2 Responses

1. Ryan Stout says:

   August 7, 2012 at 8:24 pm

   Any time you deal with money/numbers, it’s amazing how people view the results.

   Comedians tend to consider Louis CK successful for earning one million dollars of off his DIY stand-up special. But, in industry terms, it has been described as a complete flop. At a charge of $5 per download, Louis, with all of his fans, only managed to sell 200,000 copies. Meaning, in the world of ratings, it would’ve only garnered a 0.2! That is a pathetic number for any television broadcast.

   Louis was really up front with his numbers and, again, many consider his endeavor a success. I’m not sure why Aziz hasn’t promoted the results of his special, which seems strange since Aziz has always had an amazing ability to self-promote. But, in the end, both comedians ended up airing their specials via traditional television. Gaffigan eventually decided to distribute via NetFlix. I think that fact alone says something about their original business model: How successful can it be when “only available via my website” becomes “I decided to release it in these other areas, too?”

   An internet release can make you a ton of money off of people who are already your fans, but it limits your ability to reach nearly as many potential NEW fans. (And how many people would’ve spent the five bucks, if they knew they’d get to see a free version on TV a few months later?)

   So, when it comes to non-famous comedians adopting this business model, they’re lacking the one thing that makes the model work: An already established fan base that is willing to spend the money. Without that, no one is getting rich. And this method hasn’t done anything to make anyone famous.

   I truly wish them luck, but I wouldn’t participate in anything of this nature.

   Best,

   Ryan Stout

   http://ryanstout.com
   http://youtube.com/RyanStout
   http://twitter.com/StoutRyan
   http://facebook.com/RyanStout

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   • Brian McKim & Traci Skene says:

     August 13, 2012 at 3:34 pm

     Ryan Stout writes:

     Comedians tend to consider Louis CK successful for earning one million dollars of off his DIY stand-up special. But, in industry terms, it has been described as a complete flop. At a charge of $5 per download, Louis, with all of his fans, only managed to sell 200,000 copies. Meaning, in the world of ratings, it would’ve only garnered a 0.2! That is a pathetic number for any television broadcast.

     This is, perhaps, true. We might have worded it differently. Of course Louis CK’s project was a disappointment “in industry terms.” But that is precisely the point of this exercise– the comedian is doing something on his own terms (at least initially). The “industry” is being turned on its head. And, while it isn’t a perfect way to go about it, it is another way. Another way that a comic can create a product, distribute it and maintain substantial creative control.

     The whole point of disintermediation is to cut out the middle man. Louis CK cut out the middle man in the initial phase of the rollout of his special. He reaped the immediate rewards. (And he demonstrated demand for his product– although he probably didn’t need to.) When viewed in that way, it is neither “pathetic” nor a “flop.” And, when he eventually distributed it through “traditional” television– i.e., cable television– he got another nice chunk of cash on top of the original chunk of cash.

     From an Information Week Online column on disintermediation dated July 10,2000, by Michael Hammer:

     A more reasoned view of the impact of the Internet on distribution channels is that it will transform but not eliminate them. The reality is that customers need a significant amount of value to be added to most products before they can buy and use them.

     Hammer says that, unless the distributors can add value to the product, they’ll die or their role will significantly diminish or radically change. Comedy Central adds some value to Louis CK’s product– convenience for one. It is easier to turn on the television, go to Comedy Central and watch the special. For now. And for Louis CK (and others) Comedy Central certainly provides those “potential new fans.” (Although that’s not a slam dunk either, as many comedians who have been blessed with a CC special are wondering if such exposure translates directly into ticket sales.)

     To be sure, comedians with little or no existing fan base may find that a direct-from-my-website model doesn’t bring in significant revenue. It then falls on them to promote themselves and their product– something that Comedy Central and the networks are adept at. They can reach, in the case of cable, hundreds of thousands of eyeballs and, in the case of the networks, millions of eyeballs. Such marketing and advertising costs millions and can’t be supplanted by social media, Dane Cook being the exception. People without that existing fan base who seek to emulate Louis CK may not make a ton of cash, but they will gain experience in producing a special, they’ll have a product that they can maintain total control over and, perhaps in the not too distant future, other second- or third-tier distributors may enter the picture– distributors who see value in their product and can reach a sizable enough audience– and will offer them money in exchange for distribution. Or, they’ll just make enough money to keep them off the road for a year. In any event, it’s a win. And, for many, it beats the hell out of sitting around waiting for the phone to ring. (And it beats climbing up the well-work ladder through the traditional media.)

     Jim Gaffigan’s decision to distribute through NetFlix– which is itself a form of disintermediation– is perhaps a harbinger of things to come. Gaffigan and Aziz and CK assume one of the roles traditionally undertaken by the conglomerates, that of production. NetFlix is, for now, purely a distributor. And, since they have little overhead (at least compared to a major network or cable distributor), we assume the terms they strike with content providers is far more favorable than that which are offered by traditional distributors like NBC or Comedy Central.

     And, as the traditional media collapses and traditional modes of distribution morph, the “sick money” will become diffuse. More and more artists will be cut into the pie. The slices will be smaller, but they’ll be more than enough. This disparity between the “Seinfeld” or “Raymond” money and the money garnered from peddling a DVD through a personal website causes folks to illogically cling to the old model while dissing the new model. (We suspect that the prospect of a DIY project is daunting as it involves a little too much D-ing for Y.)

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