Some Thoughts On The Louis CK "Experiment"

Since the early days of this blog, it has been filled with musings on how creativity will be rewarded in the internet age. It is a theme I've come back to again and again. These thoughts have worked their way into our investment thesis and our portfolio. Investments like Etsy, Kickstarter, SoundCloud, and many others have come from this line of thinking.

So when I saw what Lous CK did last week, I was so excited. For those who don't know, Louis CK is a comedian, a really funny comedian, who made a one hour comedy special and put it on the Internet for anyone to buy/stream for $5. You can "buy the thing" here.

This week, Louis shared the finacial details of his experiment with everyone. Here are some of the salient details:

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.

So Louis' experiment was a financial success. But more than that, it is a business model success. He has recouped his investment, is well into the black, and he owns the rights to his creativity without any limits on what he can do with it. He is able to sell it everywhere in the world at the same time without any DRM on it. And he will continue to make money from this content for many months (years?) to come.

Some will say that Louis can do this because he is a star. That is true. And I sure hope other stars will follow his lead and go direct to their fans. They can also go direct to their fans and raise the upfront production costs on Kickstarter. They can use any number of internet services to process the payments (paypal), host the video (vimeo), and get distribution (twitter). This is not that hard.

But this can also work for emerging artists. They won't make as much money as Louis CK, but they also don't need to make as large of an investment either. And over time, if their work is good, their audience will grow and the investments they can make and the profits they can make will increase.

The business model of going direct to the fans is powerful, it has none of the negative issues of the existing business model (like fucking with the architecture of the net in a naive attempt to quell piracy) and is going to work bigtime. Thanks Louis CK for shining on a huge bright light on that fact for the past couple weeks. And thanks for the laughs you gave me and the Gotham Gal on thursday night.


Comments (Archived):

  1. Dave Pinsen

    What Louis C.K. accomplished with this is impressive, and it was cool of him to publicly break down the numbers the way he did. But I think you underestimate the impact of piracy on smaller players. The impact of it is bigger if you are paying for advertising, rather than getting free publicity, as Louis C.K. did for this (on Nightline and elsewhere), since, as you note, he’s already a big star (deservedly so, btw).Here’s an example of piracy hitting me last week. After reading about it here or on Mark Suster’s blog, I looked into the app ad network Tapjoy. Their pay-per-install program sounded like a good deal — the way they describe it, you only pay Tapjoy for advertising when someone downloads your app. As a rep from Tapjoy explained initially, you were guaranteed a positive ROI if your bid (the amount other app providers are paid to host ads for your app) stayed at the Tapjoy minimum (50% of your app’s sale price).For the Portfolio Armor iOS app, 50% of the sale price is $14.50. After Apple’s cut, I’d end up with $5.80 per $28.99 sale through Tapjoy, instead of $20.30 without Tapjoy, but there’d be a chance to make that up on volume. The fly in the ointment here is piracy.Tapjoy charges you for the pirated downloads too (because they pay the hosts of the ads that lead to the downloads either way). So, the first time I tried advertising with them, Tapjoy charged me for 14 downloads during a period where Apple iTunes showed 10 paid downloads — enough pirated downloads to cause a negative ROI, if Tapjoy didn’t refund those 4 pirated downloads as a one-time courtesy.Figuring a ~35% piracy rate might be a fluke, I tried Tapjoy again for one day last weekend, capping it at 10 paid downloads to be on the safe side: I got dinged for 10 pirated downloads on a day when I got 0 legitimate downloads: a 100% piracy rate. In other words, I ended up paying $145 in advertising and getting paid for $0 in sales. That’s piracy wrecking the viability of what otherwise would be an effective advertising platform.

    1. fredwilson

      i am sorry to hear about that Davetapjoy is a very problematic service, bordering on a scamapple has been trying to shut them down for a long time…

      1. Dave Pinsen

        I asked Tapjoy about that. In my case, since it’s a paid app, and legitimate users still have to pay the full price to download it, there would be no chance of artificially boosting the app’s iTunes ranking in the way there is for a free app.

  2. catullusrl

    “But this can also work for emerging artists”Please provide evidence.

    1. fredwilson

      i think freddie wong is a great example of someone who is building his career along these lines…

    2. Dan Lewis

      I think the word “emerging” is difficult here because it’s really hard to define.A guy who is a few months into his career probably hasn’t really done much of anything — maybe done a few open mic nights.  It’s hard to call this guy an “emerging artist,” but he’s obviously spending a lot of time on becoming a comic — but probably very little in the way of money.Take the same guy at a year.  Maybe he’s booked a gig or two as an opening act for a marginally known comic.  Maybe he has a website up and an email list or twitter account sharing details about future gigs.  He’s working even harder and now spending a bit (very little) to make this thing happen.  At this point, is he an “emerging artist?”  It’s hard to say.  But it’s also kind of irrelevant. His cost basis is probably a few hundred dollars a year, and that’s probably not a big deal.   But when he gets a decent following, yeah, he probably can cut his costs (or even earn some money) by doing something like Louis CK did, or a Kickstarter, or something similar. 

  3. Dave W Baldwin

    Love it!There will be many comments saying this worked because he is famous.  Of course that makes a difference.  The up and comers who are going to make it know they are not going to have it handed to them.  Utilizing the web is the way to go. 

  4. LIAD

    I like 50,000 others spent the $5 and watched the special last Saturday night.I didn’t find it as strong as his previous ones but did enjoy it a lot. (I wasn’t that upset my wife fell asleep a few minutes before the end just as he was maxing out the sick-o-meter).I don’t think his experiment has any bearing on 99.9% of creatives. For years they have been cobbling together solutions to sell their content online. He’s just done the same but for different reasons.They do it as they have no other choice, he did it because he calculated that cutting out the middle man would make his fans happier and him more money. A no-brainer.I have two takeaways:1. At what price point would I and others have sought out a torrent rather than buying it legitimately – $20, $25?2. For someone who seems to grok digital, how could he have agreed to pay $32,000 for what amounts to a 3 page website with simple paypal integration.

