Squeezing the Middlemen
by Ronald C. Burkhardt
Comedian Louis CK [website, Twitter] is the latest of real world creatives to sidestep the various middlemen involved in content distribution to go it alone. He went directly to his fans, releasing a show taped at the Beacon Theater for the low price of $5. He also omitted any digital rights measures (DRM), opening the door to potential content piracy via various online methods such as download sites, torrents, or newsgroups.
Louis, in a stunning moment of transparency, released a statement breaking down his revenue, costs, and profits:
First of all, this was a premium video production, shot with six cameras over two performances at the Beacon Theater, which is a high-priced elite Manhattan venue. I directed this video myself and the production of the video cost around $170,000. (This was largely paid for by the tickets bought by the audiences at both shows). The material in the video was developed over months on the road and has never been seen on my show (LOUIE) or on any other special. The risks were thus: every new generation of material I create is my income, it’s like a farmer’s annual crop. The time and effort on my part was far more than if I’d done it with a big company. If I’d done it with a big company, I would have a guarantee of a sizable fee, as opposed to this way, where I’m actually investing my own money.The development of the website, which needed to be a very robust, reliable and carefully constructed website, was around $32,000. We worked for a number of weeks poring over the site to make sure every detail would give buyers a simple, optimal and humane experience for buying the video. I edited the video around the clock for the weeks between the show and the launch.The show went on sale at noon on Saturday, December 10th. 12 hours later, we had over 50,000 purchases and had earned $250,000, breaking even on the cost of production and website. As of Today, we’ve sold over 110,000 copies for a total of over $500,000. Minus some money for PayPal charges etc, I have a profit around $200,000 [...]. This is less than I would have been paid by a large company to simply perform the show and let them sell it to you, but they would have charged you about $20 for the video. They would have given you an encrypted and regionally restricted video of limited value, and they would have owned your private information for their own use. They would have withheld international availability indefinitely. This way, you only paid $5, you can use the video any way you want, and you can watch it in Dublin, whatever the city is in Belgium, or Dubai. I got paid nice, and I still own the video (as do you). You never have to join anything, and you never have to hear from us again.
By cutting out the various middlemen, Louis CK made more money for himself, delivered an unrestricted product, and provided it at a fraction of the price of a similar product as compared to the established systems.There are some caveats to this story. You are not Louis CK. You have not spent a career touring comedy circuits. You do not have a network TV show. You have not appeared on TV comedy specials. You have not been a guest on the late night TV shows. You are most certainly not in a position to have rented a hall and packed it with fans. The pearl of the story is unquestionably true – you can do better on your own selling outstanding content. Cross posted at my own site.