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The Louis CK Business Model – will it stick?

May 5, 2016

business, celebrity

 

Last Decemeber, comedian Louis CK sold his self-produced special Live at the Beacon Theatre online from his own website for $5. Though this may not seem particularly revolutionary, it was.

louis ck

Image by Kelly via Wikimedia Commons

Louis has explained this endeavor as an experiment, saying:

“The experiment was: if I put out a brand new standup special at a drastically low price ($5) and make it as easy as possible to buy, download and enjoy, free of any restrictions, will everyone just go and steal it? Will they pay for it? And how much money can be made by an individual in this manner?”

Well, Louis ended up making $1 million in the first two weeks of sales. Incredible! After all, it wasn’t too long ago that Louis was entertaining audiences with his money woes.

In the wake of Louis’ success, other comics like Aziz Ansari and Jim Gaffigan have follwed suit, selling their own self-produced specials via their websites rather than putting them in the hands of a television network or an online steaming company.

Louis CK’s business model may seem a bit obvious. When I first heard about his success, I was  surprised that no one had thought to do it like this before. But even though it may seem so simple now, the decision to forgo the usual business model was actually a major risk. Louis CK explained the risks on his website:

“The risks were thus: every new generation of material I create is my income, it’s like a farmer’s annual crop. The time and effort on my part was far more than if I’d done it with a big company. If I’d done it with a big company, I would have a guarantee of a sizable fee, as opposed to this way, where I’m actually investing my own money. “

So, the trick to this method is that it requires saying ‘no’ to guarenteed money. Instead, you must back yourself to be able to bring in sales. It’s risky. It takes chutzpah. Do I think it will stick around? Yes.

A decade ago, this business model may not have been feasible. But with the power celebs and entertainers now have to communicate directly with their fans (yep, social media. you guessed it.), it’s clearly the way forward.

What do you think of Louis CK’s business model? Let us know what you think in the comments section below.
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