    1. Jacob

      I will say a few things and this is my first time comment on your blog, Fred. I saw you interview Dennis Crowley at the NYU Entrepreneur’s Festival and went home and subscribed to your blog because, I thought it might make sense to follow one of the premier NY VCs. Now that I’ve got that out of the way, I’ve got some serious problems with this experiment. First, while LIAD is right that this was built by someone who already had a following, just remember that Soulja Boy was found on YouTube after acquiring a massive following. He actually gained his following by playing X-Box Live with people. So, while Louis is famous and has a massive following, other people can do something similar–albeit with much less return on investment–and still be somewhat successful. With the Internet, anything is possible. Now, my second problem with this experiment and this is why I’m replying to LIAD’s comment is the cost of the website. $32,000? Really? There are fantastic content management systems that would have allowed all of the features that he needed tweeked for a third of the price (if not even cheaper). So, for all of those out there that are thinking of doing this, please remember that $32,000 for a 3 page website these days is absolutely archaic. Finally, my biggest problem is where he says: “You never have to join anything, and you never have to hear from us again.” While I love the idea of not having to get spammed by you, why not give them the choice? In Internet marketing, we look at what’s known as a sale’s funnel. You try and push a lot of people into the funnel and at each stage of it, more people start to leave the funnel until finally, you’ve got fewer who are buying. But, it’s those few who are buying that are your actionable. Why not try and get their email addresses so you can email them when you have another special? Don’t spam them, but just give a little option at the bottom that says: “Would you like to receive updates about other Louis CK video?” If they check it, you get their email. Now, when you release another video, you can try and spend your advertising resources on new customers, not the ones who you already had gained their loyalty from. It’s great that Louis was able to do so well with this experiment, but this was a shortsighted experiment. He overpaid for his website, he probably undercharged for his product ($10 probably would have gotten fewer people, but more profit…Then again, that’s a basic chart and you have to find the happy medium), and finally, he didn’t attack the potential of return business. He doesn’t have to be aggressive, but if you can keep your customer around and have them buy a second thing, you got the same person to buy twice. That’s tremendous. Anyway, congrats on the success, Louis. And, love the blog, Fred!

      1. fredwilson

        please don’t make this your last comment Jacob

        1. Jacob

          I promise, Fred, I won’t. And Bill, if that’s the case, then you can happily cross off my biggest problem from the list. Since I didn’t go to buy it, I didn’t see the opt-out checkbox. Email marketing, though, doesn’t need to be spam. Maybe I’ll write about it one day. Thanks for the reply!

          1. Dan Lewis

            “Email marketing doesn’t need to be spam” is entirely right.Imagine how awesome Louis CK’s email list would be if every week, he emailed you a link to a private two minute YouTube video of him sitting in his office, telling you a joke — maybe one built off the prior week’s joke.And in the email, there was other stuff: notices of upcoming appearances, a link to a new book or new $5 special, etc.

          2. Aaron Klein

            I was about to make the same comment…so true.

          3. Mark Essel

            AVC is a great place to listen, learn, educate, and laugh.

          4. fredwilson

            i should put this on the front page of the site. it does that for me every day without fail. and i’m not talking about the stuff that i write

      2. BillSeitz

        Note that he *did* collect email addresses, he just gave you a default-opt-out checkbox so you had a choice about getting spammed. This is exactly the right thing to do.

      3. jason wright

        “I saw you interview Dennis Crowley at the NYU Entrepreneur’s Festival and went home and subscribed to your blog because, I thought it might make sense to follow one of the premier NY VCs.”Where is this interview to be found please? I’ve been looking for it for a while now. Is it where there’s a discussion of Siri’s API?Thanks.

      4. BillMcNeely

        I think Louis did a great job with a Minimal Viable Product.  Eric Ries and Steve Blank would be proud! I am sure Louis will tighten up his shot group on his next attempt.

      5. kirklove

        Jacob, even though he said, “you’ll never hear from me again,” I’ve already got another “offer” from him. I’m certain I will get more. 

      6. another cultural landslide

        On the issue of opt-in email lists, there’s a really good reason for opt-in: active vs. passive users. Passive users look at unasked for email as spam, and it can denigrate the user’s opinion of the provider.Active users WANT to be a part of this list – so when they receive an email, they read it. Quickly. And they are your true backers.Also, way too often email is used to say “new product” or “buy me.” Loyalty is amplified when a recipient doesn’t think they’re just an anonymous ATM. Sure, share product news – but, say in Louis’ case, why not make an occasional email just a source of entertainment? Just a greeting, thanking the user for being on the list, telling them they’re appreciated, and being funny while doing it…That way, email becomes a way of retaining an Active user base. People want to feel connected. Doing it this way makes the issue of “funneling” away a non-issue.

        1. ShanaC

          Until you are on too many lists and they all end in your bulk folder….

          1. another cultural landslide

            Very true. ;)Still, this feeds back into the “active” participant idea; if you do not make the “join email” simply as an option in a purchase screen – and (this is my weird idea) actually “decouple” it from that entire process, the user who joins your list & has a massive bulk folder eventually clears it out… and unless they do a bulk erase, will at least check it out before doing a bulk erase.The secret is to Be Interesting in who you are, and what you send out.

      7. ShanaC

        First off, welcome Jacob.Secondly – how often do you think taste in one thing will cause spreading into taste for another ala what happened with Soulja Boy?

        1. Jacob

          I don’t know if taste for one thing causes taste in another to flourish. That being said, the premise behind Soulja Boy’s success can be applied in the future. How often do we spend looking at dumb videos on YouTube? How quickly can a video as dumb as “superman that ho” spread around that someone has to offer the guy a record deal? In this day of the Internet, I think anyone with a bit of creativity can get something to go viral. That being said…It does require that spark of creativity and I think too many people are looking for that “out of the box solution.” They’d rather hire an outside company to do the creativity for them than come up with their own solution. Soulja Boy did it himself and now look at him. He had his time of success. People know his song. And that’s what matters. So, I guess what I’m trying to say is that taste in one thing doesn’t lead into another, but the idea behind how that project first got around can be replicated. Thanks for the comment, ShanaC!

