At a certain point it’ll stop being a novelty and instead be seen as a standard distribution model.

Following the example of countless indie filmmakers, musicians, and high profile bands like Radiohead, comedian Louie CK opted to Produce his own stand-up comedy show, selling video of it online for $5 to download/stream. In a blog entry posted on the download site, CK broke down the figures involved in the production, along with loosely detailing the revenue.

The production cost US$170,000, but this was largely made back from ticket sales. The website design/hosting cost US$32,000. Within 3 days of availability, CK sold over 110,000 licenses to download the file at $5 each. Ck cites the overall profit received at approximately US$200,000. While it is less than he would have made selling the rights to the performance to a third party, CK justifies it by noting that he completely owns the recording and he was able to sell it to his fans at a very cheap price. Of course, this release model doesn’t prevent him from also selling the broadcast rights to cable television to screen, or selling it to streaming services like Netflix.

The success of the release has encouraged CK to want to do it again in the future.

Not every artist will be able to emulate the success that CK has had with this distribution method. In all likelihood, very few could. CK is in a unique position where he’s very much a DIY artist and has the technical expertise to back him up. Further to that, as a performer he currently has a lot of heat surrounding him after the release of his last very successful stand-up concert (Hilarious) and his well-regarded cult series Louie. But, that doesn’t mean other artists should be dissuaded from pursuing a similar distribution approach.

It’s all about economies of scale. CK moved 110,000 copies (or download licenses, if you will) within just a few days. It was great for him and he’s had a nice payday as a result. But, he also spent just over US$200,000 on the production. Yes, it’s a great looking show, but there’s nothing to stop artists taking a similar approach on a smaller scale. There is nothing stopping a standup from recording a set at a much smaller venue with fewer crew and less production equipment. The financial benefit will be nowhere near as great, but neither is the initial outlay.

We’re regularly being told about how “piracy is destroying the industry”. Less common is discussion about the value of the industry for the consumer. People are going to steal. The fact there’s a security guard on the front door of most big stores are evidence enough of that.¬†As I type this, The Pirate Bay tells me that 668 people are seeding a file of Louis CK: Live At The Beacon Theater, with a further 143 people leaching. It’s also worth considering that , 110,000 people were willing to pay an artist $5 each which resulted in the following:

  • A very nice pay day for the artist.
  • Work for the professional crew that were paid to produce it.
  • 110,000 fans across the world who were able to enjoy the recording, regardless of distribution boundaries.
  • 110,000 fans able to play a file free of DRM restrictions and a choice to access the very same file in SD or HD at the same price point.
Also, the file didn’t force consumers who paid for the product to sit through this promo featuring some stolen musical works:
[youtube]http://www.youtube.com/watch?v=HmZm8vNHBSU[/youtube]
Yes, there’s value to a prosperous and vibrant industry in which people are paid equitably. But, the cost of production is diminishing and distribution models are changing. The real threat to the industry is not piracy.
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