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Can a prominent comedian shake up the comedy business by producing his own event and selling it to consumers online in digital format DRM-free? Thanks to Louis CK's experiment, we now know the answer is yes.

More than 100,000 comedy fans have snapped up 'Louis CK: Live at the Beacon Theater' for $5, earning the comedian a healthy profit and sparking a discussion about digital content, business models and pricing.

Here's what you can learn from Louis CK's experiment.

Content is king.

As Louis CK himself noted in his statement, this was a premium video production, shot with six cameras over two performances at the Beacon Theater, which is a high-priced elite Manhattan venue. In other words, he didn't skimp on his venture even though he was footing the bill. 

Price matters.

Louis CK told the New York Times, "I buy lots of things online and I had a focus group of one. I thought about it, and five bucks seemed almost free and I figured if I took out the hassle, most of the speed bumps, it would almost be like hitting a link and streaming it."

It seems fairly intuitive, but as we're seeing in the ebook market, for instance, not all content creators seem to understand that consumers are quite price sensitive when it comes to digital content.

You can only focus so much on piracy.

The desire of consumers to access their content when they want, where they want is well-established. But delivering digital content that allows them to do that has proven challenging for many content creators who are naturally worried about piracy. But if we've learned anything over the past decade, it's this: there's only so much you can do about piracy, and it's possible to undermine your business when you try too hard to stop it.

Piracy didn't stop Louis CK from performing his experiment. On his purchase page, he posted a little note about torrenting, writing in part, "I can't stop you from torrenting; all I can do is politely ask you to pay your five little dollars, enjoy the video, and let other people find it in the same way." Judging from the number of individuals paying for the video, it looks like he took the right approach.

It takes money to make money.

To produce this, Louis CK spent a six-figure amount, plus a significant amount of his time. Yes, earning $200,000 of profit in a few days after investing over $200,000 and three months of sweat would by most measures be considered a satisfying outcome, but without the ability to make that investment, the outcome never would have been achieved.

The rich get richer.

This old rule of thumb applies not only to those who have lots of money, but those who have lots of attention. Louis CK is a well-known and established comedian whose experiment certainly wouldn't have been successful if he wasn't already popular. That popularity, of course, was built by taking a more traditional path.

Sometimes it pays to take a little risk.

Louis CK didn't have to be adventurous. As he noted, he could have produced Louis CK: Live at the Beacon Theater with a big backer. That would have required less effort, and guaranteed him "a sizable fee".

But in taking a well-calculated risk, he got far more in return: he not only owns the rights to his content, he owns the relationship with more than 100,000 new customers and potential fans.

Patricio Robles

Published 19 December, 2011 by Patricio Robles

Patricio Robles is a tech reporter at Econsultancy. Follow him on Twitter.

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Comments (1)

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Andrea

Musicians, such as Radiohead, have done similar business models in the past with similar outcomes. Turns out people actually don't mind spending money when it's affordable worth it.

over 4 years ago

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