          1. ShanaC

            You’re welcome. Stop by more often.I guess we need to do more creativity training

      8. nirvdrum

        I’ve seen this comment that he overpaid get mentioned on reddit, HackerNews, Twitter, and now here.  It’s extremely pejorative without any additional context and reactions like this are the reason people are afraid to be transparent about numbers.  The fact is, the site held up from a glut of traffic. Not only that, but it was fast. That’s more than can be said about a lot of product launches that have spent hundreds of thousands of dollars effectively developing a site.But, more than that, Louis seems quite happy with it.  He’s publicly praised the development company several times.  No doubt he has a good working relationship with them now.  And the customer experience was equally great.  I’ll take it.

        1. FAKE GRIMLOCK


          1. David Shermanski

            Dude, are you a retard?How about dropping the Hulk act and commenting like a real person? Too scary for you?

          2. FAKE GRIMLOCK


          3. fredwilson

            how about being civilized in this community?you are the one who looks like an asshole, not grimlock

      9. Rohan

        Welcome Jacob!

      10. Prokofy

        You’ve nailed it on all the major points.And again — it’s not science. Not replicable. He did it that one time with this $5 video. And then maybe another $5 show.And..can he keep doing this?I want the press — and Fred — to come back to him in 6-12-18 months and see if he is STILL doing this fake thing. Because — it’s fake. Not a model. People like Fred wish it were a model so they could make money from it. But it’s not.

    2. BillSeitz

      Between hosting costs and weeks of obsessing over the UI (which may or may not have been worth it), $32k might not be a horrible deal.

      1. LIAD

        I’m sure bandwidth is served from S3 and doubt anyone would offer an all-in price without knowing what kind of sales (at 1.2gig each) to expect.The site itself is super simple verging on clunky. There is no real UI. I’m not saying its bad, but it’s definitely not great.The price just seemed a non-sequitur to me. If someone really got digital they would have done better/paid less. 

        1. Gabe da Silveira

          What do you mean “if someone got digital”?  You mean if someone is a web expert?  Yes, if you know how to do it you could build this for free.But Louis is an entertainer.  The fact that he is not a technologist doesn’t mean he “doesn’t get digital”.  From where I stand he actually gets more than 99% of big wigs in the entertainment industry, so let’s not cut him down because he isn’t intimately familiar with our own little corner of knowledge work.There are plenty of agencies he could have gone to to build his site for $10k, but if you’re running a campaign like this that is likely to go massively viral, you need to hire someone who damn sure knows what they are doing and how to scale something like this.  It’s not terribly hard, but the people who have the know-how to do it reliably from day one tend to be employed, and you have to pay a lot to get them.Also, the campaign appears very simple, but how many iterations did it take to perfect it?  It may not have all the polish in the places that you value as a startup guy, but on the other hand we do not know all the edge cases and thought process that lead the final product.  In short, it’s presumptuous to sit here as armchair architects proclaiming how much this campaign should have cost when it’s one of the most successful self-produced projects ever.

          1. JamesHRH

            I agree Gabe. He is pioneering, deeply concerned about his audience experience.He overpaid and over built, I would bet. And he was right to do so.

        2. LE

          “If someone really got digital they would have done better/paid less.”There is always money to be made in exploiting (and I don’t mean that in a negative way) what you know and what someone doesn’t know who will pay for that knowledge.  Although you might traditionally think of a Doctor/Lawyer/Architect this extends into everyday things that really don’t even take that much effort (as opposed to years of learning). That person doesn’t have the time to learn everything that you do (and may very well not have the capabilities either obviously). Or maybe they are simply not aware of how little it would take to figure out how to save money.Entrepreneurs are always looking to cut out middleman, take shortcuts if they can. If you don’t do this you will never make money unless you are a monopoly or have some really really big advantage over the competition. So entrepreneurs keep their eyes open and say “I can do that I don’t need him/them”. Most things don’t involve obstacles like drilling oil wells many times they just require a little bit of knowledge and initiative. I’ll have to tell the full story on this one day, but (owner of got it’s re-start (after bankruptcy) because the owner of discmakers (Morris Ballen) was a customer of a local printing company and asked enough questions to figure out he could offer an integrated cd service to his dying base of record pressing customers as a new business idea by printing inhouse.He thought “if this young guy fresh out of college with no prior experience in printing can do printing (the young guy started the business after spending exactly one day in a print shop) it must not be that hard. I will setup a printing operation”.That young guy then passed on the opportunity to be his partner at the time … unfortunately.

          1. RichardF

            Nice story LE – I’d like to hear it all.

          2. LE

            Ironically one of the reasons the opportunity was passed was three letters “DIP”. Those 3 letters appeared on his checks. They mean “debtor in possession” (bankruptcy) and back then that was a nice black mark (similar in a way to the way divorce is viewed now vs. many years ago or politicians cheating on their wives now vs. years ago). Failure was not viewed the same way it is now and certainly not in the way the Valley views it. Now, if I hadn’t been a curious person I wouldn’t have wondered what those three letters meant and history would be different. But I was curious (he brushed me off when I asked him and his brush off alone raised flags) so I looked into it (pre-internet days of course) and when I found out it made me not trust him and not want to get involved. Which, in hindsight of course, was wrong – in this situation. That of course is not the full story but hopefully at some point I will be able to write (as others have) many of the lessons I learned early on.Discmakers was the ultimate pivot. I remember very clearly Morris telling me that he was reinventing the company and that he would either hit it big or fail big.  (Another person I heard the same “gamble” from was Paul Fishbein of (warning NSFW: ) when he moved to the west coast to pursue building a empire in the Porn industry. (He did and in fact was a consultant to the movie “Bogie Nights” starring Mark Wahlberg)

    3. Derek

      He’s a star because 1) he has talent and 2) he works really, really hard. If you ever listen to his interviews on Fresh Air he talks about developing the discipline and hustle it takes to be successful. Saying this only works because he is a star is like saying Instagram only works because it’s popular. Both entities have some natural talent, but they’ve both worked really, really hard to maximize them.Your point about price elasticity is a good one.He may have overpaid for the web site, but that’s likely because it’s a new arena for him. For all we know he overpaid for the camera work too, but none of us is qualified to judge that.

