CMOs as showrunners

0:02Why are AI brands opening cafes? Why does Miu Miu have a book club? Why does A24, a movie studio, have a membership club, a publishing arm, and now Cherry Lane, its own theater, and a bar? It's not random. It's a new operating model. And the best CMOs already know it. They're not running marketing departments. They're running production studios, orchestrating content, products, experiences, and collaborators, like a showrunner builds a world. Today, we unpack why every business is now show business, why the modern CMO isn't a marketer but a showrunner, and what are the hidden formulas behind these operations.

0:46Welcome to the Season 2 of Hitmakers, the show that tracks how culture moves margins, multiples, and market cap.

1:04hello lee hey anna what is new well what have you been up to the last last couple weeks since we did the last episode you're in la weren't you yeah i was in la for a client meeting it was a quick 48-hour trip, but I managed to squeeze in a visit to Just One Eye, this concept space that sells jewelry and fashion items that was temporarily turned into Versace showroom. So I saw the newest Versace collection and I have to say it does look good. It's really well done. Everyone is talking about the prices with a very good reason, but it's really well done. And then I went next day to meet a friend at Erwan.

1:49And for my efforts, I was rewarded with the sightings of Bad Bunny. So. At Erwan? There was a smoothie. It was the goddess smoothie, not the Hailey Bieber smoothie, but it was really good. So what about you? What are they,$30? Is that what it is? No,$19. Very reasonable. Oh,$19. I don't know. At that point, it might as well be$30. It's sort of like a magnitude of similarity. It was really good. Was it worth the$19? Does it taste like a$19 smoothie? And your better position there are to talk about value and worth. All value is perceived value, as Lee likes to quote his favorite Austrian economist.

2:28We'll get to that later, Lee. I think that's the first time that Austrian economics has been brought into a sentence about Air One smoothies. Let's just keep going. It may come up again. It was excellent. It was excellent. And you know what made it worth it? It was the prettiest people I've seen in a really long time. The coolest people, Leah Kabadda was there with her daughter and a number of African models that were all unbelievably gorgeous. Orlando Bloom was there with the tiniest dog, the size of Labubu, and his son and a friend. And again, as I said, Bad Bunny was there. And you know, the people watching was just totally$90.

3:10And this was like, for the 10 minutes you were at Erewhon, you saw all of this? I was there 45 minutes and yes. Wow, that's an intense concentration of sightings. 45 minutes, like totally worth it. Again,$19 is like, you know what? I would have happily paid double. Are they just like all milling about wanting to be like seen at Air One? Is that like the thing? They were sitting down enjoying whatever they ordered. I did buy some muffins and they were$11. And I'm like, this is so reasonable. You know, we live in New York and everything. We live in a house. And it's like$150 for living in a house.

3:46So this was like, you know,$11, perfect. Well, it's all relative, right? There is no such thing as price. There is only what the willingness to pay is relative to other contextual information. You know, after paying$19 for a smoothie,$11 was like, you know what? Honestly, we should totally. Everything looks so photogenic. You know, when you enter Airborne, people produce packaging. Everything is so photogenic. So I was like, maybe it rubs off me. maybe yes it's all it's all mel lit for photo shoots that's what it is do tell me about your week oh man i don't i don't even remember what i did it's it's one of those times where everything so busy everything just blurs together into a gray blob of nothingness and it's hard to like remember what you did or whatever yeah i don't know i don't have any trips coming up i'm going over to texas soon but that's the only trip recently that i have planned i always really like going to Texas.

4:41It's probably going to fly into Austin for a little while and visit a company that I invested in and stuff and spend some time with them and understanding the business and so on. Some of us are making money and some of us are spending. I'm not making money yet. Hopefully. It's in the energy space. So we can talk about Erewhon. We can talk about future energy investments. You know, again, this is the style of the podcast. You don't know Haley Bieber and Bad Bunny sightings at Erewhon. And now let's move into energy infrastructure and like capitalization tables of futuristic energy consumption. Speaking of, let's move to market moves and highly, highly bieber because Alpha in very strange transparency move released Rhodes results.

