I meant to write about this a few days ago.
US comedian Louis CK (I hadn’t heard of him, but he seems pretty popular) decided to produce a good version of his latest live show and make it available online for $5.
Nek Minnit (well 12 days later) he made $1 million.
Comedian Louis CK has proved a point: People are willing to pay a reasonable amount of money for DRM-free content from a performer they love, even though it would be trivial for them to pirate the same content for free.
Twelve days ago, Louis CK decided to skip the distribution, DRM, ads and everything else that goes into marketing and sale of a video, and simply offer the video of his latest performance on his website for $US5.
It took four days for Louis to earn $US200,000, and another 8 days to earn a whopping $US1 million.
It blows out the water the view that content has to be locked up with laws to enforce it because too many people will only steal it. In fact people will pay money to get access to new content. If the price is right and the product is what they want.
Louis CK posted a blog saying he would keep just $220,000 from his $1m.
He said:
So I’m breaking the million into four pieces.
the first 250k is going to pay back what the special cost to produce and the website to build.
The second 250k is going back to my staff and the people who work for me on the special and on my show. I’m giving them a big fat bonus.
The third 280k is going to a few different charities. They are listed below in case you’d like to donate to them also. Some of these i learned about through friends, some were recomended through twitter.
That leaves me with 220k for myself. Some of that will pay my rent and will care for my children. The rest I will do terrible, horrible things with and none of that is any of your business. In any case, to me, 220k is enough out of a million.
I had a quick look at Louis CK’s stuff. Here is is a clip on Youtube (not the $5 version). Pretty out there, but worth paying for. I think the business model is pretty obvious. It’s just a pity that he had to spend the money himself upfront to develop the tools to distribute his work.
Imagine if that technology was readily available to artists for a small fee. Imagine if the New Zealand tech industry was encouraged to go for it.
Another point to end on. Digital Rights Management (DRM) is the technology used by hardware manufacturers, publishers, copyright holders and individuals with the intent to limit the use of digital content and devices after sale.
Companies such as Amazon, AOL, Apple Inc., the BBC, Microsoft and Sony use digital rights management. In 1998 the Digital Millennium Copyright Act (DMCA) was passed in the United States to impose criminal penalties on those who make available technologies whose primary purpose and function is to circumvent content protection technologies.[1] The use of digital rights management is controversial. Corporations claim that DRM is necessary to fight copyright infringement online and that it can help the copyright holder maintain artistic control[2] or ensure continued revenue streams.[3] Those opposed to DRM argue that there is no evidence that DRM helps prevent copyright infringement and that DRM helps big business stifle innovation and competition.[4] Proponents argue that digital locks should be considered necessary to prevent intellectual property from being stolen, just as physical locks are needed to prevent personal property from being stolen.
I thought it was interesting that I learnt about Louis CK’s online business endeavours through twitter via the ABC’s managing director Mark Scott who tweeted:
“The comedian (is) providing lessons in the future of digital rights management”.
Prescience from the head of Australia’s public broadcaster. It would be good to have a bit more debate about it here.
Louis C.K. succeeds as an entertainer with a cult following. He has built a relationship with his audience, who will spend the $5 out of a sense of loyalty, combined with a perceived lack of barrier to purchase.
This formula will work well for artists who achieve prominence through word of mouth and relentless touring; the more A&R-lead, mass-market product will inevitably revert to bog standard DRM madness via iTunes et al.
I’m particularly interested in finding out how material without a “personal brand”, such as films, might succeed using C.K’s model, or something similar. Anyway, the prospects are very exciting for independent artists.
“Imagine if that technology was readily available to artists for a small fee.”
The website and production costs for one show were $250,000. You suggesting the taxpayer picks that up?
Alternatively, artists can learn a spot of html or buy a very cheap web production package, pay a few dollars a year for a domain and a few more, say $40pa for hosting, and do it themselves. Cost – under $100. Value of self reliance – priceless.
@kthxbai
A large portion of the $250,000 will have been spent on server bandwidth costs. We’re not talking about a a couple of people looking at a simple HTML page – it’s several hundred thousand users, each downloading a video file in excess of a gigabyte in size.
The challenge is in building a platform which can deliver such an undertaking in a way that is accessible for independent artists and production companies (perhaps a bundle of web services? Louis C.K. was using Paypal for his payment gateway),
There are an array of issues which policy-makers need to consider, beyond the enterprise. Net neutrality and rights management spring to mind, which will have a direct impact on creative industries.
Slightly OT, but great to see that Louis CK will be giving something to Kiva.org where a loan of US$25 can make a real difference.
No income tax paid? Sounds great to me!
How will Labour apply CGT to such entreprenuers?
Wish I knew what the hell it is all about ? But that is ignorant me, didn’t get to Uni, so am just plain ignorant.
Fortran, not hard to get your head around. Click on the links. Basic business principles really. There are a few policy issues for the politicians to ponder. Mainly it’s about encouraging new and especially local innovation to get our artists and creators distributing their works online where they get the benefits, not a middleman distributor.
Net neutrality as mentioned by Nick is about who gets to control the flow of content or access to networks on the internet. Those who believe in net neutrality think there should be no restrictions. And that all internet traffic should be treated equally. Consumer advocates, online organisations and some tech companies are in favour of this.
Opponents of net neutrality include many established hardware and telco companies. They argue that net neutrality is a violation of the property rights of internet service providers becasue they produce and own access to the internet.
There are similar arguments with digital rights management. Policy makers are grappling with these issues around the world (not very well). In the meantime, more people are accessing for free (often illegally) the material they want and can’t easily get through established distribution methods.
Louis UK decided to make his stuff available cheaply and easily and he is reaping the benefits. His model won’t work for everyone, but we need more people like him to take the plunge.
Our government could be encouraging such models to develop here for our creators. Sadly, most of them don’t have a clue what the issues are all about.
Just as an aside, Louis CK has an official channel on youtube here http://www.youtube.com/user/louisck?blend=1&ob=4 , that video you’ve linked to is an unofficial upload by someone who (most likely) doesn’t have permission to do so. Ie, the form of everyday piracy that Louis is trying to combat…
Whats so new about direct selling ?
It used to be called door to door, that was in the day when there was usually someone at home to answer the door. But there were heaps of things you could buy other than vacuum cleaners.
A couple hundred thousand people paid for this show. This will be a mere fraction of the actual number of people who will watch it (remember just because you haven’t heard of him, doesn’t mean he’s unheard of). So of the millions of people who enjoy his humour, a few have decided to reward him for it. Imagine having no international exposure and expecting the public to pay $1, let alone $5, to watch/listen to your crappy video/music. Good luck buddy.
“Our government could be encouraging such models to develop here for our creators. Sadly, most of them don’t have a clue what the issues are all about.”
Seems like somedays you fall into that category too Clare.
Wheres the model for TVNZ to allow people to pay a fee to download shows from their on demand site? I rather dislike ondemand as it’s slow, clunky and has absolutely no redeeming features. No ability to stretch the picture, no ability to toggle the sound, no subtitles and you have to download it each and every time you want to watch something again!
That’s the most ridiculous part of it – I’ve seen it once, why do I have to waste bandwidth to watch it again.
I watched his show for a while, it’s a simular format to sienfeld, switching between his life and his stand up comedy. But some of the things he says are absolutely outrageous. For e.g, it should be legal to rape children because then rapists would return the child afterwards rather than kill it. I’m really not PC but thats just way past the line… don’t really like the guy.
Agreed, that sounds dodgy!!!!!
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@Ghost – I wouldn’t mind a certain beverage being sold door to door!
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