Red Bull's Billionaire Maniac

May 23rd, 2011  |  Source: Business Week

A rare interview granted to Business Week delves into why Dietrich Mateschitz is making a bold move into TV, movies, and magazines.

Little known outside of his native Austria, Dietrich Mateschitz is one of the most successful entrepreneurs of our age, a man who single-handedly changed the landscape of the beverage industry by creating not just a new brand but a whole new category: the energy drink. As the visionary who brought the world Red Bull, affectionately known as "speed in a can" or even "liquid cocaine," Mateschitz, 67, has been a patron saint for more than two decades to late-night partiers, exam-week undergrads, long-haul truckers, and, above all, extreme-sports athletes everywhere.

In return for his sickly sweet innovation, the world has made him very, very rich. Last year the privately held company, also named Red Bull, says it sold 4.2 billion cans of its drink, including more than a billion in the U.S. alone. That represents a 7.9 percent increase over the year before, and revenues jumped 15.8 percent to $5.175 billion. Mateschitz runs an efficient enterprise that has yet to trip on its rapid growth: At the end of 2004, he had just 2,605 employees; in 2010, Red Bull employed 7,758 people—which works out to more than $667,000 in revenue per person.

Now he's set his sights on media. On May 15, subscribers to the Los Angeles TimesChicago TribuneMiami Herald,Houston Chronicle, and New York Daily News found a magazine called Red Bulletin inserted in their Sunday papers. The 98-page glossy features a cover story on San Francisco Giants ace Tim Lincecum, as well as pieces on Bob Dylan, graffiti art, and Russian BASE jumper Valery Rozov. Billed as "an almost independent monthly," the magazine is a product of Red Bull Media House, a subsidiary media company launched in Austria in 2007 that expanded with a Los Angeles outpost this January.

Red Bull knows what it's getting into. Over the years, it has produced TV programs (No Limits on ESPN), films (That's It, That's All), magazines, a website, and a steady diet of Web videos featuring snowboarders, rally cars, surfers, cliff divers, and concerts. Even so, its current ambitions reflect a serious ramping up, as well as the realization of a business plan that eschews conventional advertising in favor of marketing through its own events, shows, and publications. The company shipped more than 1.2 million copies of the first Red Bulletin in the U.S. (about one-third of Sports Illustrated's paid circulation). This fall its first feature-length documentary, a look at snowboarding called The Art of Flight, will be released in U.S. theaters. Earlier this year, the company announced a partnership with Bunim/Murray Productions, best known for creating the Real World reality-show franchise on MTV. The two are working on reality TV concepts for Red Bull athletes.

Mateschitz calls the multimedia assault "our most important line extension so far. As a major content provider, it is our goal to communicate and distribute the 'World of Red Bull' in all major media segments, from TV to print to new media to our music record label." He hopes Red Bull Media House will turn a profit, but, as with his sports teams, he's willing to wait. "In literal financial terms, our sports teams are not yet profitable, but in value terms, they are," he says. "The total editorial media value plus the media assets created around the teams are superior to pure advertising expenditures."

Red Bull has employees in 161 countries, but most of the major decisions still get made either at Red Bull's headquarters in Fuschl, an Austrian village of 1,500, or at Hangar-7, Mateschitz's private airplane complex a few minutes outside Salzburg.

Though he rarely gives interviews, Mateschitz's Hangar-7 provides ample evidence that he is not shy about his success. 

Abstract only, for the full article go to: http://www.businessweek.com/magazine/content/11_22/b4230064852768.htm

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