5:26And they're kind of crazy good, no? This is where we talk about market moves, a segment where we track how culture is moving markets. And just like Ana said, Elf just disclosed the full P &L for Rode, Hayley Bieber's skincare brand. Every margin, every cost, every pound accounted for. That's something we almost never see in the beauty world. Rode hit$220 million in DTC revenue with 34 % EBITDA margins. That's nearly double what most legacy brands target. Their cogs are just 19%. And for comparison, most beauty brands sit around 25 % to 30%. Marketing-wise, just 11%. And while most DDC brands burned through 30 % to 50 % on customer acquisition, Rode's marketing efficiency ratio hit 9 to 1.

6:16Elsewhere, MiuMiu posted a 41 % year-over-year revenue jump for the nine months ending in September, one of the strongest performances in the luxury sector this year. The Prada-owned label has leaned into youth culture, viral accessories, and fashion-forward casting to drive demand. Meanwhile, LVMH only had a 1 % increase in third quarter revenues. And it's not a podcast unless you're talking about Taylor Swift. It was reported that Taylor Swift's The Life of a Showgirl pulled in$135 million globally in its first week, including$80 million in the U.S. alone and over 4 million album units sold.

6:57The success has been driven by a well-engineered, full-stack fandom machine of album variants, bundled formats, scarcity loops, merch, eventization, and of course, Swiss parasocial flywheel. Meanwhile, in early October, for those of you who are in New York, you probably saw that Anthropic brought its clown brand into the real world. It opened a cafe at the former Vanity Fair editor Graden Carter's airmail newsstand in Manhattan's West Village. Not anymore, Graden Carter's. It's now Puck's. Ah, well, that's why I said former. Ah, okay. The former Vanity editor, former Ermel. So anyway, let me do my thing.

7:51Let me do my thing. The activation drew thousands of visitors and produced over 10 million social media impressions. Their baseball caps emblazoned with the word thinking became a hot ticket item with customers sharing them on social media for cred. Also, luxury stocks rallied on renewed signs of life in China. LVMH and Hermes led the rebound up 97 % and 86 % this year, as wealthy Chinese consumers slowly re-enter the market. Brands are shifting from expansion to exclusivity, offering private shopping, VIP shows, and immersive brand experiences to reignite demand. Since July, nearly$80 billion in luxury value has returned to European markets, but growth expectations remain cautious.

8:36The focus now is fewer stores, deeper spend, and a new playbook for cultural relevance. And finally, what started as a throwaway TikTok from singer Sophia James turned into a full-blown viral sensation. She posted seven random videos. One of them, Group 7, took off racking up over 35 million views and sparking a self-declared tribe called Group 7 Forever. Then brands jumped in. Pizza Hut dropped a 35 % off Group 7 code. Applebee's launched a 7 baddies promo. Hyundai changed its TikTok bio to the unofficial car of Group 7. And Fenty, Pepsi, Oreo, Slim Jim, and even NFL teams followed. This is brand cultural participation at its purest.

9:21not inventing the story, but knowing exactly when to enter one. So that's a bunch of stuff, Ana. A lot's happening in this world, Lee. And it's interesting because you see a lot of the same mechanics and a lot of the same lessons used in a lot of different places, whether it's Taylor Swift or fashion brands or Anthropic and so on. But there's three areas that we're going to dig into today, get into this idea of how every business is in show business. So the first one is what's happening with Saint Laurent. Yes, love that. For me, one common thread is analog culture and how analog is making a comeback almost at the same time as digital and AI.

10:05is that kind of that synchronicity and coincidences that are happening when AI is gaining steam, analog is also gaining steam, when you have clubbing and bars, no phone bars, and when you have vinyl and we have book sales in 2024 have never been higher, those 6.5 % year on year compared to the previous year. I'm curious to see figures in 2025. And just overall, thinking how, when you don't know what's going to work, like Group 7 is a great idea, basically releasing seven different pieces of content and see which one is going to perform best. What is the constant? Intellectual property is the constant.

11:00And how you bring your intellectual property to life, that idea, that story. It can live as a cafe, like Miu Miu Cafes, Miu Miu Book Club, or it can live as a thinking cap. It's a promotional strategy. People loved it. People hated it. It did not go unnoticed, or it can live as hospitality that is a restaurant, that is a movie theater, that is a beauty brand, that is, you know, like ideas live in many different tangible formats and basically if one fails another is not gonna fail so luxury brands from lvmh and caring what you mentioned saint laurent they're opening a movie studio so not movie studios production arms so lvmh has 22 montagne called after their location in paris and And Kering has Saint Laurent Studios.

