This most important piece here is that he's already broken even. Wow! I'd love to see the numbers comparing a Comedy Central production and Louis' self funded production. I bet there's countless areas of negligent spending in the CC production.
The question is, how can you make this model scale down to lesser-known acts?
For instance, the #5 seller on the Kindle is a $1 book: http://www.amazon.com/Wife-by-Wednesday-ebook/dp/B005SJLB24/...
It's similar to web apps being "free" in order to attract eyes/users. I think competing on other fronts (quality, connection with users/readers, obsession with consumer satisfaction) are preferable to cutting price because it's "too easy" to compete on price
The internet is unarguably a huge advantage for people on the lower end. There are some people who have been knocked form being successful in the traditional media to being successful on the internet only, but that internet group includes them and people who would have never been successful in the traditional media. I don't even think that's a question. The only reason someone who would have been successful in traditional media isn't successful on the Internet is that the increased ease of competition made it clear that they suck and they pushed them out.
"Overnight success" usually takes years.
More specifically, if comics had a free service or tool that allowed them to set a price, upload some content, and have a promotional site like he had for his show it could work wonders. YouTube does this pretty well, but what he's done is much better (though there's a lot of benefit to having lots of videos in one place with good discoverability). Recording and editing is also getting cheaper every day.
To lower the barrier for the audience, shows for new acts would need to be even cheaper or free. Once they build a following they can start charging more.
The iTunes model is almost certainly the one to follow here: sell it cheap and go for volume. If the content is good and the barrier is low, people will eat it up and the artists will get their fair share and more. The middlemen in this equation are really the biggest problem right now (for so many reasons).
How can this model scale down to unpopular acts? Or untalented ones? Or people who just started making art last week?
Because everyone who makes any art at all is entitled to compensation, right?
The conversation here is about discovering talented acts who would have been popular in a classic promotion environment but need the initial audience.
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Because the time and energy of the world's hackers is best spent on cargo cult business models attempting to mimic successes of yore?
How about developing tools to facilitate discovery of talented acts who will be popular in the current, real world environment where there's an internet, and people use it to find and distribute things?
To borrow a metaphor from Brian Eno, if recorded music (or any other duplicated and widely distributed art) is whale blubber, and we've reached the point of oil refinement, in what universe is the optimum response a sharper harpoon?
Musically, one artist that's blown up solely from releasing their own material on the internet is The Weeknd ( http://www.the-weeknd.com/) , who makes and posts songs much more often than a band on a label does (his schedule seems to be one EP every six months or so).
Quite a few, really. The golden example I think is Jimmy Pardo's podcast, which has been turning a tidy profit for a while now. He was pretty niche-y and not nationally known, unlike Louis, but has still created a successful business on comedy, self-production and self-distribution.
It's more of a branding thing with the specials and getting your name out there. It may not payoff up front, but the deals that come after it (such as Louie, the TV show) make it well worth it in exchange for the money lost.
The trick isn't really building a platform for smaller indie people to do these sort of things, that's easy and already available widely. The trick is building a service where these smaller indie people can make it big without having to go through the big players like HBO/Comedy Central first. YouTube is on the right track and Pandora/Spotify seems to be doing this for music, they just need time to growth, because as big as YouTube is, it still doesn't have the weight and advertising ability that a channel like HBO/Comedy Central has. As the ability to sift through the junk becomes better and better via analysis of social cues/demographics, it will be easier for these sort of simple "I don't care if you pirate because it's cheap enough" models to take off for smaller people. But at that point YouTube or whoever fills that gap just becomes the next HBO/Comedy Central and the cycle repeats.
Bottom line is there's always going to be a "big wig" who owns almost all the eggs. For standup comedy it's Comedy Central and HBO. If you can make it there you're set. Maybe someday it will be the YouTube comedy channel, but someones going to always come out ahead and being the leader means you can set your own price on what you wish to pay (as HBO/Comedy Central has done here).
I suspect that the type of solution you've described may work, but in its current incarnation, Spotify aint it.
So not only did he break even, he has earned some additional money. And his initial statement ""I've never seen a check from a [TV] comedy special," says that doing comedy specials the 'regular' way earned him nothing.
Now I expect it is a bit more nuanced than that, in that he was no doubt paid an appearance fee for being in a comedy special, and he didn't put up the money to produce those specials So his "net" was the fee and opportunity cost of the time he didn't spend producing the special.
Contrast that with the one he put up on the web, he paid all the costs (although I assume the 'audience' in the special also paid to attend). The and it took some time no doubt to do the post production work and to put it up for streaming, etc. Which went up on the 10th of December and here 3 days later has broken even "plus a bit more."
Over the course of the year, more people will watch it, and while the volume goes down, the tail stretches out for literally years. He's got this material that has paid for itself and he can license it to Netflix for their streaming service, picking up a bit of change when people watch it there. He can put it up on iTunes or Amazon's video service and pick up some cash when it rolls there. And the killer?
Is he makes another 'special', and now that folks are coming to the web page he puts up for the first one, he can list them both.
Eventually (sooner rather than later) he's got a catalog of comedy bits, several distribution channels and a stready revenue stream and there isn't a 'media company' (like a Viacom or Sony) anywhere in sight.
Now someone else says "Hey man, that rocks how can I do that?" and they convert over. And two, maybe five, years from now "suddenly" everyone seems to be their own production/distribution company and a new ecosystem sprouts that helps those companies get their content to market and Netflix/Amazon/Apple are cutting deals with them directly and you and I win because we get better quality stuff and not so much of the hassles and the media companies lose.
Can't wait.
People said the same when Radiohead self-released their album. But the problem is that both Radiohead and Louis CK have benefited from EMI and Comedy Central boosting their profile for years.
A new artist can't release their own work and achieve these levels of success.
No, but they've never been able to. They've always had to grind it out making no money in open mic nights, or starting for another artist "for the exposure". Between Youtube and the ease of self-distribution, it is now possible for artists to bypass the studio distribution deals that take such a large cut and result in higher prices for consumers and fans.
The content provider used to pay for the special, but now comedians are paying that cost up front and then selling the rights to air it. The next step is that the comedians just distribute their material themselves. (I'm sure there's a start-up opportunity there!)
This is inevitable because comedians are realizing that podcasts, not mass media TV or radio, are the best way to reach their audience for live shows, merch and record content income. In my opinion it's also because comedians can foster engagement with their fans on a deeper level than musicians because they are talking right to them.