True Fans + Go Direct! = $$$
It’s pretty obvious that if you can find a way to Go Direct! you can build a much stronger business. But how? Let’s talk about it.
Louis C.K. is a comedian who has built a powerful following of fans. He currently has 3.2 million Twitter followers, and has a few more million fans liking his Facebook page. His videos on YouTube are seen by millions, and his blog is a highly-trafficked hub of information about his career and his thoughts.
In other words, he built himself a platform. A platform he can leverage to Go Direct! to his fans. A platform that gives him the power, not the middleman. After all, isn’t that usually what the middleman only has to offer? Television stations offer programming and “eyeballs” for advertisers. It’s the same with radio and magazines. Websites like Huffington Post and others offer the same exact thing: a lot of traffic.
But when you have your own platform, you don’t need their eyeballs. You’ve got your own channel to use as a platform to communicate and sell. That sounds like a much better idea doesn’t it?
Louis C.K. thinks so, and he’s proven it. Through the power of his own platform he has been able to sell direct to his fans and cut out the middleman successfully. In fact, he’s done it twice for big dollars.
It all stemmed from the comedian who was tired of seeing his fans pay marked-up prices to consume his work. According to Louis in a Rolling Stone article, the giant, bloated costs of show tickets and the litany of bogus add-on fees from the middleman had become “f-ing brutal” for his fans.
"I really feel connected to the people who pay to see me," he said in the same interview. "They end up paying all those premium ticket costs and add-ons for the promoters. It's fucking brutal. I don't want people to pay more just because they like me more."
Indeed. What’s great is that he went and did something about it, and it worked. The comedy special, Louis C.K.: Live at the Beacon Theater, pulled in a gross of more than $1,000,000. It received 110,000 downloads within the first 48 hours, netting the comedian a profit of over $700,000. But how did he do it without the middleman? How did he go around the gatekeepers? Easy. He released the special exclusively through his website and charged his fans $5 via PayPal for two downloads and two streams of the performance. Then he edited it himself.
When asked why he was not bringing the special to a traditional cable television network, Louis C. K. said: “To me, I flip the question over: Why should I go through a cable network when I can just give it directly to the people who want to see it? It’s so much easier, and it’s an interesting experiment.”
How would this have happened before the Internet and the ability to Go Direct!? Typically, to make this type of thing happen, an entertainer has to hire a production company to plan the event. The production company works along with the agent and a ticket broker to plan the show, market it, and sell tickets. There are a lot of middlemen in that equation. A lot of profit lost. And a lot more headaches.
Oh, and he’d probably have to go through a gatekeeper who would want to judge his content before he put it out there. As if they know better about what his customers want?
He called it an experiment; but it was more than that. It was the beginning of a revolution for all types of content creators, comedians and everyone else.
The point was to see if he could self-release directly to his fans online without the middleman. And boy did it work. Even though it was a large gamble. Without the power of his rabid fan base, it might not have gotten such a great response. Note: The power of true fans.
Here’s a link to the original post he sent out to his fans. The letter is below.
People of Earth (minus the ones who don't give a shit about this): it's been amazing to conduct this experiment with you. 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?
It's been 4 days. A lot of people are asking me how it's going. I've been hesitant to share the actual figures, because there's power in exclusive ownership of information. What I didn't expect when I started this was that people would not only take part in this experiment, they would be invested in it and it would be important to them. It's been amazing to see people in large numbers advocating this idea. So I think it's only fair that you get to know the results. Also, it's just really cool and fun and I'm dying to tell everybody. I told my Mom, I told three friends, and that wasn't nearly enough. So here it is.
First of all, 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. I directed this video myself and the production of the video cost around $170,000. (This was largely paid for by the tickets bought by the audiences at both shows). The material in the video was developed over months on the road and has never been seen on my show (LOUIE) or on any other special. 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.
The development of the website, which needed to be a very robust, reliable and carefully constructed website, was around $32,000. We worked for a number of weeks poring over the site to make sure every detail would give buyers a simple, optimal and humane experience for buying the video. I edited the video around the clock for the weeks between the show and the launch.