12:01Emilia Perez was the movie that got a lot of Oscar attention and some wins. And more recently, Jim Jarmusch's short movie, Father, Mother, Sister, Brother, presented at the Venice Film Festival. That's just one. They have a lot going on in their pipeline. And they put a lot of their products in terms of product placement. But we also have other examples like collaborations between Jonathan Anderson and Luca Gadanino on Queer, on Challengers, because those two are friends. And Jonathan Anderson did costumes for both. And which for me sort of opened up a question, well, why did they stop there? Why didn't they create a capsule for Challengers for Lueve?

12:52and put them in stores because Jonathan Anderson was then a collaborator, a collaborator, a creative director, what I'm talking about, a creative director at Lueve. And so if it goes both ways, if luxury brands are creating movie studios, why are movie studios not creating retail arms and literally compensating actors for wearing designs and literally creating capsules from movie studios, not like glorified merch, not merch 2.0, but full-blown collections for movies, creating shopping shops, creating capsules from movies, because people are buying into a world. Retail is the story. It's not just something used to promote the story.

13:40You do want to buy what Zendaya wore in Challengers. You do want to buy what Daniel Craig was wearing in queer movie, or you do want to buy what in a number of different, you kind of like identify with the character or you love the character and you want to buy the whole collection. So I think that's a giant opportunity. And I don't know who is doing that now. And those costume designers are amazing. And again, what is the difference between costume designer and a fashion designer? And I think we're going to see more of that talent interspersion, which is, again, going to get me, how are you hiring?

14:17When you're hiring for a fashion brand, do you hire from the fashion brand pool or you go into hospitality or you go into journalism or you go to outside? So just a massive area that I'm super interested in and I have been exploring on the sociology of business in a number of analyses. So let's dig into that a little bit, specifically the St. Laurent thing. So, you know, I think it's meaningful that they won the top festival prize at the Venice Film Festival, the Gold Lion, because that's not their core business model producing movies. Their core business model is producing fashion lines and moving, you know, apparel and accessories and jewelry and so on.

14:59And so why get into that business? Why get into the film production business versus partnering with a film production studio more deeply and more systematically in the kind of like what you were saying? Like, don't just style all the characters and be the costume designer for the movie, but go deeper, do partnerships, do collabs, do spinoff content and stuff. Why do you think Saint Laurent needed to have its own production studio and as part of its business model? Again, we're going back to IP, to owning intellectual property and telling stories in that cohesive way. if you own all of it, it's yours forever.

15:48If you hire a production studio, then rights expire, copyright expires, trademarks expire at the end of the day. Like this, you own that forever and you have that control to put your own products. And for me, the same goes for 22 Month Time for LVMH. And right now, you can have the best directors and best actors work for you and give creative control or not give creative control is just that fashion brands, luxury brands, they're incredible stories. All human stories and stories of creativity are incredible stories or can become incredible stories. Even those that don't have history and heritage can be turned into remarkable stories.

16:35I totally agree with you. And I think one of the really interesting signal of Saint Laurent choosing to add this to their business model operations as a P &L is not just that they want to produce content and diversify. It's that they recognize that the value of their business is not in the apparel. It is in the IP that informs apparel or informs fragrance or informs accessories and so on. And so if you understand that the business model is the IP, then you want to own the means of production for bringing that IP to market. So in the example of like Disney would be the sort of like classic example of this.

17:20You would never imagine Disney outsourcing its parks because they said, no, we're in the movie making business and we'll license our characters to a parks operator to do. They recognize it's the IP. Correct. That's where it takes me to the beginning when you ask, it's kind of like, if I can own IP, why would I let copyright expire? Why would I license it? Why would I do joint venture? If I have intellectual property over whatever spin-off, whatever venture I'm doing, then I'm not just making clothes, then I'm not just making content, then I'm not just making making feature films or experiences.

18:02That's not the business I mean. I mean, any potential business. I can make a hotel tomorrow. I can make food line. I can make a restaurant. I can, whatever that is, the way I'm making money at the end, consumer facing, it doesn't really matter. I'm making money at the beginning. Yeah. Well, I'd be really interested. I don't know if you know anything about this, but like, what kind of crossover do you think or know of is happening at Saint Laurent between the film production studio and the, you know. I don't think they're thinking the way we're talking about it. I think they're thinking as a vehicle to product placement, as a product placement.

