How Tyler Perry Built a Customer-Centric Empire

The Atlanta mogul is rightfully praised for his high volume, low-cost model, but his focus on customer experience made the difference.

One of the largest film studios in the United States is now owned by Tyler Perry. On October 5, 2019 the 50-year-old celebrated the grand opening of his 330-acre studio with hundreds of celebrities. The studio compound—a former confederate army base—has 12 sound stages. Each named after a prominent figure in black entertainment. Some of them have supported Perry from the jump, like Oprah Winfrey. Others once labeled Perry’s content as “coonery,” like Spike Lee. It’s a testament to the tradeoffs Perry accepted when he bypassed Hollywood’s rank-and-file.

Perry’s titular character, Madea, made her grand debut in 1999. The loud, brash, gun-toting, elderly woman graced the Chitlin Circuit to perform in playhouses across America. His budget was tight, but Perry maintained tight control as the producer, director, playwright, lead actor, janitor, cleanup hitter, and all the above. It’s a process that Perry still swears by today.

But there’s a common perception with ownership-minded operators like Perry: They often own larger shares of their respective pies, but those pies are generally smaller. This implies that their wealth-generation opportunities are relatively limited. It’s a notion that I’ve reinforced in several Trapital articles. The general sentiment still holds, but Perry’s success bucks this trend with his high-volume of output.

The Atlanta-based mogul is rightfully credited for his low-cost, profitability-focused business model. But Perry’s customer-centricity sets him apart. He established the necessary connections to strengthen his distribution and engage fans.

Own the distribution

In 1992, Perry’s first play, I Know I’ve Been Changed, was financed with his $12,000 life savings. The optimistic playwright hoped for 1,200 attendees on opening weekend. Only 30 people showed up, and they were all friends and acquaintances of Perry. He went back to the drawing board but failed again. Year after year. He lost money, went through multiple evictions, and had a brief stint of homelessness. It all came to a head with a final attempt in 1998 at the House of Blues, a church-turned-theater in downtown Atlanta.

Here’s an excerpt from Perry’s 2014 biography:

"At that moment, Perry glanced outside the window. A line had formed around the block to enter the House of Blues. His show had sold out. It also sold out the next seven nights. The venue proved too small for the patrons clamoring to watch it. Perry moved the play to the Fox Theater in Atlanta and sold nine thousand seats over the course of a weekend. Promoters who wanted nothing to do with I Know I've Been Changed were suddenly calling Perry with offers to stage it.

"One of the reasons for its success was his marketing efforts to black churches. This included using choir members in the play, which drew in their friends, families, and fellow churchgoers in the production."

The black church was Perry’s base. The play’s content was gospel-inspired and he doubled down on that audience. That strategy continued as his plays traveled to Philadelphia, Dallas, Newark, and other cities.

At each performance, Perry collected email addresses from attendees. By 2005, the Tyler Perry Mailing List was 400,000 strong. And back then, people actually checked their emails! Perry made it a point to be authentic in each message. It bolstered his connections with fans. When Diary of a Mad Black Woman hit theaters in 2005, Perry already had a reliable distribution channel to inform fans about his feature film.

If any of this sounds relevant, it should. Perry was on his email game well before MailChimp advertised on your favorite podcast. He executed the same strategy that’s engrained in every digitally-native vertical brand:

• Focus on a core audience. Build relationships with the mavens and evangelizers
• Own your distribution and connection with customers
• Build a relationship by personalizing the communication

RXBAR focused on the CrossFit community and expanded from there. Walker & Co built connections with barbershops in major cities to help distribute its Bevel product. It’s a gameplan that many companies follow. It helped Perry’s plays gross $60 million from 1999 to 2004.

Yes. This is a live site for the Tyler Perry Mailing List. Laugh all you want, but this no-frills, unbalanced, Windows 3.1, Craigslist-looking landing page is a microcosm of the Madea brand: Low overhead. High volume. Results.

