First of all, let’s get this out of the way, there will be race talk in here. Get over it. People buy stuff that resonates with them, and much of that is driven by a mutual connection with the content in entertainment, and Tyler Perry’s target audience is the black community. If that makes you uneasy to admit, then grow up and let the big people talk.
“So who is making all the money in Hollywood these days?” you ask.
“The horrible woman who wrote Twilight” would be my shameful answer. But the problem is in the question. The real money being made in media entertainment these days is Peach State money, in Atlanta.
“Was it the creators of amazing, heroic characters like Captain America, Green Lantern (sorry, that movie sucked), or Iron Man 2 or rich dramatic films like Moneyball, Midnight In Paris, or Drive?”
Sorry, wrong again. It was the mind behind these costumed stooges:
Yeah, Tyler Perry has created an empire off of this stuff. I recently read that Tyler Perry made the most money in entertainment last year, taking home $130 million, and I just could not believe it. So, I started looking into what this guy is up to.
Spike Lee said the following about Tyler Perry:
"I think there's a lot of stuff out today that is coonery and buffoonery. I see ads for 'Meet the Browns' and 'House of Payne' and I'm scratching my head. We've got a black president and we're going back. The image is troubling and it harkens back to Amos 'n' Andy."
To which Perry responded that Spike “can go straight to hell.”
But this beef is unfounded, in that you have a great filmmaker arguing with a great businessman. Art and business never work in mutual self-interest.
Perry has a formula:
- 1.Black characters, setting, community.
- 2.Have one outrageous character with a sassy mouth who’s not afraid to offend you.
- 3.Include stupid or evil white people.
- 4.Jesus is the answer to the problem.
BOOM, you got a movie! This is Blaxploitation 2.0 (but not awesome as I’m Gonna Git You Sucka! or Super Fly).
I agree with what Spike is saying: Perry is selling shit sandwiches, but the dude is slaying it. Here’s how:
- 1. Find an underserved segment of the market and exploit it
Look at the box office offerings. Do you see anything where the stars are black, set in a black community, and centered on issues within the black community? Nope.
This is a hugely underserved segment of the marketplace, and one dying for some content that is relatable. Perry writes, casts, and distributes his work in ways that reach this market, and he does it better than anyone. Most of his movies/shows stem from his plays, like a grass roots campaign. Whatever is well-received on stage, then makes it to theaters, then makes it to TV, then makes it to syndication.
- 2. Create a rock-solid brand
Tyler Perry Presents... Everything he puts out features his name, which is synonymous with black entertainment. Like Oprah and Trump, it really doesn’t matter what comes after those 3 important words. He could come out with Tyler Perry Presents: Madea Plays “Words With Friends” While Taking a Dump and it will sell at this point.
- 3. Own Everything
This guy controls almost every aspect of the life of a movie/show. He writes, produces, finances, distributes. If you pay $10 for a Scorsese movie ticket, Marty gets a nickel. If you pay $10 for a Tyler Perry movie ticket, Perry gets $5 (but consider he's handling all the cost too).
- 4. Maximize Returns
Does he ever cast a movie star? Hell No.
CGI? Not a chance.
Elaborate set? Get real.
Perry’s 8 films have grossed $418 million. That’s an average of $52 million each. This is in a world where Avatar cost nearly $500 million to produce and market.
But the average Perry movie costs less than $10 million.
Here is a VERY basic cash flow model for an average Perry movie, all figures are in $ millions:
This shows average cost and average sales numbers. The DVD and TV Rights numbers are capitalized. All cash flows are net to reflect what comes to Perry.
So, he makes 4 TIMES his money back and an annualized rate of return of 1000%. HOLY SHIT!
I cannot think of another investment that generates that kind of yield. Now I know why Ice Cube is trying to copy Perry’s business model with Are We There Yet.
So in summary, Perry is a creative hack who is not exactly trying to change the social consciousness. He writes/produces a movie or two a year and has 3 TV shows- so how much can he really pour himself into on any of them? He is to the black entertainment consumer what the Twilight creators are to lonely middle-aged white women. But this guy knows how to push product and make a nasty return.
Spike Lee can talk all the shit he wants, but Tyler Perry could buy his beloved Knicks and move them to Decatur just to piss him off.
This is how to become a billionaire in America:
This ain’t rocket surgery.
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