On December 10th 2011 Louis CK decided to bypass selling his latest stand up comedy show at The Beacon Theatre in Manhattan via the usual method, and instead chose the riskier method of selling it directly to people without any geo-restriction or DRM. That was a ballsy move for him as it was his own money that had been invested and not that of one of the main distributors, plus it made the distributed video east to torrent.
Please bear in mind that I am not a company or a corporation. I’m just some guy. 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.
However, the idea payed off for him and that is down to a few key things
- The guy was honest, upfront and engaged his fans on a one to one basis regarding his decision
- He offered the end user a way to get hold of the video easily, in a download and/or via streaming in high quality for a fraction of the cost it would had been if distributed the normal way (DVD etc)
- There was no restriction on who could could get hold of the video. Normally there are restrictions in place that will prevent people from being able to watch their favourite video for a long time, and maybe it wouldn’t even air in their country. This is known as geo-restriction, and is one of the main reasons as to why people will ‘pirate‘ their favourite TV Shows/ movies
- No DRM
So, how did he do then? (via his site)
After 12hrs of the video going on sale, he sold over 50,000 copies making him $250,000. That alone paid for the production of the video ($170,000) and the cost of getting the site made ($32,000). That’s fantastic for just 12hrs.
As of today, 4 days after the video first went on sale, he has sold 110,000 copies for a total of $500,000. Now that’s good business sense.
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 (after taxes $75.58). 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.
Will the corporations eventually wake up to this and finally change the pre-historic business model for distribution, or are they happy to sit back and just keep blaming ‘piracy‘ for poor sales and distribution models.
I think the above case answers that particular question.
What are your thoughts?
I for one am massively grateful to Louis CK as hopefully, the success of his business model may actually wake up some of the large corporations and distributors to the fact that the way TV Shows and movies are currently distributed is incredibly out of date, and if they actually want to make money then they really need to offer the consumer more avenues to get access to it and get rid of the restrictions. I’m not saying that employing these points will stop piracy dead as you will always have people that will pirate, but if you really want to try and curtail it a lot, then that would help.
The distributors and corporations have to wake up to the fact that with today’s level of technology and the ease that every day users have access to it, then not distributing TV Shows/ Films/ Music etc in a fair and easy way plus at a reasonable price , then people will simply find other ways to get hold of it. It’s baffling that they still don’t understand this.
Pop over to Louis CK’s site to read his full statement here. It’s a great read and insightful.