Memo: Taylor Sheridan and His DTC Gamble

A former journeyman actor created one of the highest-potential modern brands and online marketplaces of today and he may not have to spend much on traditional advertising or paid marketing at all.

Taylor Sheridan, the creator of Yellowstone, created a multimedia universe like no one in or around Hollywood. With the launch of (and, he has a new way to monetize his love for the American west. What better than steaks and beer?

Sheridan is a creative phenom by any measure. The former ‘Sons of Anarchy’ and ‘Veronica Mars’ actor set aside his “failed acting career” to focus on telling tales from the modern American frontier (as he likes to frame it) while sharing those stories through the lens of how the past meets the present. The actor became a real name in Hollywood by hastily writing the screenplay for ‘Sicario’ (2015) in just four months and then having it in production shortly thereafter. He went on to write ‘Hell or High Water’ in 2016. For the former, he earned wide critical and commercial success. For the latter, he received an Academy Award nod for best original screenplay.

Born to a Texas ranching family, Sheridan leveraged his success of his first two films and the third critical success: ‘Wind River.’ The success of the three went on to establish a deal with Paramount Networks to develop a show inspired by the culture and calling he felt closest: ranching. The script that he co-created ended up becoming ‘Yellowstone.’ Widely considered one of the most popular scripted shows, the season five premiere earned 12.1 same day million viewers. No other scripted show has earned over eight million same-day viewers, this season. Sheridan maintains a prolific pace of writing stories on death, revenge, love, grief, and envy. Somewhat Shakespearean in his pace of production and his subject matter, ‘Yellowstone’ has been referred to as “King Lear in a Stetson.”(Collider, 2022).

With Yellowstone’s critical and commercial successes has come other projects; Paramount Network greenlit ‘1883’, ‘1923’, and ‘Yellowstone: 6666.’ Each are spin-offs designed to build on Yellowstone’s success (‘1883’ and ‘1923’ are prequels to the original series). Sheridan has also written ‘Mayor of Kingstown’ and ‘Tulsa King’ as standalone stories – both maintain his go-to themes of death, revenge, love, grief, and envy. Another series based on 19th century African-American lawman Bass Reeves (1883: The Bass Reeves Story) is set to begin shooting principle photography soon.

In five short years, Sheridan has developed an unparalleled film and television media empire. Now, he’s added commerce into the fold. And as you will read, his approach is high stakes.

In a recent conversation between 2PM and a separate, American media CEO: the business leader suggested that his company could launch a new media vertical and then acquire brands that merchandised products that would appeal to the fans of the media company. He wanted to turn viewers into consumers and consumers into customers. His suggestion felt revelatory to him; though it’s been done countless times. But never quite like this. Sheridan’s DTC gamble shares the spirit of this three year old report on linear commerce like few others before it:

The lines of demarcation between media and commerce are fading. For the brands that are most suited to the modern retail economy: media and commerce operations work to optimize for audience and sales conversion. This is the efficient path for sustained growth, retention, and profitability. Brands will develop publishing as a core competency, and publishers will develop retail operations as a core competency.

In that same report, I explained how the 130 year old Michelin star system may be one of the best examples of linear commerce. The principle behind the annual, fine dining publication was that Michelin would sell more tires by giving fine dining aficionados a reason to travel to more restaurants. As the concept went: burnt rubber and memorable dining moments meant more loyalty to (and use of) the Michelin brand of tires.

Over 120 years later and we’re still buying Michelin tires (or tyres, depending on where you’re from). It’s a similar age old problem that Sheridan is seeking to address with

Sheridan’s crown jewel, ‘Yellowstone’ is in its fifth and final season. The narrative is at a crossroads with John Dutton III on the verge of losing the legacy that his five-generation ranching family built before him. The finale of the ‘1883’ prequel foreshadowed this issue. An American Indian tribal leader named Spotted Eagle agreed to allow the first-generation of the Duttons to settle on its Montana lands. Spotted Eagle noted that his people would rise up and take it back in seven generations to which the Dutton family patriarch and pioneer responded, “You can have it.”

This season of the show features many of the fifth, sixth, and seventh generations of the Dutton family. In addition to the looming 119 year old omen of loss: there is politics, and social pressures, and the usual drama found on American television. Season five introduced a new focus on the economics of cattle supply and demand. In one scene, John and his daughter, Beth, discuss the astronomical costs of moving his herd of cattle to land away from a festering brucellosis infection that seems to be spreading throughout the herd. She asks him to sell the cows and he replied that a cow is worth $1.50 per pound. His daughter scoffed:

A good steak, she points out, can go for $30. Hamburger is, at worst, $5 a pound. Why is the ranch getting garbage money for its cattle when there’s money to be made in beef?

John replied that he “sells cattle, not beef.” And goes on to explain that his model has worked for over 100 years. In the final season of television’s most popular show, one that will end with a major change, the business of cattle is the focus. Sheridan is intentional about exploring whether or not the Dutton operation can modernize enough to survive in a different (um…DTC) form. According to Beth, maximizing profitability in the cattle ranching industry means going vertical and selling the product of cattle and not just the animals themselves. The lucrative products: loin, rib, brisket, and flank cuts are far more valuable to consumers than the whole of the cattle themselves.