      1. JamesHRH

        Personality plays a huge role in the path & model of someone’s success.If you watch the clip of Louis & Dane Cook ( from season 2 of Louis ) you will see that he realizes this, as he describes Cook in a way that is completely envious & not as bitter as you would think. He also has the grace to give Cook the line ( ‘how come I am a sell out, you are a comic’s comic, but you are here asking me for GaGa tickets?’).Louis does not have the feel for success – he is a problem solving, analytical type, with no personal status ego ( just the ego of wanting to know WHY and to then make things better).In his podcast with Bill Simmons ( he talks about how the TV pilot process, his experiences there, learning about the business of comedy, how ‘it takes 25years to be a great comic’, his inspirations and finally, how this business model allows him to not compromise his work ( a huge benefit for collaborative creators like TV & Film ).He is a very bright guy who is more likely than not to be a long term pioneer in the space.BTW, in the podcast with Simmons, he repeats several times what makes him different from most comics, when it comes to the business of media.He is curious.

    4. kirklove

      Spot on response. Agree 100%.Love Louie, even way back to Pootie Tang! This was a good special, but not great. Happy he’s successful though, he deserves it. He’s put in a lot of years of hard work and it’s nice to see it paying off.

    5. ShanaC

      He may not have known any better.  Or there may be customizations underneath for when he wants to repeat this project?

    6. FlavioGomes

      Why do folks look at the cost of web development exclusively as code jacking. The cost likely came from weeks of model planning. 32k seems a bit high but smart thinking costs money. The actual site was likely 500 bucks. Reminds me of logo creative…u’d be blown away on what some logo’s fetch for the creative.

  5. Dave Pinsen

    BTW, during Louis C.K.’s Nightline appearance, they mentioned some things about his F/X show I wasn’t ware of: he has total flexibility and creative control of it. He told the network he wanted to stay in New York and work 3.5 days per week to spend time with his kids. They agreed. Louis C.K. edits the show himself on his laptop. 

    1. fredwilson

      he edits the show on his laptop!

      1. Dave Pinsen

        Looks pretty polished, but yeah. Impressive. 

      2. Aaron Klein

        The equivalent of “coding skills” in his industry 😉

      3. Mark Essel

        As a guy who codes daily, and has tried editing several times, I painfully recognize the skills required to do video editing well.

    2. JamesHRH

      Seinfeld had nearly the same creative control – his leverage was the same as Louis : his was willing to do 200 road dates a year.Control of the product – and their career arc – are huge value drivers for creators.

  6. Elie Seidman

    People paying for product they enjoy isprobably the most important change in the business model of the web that I’veseen since I started using the web in 1993/94. The analogy I use is that ifyou’re a car engineer or designer, you expect to get paid more if you make theproduct better. On the web, for manyproduct/vertical areas (Oyster is in such an area), it has been the realitythat the way you get paid more is to, in a sense, make the product worse. Youadd advertising. You add paid links to other sites – the links often result in pop-upsand other tactics that are less than elegant.  These monetization tacticsalso require the company to divert investment away from product developmenttowards things that don’t directly help customers – for example the sales forceto sell those ads.But we now have a relatively large set of datapoints that suggests that customers are evolving how they think about payingfor product on the web; that it makes sense to pay for a good product and thatgood products – downloading paid for movies and music on iTunes, newspaper paywalls, paid apps, etc – not only deserve to be paid for but actually get betterif they are directly paid for. Hopefully this is the early evidence of a majorevolution in consumer psychology. If we migrate towards a world (on the web)where the norm is that people *directly* pay for value received, we’ll see alot of innovation and creativity that would otherwise be more difficult tosupport. For me, this is far more about an evolution in psychology thananything else. We don’t expect to be able get a great car for free – we knowthat good products cost money. If our default is that good products on the webwill cost something, we’re going to see a far more elegant web in the future. 

    1. fredwilson

      the “success” of the subscription music services (rhapsody, rdio, spotify, etc) are another data point in your “relatively large set of data”

      1. Elie Seidman


    2. JLM

      “On the web, for many product/vertical areas (Oyster is in such an area), it has been the reality that the way you get paid more is to, in a sense, make the product worse.”Haha, boy, isn’t that the damn truth.  There is almost nothing that can ruin success like a pinch of success!

    3. Mark Essel

      I gladly pay for ad free tools and media.



      1. Elie Seidman

        Well said – very much agreed

  7. awaldstein

    Getting found is hard.The beauty of Kickstarter is that you are raising funds and building your community at the same time. That’s why, I think, it works.The web feels crowded with companies in search of an audience. Great early products scratching around for people to engage and try it.VC money (unless it’s from you Fred) really doesn’t help,.Marketplaces do when done right.I’m just not a believer in ‘build it and they will come’. I’m a believer in build it along with them and you are already part of the way there.Seems obvious and logical but surprisingly not.

    1. BillSeitz

      KickStarter makes network building a little technically easier for a non-techie, but doesn’t build your network for you, unless you get promoted by them. (Like the stories about people’s efforts to get promoted by Apple in iTunes.)…

      1. awaldstein

        I’m not certain I agree.Every project I’ve supported, I’ve shared with my friends and networks and spread out why I though it was a good idea. I’m helping the project get found.And every project I’ve supported, I become a fan before and while the project is getting built/made. So I’m a market for the finished product.They are in a sense a marketplace for those of us who are behaviorally inclined  to support things in that way. But once we find something, and support it, we are indeed a network for the products future commercial success.They don’t market per se, but they are a market in a different but powerful sense of the concept.

        1. JamesHRH

          Arnold – people like Tim Grahl ( ) are developing the model of direct creative content marketing.Marketing awesome is easy – marketing something 0.000005% less than awesome is really hard work. It takes intelligence, discipline and effort.Standards are coming…….

          1. awaldstein

            I took a brief look. Testimonials are impressive.But at first glance, felt beat over the head with buzz, especially tribal buzz talk. I’ll spend some time on his blog and see how he engages with me. I’m all about embracing new ways of thinking but the idea that there are standards that become boilerplates that become a science of marketing sounds like PPC searching for eyeballs rather than value seeking for engagement.

