Louis C.K. experiment results: over $500,000 in 4 days
buy.louisck.net
buy.louisck.net
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.
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.
Similar yes, same no.
My comment was mostly just to correct the "Trent Raznor's(sic) Radiohead" part of the op.
> and they would have owned your private information for their own use.
> You never have to join anything, and you never have to hear from us again.
And I think Louis CK is going to be Louis CK's EP from now on.
EDIT: Forgot about the "don't contact me" default on the purchase screen.
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.
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.
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.
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.
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.
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.
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
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.
Nothing came of it. Maybe it was too soon? Maybe the first founder didn't know the right people?
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.
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.
Again: Well deserved and I for one feel like I got $100 worth of awesome, for a bargain price!
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.]
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].
[1] http://www.npr.org/blogs/money/2011/05/14/136279162/an-inter...
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.
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?
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.
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.
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.
Rant over for this round.
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.
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.
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.
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).
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.
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.
Think George Carlin or Richard Pryor - i.e. watching great old stand-up 20 years later. No royalties - all self-owned.
He could sell for $1 ea and still make more than the flat fee.
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."
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.
FWIW, I haven't even purchased it yet, because every time I've gone to his site its been down...
http://tech.slashdot.org/story/00/11/30/1238204/stephen-king...
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.
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.
What can be demonstrated, empirically, is that money can be made without imposing draconian controls.
Lots of people sell videos online without the middle man. Most see no sales.
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.
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?
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.
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.
Also, today he's doing Leno.
This won't happen the next times if this method of distribution becomes the norm.
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.
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.
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.
I wouldn't underestimate the long tail.
"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"
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.
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.
You bought this because it's an experiment, you wanted to validate the experiment.
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...)
But he's not forced to store the physical artifact forever.
You think because you can format shift something everyone else has the time, inclination, hardware and software to do so.
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'.
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.
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 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.
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.
What Lil Wayne did has no relevance to my point.
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.
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.
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.
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.
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.
I said the same thing about the humble indie bundle, but they seem to be doing really well still!
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.
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.
EDIT: Ah correction, he says "this is less than I would have been paid". It's the top comment.
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.
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.
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.
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).
> In 2010, Coulton's music brought in about $500,000 in revenue. And since his overhead costs are very low, most of that money went straight to him.
http://www.npr.org/blogs/money/2011/05/14/136279162/an-inter...
you mean: for showing that Louis CK doesn't need a label.
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.
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.
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 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.
I'm going to watch the video now. Cheers.
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.
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 $5 towards the CK family beach house. At least I know my money is going to someone that seems to be working his ass off entertaining his fans and not some nameless label that play artist and entertainers like pawns for the profit of their share holders.
Also, as an artist, it has to be just pretty damned cool to see an experiment like this work, and be able to connect directly with fans who are willing to fork over money.
Mostly, experience is a huge part of it.
There's also a world of difference from a shure 58 on a macbook line-in, and high quality mics on a protools rig.
that said, my band recorded a 4 song ep for about 600$ 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?
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.
Just curious. At those prices, only the very mass-market stuff will make any money. Anything niche just won't pay for itself.
"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.
[Edited for clarity]
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?
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.
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.
"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.
Bandwidth costs money too. > 100,000 GB isn't particularly cheap.
"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.
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.
You could distribute it for significantly cheaper than that, but it's still a relatively low portion of revenue.
It looks like lots of companies are using it for software patch distribution (Blizzard, Facebook, Twitter).
edit: looks like i was beat to it; and didn't include multiple downloads.
to add some value 110TB is $9213.68 200TB is $14640.90
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.
I wonder if HBO or CC paid for the special, whether he would still get 100% of ticket sales.
I'm sure it adds up quick.
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?
Very happy for his success, and I hope other artists are paying attention.
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.
A little on the high side, and possibly not using the latest and greatest platform(s), but I wouldn't say unreasonable.
If there were a comment from somebody who had built a similar site breaking down hours and dollars spent, that would be fine.
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.
Use Steam videogame and iOS game prices as a corollary instead.
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.
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?
My guess is no.
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...
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.
Searching for "louis ck beacon" on The Pirate Bay gives 7 hits, with a total of 886 seeders, 152 leechers.
So I'll be one of those leeches shortly...
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?
And yet, isup.me says it's up. Interesting.
louisck.net. 14400 IN A 75.119.221.139http://webcache.googleusercontent.com/search?sclient=psy-ab&...
[1]: http://en.wikipedia.org/wiki/Selection_bias
[2]: or at least wasn't as enormously successful as these three
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.
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 think the same model needs to be employed, without any commentary, to get a true measure of the mechanism.
I'm buying it now for this.
If it was an unknown or less popular comedian - they would have had a fraction of the sales and lost money.
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.
Congrats to Louis.
However, this goes to show: If you are well known, it's more profitable to self-publish.
Keep them coming!
FYI I recently posted a RoR app that lets you sell a file with Stripe: https://github.com/2tablespoons/Thylacine
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.
The story here is how to market to Reddit/HN rather than anything else.
IMHO It would also be a stretch to call him a comedian.
Bandwidth shouldn't cost more than $100 per TB. Seems like he got ripped off big time.
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.