The show went on sale at noon on Saturday, December 10th. 12 hours later, we had over 50,000 purchases and had earned $250,000, breaking even on the cost of production and website. As of Today, we've sold over 110,000 copies for a total of over $500,000. Minus some money for PayPal charges etc, I have a profit around $200,000 (after taxes $75.58). This is less than I would have been paid by a large company to simply perform the show and let them sell it to you, but they would have charged you about $20 for the video. They would have given you an encrypted and regionally restricted video of limited value, and they would have owned your private information for their own use. They would have withheld international availability indefinitely. This way, you only paid $5, you can use the video any way you want, and you can watch it in Dublin, whatever the city is in Belgium, or Dubai. I got paid nice, and I still own the video (as do you). You never have to join anything, and you never have to hear from us again.
I really hope people keep buying it a lot, so I can have shitloads of money, but at this point I think we can safely say that the experiment really worked. If anybody stole it, it wasn't many of you. Pretty much everybody bought it. And so now we all get to know that about people and stuff. I'm really glad I put this out here this way and I'll certainly do it again. If the trend continues with sales on this video, my goal is that I can reach the point where when I sell anything, be it videos, CDs or tickets to my tours, I'll do it here and I'll continue to follow the model of keeping my price as far down as possible, not overmarketing to you, keeping as few people between you and me as possible in the transaction.
(Of course I reserve the right to go back on all of this and sign a massive deal with a company that pays me fat coin and charges you straight up the ass.). (This is you: yes Louie. And we'll all enjoy torrenting that content. You fat sweaty dolt).
I probably sound kind of crazy right now. It's been a really fun and intense few days. This video was paid for by people who bought tickets, and then bought by people who wanted to see that same show. I got to do exactly the show I wanted, and exactly the show you wanted.
I also got an education. And everything I learned are things I was happy to learn.
I learned that people are interested in what happens and shit (I didn't go to college)
I learned that money can be a lot of things. It can be something that is hoarded, fought over, protected, stolen and withheld. Or it can be like an energy, fueled by the desire, will, creative interest, need to laugh, of large groups of people. And it can be shuffled and pushed around and pooled together to fuel a common interest, jokes about garbage, penises and parenthood.
I want to thank Blair Breard who produced this video and produces my series LOUIE, and I want to thank Caspar and Giles at Version Industries, who created the website.
I hope with all of my heart that I stay funny. Otherwise this all goes to hell. Please have a safe and happy holiday, and thank you again for all this crazy shit.
So what do you do when your first “experiment” works very well? You do it again. Next time he sold tickets to his upcoming comedy tour for $45 a pop. And his time he “only” sold over 100k tickets in 45 hours, for a box office gross of $4.5 million.
He later tweeted, “I guess it was a good idea.”
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Yeah, we think so too. Want some proof of his success? Check out this screenshot of his PayPal account with over one-million dollars in it. <!-- [if gte vml 1]>
Of course, the middleman took notice of Louis CK’s success and is already plotting a way back into the middle by providing actual value. Sites like Chill are offering a middleman service for content creators who want to “sell direct”.
Los Angeles-basedChill.com launched a DRM-free content marketplace for independent creators on Thursday, letting content owners sell streams and HD downloads of their movies, live comedy recordings and other types of videos directly to consumers.
For a cut of the action, of course. The middleman is clever and relentless! Of course, Chill provides some value and a welcome helping hand.
What Louis C.K. has done is completely break the model of traditional business by cutting out the middlemen that don’t provide value and going around the gatekeepers who wanted to control his content. Using the power of his true fans and his “why not?” entrepreneurial attitude of Go Direct!, he was able to show all of us the path to doing it on our own as well if we choose to do it. This is the future of all content creators, large or small, famous or not.
A big part of Louie’s success is email marketing and social media. Louie C.K. not only drives his fans to his email list, but also to subscribe to his blog updates. Because he has direct contact to his true fans via email, he doesn’t have to try to rely on social media channels like Facebook and Twitter, which are great for content sharing and distribution, but not the best or most effective way to Go Direct!.
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