          2. LE

            See my comment above.

          3. LE

            @arnoldwaldstein:disqus :”Testimonials are very impressive”Oh yeah it’s all “well played”. Down to the BW photos on the “about” page posed in front of a brick wall.  I’m wondering if the clients in the testimonials are actually paying clients or were offered services in exchange for being featured as clients. If they didn’t pay that’s fine and clever (an idea I would advocate).Interestingly no bios on anyone but this is on linkedin and probably why:…So we have someone running this business who doesn’t appear to have any particular expertise other than in web development. Consequently this is actually a web design, consulting and hosting solution (at $5000 cost) packaged for a niche market. A fine business idea of course no problems there.  Size of the current market (as well as their other clients) can be had by searching for “Site by Out:think” which appears on the bottom of their client pages.  Bludomain does a similar thing for photographers and is very successful but cheaply:…So the value added for the author site is just a middleman extracting money to save an author the time needed to do some reading on what they should be doing (there certainly are multiple ebooks and articles on this, right?) and putting up a wordpress site at a cost of $5000. But feel free to let me know if you feel differently.

          4. awaldstein

            Thanks for the deep dive LE.

          5. leigh

            Feels a lot like marketing marketing — not that i’m against that – but there are lots of great SEO, SEM, performance marketing companies etc. but all that takes money and that’s the point – to get the content created, then to market it etc etc. that’s an entire business and most creative pple — well that’s why the model of creative person and producer exists in the first place.  Andy — re: marketing marketing — does that mean you or i need to be in the jackass category??? 🙂

          6. andyidsinga

            oops, in a twisted way i think you may have inadvertently marketed the idea of ‘marketing marketing’ 🙂 🙂 🙂 :)Fred, if you see this, feel free to create a ‘jackass’ category of avc community member and add me to it.

          7. fredwilson

            no jackasses herejust talkaholics!

          8. FAKE GRIMLOCK


        2. ShanaC

          I know you, in fact I know lots of you, and I didn’t find out about @fakegrimlock:disqus ‘s posters until last week.Not pushing your taste is the easier approach than pushing it out.  It is why in a certain menacing way, Facebook’s OpenGraph is brilliant (forces pushing out of that behavior)

          1. awaldstein

            Facebook is brilliant Shana. And not at all menacing to my way of thinking.So is great marketing when it works and creates value through the connection.But understanding people’s needs and wants and core behavior is what makes great companies and products and campaigns.I love numbers and data and analysis. But the answer is always in the interpretation.

          2. falicon

            I’m not running for anything (yet)…but I fully support and endorse this comment 😉

          3. ShanaC

            Agreed on most of this. The bigger question si how much of my needs do you need to understand before it gets invasive in the way you get your information.Granted, I giggle at ad targeting.

          4. Mark Essel

            I mentioned the posters and tshirts on twitter a couple of times, but alas my sharing efforts were insufficient. Glad you found out.

          5. ShanaC

            It was more about how I am not monitoring as actively as I could. And people share inconsistently

          6. FAKE GRIMLOCK


          7. ShanaC

            true. It is very hard to shift user behavior that way.

          8. andyidsinga

            i also didnt hear about it ..until i happened upon one of FGs tweets when i turned my twitter firehose one afternoon :). and hell, i follow <200 people.I guess im kindof twitter power-less user.

          9. ShanaC

            I’m overfollowing. It’s creating surfacing problems in my case

    2. leigh

      yes getting found is very hard.  but even once your found, making money in the first year as you build audience is almost impossible.  

      1. awaldstein

        No argument. Building a business that works is hard. It will never work if you don’t get found though. Connecting product with customers has got to be step one.

        1. leigh

          totally – but depressing when you think geting the number one hurdle for media – audience – and the net result is you end up in the very same place you hoped to avoid in the first place — with a production company

          1. awaldstein

            I think you can find audience and community without it.I’m optimistic I agree to that charge… but being optimistic as long as you can deliver results is way more interesting than capitulating to short term numbers.



        1. leigh

          Disagree — creators have as much right to make a living as anyone else.   Fix the system.  Don’t blame the creators for not being able to survive it.  

          1. FAKE GRIMLOCK


          2. Edward Coyle

            Even if good, money often not happen in real world.

          3. leigh

            sad but sometimes true. but i’m always cautiously optimistic that with the right group of talented people, eventually success will happen — if for nothing else bc of raw unwavering determination.

    3. Christian Brucculeri

      I agree with this statement.  You can even make the argument that Louis’ experiment is harmful to the entertainment business in that it takes profits from the same entertainment companies that use their resources to develop new talent and bring new entertainers to the world.We saw this in the music industry over the last ten years and I’m not certain that the outcome has been net beneficial for consumers in terms of quality.  Testing that hypothesis would require trying to quantify how ‘good’ the music industry is now compared to what it was in the 80s or 90s, but I have a hunch that there’s less talent and fewer great artists than there were. Admittedly, that could also be my own ‘market of one’ bias.

      1. Mrcho


      2. leigh

        Disagree. current system broken.

        1. Christian Brucculeri

          To clarify, the statement i was agreeing with is that getting found is tough.Social media didn’t break CK- being on Conan did.I have friends making great money in this new model. But they’ll never be stars without a push from the machine.

          1. Alex R

            If you’re making great money, why do you want the hassle of being a star?

          2. Christian Brucculeri

            I think there’s a natural tendency for artists to want their music heard by the most people possible. Let me also redefine ‘great’.  They’re making enough to pay the rent and make their lives work.  Seeing this evolution has been incredible.  Under the old music system there was no middle-class in music.  So that’s awesome.But these guys aren’t making enough to hit the road and develop themselves and the system that used to subsidize that development has largely evaporated.  

          3. FAKE GRIMLOCK


          4. Ben Apple

            Disagree!  We’ll always have stars, probably even bigger since it’s so much easier to share things globally now.  10 years ago, Justin Bieber and Lady Gaga would have been nothing.  Now they’re global stars.

          5. Michał Gancarski

            Who needs “stars’?

