I'm glad he made some money on it. His mind will be blown when the 'long tail' kicks in (people buying this video 3 years from now, still). He mentions "This [$200,000] 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."
Here is the part where this can go off the rails. So the long tail will hit, people will 'discover' him (maybe on his second or third video) and will download this one. There will be many copies out there in circulation. The temptation will be to think "Gee if people couldn't just get one of those copies out there already I would be making even more money!" Completely losing sight of the fact that the videos out there are an agent for discovery and 'tasting' which is bringing more people to his web site.
People sometimes go all green with greed when that happens. Money can do that to people sadly.
That being said, the really cool thing is it adds another 'success' story to Trent Raznor's Radiohead (I don't think they were ever this transparent with the numbers there but I may be wrong) and makes it harder to dismiss the successes as 'anomalous' rather than 'reasonable expectation'. It is the presence of success stories that will get more and more people to move this way.
I wish it wasn't like water eroding a rock though, progress will be rapid when the flood starts but for now it is just a trickle.
Back in the early days of the internet, I was the IT Manager at Nettwerk Records. We went out of our way to put complete, high quality MP3's of every song we owned the rights to online, for free, because we were willing to let the music stand on its own. We believed that it was worth giving potential new fans the chance to hear what they were (hopefully) buying, and that really was the case.
We had so much obscure music in the back catalogue that people would browse our archives, find a band that they'd never heard before, listen to a few songs, and then buy one of their CD's. More often than not, people would buy multiple CD's.
For that matter, when Sarah McLachlan's first big album, Surfacing, came out, the day that it hit the shelves we also put the entire thing in (for the time) high quality MP3's up on our web site for people to grab copies of.
And even if they didn't buy the CD, we hoped that they'd enjoy the music enough that they'd come out to see her in concert, or at Lilith Fair.
That kind of worked out not too badly, it turns out.
This is because the modern music industry honestly believes that it is going to go the way of a dodo.
When you think that your sources of revenue are dying, it makes sense to try and extract as much as you can from them on the short term, despite the damage it does to them long term.
Of course, this makes the prediction self-reinforcing.
I would actually counter that it's not the music industry that believes it's going the way of the dodo. I'm in the music industry. Have been for almost 15 years now and have never worried for one second about my career. I'm a musician though.
The people who are rightly worrying that their jobs are in peril are the suits (though often dressed in Tshirts and ballcaps) who bring less and less value in an age where experiments like Louis C.K.'s are a widely publicized and self-produced success. Disruption at it's finest and most liberating.
You're basically right, I just want to reinforce that there are lots of us modern music industry types who couldn't be happier about "the situation".
As a side note, I wonder how someone could plot the frequency of usage of auto-tune in the studio with record sales.
One thing that most people don't realize is that a lot of the major record companies are in fact more manufacturing and distribution companies than anything.
Here in Canada, EMI produces and delivers, via physical distribution, a huge number of CD's and DVD's.
As soon as things "go digital", that goes away.
I think that physical channel, more than anything, is what they've been trying to salvage, by staying away from digital.
I worked for one of the big 5/4/3 music companies and they are actually desperate for physical distribution to go away.
Universal Music (the largest music company) sold its CD manufacturing plants a few years ago and all their focus is on digital exploitations. They are looking to the future and that rarely includes people buying CDs in retail stores.
I can't stress how desperate they are to take advantage of the huge number of digital assets that they own. So, start-ups, don't be too afraid of them. If you have a way for them to make money they will be interested in you, just don't assume they are idiots.
You may also want to start thinking about writing software to help them manage the millions of digital assets that they have - its not a simple problem - imagine the digital rights that needing tracking (for every type of exploitation in every territory), the royalties to be paid, the SOX auditing, the contracts, digital workflows, let alone the challenges with taking digital content and pushing it to a huge variety of downstream partners.
If you have a way for them to make money they will be interested in you, just don't assume they are idiots.
That's a really polite way of saying "They will squeeze the last drop of blood out of you and then some".
You may also want to start thinking about writing software to help them manage [...]
We already have the software. It's called spotify, soundcloud, grooveshark, iTunes etc. The technology to pay the artists a slice of the revenue is in place. Except currently it's mostly used to pay the labels instead.
That's a really polite way of saying "They will squeeze the last drop of blood out of you and then some".
Very true! However, they do have a lot of cash and very few ideas of how to exploit all their digital assets.
We already have the software. It's called spotify, soundcloud, grooveshark, iTunes etc. The technology to pay the artists a slice of the revenue is in place. Except currently it's mostly used to pay the labels instead.
I didn't mean software for end users, but software for the music companies to use internally to manage their assets. You'll be surprised (or not) to know quite how disjointed and hacked together their internal systems are. Every music company merger results in years of hacks in getting data from one set of archaic systems into another. Of course, the same software could also be used for managing other media, such as film, tv etc - there are small companies that have done very well supplying custom software to entertainment companies
e.g http://www.ecteon.com/products-overview
You'll be surprised (or not) to know quite how disjointed and hacked together their internal systems are.
Not surprised, I've witnessed it first hand (I've been with a music startup).
My argument is that they don't have a software-problem. Managing an inventory of a couple million items is by no means rocket science, they could fix that in a couple months. What the best software can't fix is their mindset, which is firmly stuck in long expired business-models.
Dealing with one of the so-called "majors" is like dealing with a really stubborn 3yr old. You can forever explain the simplest realities to them in the simplest terms - they will still insist on their objectively absurd position and use all the remaining power that they have to make your life miserable in every possible way.
The best strategy is to stay far away from them until they run of money and their inventory moves into more clueful hands. Unless you want to be the one to take-over their inventory of course. In that case I wish you the best of luck - and nerves of steel.
Maybe the first founder didn't know the right people?
Probably.
Music companies are entertainment companies so are still extremely relationship-oriented businesses - far beyond the way conventional businesses are (such as software companies, manufacturers, retailers, etc). To be a top exec at a music company does not necessarily depend on skill or acumen.
Music execs can fail horribly at one company and then effortlessly transition into another great exec job at a competing music company. It's a small world. The music industry has this idea that its very complex and difficult and needs years of experience - but its really not.
If your founder happened to know the right exec in an e-commerce department and was able to show a demo/trial you could have been in with a chance. Anything related to billing software always has a good chance because its easy to make a case how it is generating revenue from day one. That's a difficult thing to do.
So why was this not more widely adopted? I mean, if you want to convince a corporation to adopt some business model, all yo have to do is show it's more profitable. Or is that naive?
How do you demonstrate that a fan is more profitable with something more than speculation? In a way that can still be charted in a PowerPoint for the suits to see?
You demonstrate the opposite; that pissing off fans is unprofitable. The music industry is no stranger to speculative charts and graphs; they use them all the time to justify their stance on piracy! "Potential revenue lost".
But back in the early days of the Internet, the hassle/quality/price ratios were not the same, so I suspect that would not work as well these days.
For a start downloading a full CD would be quite a faf back when most people had dial-up or something else slow as their main connection method. Costly too if you were in a country/area where there were no plans that didn't result in you paying per minute for time on dial-up.
To keep the download size manageable you'd have to use a relatively low bitrate, which would probably mean most people could tell the difference between them and the CD, especially with the older compressors with psycoacoustic models inferior to those used today (giving the choice on dial-up: high quality some time later today, or low quality sooner).
Being able to download a track, at a high enough quality that you can't tell the difference without breaking out a spectrum analyser, in a matter of seconds means the number of people paying for the CD because that is easier is going to fall drastically. The number of people buying other merchandise of tickets for live gigs might remain more constant though: physical delivery and "being there" can't be refactored by a fast connection in the same way.
I think that kind of thing is often also done with a twist: the artist whose content is put online for free (or very cheap) does not get a dime. After all, no money is made from selling his stuff. Meanwhile the company profits nicely in the way you describe, selling other stuff.
Not saying it worked that way for you, just that it is an old technique...
But a major challenge remains, and it's this: Trent Reznor, Radiohead, and even Louis C.K. were all hugely popular and successful before they employed this model. Can the model work for lesser-known artists attempting to capture an audience?
In theory, sure. If anything, I could see this model's working out quite well for the proverbial little guy. But first, that little guy faces a big challenge: how to get himself noticed. How to turn himself into a Radiohead without the tens (hundreds?) of millions of dollars that EMI spent marketing and promoting and touring Radiohead, over 20-odd years, prior to the band's online release of "In Rainbows." How to turn himself into a Louis C.K. without two major HBO series deals, a bevy of TV roles, sponsored tours, and a movie role or two.
In looking at the majorly successful artists in pop culture today, we see that 99.99% of them were "made" by a big company or series of big companies. They were self-made in the sense that they quietly worked in the trenches, perfecting their craft, sometimes for decades, before they hit their big breaks. But big breaks were necessary conditions of becoming superstars. And becoming a superstar seems to be a necessary condition for big success in this model.