Low-cost production

As Perry’s brand expanded, his fanbase became more devoted to its titular character. In true stan form, the Madea-hive clapped back at its haters. The late Roger Ebert gave Diary of a Black Woman a scathing review. “All blame returns to Tyler Perry. What was he thinking?”

The hive let Rog’ have it. Ebert followed up the next week:

"Last Friday I published a negative one-star review of Diary of a Mad Black Woman, and since then I have received more e-mails than about any review I have ever written, out numbering Fahrenheit 9/11 and The Passion of the Christ put together. And they were not all the same message, generated by some web site or its followers. Each manifestly came from an individual reader who felt moved to write."

Remember, Fahrenheit 9/11 and The Passion of the Christ tackled third-rail topics. They are two of the most controversial films of the 21st century. And yet, the emails from Madea’s big-screen debut exceeded them combined. That’s some Beyhive-NBA-Finals-don’t-lean-over-Beyonce-to-ask-Jay-Z-what-he-wants-to-drink level shit. Film critic Wesley Morris, who also panned Diary, received angry emails for years. Fans assumed that Morris, a black man, must be white to have given such a review.

Perry never made content for critical acclaim. “I never wanted to get distracted by opinions when I know it’s working for the people,” he told film critic Nick Allen in 2016. His acceptance of what Madea is (and isn’t) solidified his strict model.

Most of Perry’s movies cost ~$20 million to make. His marketing spend is limited (thanks to his email list). The films generally gross north of $50 million at the box office and earn $5 million more from DVD and video.

He also optimized his production process. He has a three-week process when writing scripts and rarely writes multiple drafts. His sitcoms film three to four shows a week, where most Hollywood sitcoms film weekly. And since Hollywood often overlooks black talent, Perry easily found diamonds in the rough. Viola Davis, Idris Elba, and Taraji P. Henson all came through Tyler Perry Studios at some point in their careers.

It’s reminiscent of Southwest Airlines’ well-known strategy. The low cost-carrier focused on under-utilized airports, used a point-to-point model to serve its markets, and dramatically reduced the time to board and deplane. Fast turnaround and underutilized resources were core competencies for both the airline and Perry’s studio.

Since 1999, Tyler Perry Studios has released 21 plays, 24 films, 10 TV shows, and a book. A perfectionist could never produce that level of content. Today’s creators and experts all emphasize the importance of consistency. They also repurpose their content for other uses. Perry’s done both. His fans have rewarded him for it.

The Tyler Perry Studios Customer-Centric Model

Perry didn’t just transition from phase to phase. He still focused on the core as he stretched to new opportunities.

Consumer insights from the day-ones

After Diary of a Mad Black Woman, Perry could have easily moved on from live performances. He had a favorable distribution deal with Lionsgate: A 50/50 profit split where Perry maintained creative control. But Perry stayed true to the theater circuit. He still wrote, directed, produced, and acted in most of his plays, including 2019’s Madea’s Farewell.

His multimedia approach follows the mixtape-album strategy that I wrote about in May:

"Rappers got their start by releasing rawer, uncut mixtapes to the streets. These tapes were more frequent, less polished, and had samples we knew damn well weren’t cleared! But once the artist got popular, their studio albums were more polished, had radio-friendly singles, big-name producers, and a slow song or two to broaden appeal.

When artists focus on albums and stop making mixtapes (or mixtape-type music), they risk losing the audience that fueled their rise. But if artists stuck only with mixtapes, there’s a higher chance they might never breakout. Doing both allows them to grow while staying true to their roots. That’s why Lil’ Wayne’s run from 2005-2009 was so iconic. He released classic mixtapes and albums to maintain both audiences."

Madea’s plays are the mixtapes. Meanwhile, the big screen films are the studio albums. The multimedia approach maintains his content’s accessibility. This is the only opportunity that some of his fans will get to see Perry in person.