      3. Paul

        Honestly I would want things like this to be harmful to the music industry.  I don’t know if there was ever a time when the recording industry cared about talent, skill, or artistry as much as they care about profit.  I would say that is an attitude that is harmful to consumers.  Why is it even a needed industry?  I would bet that whatever town your living in has plenty of talented musicians that you could go out and enjoy.  Plenty of money can be made from touring more and maintaining control of the merch you sell at those shows.  Plenty of people made a living playing music before the recording industry existed and I think they could survive without it.  Maybe they wouldn’t be a worldwide star but can you tell me that the desire to be known the world over is driven by anything other than greed?

        1. Christian Brucculeri

          I don’t entirely disagree with you from a personal preference perspective.  I’m lucky enough to live in New York where we have an incredibly vibrant music scene that’s separate from ‘the machine’.  This city supports lots of independent art and music and I’m a consumer of it.  I’m also not trying to defend the music industry, I’m simply trying to look at this situation from the chair of an economist, and I think the jury is still out on utility to society of this new model.You can argue that he’s not the greatest artist, but I like to think of Bruce Springsteen as someone who benefited from the old label system. Springsteen didn’t break for three years and multiple releases, but Columbia believed in him, backed him and coached him and eventually he caught on. I’m just not sure Kickstarter can provide the same value to an upcoming artist that Columbia provided to Springsteen in terms of capital, resources and relationships.In terms of keeping things local, the star system has made the United States an exporter of entertainment for decades, which from an economic point of view has unarguably been good to our GDP.   From a consumer perspective, had music lovers really wanted to keep their music scene localized they would have never bought into the star system in the first place– it would have been rejected.  And personally, I just think it’s difficult to argue that the world would be better off if The Beatles had simply stayed in Liverpool and played in local venues.

      4. fredwilson

        i have never had a richer listening experience than i am having right now. i’ve been listening to music obsessively for 40 years, since i was around 10 years old. that was 1971, supposedly the peak of the rock music era. i have been through punk rock, new wave, grunge, hip hop, indie, electronic, and i’ve been into all of it and more.but right now the amount of music that is coming at me every day is astonishing. it comes from all places, my phone, my email, twitter, soundcloud, turntable, rdio, rhapsody, spotify, youtube, tumblr,, hypem,, ………my kids and my wife and i are constantly spinning new stuff for each other. every single day i discover something new and amazing i have not heard before.the music is out there, the talent is out there. its just not limited to the big music companies any more. it is everywhere.

        1. Christian Brucculeri

          I hate being the guy defending the music industry–  I really do struggle with this.You’re exceptionally good at leaning forward.  If the market behaved like you do I think that this wouldn’t even be a conversation, and maybe it will start.  Spotify is starting to increase discovery with its Facebook integration and I think that’s great.I’m having the best listening experience ever as well.  I’m also having my cheapest listening experience.  One of the side effects of cheap music consumption is that there’s no infrastructure in place to bring my independent friends to a national touring level because tour support has largely dried up in the business.  Consumers would pay for fair value for tickets to their shows but most artists lose money on their first few tours because they’re still building.  There used to be an infrastructure in place to develop artists in this ‘farm’ level and that’s really not around anymore.  As this new model moves its way into publishing and film and as the experiment in music continues, I wonder how it will affect development, which can require significant upfront investment in people who maybe don’t generate the returns that a public system like Kickstarter wants to see.  I guess I’d like to see this new system find a way for talent development to happen in a sustainable way.

          1. FAKE GRIMLOCK


          2. leigh

            will totally agree with that last statement 🙂

        2. Sam

          Unfortunately, there is no new model in music or entertainment.It’s astounding how tech industry just doesn’t understand showbiz.

          1. Julie Beacon

            Not sure by what you mean “no new model.” But you are right that the technology interests never got music, and that’s why most fail.

          2. fredwilson

            can you explain your statement?i see hundreds of models and at least dozens that are working well for artists

          3. Sam

            The “perception” of a new model is what sells.In actual realty, the current models for music (even more so for film/tv) are pretty much mirroring past music models.What everyone in showbiz was hoping for, is a new model that can drive sales. It does not exist because tech has used past music models for new models.Make sense?

          4. fredwilson

            i disagree. the subscription music model, for example, is entirely new. i’ve been a subscription music customer since the late 90s ( and we are finally seeing a large number of music listeners coming onboard

          5. JH Thorsen

            Rhapsody is pretty much a music club model, which has been around for decades, so nothing new.



        1. andyidsinga

          Hey FG, When we make things in the garage we shouldnt forget we’re standing on the shoulders of giants 🙂 There is a lot of ‘industry’ that went into that pc, that ipad, that bench top drill press that arduino kit …

          1. fredwilson

            such a great comment andywe innovate on top of other’s innovations

    4. Rohan

      I guess it’s build it and with them across most things in life.Unless you’re Steve jobs.



      1. awaldstein

        Grimster…my bet is they are listening.Kickstarter has so much good will. Such a great promise that is delivering, Most companies never get to that point. 

  8. tomcatalini

    There’s a lot I like about this story… particularly the involvement of the artist so intensely on all aspects of the production and distribution of the content. It sounds as if Louis is more tech savvy and more inclined to do this than others, but still I don’t think you give the same amount of attention when your fee is guaranteed up front as you do when you have more skin in the game.Thanks for sharing this post!

    1. JLM

      “Skin in the game” is the answer to almost everything in life.  Well played!

  9. Mordy Kaplinsky

    One of the key benefits of the studio model is discovery and advertising for unknown talent and other specialty services provided by the studios.  Myspace was the first chink in the armor and today there are many more services that combined provide the artists with exposure, publicity, content, distribution, events and other related services required to make it as an artist, but at the moment the studio still holds the balance of power to mainstream an artist.I think that with time the studio model will change to reflect more of a boutique establishment that empowers an artist to leverage the publicly available tools while also bringing to bear some of their unique specialties.  This of the difference in polish between a great self created music album versus a professional studio quality album which has the benefits of the studio proprietors professional skills.