[I don't want to get onto too wild of a tangent, and start discussing the philosophical meaning of "success." For some, success might mean simply making a living as an artist. I get that, and I respect that. I'm putting that aside for the moment, however, and focusing on the top of the game.]
I'm anything but an apologist for the current model. But if it disappears, we haven't necessarily made life any better for lesser-known artists. So if we are to remove one of the critical steps to success (i.e., the marketing and promotional spend of traditional labels, publishers, networks, and studios), we should hope that there's a viable replacement. Or we should try to build one.
In our haste to cast out the old guard, we tend to lose sight of the fact that the old guard still fills what appears to be a necessary purpose: the breaking-out of artists. I'm confident and hopeful that their crucial role in that purpose will, eventually, weaken or fade. But for now, it's still a strong reality.
Ultimately, we have yet to see indications that this new model is any kinder to small-time or nascent artists than the old model is. That's the big problem. The winners of the new model (Radiohead, Trent Reznor, Louis C.K., et al.) have first been winners of the old model. So it's very premature to say that the new model is better for the little guy.
To put it in financial terms: the new model holds bigger theoretical upside (share of profits) for artists and consumers (reduced costs). But it does nothing about the downside (risk of never breaking out, financial burden of building a fanbase, etc.), and may even make the downside worse for most artists. At least the little guy in today's model has a chance, albeit extremely slim, of getting discovered and catching a big break. But will the same thing be true in a pure long-tail environment? The jury is still out.
"In our haste to cast out the old guard, we tend to lose sight of the fact that the old guard still fills what appears to be a necessary purpose: the breaking-out of artists. I'm confident and hopeful that their crucial role in that purpose will, eventually, weaken or fade. But for now, it's still a strong reality."
To be totally but somewhat apologetically blunt - that is a steaming pile of BS. That is the exact party line repeated by every single rank and file music industry do-nothing to justify their phony-baloney jobs.
In my own personal experience, affiliation with a record label as a young and growing artist is almost certainly more likely to handicap your chances at success than it is to actually help it. The reason is that when the young artist buys into the party line that "you need the major label machinery to grow your career", the artist then hands over a large amount of control and trust to a supposed "experienced, connected industry professional" to do a job that 99 times out of 100 would be better off done by the artist themselves.
Not only that, but the young artist has no idea that the supposed "experienced, connected industry professional" has zero interest in or understanding of what it is that the artist actually has going for them, either artistically via their music or commercially via their fanbase. At that point all they know is that for some reason, things aren't working out as everybody had hoped it would with the new label. They find out later that they are essentially paying a 100% interest rate on their advance for the privilege of believing this in the first place.
I and all of my buddies in other bands live our lives in the long-tail environment and we play for larger crowds and make more money than probably 98% of the suckers that take the advice to place their bets on "the traditional industry model". And we own our souls outright. You've probably never heard of any of us, but we're okay with that.
THE ONLY WAY FORWARD is to once and for all crush the notion that the "traditional industry model" is anything other than a parasite that eats hopeful and talented artists and excretes auto-tuned plastic dolls.
> So if we are to remove one of the critical steps to success (i.e., the marketing and promotional spend of traditional labels, publishers, networks, and studios)
This is still marketing. By removing the publisher, which specializes in marketing, we put the burden of publishing duties on the artist.
Note how financially successful, award-winning, prime-time comedian Louis CK is playing the little guy against the publishers, mentioning that he financed it all (much like a publisher would do).
Who knows who he's paying or how much. The role he's playing implies that all the cash goes straight to him, the artist, but did he pay anyone for the production? Does he have a future royalty agreement with an agent or, perhaps, a channel like Comedy Central? Is he paying for advertising, or has he hired a marketing manager/publisher to rustle up publicity? Is he calling in favors to get mentions on news sites (much like a publisher would do)?
I'm not being cynical, just that he's playing the game very well, he's using his fame/brand to leverage sales, and that this distribution method doesn't really change anything except move the same roles elsewhere.
There are lots of examples of artists blowing up without labels (though some subsequently start their own or get signed) in the past few years by distributing their music on the internet for free. See: Pretty Lights, Girl Talk, Odd Future, The Weeknd, Justin Bieber, etc. It won't be viable for every artist/band but neither is the music industry of old. You must bring something special because otherwise nobody will care.
It's not clear the internet has actually improved the odds, though. There are plenty of examples of artists DIYing their way to at least moderate prominence decades ago as well; particularly common in punk-rock, where you've got Bad Religion, Fugazi, Crass, etc. You didn't have blogs to promote your music, but did have zines, flyers at shows, college radio, etc.
The current model doesn't work for most less popular artists. All the artists who came up through the system and are now superstars were less popular once, and the promotional machinery had a big part in making them popular (and rich).
This is sort of how I feel about the traditional publishing industry. The way it's worked traditionally is that can't quite tell which authors are going to be big sellers, so you take a chance on a bunch, and the more successful ones subsidize the less successful. Now the successful ones for obvious reasons resent this and can shift to a self-publishing model. The problem is they never would have gotten successful had some publisher taken that initial chance on them. Where's the next generation coming from?
An interesting angle is that the current model actually works quite well for the least popular artists: someone else pays for the cost of recording, usually at least a small advance, and tour, and if the record ends up selling nothing and the tour is a bust, the label eats the expenses. Such people would be quite a bit worse off if they paid for the recording/tour out of pocket and it went nowhere. The people who get screwed are those who do moderately well, where the record company takes most of the profits.
But this is a symptom of one-size-fits-all solution the labels cram people into. Like VCs, they don't care at all about moderate success, anything less than phenomenal success is failure to them. So they'll burn your band/company out trying for unreasonable goals instead of helping you achieve whatever you can.
Your band could have been poised to be a very successful mid-level act and have been mispositioned, because mid-level acts aren't hugely profitable, and thus seemed to be a failure in a market you weren't wanting to compete in.
The small bands don't need a ton of financial support, especially these days. Recording a song can be done, professionally, for just a few thousand dollars and traveling to nearby concerts is pretty cheap. If you drop the idea of trying to sell an album in stores (payola!), and doing continent-wide tours, it's not all that expensive to spread your music to fans and enjoy a moderate return on investment.
Well there are also people like Jonathan Coulton (the guy who sings "code monkey") who started with nothing and built a fan base. Also he did the ending song for both Portal games.
No doubt there are examples of people who built a fanbase online from nothing.
But I'm sure it helps a lot if you happen to write songs that appeal to nerds and then get featured on slashdot as a sort of novelty act. I don't see that working as well if you write earnest alt-folk love songs instead of songs about Mountain Dew.
Incidentally, there was a story about Coulton on NPR not long ago [1].
But I'm sure it helps a lot if you happen to write songs that appeal to nerds and then get featured on slashdot as a sort of novelty act.
Isn't that kind of the whole point though? You can't just be a no-name, release some music that is very similar to a large number of artists in a popular genre of music, and then expect to hit it big.
The internet is not restricted to nerds anymore. Sure, your average musician isn't likely to get a mention on Slashdot, but there are about a zillion different forums/blogs/etc out there covering a zillion different topics, and if your music appeals to even a small subset of them you can get some pretty cheap advertising. And if your music is good, you can start to build off of that.
I think the important fact is that this worked. If this did not work even for someone with a sizable reputation and fan base, then the outcome would be bleak for those who do not. Plus as more people follow this path with success, even those who do not can benefit. The studios and other agencies may have to compete with this model, and in the process hopefully improve the current model for those who are still under it.
I had never heard of Pomplamoose before stumbling upon them on YouTube. They seem to do well. Jonathan Coulton has been mentioned, who I knew before Portal came into existence and made him even more famous. Can't remember how I found out about MC Frontalot, but I bet I never would have heard about him at all in times before music production and distribution became virtually free.
Novelty acts? Sure. But they're proof that it's possible to become reasonably successful without the help of traditional media outlets if there's an audience for your work out there (I think most artists are–understandably–delusional about this one).
Anyway, I think curation is becoming more important and influental nowadays. And curators used to be much more (totally?) dependent on what the industry decided to provide them with.
It is no more so. I see no reason to worry about that (being a recording and performing artist myself).
"quietly worked in the trenches, perfecting their craft, sometimes for decades, before they hit their big breaks. But big breaks were necessary conditions of becoming superstars"
Right and I would add that the model also worked because the supply was constrained on talent by the those offering the break. It's possible that we will hit (and are already hitting) a talent saturation point there is only so much entertainment pie that an individual will pay for or needs to consume. I mean my time reading HN takes away from the time that I used to spend reading other sites.
This is exactly what I was thinking. No one knew who he was, and I'm still seeing Minecraft as one of the most popular apps on the iPhone.
It's currently the 25th highest grossing app, 12th if you exclude all the free games that rely on in game purchases.
