Cirque du Soleil Has No Chance in China
It's no secret that Cirque du Soleil has been in need of a savior. After spreading to 271 cities around the world in the 1990s and 2000s, the producer of elaborate circus events has more recently hit hard times. In 2013, the company laid off 400 employees, mostly at its Montreal headquarters, citing rising expenses and the global economic downturn. It looked like Cirque had finally slipped off its high wire.
Just in the nick of time, a Chinese company seems to have swooped down to stop its plummet. Last weekend, Fosun International, China’s largest private conglomerate, announced that it had acquired a minority stake in Cirque du Soleil in order to add a “unique element” to what the company calls its “happy lifestyle area” (which includes hotels and resorts, including Club Med) that target China’s growing middle class. It seems like a clear win-win: Cirque gets a massive new market for its kitsch, and Fosun gets to shift its business model away from China's slowing real estate sector.
But Cirque du Soleil's saga isn't over quite yet. There's plenty of reason to doubt the Chinese public will have much interest in what Cirque is selling. Fosun's challenge will be to convince the company's creative staff that Canada's idea of "happy lifestyle" entertainment doesn't overlap with China's.
Cirque du Soleil has been active in China for the past decade, but it hasn't ever shown much talent for entertaining Chinese audiences. In 2007, it staged its first-ever China shows in Shanghai. They were well received, though not particularly well attended. And why would they be? In China, at least, Cirque du Soleil offers very little in acrobatic spectacle (rope tricks, spinning plates, death defying heights) that the Chinese haven’t been doing on stage, in their own circus performances, for centuries. In fact, in most large Chinese cities there are several expertly staged choreographed acrobatic shows that cater to Chinese audiences -- and for cheaper ticket prices than what Cirque du Soleil charges.
Part of the problem is that Cirque du Soleil has resisted catering to local Chinese tastes. The best example of this misguided approach was the Canadian national pavilion that the company was commissioned to design for Expo 2010, better known as the Shanghai World’s Fair. Prior to its opening in April 2010, I interviewed Johnny Boivin, Cirque’s Director of Creation, who explained to me the company's approach to the building:
“So I said why don’t we go really honestly about who we are … and talk to the Chinese without using the language. In this project we don’t speak but rather we show people images so they know what we are talking about.”
Boivin was true to his vision -- to a fault. Visitors to the pavilion were ushered through two rooms. The first provided an opportunity to peddle a bike on a virtual tour of Canada; the second was a darkened room where visitors were asked to sit on the floor and watch atmospheric images of Montreal bleed into each other on a screen.
Whatever its aesthetic merits, this showed a complete misunderstanding of what Chinese audiences expect in exchange for buying tickets (and standing in line, as they sometimes did for hours at Expo 2010). The first thing is that no paying Chinese audience would ever volunteer to sit on the floor; in the West, this might resonate with theatergoers eager for a shift in perspective, but from the Chinese perspective it comes across as cheap and uninviting.
More importantly, Cirque du Soleil's sedate aesthetic bears little relation to the spectacle and bling that middle class Chinese tend to associate with paid entertainment. No surprise, most visitors walked quickly through Cirque's exhibition with little more than a glance at the images, and then wandered off in search of national pavilions that offered more excitement.
Sometimes the company seemed to neglect even more basic sorts of market research. In 2012, it pulled out of a 10-year contract at The Venetian resort in the Chinese casino mecca of Macau after disappointing ticket sales. Cirque had somehow failed to understand that Macau wasn't a typical tourist destination, but a city associated in the Chinese imagination with gambling and other unsavory financial dealings. Needless to say, the city's traditional clientele rarely brings family along.
None of this is to suggest that Fosun is wrong for buying Cirque du Soleil. At the very least, its newly developed expertise at designing theaters will prove useful to Fosun’s real estate and hotel developers. Moreover, given the rapidly growing demand by China's middle class for "happy lifestyle" products, it would be hard for Cirque's shows to prove a total failure. Chinese tourism is booming, and if a Cirque du Soleil production is the only entertainment available at a Fosun-owned hotel or resort, the guests -- who won’t necessarily be Chinese -- might just be convinced to go and see it.
But for now, Cirque du Soleil is just another Chinese-owned circus. Unlike the others, though, this one still needs a Chinese audience.
This column does not necessarily reflect the opinion of Bloomberg View's editorial board or Bloomberg LP, its owners and investors.
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