Source: MTV Studios

For fans of Sheridan’s work, this scene was meta at best and cringe at worst. It was native advertising but it broke the fourth wall in a way that was abrupt and desperate. But the advertising worked and here I am writing about an online retail operation that I have watched over recent months. The episode made it clear that Four Sixes Reserve Steak wasn’t an offshoot of the 6666 Ranch business, it was the future of the ranch (and quickly earning Sheridan a return on investment). Beth was intentional in handing over the Macbook Pro screen with the example of going direct on it. It was the direct-to-consumer steak retailer of the ranch that Sheridan finalized the purchase of in early 2022:

The legendary Four Sixes Ranch (often written as the 6666 Ranch) was recently sold for just under $200 million to a group that’s believed to be led by Yellowstone creator Taylor Sheridan. Initial listings show that the owners sought more than $340 million for the 143,000-acre property.

With the acquisition of 6666 Ranch, Sheridan acquired three assets at once: the credibility that comes along with owning a 150 year old Texas ranch, a set for filming shows and movies that require expansive horizons and prairie lands, and a larger canvas upon which to use his vast, creative influence. The closing episodes of the show’s final season will be focused on moving Yellowstone from an aging model to a modern one. While in real life, Sheridan and his team of investors are doing the same for the legendary and historic ranch that he now owns. Yellowstone’s 60 second native advertisement was Sheridan’s first attempt at getting the word out at scale.

The Four Sixes Ranch isn’t Sheridan’s first rodeo (he’s an accomplished horse breeder) but the bet he’s making with this integration between art and retail is one with countless implications. Sheridan is going all in on the cattle raising and marketing business at a time when the industry is rife with turmoil between suppliers, packers, and their consumers.

The Academy Award-nominated writer will be joining NCBA as the keynote speaker for the 2023 Cattle Industry Convention and Trade Show’s opening session. The NCBA is “the voice of U.S. Cattlemen and Women.” Sheridan will be the rare celebrity that walks the convention’s halls but he will be a welcomed presence and his positioning with Four Sixes Reserve means he’s also an advocate for cattlemen of large and small ranches. No one in modern media has shed more light on the culture of ranchers and the “modern west” as Sheridan has. He’s glamorized the industry while casting a bright light on its struggles and sorrows. Sheridan has spent seven years building the credibility required to stand alongside legitimate cattlemen and the organizations (like the NCBA) that advocate for them:

We sit at the intersection of all of these different takes on what to do with the spread that we’ve seen over the last couple years — the disparity between packer margins and producer margins on cattle.

Now, he will try to galvanize them around his real world plans. There is a political risk for Sheridan. At the core of the Four Ranches DTC operation is an effort to address one of the many issues tolerated by producers who drive the American-sourced beef industry. In July 2022, wholesale food distributor Sysco filed a lawsuit against the four companies responsible for processing over 80% of the domestic cattle market according to Food Business News:

Beginning as early as 2015, the meat processors “exploited their market power in this highly concentrated market by conspiring to limit the supply, and fix the prices, of beef sold to Plaintiff in the US wholesale market,” the lawsuit alleged.

JBS, Cargill, National Beef, and Tyson deny any allegations of price fixing. Sheridan’s DTC bet is larger than the traditional narrative of direct-to-consumer success or failure – in some ways, his direct-to-consumer efforts puts him in competition with the four processors. At the NCBA, Sheridan will work to rally the dozens of other cattle-producing and / or processing operations, many of whom are pursuing DTC marketing as opportunities for themselves (here is a growing list).

Sheridan is betting that his media empire and shameless (fourth-wall breaking) native advertising can help suppliers by providing them a new marketing vein to sell more of what they directly supply without the big four who own 80+% of the processing industry. The Four Sixes website all but says this is the case: “We are proud to offer the Four Sixes Ranch Brand beef, which is sourced from a network of ranches, including our own, that meet grading, marbling and tenderness qualifications.”

Sheridan’s final season of ‘Yellowstone’ will explore the business model of DTC meat. It’s likely that the ensuing spinoff ‘Yellowstone: 6666 Ranch’ will double down on the changing economics of the industry. For the first time, Sheridan will give his fans the ability to play along in the story. When Beth picked up the phone to call the merchandiser at 6666 Ranch, the gentleman mentioned “we’ve sold 8 million pounds of beef this year.” While that was likely fictional, it’s a reasonable first-year mark given Sheridan’s reach and growing popularity. At $5 – $30 per pound and 8 million units moved, that goal would make Four Sixes Reserve a serious DTC business. One of the fastest growing, ever. The kind that could save a seventh generation ranch, a fictional one or otherwise.

By Web Smith | Art by Alex Remy  

Additional reading (very fascinating): Assessing Economic Impact That Would Follow Loss of US Beef Exports and Imports

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