The fact that my wife knows what Minecraft is speaks worlds, when I barely get her to pick up an xbox remote, let alone think she'd find an obscure indie developer.
More valuable than the long tail is that he probably has an email list of ~20,000 people -- and more by the hour -- who have demonstrated interest in paying money for Louis C.K. comedy specials. I trust I don't need to tell you what to do with that if you're the exclusive producer of Louis C.K. comedy specials.
When you go to the purchase screen you can choose between "contact me," and "don't contact me." To Louis' credit the default is "don't contact me," but I as a fan actually opted in to receive future notifications. I fully expect to be notified next time this opportunity arises (and I am probably not alone).
I opted in as well. I was sort of disappointed that the results of the "opt-out sub-experiment" weren't discussed in this statement. He's mentioned it in interviews - on NPR and repeatedly on reddit, at least - that he's got huge feedback on that little decision. It's also something that people, present company included, love to talk about. It would be interesting to see how many people decided to opt-in because he defaulted to opt-out.
I'm curious where you're getting the 20k figure from. He mentions only that he's sold over 110k copies, but not what percentage of people opted in to the mail list.
Its a guesstimate based on what clients of mine or I get for opt-in in similar situations, with a discount based on his customer population disproportionately being Redditors or demographically similar to them. I figured "Meh, 20% sounds about right."
> Radiohead and Trent(nine inch nails with ghosts) did the same thing but at different times
Not exactly the same thing: Ghosts I-IV was fixed price(s), provided lossless downloads, under a very permissive CC license and the first quarter was put on torrent sites directly.
It will be interesting to see the analytics of the sale in a long term model, and see if there is a long tail, or if it's just a stubby tail. Like many, I hope that it is long. But this is currently on a single website, and not through a major distribution channel (one of the initial appeals). If he gets the content onto other services, then I imagine the tail would be longer. He should get it on Netflix, etc, if a true long tail is desired.
"It is the presence of success stories that will get more and more people to move this way."
Absolutely. There's a very recent (<60 years) misconception (among artists and fans alike) that creating (as opposed to performing) music is a standard career choice and if you're at all good at it, you should be able to make a living off of it, and if you're not it's because the labels screwed you over. This causes musicians to vie for the favors of the industry they profess to despise.
These guys going out and actually making it happen on their own (even if the initial entrants have a historical advantage) will erode that sense of entitlement, and thus erode the willingness to submit to the industry that artists have.
Eventually, hopefully, musicians will be busting ass, giving away their music to fans early in their career, and getting increased funding/patronage as they go along, just like every other artist has since ancient times, not positioning themselves for a deal and being depressed if there's no A&R people at their big show. The most talented will likely still get rich, the one-hit wonders will go back to their day jobs, and if we're lucky, music will again be created by those who love doing so.
I really believe content distribution has to work this way, so much so that we've created a site (http://momeant.com) that allows you to enjoy content and then "reward" it after the fact. As Louis proved, audiences will support something they find value in, especially if the price is spread across a large volume of people.
This is so true; and so well deserved!
I'm 'guesstimating' wildly, but would not be surprised if the end revenue for 12 months hit $3.5+ million for this 'project'.
Again: Well deserved and I for one feel like I got $100 worth of awesome, for a bargain price!
Devil's advocate: In the post, he himself says he would've earned more by doing a show for HBO/Comedy Central/other (also note that he mentions, but doesn't factor in the cost of his own time in putting this all together).
Given that a lot of people purchased this only to support "the experiment" (i.e. they might not buy the next time he or someone else does this), does this really demonstrate the success of selling independently?
Yes, he still owns the material and can resell it to Netflix or whoever. Yes, he will continue to earn money from it. But I imagine most of his true fan base will have already purchased it by now, so how many people are there really left to reach?
Don't get me wrong, I would love to see this all become the standard way of distributing content. I think it will eventually happen.
But what does it say that today's most most popular working comedian makes less money selling independently?
EDIT: Based on these numbers, yes, Louis CK will end up making more money this way. But to say he hasn't done any publicity to this point is stretching the truth - he's promoted it all over his Twitter, gone on Reddit, did an interview on NPR, etc. It's not like he just dropped this out of the blue without warning. But my overall point isn't whether it will work out financially for Louis CK (clearly, it will) - it's that the circumstances of this business model work for Louis CK, but not necessarily others following in his footsteps.
EDIT2: Also, it's not as if others going the traditional route wouldn't make money in perpetuity. Maybe Eddie Murphy only got a standard fee for his Raw standup special, but surely he's getting residuals from DVD sales.
I don't think there is any evidence to support the notion that "a lot of people purchased this only to support the experiment." Sure, some folks on a HN thread commented to this effect, but I think that the vast majority of the 111000+ people who bought this probably like Louis CK. I recognize that I don't have any data to support my assertion either, but given the options of "buy this because I like Louis CK" and "buy this because I like alternative distribution models," I am fairly confident that more people are on the side of the former.
I also don't know why you think most of his "true fan base" would have bought this already. I love Louis CK and only found out about this because I am an HN reader. Why would you think most non-HN readers even know this is available? I mean really, I think you should at least wait a week before decreeing that "today's most most popular working comedian makes less money selling independently."
Well, almost all of the facebook shares about this that I have seen are exclusively about the novelty and experiment. I didn't see anything that just left it at "Oh, Louis C.K. is awesome. Check out his new thing."
So at least anecdotally, a lot of people around me bought this because of novelty and to support this business model instead of because they like standup or Louis CK.
I think that says something about his target audience. People are capable of more complex thought than "funny man is funny" and the usual base instincts that marketers have exploited to great effect. This marketing ploy adds an extra layer to customer involvement, just mildly stimulating the slightly higher faculties of the consumer base cognisance. As sentient biological super-computers that human beings are, they easily comprehend the concept and gladly exchange money to support it.
Anecdotally, I've experienced the opposite. I haven't seen a single "hey this is a neat experiment" post (Radiohead's similar album sale on the other hand...), yet I know quite a few pretty dedicated Louis C.K. fans, and remember his show here (Winnipeg) being packed solid. Louis already has the popularity behind him, because he's done the years of paying his dues building that up. That's going to be the majority of sales, with a minority percentage (10-20% I'd wager) buying out of curiosity.
FWIW, I haven't even purchased it yet, because every time I've gone to his site its been down...
Beyond the anecdotal evidence sirclueless has given for the actual supporting of the experiment (which matches up with what I have seen), it is the experiment that drove the publicity for this story to get so much coverage. Just look at the title of this thread.
I bought to support the experiment, same with rainbows, NIN and others. I do agree that most purchases aren't this way and the long tail should be significant.
I remember The Plant. Stephen King made over $700,000 writing a partial novel which he declined to finish not because it didn't turn a profit, but because his download statistics didn't show the opt-in payment ratios he wanted.
It's an instructive example of hubris and mis-aligned goals. Stephen wasn't interested in generating a profit. Had he raised the same revenue with half as many readers paying twice as often he would have continued the project.
It is also an instructive example of novelty. His initial experiment was reported very widely, and tens or hundreds of thousands lined up to "prove it could work", putting their dollars to demonstrate it.
Once the novelty wore off, the viability of the approach disappeared. The opt-in payment ratios started generously, and rapidly approached zero.
Little can be learned from CK's experiment because it was novel -- it got covered far and wide, encouraging a lot of people to "show" that the model works.
That's an interesting theory but I'm not convinced it has a factual basis. Maybe readers decided that King's book just sucked and were waiting for it to improve? Neither you nor I can draw a meaningful conclusion on that point.
What can be demonstrated, empirically, is that money can be made without imposing draconian controls.
Empirically what has been shown is that if you do an IAMA on Reddit leading up to the release of your "experiment", a lot of people will play along. It does not carry over to any other release, and says absolutely nothing about DRM or atypical release plans.
Lots of people sell videos online without the middle man. Most see no sales.
"It does not carry over to any other release, and says absolutely nothing about DRM or atypical release plans"
This is demonstrably false. In fact, every artist who's ever done an online release of their content without DRM has seen sales in proportion to their general popularity. We've seen this with Radiohead, with NIN, and with many other lesser artists.
In every case, the profits were roughly in line with the general popularity of the artist's content.
"Lots of people sell videos online without the middle man. Most see no sales."
And most content distributed through the various middle-man networks likewise is a failure. Most OSS software is a flop. Most commercial software is also a flop. This statement is neither surprising nor relevant.
I'm not sure that one can really compare a written story sold on the internet over a decade ago, before pretty much anybody had a decent reader for such things, with a video being sold online today when literally tens, perhaps hundreds, of millions of people own the right equipment for viewing it comfortably.
The comparison is the hype, delivery, and conclusions. After the initial release of the Plant there was much fanfare about its demonstrated validation of a sales model, yet it was a completely atypical example that earned tremendous publicity and enhanced engagement because it was novel.