It’s also the only time that Perry gets to see his audience. This exposure strengthened Perry’s consumer insights. Here’s a segment from a 2009 interview with The Hollywood Reporter where Perry explains how he adjusts his content for different regions:

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"[My audience is] about 50% Christian churchgoing. It depends on what part of the country I'm in. If I'm in the Bible Belt it's 90% churchgoing. If I'm up north in Newark it may be 30%, so it depends on where you are. I used to adjust the shows to where I am. If I was in the Bible Belt I made it more Christian, God-themed. If I was up north I could get away with saying "ass" a little more. I would say 75%-80% women, 10%-20% men and about 5% children. What I've learned is you treat the women right and they bring everybody else."

He can only get those insights when he’s on the ground, literally looking out in the crowd from the stage, watching the audience’s faces as he delivers one of Madea’s brash lines. The live performances became Perry’s focus group. Those insights have had a profound impact on his creative process.

Challenges replicating his model

"When I built my studio, I built it in a neighborhood that's one of the poorest black neighborhoods in Atlanta so that young black kids can see that a black man did that, and they can do it too."

It’s inspirational, but replicating Perry ain’t easy. I’ve laid out the important factors, but his approach came with challenges too.

First, Tyler faced tremendous backlash and criticism for Madea. Not just from film critics, but from black folks put off by its negative cultural stereotypes. It took considerable focus not to cater to the looming criticism that his content sets black folks back. This is a critique that Mona Scott Young, the producer of Love & Hip-Hop, also receives for her drama-induced portrayal of black celebrities in her reality series. But it’s yet another example of the age-old debate between high-brow and low-brow content. Conversely, the anti-Madea camp has been categorized by some as elitists who are out-of-touch with the folks who do enjoy his content. As Netflix’s current strategy shows, low-brow content is far more accessible in today’s media landscape.

Second, the Madea franchise succeeded because Tyler was both the operator and lead talent. His multi-hyphenate status has been critical to his informed decision-making, but it’s a hard, hard grind. Perry has it down to a science by now, but his entire process still requires long hours and fair amount of isolation.

His success has sparked inspiration in several rising auteurs who have followed his lead as playwrights-producer-directors. With today’s technology, it’s easier than ever for solo creators to do the same in their respective fields. Tyler the Creator became the first solo rapper to debut at #1 on the Billboard charts with a self-produced and self-arranged album with IGOR. It’s dope company to be in, but it’s still a grind.

Life after Madea, new chapter with BET+

Mabel “Madea” Simmons had her funeral earlier this year, and Perry assured us that she won’t be resurrected any time soon. Fans poured out some liquor for their favorite grandma. Madea’s closure marks a new chapter. Perry launched a new partnership with BET to join the streaming service wars with BET+, a $9.99 a month service with a mix of original programming from BET and content from Perry’s catalog.

Here’s what I wrote about it back in June:

"For BET+ to succeed, it needs to rely heavily on its own catalog, not just Perry’s. It also needs to think deeper than just releasing content that black people watch. It needs to focus on the type of content that the “black SVOD audience” likes to stream. A lot of it is shows like Power. A lot of that is shows like The Office too. But far less of that is shows like Madea."

I’ll admit, I came in a little hot. I still believe what I wrote, but the connection to Perry does have its advantages. Perry’s low-cost, high-volume machine is aligned with the current content streaming landscape where volume trumps quality.

Its new shows, Oval and Sistas, are set to premiere on October 23. Both are written created and directed by Perry, but he won’t star in either. They are stylistically different than Perry’s norm, but relevant enough to benefit from his fine-tuned operation.

In 2016, a film critic once questioned how Perry maintains his energy as Madea. Perry said that it’s second nature by now. “I’m not starring in Schindler’s List. It’s Madea. It is what it is.”

His acknowledgment is a subtle reminder of Perry’s focus. It sets apart the folks who will make the necessary tradeoffs for a prime seat at the Hollywood table. Or in Perry’s case, the table he built for himself in Atlanta, Georgia.