Why Magic Mike Should Launch a Skincare Brand + Temu Makes Waves at Super Bowl
2 articles + RockWater analysis to make you a better investor and operator. Today we discuss the ingenuity of Magic Mike’s franchise expansion, and Temu’s grand entrance at the Super Bowl.
The RockWater Take by Chris Erwin
The Magic Mike franchise turned a $7 million investment into a $600+ million global brand. Here’s the story…
KEY TIMELINE & FIGURES
- In the late 90’s / early oughts, Channing Tatum’s early career included dancing in music videos, fashion modeling, commercial TV spots…and briefly being a male stripper in Tampa, FL
- In 2006 Tatum’s role in Step Up catapulted him to global fame
- In 2010 Tatum said he wants to make a movie about his experience as a male stripper
- Famed filmmaker Steven Soderbergh agrees to direct it, and him and Tatum jointly invest $7 million to make the movie
- The film Magic Mike released in 2012, earned $167 million of global box office
- The sequel Magic Mike XXL released in 2015, earned $123 million of global box office. Production budget was $14 million
- In 2017 Magic Mike Live launched in Vegas at the Hard Rock Hotel
- In 2018 Magic Mike Live expanded globally, including shows in London, Australia, Canada, and more US cities. Total sales estimated at $125 million
- Other revenues from TV and home video are estimated at $170 million
- Last week the threequel Magic Mike’s Last Dance opened during Superbowl weekend (ouch!), but did an ok $8 million, considering it opened in half the screens relative to its first 2 film releases
Here’s a few things I found interesting about the franchise…
First, to guide the strategy for the brand’s expansion into live, the business team behind Magic Mike took market research seriously.
It started with looking at opening weekend demos for Magic Mike in 2012, which attracted an audience of 73% females, with 43% of the audience being over the age of 35. The business team then sought psychographic research to build upon this core demo data.
So in 2016 the team setup a confessional in NY Times Square, where strangers were invited to describe their desires anonymously. The business team, including Tatum who sat in the booth for 10 hours, used the feedback to create archetypes for the personalities on the live dancing stage.
Like the “bad boy who won’t ghost you”, and the “guy who think you’re funny”.
It also led to a decision to cast a female MC for the live shows, who uses empowerment and wellness language to hype up the crowd. The MC calls women in the crowd “Queens”, and tells them “they’re enough”.
The casting process for the male performs includes vetting questions like “do you love your mother?”. The goal is to remove “ick factor”. I like this quote by Soderbergh…
“…a show that’s off by 2 degrees, might as well be off by 180.”
Yup, the business team is positioning Magic Mike as wellness for women aged over 35. With language around empowerment and self-care. That has some interesting implications, which I’ll come back to.
But before that, here’s some interesting math on the overall franchise ROI…
Film Production / Marketing costs:
- 2023: $40M / $20M
- 2015: $14M / $7M (mktg est at 50% based on 2023 figures)
- 2012: $7M / $3.5M (mktg est at 50% based on 2023 figures)
- TOTAL COST: $91.5M
- 2023: $47M (based on $8M North America opening weekend being 17% of total BO, per historical averages)
- NOTE: the film was originally a commission by HBO Max, meaning no theatrical window and lower marketing budget, but early positive test screenings caused studio execs to opt for a limited theatrical release
- 2015: $167M
- 2012: $117M
- TOTAL BOX OFFICE: $331M
Other Franchise Revenue:
- Magic Mike Live: $125M est per WSJ
- TV and home video: $170M est per WSJ
- HBO Max SVOD / AVOD windows: unknown
- HBO Max reality TV show: unknown
- Podcast: unknown
- TOTAL OTHER REVENUE: $275M
This would imply total revenue to date of $626 million…not bad for under $100 million of spend!
But there’s more upside…
With the average live ticket price of around $75, and 500-seat venues around the globe like the one in Miami mentioned in the article, I estimate that a sold out nightly show can deliver another $1-2 million of incremental revenue per week.
To that end, the Magic Mike Live shows in Vegas and London just posted their biggest weeks of ticket sales in the history of the brand. Clearly the limited theatrical release is giving a helpful marketing boost to the global brand.
But I think the MM business team can and should be offering the fans more.
That $60 million production and marketing spend this year seems like it’ll take longer to recoup based on lackluster opening box office relative to years past. But the investment in franchise brand growth could be money very well spent, regardless of box office performance.
The following stood out to me.
One 29 year-old registered nurse has spent over $5,000 on Magic Mike Live tickets, not including airfare. She’s been to the show a whopping 111 times.
That signals there’s opportunity to go deeper with hardcore MM fans, and give them new ways to experience the MM brand. Considering the female and wellness focus, I think of MM-branded fitness classes that can be licensed to Peloton, Equinox, and the Netflix / Nike Training Club collab. One could propose a dedicated fitness app, but I think the licensing opportunity is better considering speed and ease to market.
Or what about a new restaurant chain? Think the Hooters model flipped on its head, where the target clientele is women, and the guest interactions embody the values evangelized in the live show. Speaking of food, there could also be a ghost kitchen-powered food delivery concept, where the delivery experience is the main attraction. Wit burgers called “Self-Love” and “Queen”?
Or even…could MM be behind the next talent-led skincare brand?
This clearly aligns with the dynamics around premium talent, premium IP, and CPG products we talked about in our 2023 Exec Playbook we published last week.
Very curious what the MM business teams are newly cooking up. I recommend some more market research is warranted. Now that would be a fun project our RockWater team would 100% sign up for 😉
A Must-Read for Creator Economy Execs: Gahan’s 1-2-1 Newsletter.
The RockWater Take by Chris Erwin
(Written on Monday Feb 13)
China is driving a lot of US’s media diet right now. Two superbowl ads by Temu (parent co is Pinduoduo) are keeping the convo going strong this Monday. Highlights…
Today Temu is #2 in Apple app store and #1 in Google Play store
Today Temu is also #1 in app store for Shopping. Of note, other China-owned apps in top 20 include SHEIN (2), Alibaba.com (14), and AliExpress (20). And let’s not forget that TikTok, while not a shopping app, is making a big social shopping push.
In the last week of Jan Temu hit $47 million of GMV.
Reminder that Temu quietly launched in the US in Sep 2022, which we covered on our RockWater blog, and has been quiet on the PR train. But that changed big time last night via a $14 million ad spend between the 1st and 3rd quarters of the game.
Reports say only 2 Superbowl ads were shown. But IMO it felt like at least 3 or 4. I wonder if this kicks off a massive new PR blitz by the company. Their parent co is cash-rich, has a $117 billion market cap, and could easily make a strong move while US tech co’s and retailers struggle with softer 4Q earnings and Wall Street expecting cost-cutting.
“Shop like a billionaire” is a great slogan! Give credit where due…
Previous reports show the app had a very low ranking among consumers, below 2 stars. But I’m seeing around 4.6 this morning. It’s below the 4.8 from peers like Amazon and Walmart. But I’m confident in time, with launch learnings, and with the launch of exciting new features like team shopping and other gamification inspired by its Chinese version, that it’s ranking will rise over time. And with a bargain-hunter customer focus, it’s very well time for our current economic climate!
If these insights are relevant to projects you’re working on, ping us here. We love talking all things media x commerce!