Sure, The Plant was an experiment with a completely new and novel sales model that ended up falling flat. Meanwhile Louis CK is selling videos online in a world where millions of people buy videos online, but with the barely novel gimmick of selling direct instead of through intermediaries. (Something tons of people have done before, some with great success.) I really don't see the similarity.
That barely novel gimmick got it front and center of every social news site. Indeed, why are we even talking about this experiment if it were "barely novel"? This submission and every comment in it is a counterpoint to your claim.
A fascinating question! I think we're all talking about it because Louis CK is pretty popular.
None of this is a counterpoint to my claim. A counterpoint to my claim would be actually showing that it is novel, e.g. that this experiment contains attributes which have not been seen before.
People have produced and sold videos direct over the internet many times before, so that aspect isn't new. Is there some other aspect to this which I'm missing which is novel?
>it's that the circumstances of this business model work for Louis CK, but not necessarily others following in his footsteps.
I fully agree with this. If you have your own cable TV show, you can make a lot of money by selling your wares independently online. The platform is a lot different for those of us that can't start an AMA on Reddit and have it shoot up to 10,000 comments in a few hours.
This mentality is reminiscent of the first tech bubble. People, if you aren't already a famous figure or brand, it is difficult to get traffic and it is really difficult to get $500k in sales in four days. I'm not saying it never happens, but you shouldn't go into anything with that kind of expectation.
I don't disagree, but I think the more interesting angle is not that people are "supporting an experiment", but that so few A-listers are doing it this way so it stands out and attracts attention without any marketing effort. If everyone did it this way then no one would be impressed and he would have to fight for attention just like everything else in the normal marketplace.
That said, the normal marketplace has completely lost sight of pleasing the consumer, and instead they're trying to fleece us for everything they can get. An example is the price of Blu-rays and the fact that they still force you to sit through 20 mins of ads every fucking time you want to watch the movie you paid an arm and a leg for.
So even though I'm cynical about the industry, it's refreshing that Louis can do something like this in such a plainspoken way and really move the needle, giving the industry execs something to think about at least.
> But to say he hasn't done any publicity to this point is stretching the truth - he's promoted it all over his Twitter, gone on Reddit, did an interview on NPR, etc.
This is all stuff that he was able to do from the comfort of his own home. An HBO/Comedy Central/other contract would also stipulate that he make the rounds of Conan O'Brien, Jay Leno, David Letterman, and numerous radio shows to promote the material. Those kinds of appearances are critical for expanding your fan base, since they give an essentially captive audience a chance to be exposed to a performer's material. Just look at his viral "Everything's Amazing and Nobody's Happy" routine that helped get a lot of his current fan base.
The point is, he hasn't even begun to do the type of promotion that he typically would be contractually obligated to do, yet he's already closing in on the amount he usually expects to make. This looks like a wildly successful experiment.
You'd need to know what conglomerates pay him. If the differential is not large, I could see the difference residing in the costs he paid. HBO doesn't have to develop a new website from scratch every time, and they probably have in-house production, reducing cost.
A comedy special isn't an every-couple-of-weeks thing, and the front page of reddit isn't a very exclusive club. I'd bet five bucks that his next $5 special enjoys a great deal of attention from there.
Just as far as this goes: "Yes, he will continue to earn money from it. But I imagine most of his true fan base will have already purchased it by now, so how many people are there really left to reach?"
Fan bases are always growing/shrinking. That statement is the equivalent of saying that Michael Jackson's "Bad" album probably saturated his fan base in 1987, and he probably didn't make much money off of it in the 24 years since.
Are you serious? Most popular on Reddit and other liberal political communities maybe. I don't think anyone would claim he's the most popular comedian working today.
I really hope people don't turn this into a "Louis CK did it, so you should publish without DRM!". I agree with the anti-drm sentiment a lot of people hold, but this experiment only worked because it's "rare". Every time something like this is done people use it as evidence of the viability of the idea (Radiohead's pay what you want comes to mind too) and that really shouldn't be done. The only reason I heard about this experiment was because it's an experiment and I would personally bet that if this wasn't an experiment a huge portion of these sales would never have happened, I hope in the ensuing celebration of the success of this people don't forget this important fact.
"Louis CK published without DRM and made $500,000 sales in 4 days, therefore if you publish without DRM you too will break your own sales records"
It boils down to saying, "sure, it worked for Louis CK and Radiohead, and Cory Doctorow and Humble Bundle. It worked for Trent Reznor, OK Go, and pretty much everyone funded by Kickstarter...
But it could never work for you."
This stuff doesn't because it's sprinkled with magic experiment dust. It works because the authors are doing good work, they're able to build a fan base, and they're able to make the case to their fans that the way to keep getting new work is to buy it. There's no reason that won't scale out.
The reason it works for those specific groups is because of their fan base. Do you think that if Britney Spears tomorrow launched a similar "DRM free pay what you want" sale that and the "viral" element (news articles about how edgy it is) didn't exist she would have the success that these people have? She would outsell all her other releases because "whoa DRM free this is incredible!"? I don't think so, her average fan (vs average fan of Louis CK or purchaser of Humble Bundle) do not give two fucks about whether or not music is DRM free or independent and would treat it just like DRM music is treated.
The reason this was succesful for Louis CK is because it (for want of a better phrase) "went viral". People spread the existence of this around because he is being edgy, because he's doing something nobody else has the balls to do. If every artist released their creations independently, DRM free and without any "major label" backing this would have flown straight under the radar and been a resounding "meh" in sales.
This sold because it "went viral". The story of what he was trying to do, the desire to prove people wrong. This had the absolute perfect marketing; better marketing than money can buy, but this isn't a group of buyers with endless supplies of money. If what he did became the standard it would no longer succeed like this did.
How many years ago was it edgy to release an album on the internet? I wasn't on the internet back then so I can't provide any examples, but I'll put money on this happening and back then it being a guaranteed success because the people that wanted to prove that selling online could work bought it. I'm going to try and find one.
The reason it works for those specific groups is because of their fan base.
That's exactly the point.
I think you are trying to argue that people outside Loius CK's fanbase bought this because of the desire to prove people wrong. You might be correct in part, but that isn't the whole story.
Do you think that if Britney Spears tomorrow launched a similar "DRM free pay what you want" sale that and the "viral" element (news articles about how edgy it is) didn't exist she would have the success that these people have?
There are plenty of popular artists who have done similar things and had massive success. Lil' Wayne exclusively released (free) mix tapes between 2006 and 2008 which built his profile to the point that his next actual album sold more than a million copies in its first week of release, and gave him his first number 1.
Imagine there is a time when releasing music/video or any other form of media is done independently without a label and without DRM. Will people who release stuff in this way be hailed heroes and make sales because of of how they're selling? of course not. That's what is happening here with Louis CK. If the standard for publication and sale of media was what he was doing here we wouldn't even be having this conversation because nobody would be talking about it.
One option is to cater to your fans, to cultivate a large fan base, and then to offer them a convenient way to support you.
Another option is to cater to the whims of a production company, promote your record with late show appearances, cut into your profits with advertising and middle-man salaries, and then hope that a large faceless audience buys enough DRM-encumbered media to clear your advance.
The point is that it's a better experience all around to have that connection to your fans and to enjoy the fruits of your labor without having to compromise your ideals or give money to a bunch of people who added very little to the creative process. The world is a bit better when there is a direct connection between artists and their fans and when those fans care enough to want their favored artist to make a living and keep being able to focus on the craft.
No doubt, if all music and video was released this way, a lot of it would fail.
A lot of music released by major labels fails, too. Movies flop. There are no guarantees.
So, I agree with you that Louis CK's marketing is fantastic. But it's not like only one person can market themselves this way, and there's not just a single audience that will pay for good stuff distributed in a civilized way. I think it's more like a giant overlapping Venn diagram of people.
Kickstarter might be the best place to see how this stuff scales. Everyone on there is doing their own marketing, and a lot of projects are getting funded.
Except this worked before the internet too. I have a ton of albums from working folk musicians in cardboard home-made sleeves, with great production values on the music and crap for polish so they'd cost $5. I found most of the bands I listen to from mixed CDs friends made for me. The Grateful Dead got rich off people stealing their music. The Sullivan Show, radio stations, MTV and clubs were letting people listen to music for free before Napster; together they made every big commercial artist in the last sixty years.
The new thing the internet adds isn't "free music" or "sell things that are easily pirated for cheap". It's that big-names can do it and we can measure the results.
Where are the glowing articles about how much extra money an artist made after adding DRM to their game, video or music? I don't think torrents wreaked the commercial market; I think they wreaked the bootleg industry (http://books.google.com/books?id=hUyMNhH_l-EC&lpg=PA236&...). The people who says otherwise are self-interested and fail to offer the kind of concrete numbers that reluctant experimenter after reluctant experimenter produces from every creative industry.
