term revenue sources.

The Complete Cirque du Soleil Business Model Canvas

The Cirque du Soleil Business Model

Cirque du Soleil’s business model caters to diverse customer segments. The company’s unique blend of circus arts, theatre, and live entertainment attracts audiences from a wide set of demographics. Cirque du Soleil’s customer segments include:

The Cirque du Soleil business model is built upon delivering customer experiences. The company’s value proposition lies in its ability to create awe-inspiring, immersive experiences that transport audiences to another world. (Note: a value proposition is not the same as a brand promise.)Cirque du Soleil’s main value propositions include:

The Cirque du Soleil business model uses social media channels to reach and engage its target audience. The company also employs sells tickets via partners as well as on its won website:

The Cirque du Soleil business model prioritizes creating memorable experiences encouraging repeat visits and positive word-of-mouth. Cirque du Soleil’s customer relationships are characterized by:

The Cirque du Soleil business model include:

The Cirque du Soleil business model relies on several key resources to create and deliver its unique value proposition. These resources are essential to the company’s success and differentiation in the market. Cirque du Soleil’s key resources include:

Cirque du Soleil’s business model involves collaborating with key partners to enhance its offerings and reach. These partnerships provide essential support, resources, and expertise to the company. Cirque du Soleil’s key partners include:

Cirque du Soleil’s business model generates revenue through multiple streams. The company’s primary source of income is ticket sales, but it also explores additional revenue opportunities. Cirque du Soleil’s revenue streams include:

Cirque du Soleil’s business model incurs significant costs in order to create and deliver its world-class performances. The company’s cost structure reflects the high-quality nature of its productions and the resources required to maintain its reputation for excellence. Cirque du Soleil’s main costs include:

The future of the Cirque du Soleil Business Model

The company may explore new avenues for growth, such as expanding its digital presence, offering immersive virtual experiences, and collaborating with other entertainment brands.

Cirque du Soleil may also seek to diversify its revenue streams further by exploring film, television, and other media opportunities.

Blue Ocean Strategy for Cirque du Soleil

Cirque du Soleil is a prime example of a company successfully implementing a Blue Ocean Strategy. By creating uncontested market space and making the competition irrelevant, Cirque du Soleil has redefined the circus industry and captured new demand. The company’s Blue Ocean Strategy can be analyzed using the Eliminate-Reduce-Raise-Create (ERRC) framework:

Eliminate:

• Animal acts: Removing traditional animal performances
• Star performers: Shifting focus from individual celebrities to ensemble casts
• Conventional circus format: Eliminating the traditional three-ring circus structure

Reduce:

• Emphasis on danger: Minimizing high-risk stunts and daredevil acts
• Reliance on nostalgia: Reducing focus on traditional circus nostalgia and clichés
• Ticket price sensitivity: Decreasing the importance of low ticket prices

Raise:

• Artistic elements: Elevating the role of music, dance, and storytelling
• Production value: Increasing investment in stagecraft, costumes, and technology
• Audience engagement: Enhancing immersive and interactive elements of the shows
• Performer skill level: Raising the bar for talent and multidisciplinary abilities

Create:

• Unified themes: Developing cohesive narratives and concepts for each show
• Immersive atmospheres: Creating transportive, multi-sensory environments for audiences
• Fusion of art forms: Combining circus, theater, dance, and live music in innovative ways
• Upscale venues: Establishing permanent theaters and high-end touring facilities
• Emotional resonance: Crafting performances that evoke deep feelings and connections

By eliminating, reducing, raising, and creating these key factors, Cirque du Soleil has successfully differentiated itself from traditional circuses and created a new market space.

The company’s Blue Ocean Strategy has allowed it to attract new customers, command high ticket prices, and maintain a strong brand identity.