Fred Wilson: Some Thoughts On The Louis CK "Experiment"

I was always taught a business model is essentially a corporate version of a scientific hypothesis. Meaning it has to be defined and tested in a way that can be repeated by others

(successful business models can fail if the people using them don't execute them properly but that's the equivalent of a scientist not reproducing the environment of an experiment properly)

In the case of Louis C.K. his celebrity filled a very important aspect of the business model which is "the method by which customers are enticed to pay for the goods being delivered". Mr. Wilson tries to gloss over that by saying...

"over time, if their work is good, their audience will grow and the investments they can make and the profits they can make will increase."

But that's not proven by what Louis C.K. did and in fact there's tons of proof on the internet that shows it isn't the case (it isn't hard to find undiscovered talent on the internet). Moreover the situation will only get worse over time. As more people try what Louis C.K. did it will add more noise to the already noisy internet making the true talent that much harder to find.

Companies like record labels originally existed because society needed middle men. People who would pay A&R reps to go to clubs every night and find talent. Then the label would deliver that talent to the masses. If you really want to make the Louis C.K. model into a business model everyone can use the question that needs to be answered is....

"how do you use technology to find the talent and then connect it to people who want to consume it?"

And Louis C.K.'s experiment does nothing to answer that.

However, there is a reason it worked: The Hollywood/NYC advertising machine spent a lot of dollars to cause his name recognition. (Most likely, they profited handsomely too.) But now he has taken that name recognition and cut them out of the deal.

So it is very predictable what happens next: Future studio contracts will return to the days where the studios own all of your output for a period of time in return for promoting you.

The two main parties in any published work are 1) the author and 2) the reader. The publisher, agent, distributor (book store) etc. are all intermediaries that have increased the cost of books for the reader AND decreased the money earned for the author (therefore restricting many authors' artistic contributions). With websites like creativespace.com authors can now publish self-publish with many fewer middle-men - therefore making the price lower and the net gain to the author higher.

The same applies for Louis CK's experiment. I assume his industry is pirated more than the print publications so that is the real trick. Either way, great experiment.

Freddie Wong is starting an episodic series. He raised the production money on KickStarter:

http://www.kickstarter.com/projects/freddiew/video-game-high...

Can you imagine how more interesting the web will get when the next Lucille Ball can go direct to the fans? All that is needed is a way to easily consume media from the web on the big screen.

Forget 500 channels, how about 5 billion channels!