I will note that this is the only venue I saw this on; not from my friends or Facebook or Twitter or any of the other "viral" channels. It seems to me like it's already to the point where it is normal. It is working because this approach works, just like it always has.
Femme Fatale, amazon mp3 is eleven dollars. I don't think pay what you want is going to be a viable model other than random stunts, but drm free is .. well.. seems to be here to stay for music. See also: iTunes Plus. People want drm free so much, they'll pay extra for it.
People feel invested in the purchase when someone like Louis CK comes out and speaks directly to his fans. We all get to know what the deal is, and how it works. It's the same feeling you get when you support a Kickstarter project, even if (to be cynical) many Kickstarter projects are just a way to sell units directly from producer to consumer.
Disagree. I've never bought a comedy DVD in my life, because frankly, an hour of humor isn't worth $15 + the overhead of receiving a package and storing a physical artifact in perpetuity.
But $5, I can have it in seconds, and forget about it until I want it again? Different story entirely. So I bought it. I don't think I did it because it was an experiment - if every comedian released stuff like this, I feel like I'd regularly spend money on comedy which now, I frankly don't.
The point is he considers receiving and having to rip and/or store the disk as an additional cost on top of the $15. It widens the gap between the $5 download and the $15 disk further because he has more hassle to get the same functionality.
The point is that he's gilding the lily. He doesn't have to store the physical artifact in perpetuity, he can format shift it and make it like his $5 purchase. Sure, it's more work for him, and makes the effective cost more than $5.
But he's not forced to store the physical artifact forever.
No, I can't rip a physical disk without considerable effort and learning and trial and error. I have one machine with an optical drive, and no ripping program I know how to use to rip a DVD.
You think because you can format shift something everyone else has the time, inclination, hardware and software to do so.
Are you serious? With the amount of effort you've spent complaining here, you could have already found out how to do it. And it's a one-time learning thing - once you know, you'll know for next time too. Software is free. Handbrake is popular. You have the hardware. Time is trivial. Seriously, unless you have eight kids, you have the time. And frankly, people had the time before digital downloads became popular over the last few years - society hasn't changed that much.
The only argument you have is 'inclination', and frankly that's an argument against anything. There are people who prefer physical disks because they like the physical entity and find digital-only to be too ephemeral (witness the endless screeds against Steam not existing in the future, for example). Their inclination is the opposite of yours.
Your argument style is simply to grossly exaggerate the point. I also find it amusing that you follow a tech startup blog that markets itself to 'hackers', yet consider learning how to rip a disk 'considerable effort'.
Found out a method that might work in less than 10 minutes and try it out and find that it works? Possibly I could do that. (I've made 2 comments, Took about 10 minutes). I'm not sure I own the proper drivers to do it, I don't know enough about the video format to know what is required to decode it. I know my Grandmother, youngest half sister, step-mother, and many aunts would be nonplussed to do it (as I was arguing how valuable the media was to everyone, not to me; I pointed out YOU assumed EVERYONE had your abilities).
It was illegal until 2010, and I haven't owned DVD's since Xmas 2009. So yes, no inclination personally either. But I know that list of people has much better things to do than to learn to do all that stuff.
Now I own no (non-computer) DVDs. Why buy some? Why learn to do anything to them? I don't have any of the media.
I'd not even look at buying the DVD. Just like I don't look at buying the record, or the 8-track, or the floppy disc/betamax combo pack.
Of course this is personal analysis of my own motivations and thus hardly scientific, but yeah, my whole point was that I think I would buy this even if it wasn't an experiment. I didn't buy Trent Reznor or Radiohead's experiments because I don't like their music, but I did want to see this show, so I bought it.
Because two points make a line and therefore are irrefutable (ha ha), I'd like to add that I also passed on those experiments and bought the DVD. It was $5, just like the games I tend to buy on Steam. But if it were $15+, I would have passed, like I have on the rest of his DVDs.
But there is also the lower price to consider. Even if the rarity of the event brought more purchases, with $5 vs the $15 or $20 it would have cost in a more tradition method of sales, the price alone would certainly bring in some customers who would not have paid the higher price.
No, he bought it because it was a better product at a lower price point that currently-available comedy, making the marginal value of the product lower that the marginal cost to him.
If he had bought it and not watched it, he'd have been validating the experiment. As it is, he's just an anecdotal example of someone on the right hand side of the supply-demand curve. Reality validated the experiment, not manipulative consumers (of course, reality has a well-known liberal bias...)
He's not. He's making a point about the transformative nature of price, lack of DRM encumberance and immediate gratification. These are behind the success of itunes as well.
I think the Humble Bundle is a good measure to how these kind of experiments will succeed of fail. People are now starting to "complain" that they are released too often, and I certainly am seeing less and less enthusiasm for each subsequent bungle but there are still making a shitload of money on them, otherwise they would simply stop doing this.
Personally, I think that in a (utopian) world where media is easily available, not restricted, and is fairly priced (like Louis C.K's video) piracy will still be a major issue. Perhaps it will be reduced but even if content makers manage to compete with the availability of pirated content, they can never compete with the price.
Well there's also the issue of how many games can I play? I've stopped buying from the humble bundles since the combination of that, plus good old games, I have enough games for now. If I had half a dozen unwatched comedy specials on my hard drive, I wouldn't have bought Louis' video.
And, at least for the foreseeable future, there are going to be people for whom it is very difficult to pay for the content rather than pirate it (e.g. kids, teenagers, folks in countries without an online payments infrastructure etc.).
A proper experiment is repeated, over and over again. Some indie bands are managing to make money from "pay what you wish", and a great many more have been thriving from customers paying for easily-torrented, DRM-free downloads.
Video, on the other hand, has had few other tests of the notion that (most/some/enough) people are willing to pay a reasonable price for a good product, even when they don't have to. Instead, our choices are streaming services (to authorized devices only), or physical artifacts (with five layers of encryption). This is the first digital video purchase where I felt like I truly owned the movie I was buying. Give it time for others to try the experiment and see how they fare.
I can't say why it worked for him, but it worked for me as a consumer because it was easy-peasy and felt very safe.
I'm perfectly happy to pay for content I can get reliably and instantly. Today I gave Amazon $10 for the two Christopher Nolan Batman films because a) it was dead simple, and b) I trust Amazon not to fuck me over. (And I guess c) it works on my Linux box, and d) I love his work.)
In fact, I'm even happier with the Louis CK thing because it's just a file. I'm going to buy another copy for my dad for Christmas, something I doubt Amazon will even let me do.
So yes, as far as I'm concerned, yes, everybody should do this. They may not break sales records, but they may not do that the DRM way either.
I disagree. I like Louis CK but I haven't looked into this at all and probably in a few weeks I'll have forgotten about it without buying anything. But the model I like. I'd love if I could get all my media DRM free over the internet and be able to pay for it. Right now I torrent and PVR a lot of stuff but the continued existence of programs I like are at the whim of those with Nielsen boxes.
Ever hear of JA Konrath? Neither did I at first. He's, at best, a mid-to-back list writer who had a few novels published back in the late 90s and early 2000s. He started self-publishing his old catalog of books once they were reverted (ie, the publishers saw little/no value in holding the rights, and released the rights back to him). He saw not much in the way of sales, but he pressed on, releasing ebook forms of old and new novels as he published them.
Then, the Kindle.
As of today, every new title he releases goes straight into the Amazon top 100 list. Every single new one. And, he's not alone.
Amanda Hocking, John Locke, Michael Sullivan and hundreds of other new and established writers, some who have zero published work or professional experience have made substantial living self-publishing, mostly in DRM-free epub and mobi formats. None of them are running experiments in digital distribution or DRM that I know of.
It's a proven method: For apps, for ebooks, for video (ie Louis CK for paid video and Ryan Higa, Freddie Wong, or Ray William Johnson for ad-supported video). We read (some with disdain, I might add) when someone publishes an ebook through ejunkie that sells a tens of thousands of copies at US$30 a pop, yet we don't question whether that's some "experiment" or not.
It's the future. We'll all have to embrace it eventually.
You do realize that the revenue that a comedian/Musician take home from a major label contract averages somewhere between 4-9% of total right?
If Louis CK would have really just sold the rights to comedy central, HBO etc. He could have 'pocketed' an after tax revenue of maybe $100k, with little post-air revenue.
When everything is said and done I am willing to bet my beard that this 'experiment' will net him at least $2 million more then a traditional contract.
Of course the 'pet project factor' and his timing played in, but seriously; He was NOT first!
Radiohead, Nine Inch Nails, Smashing etc. have been doing this for years and continue to acknowledge the viability of the self publish model over traditional labels.
TLDR; This is not a fad, this is not a 'one off thing'. If you make something worth paying for, people will pay for it.
