When businesses innovate, business schools study it. Beyonce is a business, and she definitely innovated with the release of her latest album. Ergo, Beyoncé is now a Harvard Business School case study.
A new study authored by HBS professors Anita Elberse and Stacie Smith delves into the strategy behind Beyoncé's latest album. There are all sorts of great details to it: the Christmas party at Columbia Records, where she told staffers the night before the release that — by the way — she had an album coming out tomorrow; the (surprisingly) occasional joy of academics taking on R&B (mentioning her "addictive 'uh-oh' hook," for example); and the fact that she's just like us (she gets antsy and distracted when business meetings at Parkwood Entertainment, her company, go longer than an hour).
But maybe most fascinating is the lengths to which Beyoncé went to make sure the album was a secret. And that meant releasing it online before releasing it in stores —allowing fans to get the music and videos the moment they were released, plus eliminating the possibility a store would leak her music. In 2013, Katy Perry and Eminem both suffered high-profile record leaks, as the study notes.
And that meant toying with all sorts of labor-intensive ways of releasing physical discs.
The team had explored an extensive range of scenarios that would allow them to begin the manufacturing process without putting the secret at risk. They studied the possibility of manufacturing blank discs in advance, printing paper packages in advance that looked more like those used for singles, and producing cardboard slip cases without a track listing or album title. "Once the album is out, the plan is to quickly print a black cover with "Beyoncé" in pink font which we can just slip over the package," said [Jim] Sabey, [head of marketing at Parkwood].
But attempting to manufacture them in just 72 hours to get them into stores was a lot of trouble. And the people around Beyonce knew it could backfire. While Beyonce had partnerships with Apple and Facebook for her release, she did not have the backing of major retailers.
"We know that physical retailers are going to be upset," said [Lee Ann] Callahan-Longo, [Parkwood's general manager]. ... Even if some retailers would agree to carry the record, Parkwood anticipated problems in physical retail. "Take Walmart, traditionally our biggest partner," said Sabey. "Most of their supply chain and promotions for December are booked in July. If I said to them tomorrow ‘I want every end-cap display you have in your music section,’ they’d look at me and be like ‘get out of here.’ They are not going to be happy no matter what we do."
But of course, we know how this ends: the record broke sales records on iTunes, aside from being a critical smash.
The upshot of this all is, first of all, that Beyonce gets to release her album how she wants, because she's Queen Bey. And Queen Bey gets to shrug at Target and Walmart if they aren't part of how she wants to do things.
Which also makes it another example of how big stars get to muscle changes through their industry. Everyone knows physical record sales are declining while digital takes over. Beyonce decided that the benefit of releasing her album digitally (surprise, doing it how she wants) was bigger than the potential cost (losing physical record sales).
Importantly, it's not just Beyonce. Kanye West, Jay-Z, and U2 have all experimented with new ways to release music (with mixed results). And the Foo Fighters are embracing crowdfunding, which diminishes concert promoters in the touring equation. In many ways, technology is simply making the old ways more costly for big acts who just want to eliminate barriers to getting their work to fans.