18:40Because Emilia Perez, they had to tow their brands. So there was like, oh, Saint Laurent glasses. They were like, you know, Gucci. It was just like head to tow carrying brands. And I think even while not even carrying brands, they had to tow Saint Laurent. and so that was like oh we are just going to create our own ad which is one way of doing it the way we are talking is the future in 10 20 years when you're actually saying i'm going to own this entire world i'm going to create the world and i'm going to own every single piece of it like again disney but disney on steroids because if disney had food and restaurants and hospitality and books.

19:24I mean, they own a lot of that because Disney even hired now this streetwear guy, Bobby Hundreds, I mean, that's his Instagram name, to not create the next level merch, but help them with the drops, with the sort of retail aspect of it. Oh, so you hired him for the business aspect of it. Yes. Like, teach us the mechanics of this. Correct. So you see, like, they're kind of thinking, I don't know where that's going to, I haven't heard anything since, it was a year ago. so I don't know where they're going to take it maybe it's just for merch again and they're very good at merch but when you also think about Mattel they have I read somewhere about 45 movies coming up so you see that is that is somewhere where kind of retailers are thinking about creating content where I am also interested is how are curious creating retail because exactly what I was explained people do want to participate in those worlds beyond just enjoying a piece of content their product lines their capsules their full collections their brands movies are brands and why would they stop when you exit the movie theater they start way before and then you have during and then you have after and you want books you want to wear that.

20:50You want to maybe eat that. You want to wear the accessories. You want to wear clothes and so on. Like very often when you see, when you watch TV shows and you're like, oh my God, I want to wear succession wardrobe. That's like a known known. And then you scramble to take a photo and to put it in chat GPT and say, tell me what they're wearing. You know what I mean? Are you describing your weekend? very detailed you know the process very intimately

21:25so you but you see like this is a massive massive opportunity and and i like i just think that like there are there like and there is there is money to be made again like oh if you have creative direction for for for for the movie just extend it to to apparel and then either hire creative directors. There's so many fashion brands. So just like hire one of them to create a collection or like just hire a creative director to create specific. Spin off a temporary brand for that. 824, Brutalist, amazing knitwear. Just like hire a line out of it. Instead of making stupid t-shirts that said Brutalist on it.

22:05Like, you know, how many t-shirts from 824 one meets two? I bet there are people who have entire closets full. No doubt. I just wanted to say that. There is like a lot of they have the tools they have everything and like like you know good for them like that's the strength of their their brand again how like you need like you need to grow and it's great that you have a theater it's great that you have that space in in west village and a restaurant but it would be also even better if they had a hit in the past year you know because you first fix the core business and then go further but that's a separate so i do think also that has a lot like it does touch upon a lot of things that that i am interested in which is again and that you you and i are interested in which is that the portfolio approach which is also how do you organize for a constant cultural production and constant creative how do you organize as a as a movie studio which is how do you pull in the best creative talent at all times which means that your creativity can be siloed in your creative department or your marketing department and then also like how do you hire talent because like who did Saint Laurent hire they did go to Hollywood they did hire the best director Jim Jarmusch they hired Adam Driver they hired like like, Chloe Sevigny was in that movie.

23:34They had also Cate Blanchett was in that. You know, these are Oscar winners. This is the top talent that they want to be in those movies. Yeah. Well, I mean, obviously, the Saint Laurent brand is a pull to pull in that top talent. Like, I think if an unknown luxury fashion brand couldn't do it. The script was great. The money was there. The director was great. You know, like, the award was attached to it and so on. And so it doesn't really matter at the end of the day who is the producer if you have unbelievable creative projects. I think the interesting thing about the saying the wrong thing, maybe we're giving them too much credit for some of the thinking, but at least it provides a really interesting object lesson in at least what could be.

24:23Because, you know, this whole idea of brands making content is nothing new. I mean, I remember really early on in like the 2000s, BMW did the BMW films thing, which was very famous. And but it was to your point, it was just treated as marketing content. It was sort of like a longer form, more interesting, higher cost commercial where it was product placement for BMW. Very successful at the time. But I think what obviously you and I are talking about is very different. It's not just about creating more prestige or premium, longer form content that ultimately serves a marketing purpose. I think that happens just by the nature of creating something like a movie and putting it out there.