For me personally it would be refreshing to get something that is so deeply personal to the person or persons I support. Any band, for instance, that I enjoy I would feel overly elated to support something they spent all of THEIR time on. It becomes something very personal and I would know that I am supporting THEM only and not the myriad of people in between that have done nothing deserving. It probably won't work for everyone but I doubt everyone would even try it. It takes a lot of effort and knowledge to pull off unless you have a lot of help.
I think a lot of people bought this because they enjoy Louis CK and not because they wanted to experience what downloading a video is like.
The benefit is that he made it easy and cheap. If he went the conventional route I probably wouldn't have watched this special for a year or so until it came out on Netflix (and I've been a big fan for a long time). I don't have cable and it probably would've cost $14.99+ to own from Amazon and maybe $3.99 to rent (for two days). The benefit to what he did was I can buy it now and do what I want with the copy I own.
Actual buyers of the content have issues getting to it, and people who want to pirate easily find it online and download it after some random dude removes the DRM.
Also keep in mind it may not have "worked for him". He made $200k less than he would have using the traditional route. Who knows how long it will take to make that additional $200k from this offering (if he ever will) and I'm skeptical about counting "the long tail" because he would have probably had residuals on a traditional DVD as well.
Where does it say he made $200k less? The article says he made $200k profit so far, and that this is less, but it doesn't say how much less. It is also numbers 4 days in. Sales don't stop after 4 days.
As for residuals, maybe, but it looks from the post as if he is comparing his (so far) $200k profit to a lump sum payment for the rights, though he's not exactly being explicit about that.
Louis C.K. deserves all credit for showing that you don't need a label, that non-DRM distribution's benefits outweigh its costs, etc.
Yet to me the real lesson is about the remarkable PR he's built for this story around being the "purple cow" and his ability to market to his audience (holding a AMA on Reddit even).
Using Louis C.K. as a guiding light for the rest of us is a little like hearing that indie game developers can make big bank, because Notch did. Louis C.K. is the biggest comedian now, and is generally popular with appearances on all the late-night talk shows, NPR, reddit, etc. We have no idea about what parameters had the biggest influence. Novelty value is probably one of those parameters as well.
We don't know how much Louis would have made, had he published the normal way, but we do know that the customers benefited by it.
We need more people to do this to draw any significant conclusions from it.
It is a great story that someone as popular as LCK chose to do this partly as a service to his fans, but I don't know how much there is to be learnt from the perspective of self-publishing right now.
Though since Trent Reznor, Smashing Pumpkins etc. have used the same model for 4-5 years now I wouldn't exactly say that Louis CK was 'first'.
Of course, he's sort of a 'pet project' and lovechild of Reddit etc. But I'm pretty sure that there are many comedians, film makers, musicians etc. that would be happy to make 1/5th of 'traditional revenue' and keep 80% instead of the 5% they keep being signed to a major label.
I think by releasing the sales figures he actually runs the risk of decreasing sales. I think there is probably a segment of the population that would feel bad about not paying for the video but now that he announced how much money he made their guilt over stealing from a poor artist will subside. It's a bit hard to keep people sympathetic if you've announced that you just made a nice profit. I'm sure at this point he's satisfied either way but it's a thought I had.
I read the post, and decided I finally needed to see what the big deal about this video is. I did feel your reaction -- that he won't be hurt if I don't pay for it at this point -- and actually did search for the video on a torrent site.
I found it, but then realized that streaming the video right now is worth the $5. Torrents are a hassle compared to streaming. So I just clicked through to paypal and now it's paused on another tab.
exactly! also, when its that low, the good feeling of actually buying something is not overshadowed by the bad feeling of spending money, since its so little money, at least for me at 5$.
In response to the initial comment- I was indirectly prompted to buy this because of the post he made... I don't know why, but after I read it, I bought the show. Probably because I want the experiment to work.
You would think that, but in an interview I heard, he said it's already been torrented.
I would be interested to see if the increase in torrents over time has a correlation with a decrease in sales. This also might depend on who the artists is. Some demos aren't that tech savvy.
I bought it and then downloaded it with torrent because it went faster that way. I think the server were overly busy, so maybe the correlation you speak of is negative.
Why would any significant part of the audience somehow not purchase the show knowing that he may actually make a decent amount of money from the sales?
I for one am perfectly happy chipping in my $5 towards the CK family beach house. At least I know my money is going to someone that seems to be working his ass off entertaining his fans and not some nameless label that play artist and entertainers like pawns for the profit of their share holders.
Or: Releasing the numbers just made him a whole lot of new visibility, and increased his sales enormously.
I had never heard of the guys before. I saw some headlines here and in reddit before, but never bothered to check it out. But raw income numbers are rare and interesting, so this headline made me check it out.
Is it just me, or is Louie sounding more and more like a part of the hn/reddit crowd? He went from "I don't know what this 'torrent' thing is" (implied: "I'm not a nerd or anything") to being excited about online distribution and avoiding DRM. I've been a fan of his for some time and this seems unlike him. I think it's pretty cool to see someone's geeky side being exposed publicly.
He's surrounded by that crowd. Remember, it was recommended to him that he release without DRM (not by the industry folks) and that he do a (wildly successful) AMA.
Also, as an artist, it has to be just pretty damned cool to see an experiment like this work, and be able to connect directly with fans who are willing to fork over money.
And that might be the case. But the guy has been around the business for a while. His mother was a software engineer and grew up learning to fix things according to interviews. I mean he writes, directs, edits, produces his own TV series, uses RED cameras and then does this, so I'm inclined to believe that it's not all for show.
So this is why Big Media is freaking out. Anyone with a MacBook and a Shure SM58 mic can record a studio quality album, and anyone with a Canon 5D on a shoulder rig can produce professional quality video. The Internet replaces the studios' giant duplication and distribution networks. And now Louis proves that this applies to full features as well, and that the artist can make really good money with this model. Reminds me of Kina Grannis of YouTube fame, who won a major record label deal, but decided to keep self-publishing, probably for her own best (even financially).
Too bad Big Media is barking up the wrong tree (piracy). They can't stop technology.
That's not really true, there's a lot that goes into 'professional' recordings, video or audio.
Mostly, experience is a huge part of it.
There's also a world of difference from a shure 58 on a macbook line-in, and high quality mics on a protools rig.
that said, my band recorded a 4 song ep for about 600$ at a local studio start to finish recently. (i linked to the album on my about page) I don't think any of us expect to make our money back on this one, unless everyone on here decided to go buy a copy on itunes, so we're giving it away.
Were we to do it all ourselves, the investment in equipment would have been at larger than that, and then amortized of a small amount of sales. The resulting quality also would not have even been close.
It's also hard to do promotion on a national scale without some kind of built in audience. Hows a small local band or whatnot going to reach people on the other side of the country, or in other countries entirely?
I love that this worked, even though I'm not buying. For me it's a value-for-the-money thing. I'm sure I can spare the $5, and I'm sure I would enjoy it, but still, I get a huge amount more value from my $8 monthly-fee-for-a-limited-selection Internet streaming service (yeah, that one, I still love it even after the bumps).
It's really great for our freedom from DRM that this worked, and I almost bought it just to support that cause, but ultimately I think prices have to be even lower for me to do outright purchases of content. But then, maybe that's just me. A lot of other people voted differently this week, with their wallets, and that says a lot.
I'm glad it's worked out for him, and unless I'm misunderstanding, it seems he's double-counting his production costs in working out his (pre-tax) profit, so he may have done even better than that:
"the production of the video cost around $170,000. (This was largely paid for by the tickets bought by the audiences at both shows)"
"12 hours [after launching] we had over 50,000 purchases and had earned $250,000, breaking even on the cost of production and website."
Surely one or the the other covered the cost of production, not both?
"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"
(170K + 550K) - 250K - paypal fees != 200K
Which makes me wonder if this statement is correct:
"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"
On the other hand, whilst in the other front-page article on HN he says "I've never seen a check from a [TV] comedy special", I only heard of Louis C.K. from watching one of his stand-up shows on TV on an airline, so even if he didn't get payed directly, there's still publicity value in them.
I think your math here using different assumptions than he would.
"This was largely paid for by the tickets bought by the audiences at both shows."
Otherwise he would have been able to simply pocket 170,000 dollars worth of tickets, as if he had done a regular show.
So to him, that's a net loss of 170k, you don't get to add it back in at the beginning.
So, 550 - 170 - 30 = 350k
You've also got to assume that his time is worth something, he could probably be working on something else instead of arranging his own marketing blitz... Also have to assume he pays for his own travel expenses etc.
I can see that being an expensive proposition if he, for example, has to fly cross country, miss out on potential shows, etc. If he misses out on 2 shows, that's a couple hundred thousand right there (apparently).
The point being, if he had done this through a media conglomerate, he probably could have had time for other stuff that would have made him money.
"I only heard of Louis C.K. from watching one of his stand-up shows on TV on an airline, so even if he didn't get payed directly, there's still publicity value in them."