  10. CliffElam

    This reminds me on the only interesting thing I saw at the Cleveland Rock Music Hall of Fame (aka: Dead Man Pants Museum and Closet)….  Elvis’s tax returns and a letter from his manager telling him that just because he made (and I paraphrase) $5M he really only earned about $50K and not to get spicy with his checkbook.Plus ca’change I guess.This was certainly a business success for the taxman – I’d advise LCK to work with his accountant to shelter a TON more of that income stream.-XC

  11. William Mougayar

    Was this just an experiment or a model that can be codified and simplified such that others can replicated without the $32K in infrastructure costs? I was thinking maybe someone will come up with a common platform to do this for everybody else.But isn’t that called YouTube? What prevents YouTube from having a Paid option upload, and they take a % cut? They’re already paying high-traffic downloads a portion of Ad revenues.

    1. jeffyablon

      Bill, I posted a comment earlier in which I suggested that Louis CK has created that platform (sadly, Fred seems to have disapproved it )You’re right that there are already “platforms” available. But getting that deal done with Youtube isn’t exactly easy.I sure hope Louis is listening, because he can make a BOATLOAD of money if he jumps in right now.AND be “a good guy”

      1. Aaron Klein

        I’ve never known Fred to disapprove a comment.More likely the Disqus spam filter caught it. @shana:disqus or @wmoug:disqus may be able to bring it back. 🙂

        1. ShanaC

          a) it is shanac, there is apparently another shana on this thing (actually that surprised me too, shana is a fairly uncommon name)B) we know, there have been spam problem of catching legitimate spam and blocking off normals…driving me crazy here)

          1. Aaron Klein

            To paraphrase the Grimster…ME DO NOT KNOW OTHER SHANA YOU SPEAK OF. IN OUR BAR, YOU THE SHANA. NO OTHER SHANA CHANGE THAT CAN.And your new pic looks even more like you IRL!

          2. ShanaC

            Aww. Yeah, now I can get AVC people stalkers :-P.Though more seriously, apparently it tags the other shana

          3. FAKE GRIMLOCK

            HURR HURR!

          4. jeffyablon

            Hi, Shana. That comment to which I referred has appeared, so thank you, and FRED: apologies if I spoke out of turn.As I said above, this is a favorite topic of mine (still refraining from linking . . . not .. . easy . . .). I honestly believe that if a comment is on-topic and the author chooses to post a link to back up his/her opinion, that ADDS to the value of the comment stream in general. In fact, I’ll go a step further: if I wax prolific and DON’T give you a chance to read more of my stuff it’s a disservice to the process.That said, SPAM filters are what they are. I actually end up in my own from time to time as the larger community (Akismet, in my case) can have an undesired impact.So it goes …

          5. ShanaC

            Generally I would agree with you, but the past week or so seems to have just been weird in that regard. (not in terms of actual people and what they say, in terms of the reemergence of a certain spammer who I thought disappeared.)either way, next time this happens, email me.

        2. William Mougayar

          Nothing in spam that shouldn’t be there. I think he meant that Fred didnt agree?

          1. Aaron Klein

            His comment had links so there might have been an approval delay? I have that Disqus setting on my blog.

          2. William Mougayar

            I double checked. Nada

          3. ShanaC

            I fixed some stuff

      2. fredwilson

        i never disapprove commentsi do delete spam and extremely rarely something that is deeply offensive to everyone

        1. jeffyablon

          I didn’t think you did, Fred. I was speaking against my other/longer comment seeming to have disappeared while this one was still alive and assumed I had hit the line, promotion-wise,in the first one.Happens to be another favorite topic of mine, but I’ll refrain from posting a link to any of my musings on that point … at least for now    😉

  12. Steve Hallock

    the internet, in the long run, is going to lead to the end of most middlemen. That will be a HUGE net positive for all of us as costs will go down, profit margins will go up, and quality will also go up.As far as whether this is relevant for those without a huge following already, i think it comes down to skill sets. Louis is obviously a very smart marketer, business man, and producer. He is interested in all of the different aspects and is clearly very motivated. Lots of artists dont have enough interest to develop those skill sets and therefore would probably not be very successful. But i dont believe it is dependent on status.

    1. JLM

      Two fabulous points:The Internet is going to put a lot of middlemen — bloodsuckers — in the ground.Anybody using the Internet has an opportunity to leverage talent with business savvy.  Everybody has to become a 360 degree business person.  Anybody can learn this.

      1. JamesHRH

        Right on the head of the nail – compression of distribution and convergence of models.

      2. LE

        “put a lot of middlemen — bloodsuckers — in the ground.”To the well respected JLM –  I take issue with your characterization of (what appears to be by your statement “most”) middlemen as bloodsuckers which appears to be out of character for you.Middlemen exist for a reason and not all of it is nefarious. They aren’t people who got into Harvard because of family connections. Or elected President because their father was President.  As one example general contractors are middlemen between, say, someone who wants to build something and a bunch of sub contractors. They have experience with the subs that can deliver on time at a good price and those that don’t. They coordinate aspects of the job and take on risk themselves.  Of course if you know what they know you don’t need them and you can save money. But you don’t, which is why you need them (I’m not seeing there is an angies list right now for that industry and don’t believe it would work on that scale easily.)A former family business was an importer of giftware overseas. They traveled to foreign countries and bought goods which were then distributed to gift shops around the US, Canada etc. They would warehouse and exhibit at gift shows where the gift shops came to learn of all the new products (New York International gift fair as only one example). They took phone calls at 3am from the factories about production problems.  They ate merchandise that didn’t sell. All the buyers had to do was to show up at the show or order from a catalog what the middleman had winnowed down from the large world of offerings based on their knowledge and experience of what sells and what doesn’t. But their customers, the gift shops, well, they were also middlemen (between the end purchaser  and the distributor).  So they also provided value. Like a physical place to view and hold the product they were buying as a gift.What has been gained as middlemen are disappearing is cost savings no doubt about that. What has been lost though is knowledge which is now put upon the purchaser to spend time reading and understanding how to end up with what they want. As anyone who has spent hours pouring over a travel site vs. dealing with a travel agent will tell you. All this available information is overload there are only so many hours to devote to learning as you know. USV and Fred are middlemen as well between people who want to invest their money and places to invest. Using Fred as an example there is no doubt that Fred provides value to the investors even by operating this blog. I can’t begin to imagine the amount of time he puts into this that will directly benefit people who are his limited partners (by raising his profile as only one example among companies that are looking for capital or giving him voice).  Not to mention the detrimental effects on his family (like getting interrupted in public which may not be as is not welcomed by gotham girl.)

