This was one of the topics we talked about in The Bean Cast show the other night. It is of special interest to content creators, whether or not you support or work in the entertainment industry.
As Bob Knorpp said:
the entertainment world was abuzz in December because of an experiment by comedian Louis C.K. Following the example of some music acts, he placed one of his shows online and unprotected, asking only for donations.
The result? After expenses and PayPal processing, he netted $200,000 free and clear, he had very little piracy and still owns the rights to his content.
How important is this story? Is the appeal of this overblown?
"When Louis C.K. asks, people give," said Marc Whitehead. He actually grossed $1MM by charging a $5 per download. Some really good thoughts on implications from Marc (loosely transcribed by me here):
- this shows that as consumers we're more than prepared to pay for digital content that is being distributed online. Indeed, Steve Jobs is the one who changed the game here
- for entertainers like Louis C.K. this is another example of entertainers who are developing original content and distributing it online or in very different venues.
Someone like Kevin Smith who is a film maker and is not using the traditional distribution channels and is actually renting out theaters and inviting people to come and pay two, three, four times what they would normally pay, and he comes there and shows he's films and talks about them . So all that money is going into his jeans pocket.
Or you have someone like an Adam Carolla who's doing the same thing on his podcast. His podcast is free, but he asks people to help him out by buying his books and going to his live events, and he made the best seller list as a result of all the sales of his books.
- the really interesting and noteworthy and maybe even sea change moment is for the distribution community because Louis C.K. would normally look to HBO or a Showtime as a partner to distribute this kind of content and he's called it an experiment in part (probably) not to get their backs up, but distributors are going to meed to start to redefine what they're all about.
Through the Internet and through technology that is allowing people to connect with this content (starting in 2012 and onward it will be difficult to buy a TV that is not Internet-ready) and you're going to be able to find this content directly form the people who are creating it rather than having to deal with any kind of online distributor or even the more traditional distributors like NBC and CBS and ABC.
So, for distributors and distribution networks, they're going to need to think long and hard and redefine their role in the process.
We've often criticized such efforts and not being truly indicative of a flattening entertainment space and maybe it's just the top tier entertainers who can do that. Another example Bob Knorpp brought up is Radiohead.
Then there is another consideration, which is people like Louis C.K. had their reputation built up by the entertainment industry -- so is this something everyone can truly take advantage of?
Peter Shankman pointed out that the question we should ask ourselves is how popular is any of us? Millions of people put stuff online and ask for donations all the time and don't make a penny from it. So the issue is: will big celebrities do this and if that catches on, will that change the model?
Is that going to go mainstream? Do we like everything that is out there? I agree with Shankman here, if we did many more bands would be millionaires, and so on. And of course, as Whitehead countered, not everyone is looking for mass or we would not have special interest channels like tennis, golf, etc.
To build on this specific point, my take is that with this move C.K. is giving direct access to his fans as this discussion on Reddit demonstrates. And fans are willing to become patrons to support the work of people they gain benefits from.
This Kevin Kelley's 1,000-fan concept. Find those fans who love what you're making, your art, and find a way to connect with them.
The other thought I had is that often people don't have the gumption to go out there and start selling their art and creation. Many talented individual suck at selling themselves.
So the role of the intermediary is to leverage assets like distribution deals and relationships to aggregate content and distribute it through a combination of nascent and established outlets. In other words, doing what they know how to do: distribute, cut deals, in the digital age of multiple verticals.
Louis C.K. is also a good salesperson, for example. Going back to an earlier point though, taking responsibility for direct relationships with fans like Lady Gaga and other smaller bands are doing is highly desirable, added David Burn.
Direct relationships lead to direct connections.
And I'm going to leave the last two questions from Bob Knorpp for you to address:
Some critics of the Louis C.K. experiment say that he traded dollars for cents -- is that fair if he retains the rights for future revenue, unlike a deal with HBO say?
What do you think? Yes, not, maybe? Too early to tell? What's your take on his price point? Will $5 affect pricing online or is the model still evolving?
Let's say this is the future of entertainment marketing -- is there also a place for ads and product placement without having leverage with big distributors for the biggest name content? Would a whole bunch of deals be palatable?
What do you guys think about this one? If there were an app that would do this kind of thing, get it organized by vertical or kind of deal, which we discussed in the next segment of the show, would it create a new model?