Same, except it was YouTube. There's even publicity value for him in piracy.
If he can afford to sell this thing for $5 and make a profit, he only needs something like 1/15th of people to become fans, buy a ticket and see him live.
Yeah, because if someone got ahold of that password...they could login and download that $5 video!
In this case, I think this is actually superior, because a lot of the purchasers are going to buy and download this, and never login again. Why have them type in the same password they use for their email and banking, and have to worry about keeping it safe indefinitely?
4 reasons the plaintext password is OK in this situation:
1) They generate the password for you, how else are they supposed to get it to you?
2) Just because they email it to you in plaintext does not mean they are storing it in plaintext (they could easily send the email at the time the password is generated)
3) You won't reuse this password on other sites because you didn't choose it. The primary reason why it's bad to store passwords without proper hashing is that a leaked password database means hackers can tap into everybody's email/bank accounts which are using the same password.
4) All the password gets you is access to download a video (no other personal info available). Not a huge risk.
That's A way. For a virtually costless good, this is just as fine a way that has a much smaller chance of capturing a password anyone gives a shit about
Look, my point is that for $35K, a newly-built commerce site should follow basic best practices. It isn't exactly hard to implement, esp. if you're worth $35K. It isn't about someone stealing my account info – it's about evaluating what he got for $35K.
For a commerce site that you will not use or necessarily maintain for years, a system where you don't ever get passwords that other people give you can certainly serve better than one where you do, as the logins are only useful for the content.
This could be more useful to him as his security matters less, as he has less valuable things stored in his site. It may also work better to lower support costs (as many people are pretty bad about keeping track of passwords), and this approach means they can just look at their email to start.
I agree for many cases (say, HN), that it is a good practice, but it's not gold in all cases.
I dislike how it says "if anybody stole it". Piracy isn't stealing, it's copyright infringement.
I'm still curious about the bandwidth costs. 110, 000 people is 110, 000 gigabytes which is 110 Tb of bandwidth. How much does that cost??
Also, since some of the torrenters did indeed pay for the video, they can be included as profit and they didn't add to the bandwidth costs. They were also a small amount, 10k is listed as the number of downloaders on one site. That's 10,000 out of 120,000 people who downloaded using torrents. That's around 8.3% That's really not bad at all and I'm thinking that this is the case for many things. And like I said, some of those people did pay for the video which bumps that percentage down; I would say down to 8% if you're a pessimist, and down to 5% if you're an optimist ;-)
Anyway, piracy isn't a problem here. I hope other people do this because it cuts down on the middlemen who are a constant drain of society.
I bought In Rainbows and this, as well as Harvey Danger's album (one of the first experiments from an established band) and Saul Williams's 2007 "Niggy Tardust." This is not to mention lesser known pieces that I've bought from independent artists online.
What I will say is that I wouldn't have bought any of these had they not been promoted online or DRM-free -- that isn't because I wouldn't have heard about them, or because I needed to support a particular model, but because in each case the artist both presented a genuine interaction with the fan and because the work was good. To the extent that the artists showed their humanity, provided an appealing product, and supported values that aligned with my own -- that was what drew me in.
It goes back to being a human rather than a faceless corporation, and it's a great tool of marketing niche products.
Can anyone comment on the $170,000 cost to produce the video? He says he edited it himself so that pricetag must cover only the recording side of it. Is this cost a reflection of the price that large studios normally pay, or would he have gotten this rate from a smaller shop as well?
My interpretation is that this was the cost of the cameras, cameramen, and venue (tickets, box office, ushers, sound setup, soundboard, lights, spotlights, advertisements). Basically, all the costs associated with getting people in the seats and the show on film (or whatever the cameras record to)
Yeah maybe. I think the numbers are a bit weird then. He talks about making a profit of 200k, but then admits that ticket sales largely covered production costs, so is his total revenue around 750k with profits closer to 500k?
I wonder if HBO or CC paid for the special, whether he would still get 100% of ticket sales.
This one video spanned three performances (Nov 10, 11, 12). Three nights in the Beacon theatre + audio/video engineers + equipment + set + lighting + production assistants + security + travel expenses + other stuff I can't imagine.
Just throwing this out there, but if I can buy a Louis C.K. comedy special for $5 each year, I'm going to buy a Louis C.K. comedy special for $5 each year.
It's probably a self sustaining model. I only just heard about it now, and bought it just now. I don't think he's tapped 100% of his potential market in the 4 days it has been available.
I look forward to the next batch of statistics released. Hopefully in ~4 months?
Or without even choosing the price, going Bandcamp-style and setting a base price while letting you choose to pay more. He also could have made more by providing a link to send the special as a gift, both giving a fans a way to show support, and perhaps growing his audience at the same time.
Very happy for his success, and I hope other artists are paying attention.
Haha good question. I didn't buy one - did he use PayPal exclusively? Someone should tell him about Dwolla - he wouldn't have had to pay anything in fees!
Girl Talk's been using an even more beneficent form of this model since day one, which means far before getting popular. Gregg Gillis has achieved enough success to be touring and making money. There's still a couple caveats though:
1) Girl Talk is remixing bits of other songs that people already know, thus there's familiarity.
2) Trying to go through any label and traditional distribution model very likely would not have succeeded anyway, so trying something different wasn't really a choice.
Of course you or I could do it for cheaper. But for someone without particular technical skills to contract to a good, reliable company, spec it out, and produce a solid product at market rates on a reasonable timeline? 32k seems about right.
Indeed. I thought the same thing, but I suspect he's including a design firm that tested out multiple versions of the site, backend infrastructure to handle potential load, support to handle issues in a timely manner should they come up, and maybe his personal time.
It seems pretty inexpensive to me. Designing a site where people can log in, pay actual currency for a file, and download it a few times is not trivial. We may be able to do stuff like this ourselves over the weekend, but Louie can't, and so he had to pay someone to do it. And when you pay for something like this you're paying for things like the company's reputation, support "forever", and the right to say things like "can you move that 1 pixel to the left"?
Your weekend project also doesn't lose you a quarter of a million dollars if it goes down for a few days. There is a big difference between tinkering and building a product.
Why are all the downvotes on comments relating to the website cost? I thought it was pretty high as well when I read that, I mean sure you pay much more for peace of mind, but that's like a 100% markup. And the red on black text wasn't a great choice IMO.
Because those comments are pretty much content-free. "That large number! It's large! Since I, as a non-expert, can't imagine spending that much, the people involved must be idiots!"
If there were a comment from somebody who had built a similar site breaking down hours and dollars spent, that would be fine.
design, e-commerce, login/registration, authorized downloads, streaming, social integration, CMS (I assume), probably analytics, and who knows what on the back-end.
A little on the high side, and possibly not using the latest and greatest platform(s), but I wouldn't say unreasonable.
Pay attention MySpace, because this is what you could have been: The go-to spot on the internet for artists who just want to pay some money for a personal website where they can put up their shit and sell it and not worry about the details.
While I think this is great, and am just like (nearly) everyone else in our (nearly) universal disgust with the big content-owning conglomerates, I wonder about the part where he's justifying selling the video for $5, when through traditional channels it would have cost $20.
I feel like it's not uncommon to see stories on hn that basically say we should do the opposite with our products. That is, charge more, because the difference between increased revenue vs. customers lost will still result in a net gain.
Now, obviously Louis CK is a pretty widely-known comedian who already probably has a lot of money, so I don't think he conducted this experiment as a way of becoming that much wealthier, and I applaud him for not taking advantage of his fans. If he had sold it for $20 and billed it as "cutting out the middle man" I'd wager his total revenue probably would have been higher, but he chose to cut his fans a better (for them) deal.
That said, for lesser-known folks with smaller audiences who aren't already wealthy enough to cut their fans some slack, I'd imagine they'd do better charging $20 rather than $5.
I think the arguments you bring up are usually mentioned in the context of subscriptions and salaries. LCK's product is a one-time purchase, so the psychological limit sounds like just about $5, which is a price so low that you don't have to debate with yourself whether you want to buy it or not.
Use Steam videogame and iOS game prices as a corollary instead.
While this is great for Louis CK, whom I find to be hilarious and wish only the best, it doesn't strike me as a truly generalisable model. I mean, it's basically a restricted version of NPR's 'pledge' model, right? The copies are effectively free, but you can choose to donate some money to the artist. Sure this can work for someone with a lot of name recognition, but that's because he was already discovered.
I think the problem is that Louis CK isn't in the business of distribution, he's in the business of producing comedy. The NPR model does disaggregate the two. You don't pay for the distribution, you pay so that they keep producing content.
I think the Kickstarter model is more generalisable, in that it more directly solicits payment for the production, not the distribution. But it still depends on people wanting what you will produce, which means they have to know who you are already. Which, I think means that people are going to have to produce things for free until there's enough demand for continued production to be able to solicit payment.
