Gigaom

What Louis C.K. Knows That Most Media Companies Don't


Until recently, comedian Louis C.K. was known mostly for a hilarious clip about how “everything is amazing but no one is happy,” which lampooned our inability to recognize our own good fortune and led to a TV show. Now he has become the new poster boy for the idea of selling content directly to fans, after the success of a video download he offered on his website without any digital-rights protection. And that success contains lessons for traditional media companies who continue to lock down their content and otherwise fail to take advantage of the social Web.

Louis C.K. (whose real name is Louis Szekely) announced earlier this week he was going to both live-stream a video of his latest stand-up routine—called Live at the Beacon Theater—and offer a download of the show for $5 on his website, without any copyright or digital-rights management (DRM) protection. Or as he described it: “No DRM, no regional restrictions, no crap. You can download this file, play it as much as you like, burn it to a DVD, whatever.” However, the comedian asked his fans to please avoid uploading the video to BitTorrent or other file-sharing sites, saying he wanted to be able to continue such self-financed experiments in the future:

“I paid for the production and posting of this video with my own money. I would like to be able to post more material to the fans in this way, which makes it cheaper for the buyer and more pleasant for me. So, please help me keep this being a good idea. I can’t stop you from torrenting; all I can do is politely ask you to pay your five little dollars, enjoy the video, and let other people find it in the same way.”

Many uploaded pirated copies, but thousands paid

As my colleague Ryan Lawler noted, this plea didn’t stop people from uploading copies of the video to the usual file-sharing websites and services, and within a matter of hours, there were dozens of copies of Live at the Beacon Theater available for free. But the interesting thing is this didn’t stop plenty of fans from paying for the video—in just four days, more than a hundred thousand people had downloaded and paid for it, racking up over $500,000 in revenue. According to a blog post from the comedian, the video paid for itself in less than 12 hours, and after four days he had cleared about $200,000 in profit.

Half a million dollars in revenue from a self-produced product may not compare to some of the millions developers have made from Facebook games or iPhone apps, but for a comedian, that has to be a nice windfall—and presumably that number will continue to rise. This is for a show Louis C.K. filmed and edited himself (he also said during a question-and-answer session on the Reddit site that he edits his TV show on his MacBook).

The comedian now joins the alternative rock group Radiohead and DJ mashup artist Girl Talk (both of whom have released “pay what you want” downloads) as an example of how successful a direct-to-fans approach can be. And Louis C.K.’s experiment shows this approach can have the same kind of disruptive effect on television and movies as it has had in music. So what can media companies—or other would-be independents—learn from his example?

It pays to be human: Louis C.K. likely got a lot of support in part because he opened himself up to his fans, via both his blog and the Q&A he did on Reddit, one of the site’s popular “Ask Me Anything” features. His openness on the site about his financial stake in the video no doubt helped encourage that support. Media companies too often focus on their corporate brand, not the human beings who actually create the content.

You have to make it easy: As the comedian described, he didn’t want to give his fans something with DVD region-encoding or DRM padlocks or other gimmicks because they are irritating. Instead, he made it as simple as possible for them to get something they could use in any way they want. This is the exact opposite of the approach most media companies take, and it virtually guarantees their content will be pirated as much as possible.

It’s better to be cheap: C.K. could probably have asked for $20 or even more for his video special—and a TV network or media conglomerate undoubtedly would have. But $5 makes it an easy choice for just about anyone who likes the comedian’s work or is even mildly interested. E-book prices have demonstrated the same thing: If you price it low enough, you can sell orders of magnitude more units than you would if you put a higher price tag on it.

Direct-to-fans is the way content works now

How could a traditional media entity take advantage of this phenomenon? By making it as easy as possible for the individual brands they have in their stable—whether it’s a comedian, a singer, or a newspaper columnist—to make direct contact with their fans. Mike Masnick at Techdirt has written a lot about how connecting with fans and giving them “a reason to buy” can benefit musicians and other artists, and former Wired magazine editor Kevin Kelly has also written about how an individual content creator only needs 1,000 loyal fans to make a living.

The elements of this approach that are probably the hardest for media companies to focus on are the “making it easy and cheap” parts. Media conglomerates are used to not only overcharging for their products, but locking them down and trying to control their distribution as tightly as possible—the idea of simply offering something for sale without DRM no doubt seems like insanity. But if more artists take the Louis C.K. route, who will be left to provide the locked-down content for those old media companies?

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Reviving Keynes
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