25:06But the bigger point here that we're leaning into is that it's really more about IP cultural production and being able to produce a lot of that, but then also to be able to monetize it and understand the different ways that you can create value and capture value in doing that from a single piece of content. Like one of my all-time favorite examples in this is he, oddly, the NFL. I think the NFL over its history has done a remarkable job of taking a game and finding so many different ways to carve it up and extract value from it. whether it was moving a game from Saturday to Sunday and doing Sunday football and selling the rice of that, creating the Super Bowl, selling the rice to that, creating Monday night football, selling the rice to that, creating Thursday night football, selling the rice to that, and on and on and on.

26:00And you spin off all these different ways of defining the value. Of course, then they have NFL films, which they create value from, and of course, the merchandise and all that type of stuff as well. But you could bucket a lot of this under just marketing. But when you start being able to look at marketing as an IP product, then the conversation about monetization and bundling and packaging of value comes into the equation. And all of a sudden, marketing is no longer a cost center, as a lot of people talk about it. It's now a profit center. It's a diversification of the portfolio of income streams for a business.

26:38And that's a very, very different way of thinking about it. But to be able to do that, you have to have a production capability that is constantly producing IP for your organization. And in the case of St. Laurent, that's why having it in-house is more valuable to them over the long run than partnering with a person whose business model focuses on prestige film production, for example. Anyway, that's what I find really interesting about it because it has a lot of downstream implications for how it changes the nature and dynamic of a business, how it changes the nature and dynamic of marketing, portfolio development, revenue management, and so on, if a company chooses to go in that direction?

27:20I think more and more are. And I mean, if you're talking about BMW, why we don't go all the way to the beginning of advertising and radio and soap operas, which again, were created in order to sell soap, literally. That's why they were called soap operas, because you sold soap by creating stories. So, which really does bring me to stories and i do think it's not even marketing as you say it's literally the brand because the brand is an idea and a story as a narrative like why are you creating something for apple like let's just take out the cynicism and the business aspect of it and say nike owns running let let's say they haven't owned running in a really long time but let's that was the intention Apple intention is to own creativity.

28:16So that is sort of the IP they started from the brand. So it's not even the marketing is even more upstream. It's the entire brand. So if you turn brand into intellectual property and you say, we do want to own this area, running creativity, telling stories for Saint Laurent, for caring about our founders, about our brands, what LVMH is doing. Or we are telling stories about Dior or what Chanel is doing. We are telling stories about Coco Chanel for 35 different angles. So either you're telling stories about founders or you're telling stories about the discipline. By the way, it's a massive miss that Iron Waffle Entertainment, nike's studio and entertainment arm did not tell a story about air which is a movie ben alflex movie about nike because they said and i learned that last week it's a great story they were like interested if it was a documentary but they were like it's a great story it was you know too you It was fictionalized, which is, I mean, that's what great stories are.

29:34Embellishments and, you know, give me always a great story. So for me, IP is going more upstream. This is how you manage your business. You're in a completely different business. And that is right now what I'm most interested in. And why are brands, apparel brands, luxury fashion brands, ran like retail companies and not ran like entertainment studios, which run as IP, which says we are going to tell this story. We are going to hire a producer, a production company. We are going to run a creative director who is going to bring the best talent, who is going to create, who is going to, the entire organization is creative organization.

30:22And we are going to, you know, and then we are going to create a lot of hits and some of them are going to work out and so on. And I know that sounds crazy, but in any, I'm talking about the future. I'm not talking about the now. And that also is how you treat your archives. And it's then the media, the marketing, the experiences, the events. And Prada is doing that. They have Art Foundation. They have Prada Marfa, which at the beginning had nothing to do with them. They have the yacht cup. They have the space suit. They have a Miu Miu book club. They have a cafe and a restaurant and so on. All of that is their IP.

31:01So one thing is not fashion is not doing so well. No problem. Foundation is doing well. Yacht doing well. They're always in culture, cultural production and stops. So let's use that to talk about F1 and what the Mercedes Patronus team has been doing in F1. So to kind of get everyone on board into this. So back in January, Mercedes-AMG Patronus quietly made a surprising hire for the F1 team, Eleanor Coleman. Eleanor was named the team's first ever styling and partnerships manager, a title more common at luxury fashion houses than Formula One teams. With Coleman, Mercedes is doing something we're seeing more and more across sports and entertainment, turning what used to be side stage marketing into a main stage business function.