Am I the only that finds it odd he spent $32,000 on a website that features small, dark red text on a black background? I had to highlight the text to read it.
Otherwise, I'm glad his experiment worked out for him as in a small way it proves new business models can work if only tried. My question is whether the related industries will learn anything from this?
I was relieved to hear hear he only spent $32,000. He's clearly not heavily involved in the web, and I'm glad he wasn't drawn in by some flashy firm trying to charge him $100,000. It may seem like a lot to anyone on HN that could put something like this together in an afternoon, but I feel he could have done much worse.
I have said for the past 10 years or so that I would gladly pay a small fee directly to an entertainer instead of having them get an even smaller fee from a middle-man. For example, torrent the latest Rush album + give the band $5 directly = everyone (who matters) is happy. I have the satisfaction of supporting my favorite artist and Rush has quite a few more $$$s directly in their pocket.
All we have to do if find a way to send money directly to an entertainer and keep the (MP|RI)AA off our backs. Maybe this would be a good startup idea. Provide a "Pay Me" button (implemented with Stripe :) for artists to stick on their site. Joe consumer torrents their work then visits their site and clicks the button. Neat and easy. Of course, then you become the middle-man...
I started out with that idea (adding a "contribute to me" button), and tried to validate it.
It turns out that the people I approached weren't interested in a service to accept contributions if said service had significant fees, and I couldn't find a way to make those cheaper (moving money has a significant cost) and couldn't compete with Paypal Donate.
I still believe there's a market for it (you're an example :) ), but it's going to be tough to convince the content owners.
It really doesn't matter how many people pirated it, as long as he makes enough money for it to be worth it to him to have made it in the first place. If it was 10 people but 40,000 bought it or a million pirates and 40,000 consumers, it's all the same to him.
I'm sure that most big production/distribution houses are not panicking because it's still a new way to distribute content and it's a niche product, but I'm wondering what they are thinking of this right now. Do they view this as an emerging trend or just as a fad?
Wow. I expected positive results, but not that fast. Is there any precedent for this sort of thing? Hell, did Radiohead or Trent Reznor release sales statistics when they tried schemes like this for CDs? I'd love to see the numbers if so.
Although I'm really happy for him doing this, and it working out so well; Trent Reznor / Radiohead did this exact thing years ago and made millions from it, so I'm confused as to why this got such large publicity.
Devil's advocate (another in a long list of threads here): I really like this model, and that the people actually creating contents receive good benefits cutting out the middle man..
however
There's this (I think correct) assumption that big labels are getting richer and richer by sucking a good portion of the money off the content creators, and providing almost no value in return. But they also create lots of jobs for other people, which in this model is reduced to a minimum. Could there be some way to fix the current model without losing all of those jobs for lots of people?
Kind of surprised by the amount of people in this comment thread saying "yes it works for him but no one else". Why operate from this as your default? How sad. Examine this for how it can work for you, or someone else. Examine how it can work for a nobody. A small somebody. A first CD release. A "reunited after 10 years" cd release. Put that effort into how it can be done people!
This is great news. I know Radiohead and Trent Reznor had similar results, but to avoid selection bias[1], does anybody know of an artist/musician/producer/etc that tried this and failed[2]?
When Trent Reznor released Niggy Tardust, 28,322 paid $5 for it, which was 20% of the total who downloaded the album freely. Were there any other albums he released for $5? Granted, this was Saul Williams' album and Trent appeared on it; it wasn't a Halo album.
Saul Williams has always said he was very happy with the result despite 80% of downloaders taking it for free.
Trent made a point later on the nin forum that allowing people to choose how much your product is worth really devalues it, but offering it at a cheap but fair price (say $5) doesn't devalue it.
Personally I think the best model is setting a cheap bottom line that people can pay for your product, and letting them pay more if they feel it is worth more (adding extra stuff for the people who pay more is good too, like a physical copy of the CD for people who pay $20). You don't have to use your bandwidth to give it out for free, the pirates will do that and I think it's safe to say that if someone pirates your album they are probably going to turn into a fan (or be turned off).
I forgot he released those in that format, and you're right; he really hit some impressive numbers with that experiment: "A week after the album's release, the official Nine Inch Nails site reported over 750,000 purchase and download transactions, amassing over $1.6 million in sales." (Ghosts I-IV)
I bought both Ghosts I-IV and The Slip. I also spent $300 on the Girl with the Dragon Tattoo soundtrack that he put out last week.
And I downloaded Niggy Tardust for free. I did this because I had never heard Saul Williams and wanted to support an artist who I had never heard of. But after listening to it, I honestly just didn't like it, so I did not go back and buy it.
I wonder how many people were like me and downloaded it for free because of the experiment and Trent Reznor's involvement but didn't pay because it wasn't their style of music.
Niggy Tardust was a collaboration wasn't it? A lot of people probably downloaded it to see how good it was. However, $141,000 is still a hefty amount. It would be nice if it were closer to $700,000 but I think it's good enough to live on and to produce the next album or two?
I also wonder what may have been different if this was not placed in the context of a very public experiment. How many of the purchases were political statements?
I think the same model needs to be employed, without any commentary, to get a true measure of the mechanism.
Awesome to hear and hopefully this encourages more content creators to distribute directly to fans through independent sites or apps. Loved the direct and blunt nature of the site. Price wasn't too shabby either.
Would love to hear how the releasing of this info has further affected sales. Based on the upvotes here, I wouldn't be surprised if it doubled them again.
A case someone made about Louis C.K. being an asshole. Downloading his content and watching it without paying != stealing. Stealing is a +crime+ punishable by heavy fine/jail time (depending on how violent), watching his stuff and not paying is just not supporting future versions. It's like going to a website and blocking all ads. This is not stealing. It is not supporting, consuming without desire to help the producer succeed.
However, this goes to show: If you are well known, it's more profitable to self-publish.
You're thinking from the perspective of "geek who could actually implement this." Try thinking from the perspective of "entertainment personality who doesn't want their personal brand tarnished when their website blows up in their face and is willing to pay for surety of that."
The comments are full of people proclaiming that the cost was too high, but then every time someone asks for an estimate on working as a freelance everyone says to charge as much as possible.
Yes, nowadays you can easily record video and audio and edit both very comfortably on your home computer and if you know a bit what you are doing, you will get pretty good results.
Yes, nowadays there are a lot of ways of easily distributing music, especially online and yes, as the artist you will be keeping more per sold unit.
Yes, "surprisingly" your fans will want to pay for your albums - is it really so surprising? They also buy your merch and pay good money for seeing you perform live. So the whole "people aren't paying for music anymore" is nothing but propaganda.
Now here is the thing: this has been done a couple of times before, e.g. by Radiohead and then by Trent Reznor and NIN and probably a few others.
The point is: Reznor, NIN, Radiohead and Louis CK can do that kind of thing because they are ridiculously famous and successful. But for any other bands or musicians, I doubt they would have remotely that much success with a stunt like that. A lot of bands publish music online but come on, that is more a way of presenting themselves than it is a super easy and fast way to make half a million for them.
Using your bandwidth price, his bandwidth costs alone will have easily exceeded $10k. Assuming $22,000 as a top end estimate for design, development and somewhere to host it sounds quite reasonable to me. If he hasn't chosen a bargain basement designer and developers, it's not uncommon to pay $1k+ per day for an agency. 20-22 man days if we exclude hosting costs, from concept, through proper design, content, development, testing and deployment isn't much at all.
yeah I just don't understand the whining from some people here at HN about the cost of the website.
I suspect they are freelance guys with inadequate skills to charge the proper rate. This website would have taken at least taken $32k to design, build, test, approve, test etc. (test allot)
Of course some hackers could whip it up in a day - but I wouldn't trust the best hacker to have dotted all the i's and crossed the t's. Payment testing, S3 testing etc.
Doing something right is different than just doing it.
Well, I guess I was wrong then. It's true I'm not a technical guy, but I've run a site that did 1TB of bandwidth each month and never paid more than $130/month for hosting (back in the early 2000's), so I figured he should have gotten better pricing these days.
Here is the part where this can go off the rails. So the long tail will hit, people will 'discover' him (maybe on his second or third video) and will download this one. There will be many copies out there in circulation. The temptation will be to think "Gee if people couldn't just get one of those copies out there already I would be making even more money!" Completely losing sight of the fact that the videos out there are an agent for discovery and 'tasting' which is bringing more people to his web site.
People sometimes go all green with greed when that happens. Money can do that to people sadly.
That being said, the really cool thing is it adds another 'success' story to Trent Raznor's Radiohead (I don't think they were ever this transparent with the numbers there but I may be wrong) and makes it harder to dismiss the successes as 'anomalous' rather than 'reasonable expectation'. It is the presence of success stories that will get more and more people to move this way.
I wish it wasn't like water eroding a rock though, progress will be rapid when the flood starts but for now it is just a trickle.