The Future of Entertainment

Louis CK cuts out the middleman and shows the way

Comedian Louis C. K. has done the unthinkable. He sold one of his performances online with no copy-protection restrictions and made a profit [ ]

In the four days after putting “Louis C.K. Live at the Beacon Theater” for sale at $5, the stand-up comedian has made a profit of about $200,000 so far, he said in a statement yesterday. As a result, he said, he hopes all his future work will be distributed the same way.

[ ]  Here’s how Szekely describes the bottom line:

I have a profit around $200,000 (after taxes $75.58). This is less than I would have been paid by a large company to simply perform the show and let them sell it to you, but they would have charged you about $20 for the video. They would have given you an encrypted and regionally restricted video of limited value, and they would have owned your private information for their own use. They would have withheld international availability indefinitely. This way, you only paid $5, you can use the video any way you want, and you can watch it in Dublin, whatever the city is in Belgium, or Dubai. I got paid nice, and I still own the video (as do you).

[ ]  While music labels and movie studios play a role in finding new talent and bringing it to market, they are not the only entities that can do so. What a budding artist needs most is publicity. He needs to get his work out in front of many people as possible. The people who like him will pay him. Let’s say that a budding comedian is working the comedy club circuit. He does not have an HBO or Comedy Central special, but he needs to get his work out to the general public. While performing in comedy clubs helps, it’s still difficult to get publicity. The comedy club will advertise, but if people have never seen your act, they will be reluctant to pay. The comedian can rely on word of mouth, but the art of comedy is not just the jokes, but also the delivery. An audience member might deliver the comedian’s joke in a way that is not funny and turn off any potential new audience members.

So what should the comedian do? He could follow Louis C.K. He could produce a video of his act and sell it for a low price with no copy-protection. He might not profit in the short-run from the video; his production costs might be more than the revenue he receives from the video. But if he is good, if people like what they hear, he will get what he needs most-publicity. People could send their friends his video for free and say, “Hey, watch this. This guy is really funny.” Now when the comedy club promotes this comedian, his shows sellout. He needs bigger venues because people really like his act. People now pay to see him perform. But he might not have had this success if he had to go the traditional route of telling jokes and hoping some talent agent discovers him. He serves as his own talent agent. Perhaps the comedian can grow to the point that he sells 110,000 copies of his video without copy-protection in four days like Louis C.K.

[ ]  It does appear that Louis C.K. has a first mover advantage. But we should remember that he is selling his brand of comedy. This does not mean that others cannot profit selling their brand of comedy. We should also remember that this type of novelty might become the norm. Louis C.K. might have begun a revolution in the way that comedians market their acts. This route allows the comedian to publicize his act himself. Instead of hoping that a talent agent finds him funny and markets him, he can go directly to the people. He might have mass appeal, he might have just a loyal niche. But he can be discovered by the people rather than hoping and wishing that in one of his shows, some talent agent might take a chance on him.

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