        1. JLM

          Perhaps I was not clear in expressing my opinion — not all middlemen are bloodsuckers — the ones who are put into the ground by the Internet will be those who do not perform a real service — the bloodsuckers.A general contractor, as an example, is not a real middleman in this context as he adds huge value by his organization of the job and managing the work of the subs while undertaking the comprehensive financial liability for completion in accordance w/ plans & specs. 

        2. Aaron Klein

          I don’t think you and JLM have the same definition of “middlemen.” By definition, the term seems to indicate that you do nothing but stand in the middle and extract a profit without adding any value.All of the examples you posted add value to those transactions. I wouldn’t call any of those people middlemen (maybe the importer, but with no other way to get those objects in country, they’re providing a valuable service to some).On the other hand, the consultant who helps you navigate the regulatory system (that he probably designed while he served in Congress) is definitely a bloodsucking middleman.

          1. LE

            “All of the examples you posted add value to those transactions”….”the consultant who helps you navigate the regulatory system (that he probably designed while he served in Congress) is definitely a bloodsucking middleman”Aaron, while you might find what the congress navigating consultant does distasteful,  the truth is that that person is providing value by knowing something you don’t know and providing it as a service at a price.  So I don’t think that example is a good one to illustrate middleman such that ” the term seems to indicate that you do nothing but stand in the middle and extract a profit “

          2. Aaron Klein

            Sorry, you’re not going to get me to appreciate lobbyists and regulatory consultants, who typically build the system that they then profit from helping you navigate.There are two ways to forcibly take money from people: you can be a thief or you can be the government.We need government for a lot of things, but we’re beyond ridiculous at this point.

          3. FAKE GRIMLOCK


        3. FAKE GRIMLOCK


          1. fredwilson

            i thought it was a series of tubes

      3. Harry DeMott

        Yeah and that’s the real interesting thing about all of this.Guys like Louis CK are going to be able to do this because of their built in audience, hard won over years of work, but they are going to make less than they did in the past – as those middlemen extracted pretty high rents for their services.The unknowns will have the ability to make something – rather than nothing.And the middlemen just get run over.So the high end comes down to the middle, and the low end moves up a but – and everyone in the middle gets pushed out of the system period.Frictionless capitalism = Europe. A vast middle class

        1. Mark Essel

          I followed you all the well till frictionless capitalism = Europe?

          1. Mark Essel

            Thanks Harry, heading there now.

      4. ShanaC

        Not all – I hate to say this, but the guy who sends your candy to your drugstore isn’t going away so fast.  If only because those are impulse purchases.  And impulse purchases can and will happen when you have a terrible head cold.*Full disclosure – I believe in certain cases that person is a family member.  



        1. JLM

          NBA is a bad analogy as you are talking about 0.001% level.Think more along the lines of fly fishing.  Anybody can learn to fly fish.  It is easy and yet folks are often intimidated initially.Being a 360 degree businessman does not require you to perform at an NBA level, just learn to fly fish.

          1. FAKE GRIMLOCK


          2. JLM

            Anyone can learn enough about fishing to feed themselves.  But they don’t have to.  They just need to learn enough so that if they are in a conversation about fishing they know enough to know when they are being BSed.Being a 360 degree businessman just means knowing enough to fashion the solution without relying blindly upon a consultant or wiseman in that field.A bit about real estate sufficient to know the importance of having liquidated damages rather than unlimited damages or using binding arbitration as an alternate dispute resolution technique.This comes with experience but much experience requires you to want to learn to fly fish.

          3. FAKE GRIMLOCK


          4. JLM

            I was only addressing this concept toward businesspersons who are in some type of management or leadership position; or, who covet such position.I believe that ALL people are talented.The issue is how deep one has to probe to find the talent and the degree of natural talent that is there when the probe hits it.There are undoubtedly folks who have a bit of “natural” talent but often that means they are drawn to it very easily and thus it is right on the surface.Persistence is the greatest boon to talent.  If you live long enough or try hard enough, you will be amazed at how much one can really do.Lots of success in life is an ounce of talent and a ton of persistence.

  13. William Mougayar

    This part caught my attention on his website “I was told that it would be easier to torrent the way I made it, but I chose to do it this way anyway, because I want it to be easy for people to watch and enjoy this video in any way they want without “corporate” restrictions.”How difficult would it have been to include a digital lock scheme or some anti-bitorrent technology inside the download? If these additional protection features were easy to add, wouldn’t that encourage more of this sort of thing to happen? 

    1. fredwilson

      drm is horriblei refuse to purchase anything that has drm in itit simply encourages me to torrent the clean file

      1. William Mougayar

        I’m trying to better understand this, so bear with me. Without drm, it can be torrented more easily, no? Louis is “begging” users not to do that. And his T&C’s say “You may not reproduce, duplicate, disseminate, publish or transfer such content or material…”. So, it’s a form of restriction without the DRM part.But why can’t there be creativity and innovation with a simple DRM?

        1. jeffyablon

          It’s copyrighted. Louis used some pretty standard language to back that up.I find one of the most interesting parts of this to be that some of the torrents (see this one, for example:… include a plea from the person who put the torrent up to go back and pay Louis.Amazing stuff.

          1. William Mougayar

            Very interesting…Wow. But if this person really wanted to help Louis, he should torrent only a partial preview of it, and keep the same language about going and buying the real thing. Torrenting and showing the original link makes it slightly more respectable, but he’s still ripping Louis off. 

          2. ¯_(ツ)_/¯

            And yet the moral of the story is that it was an inconsequential amount that pirated anything and the artist was still able to make a pretty good chunk of money!Nobody’s really getting ripped off.   In this case I believe that skipping expensive DRM and pricing the product at a level where most people would feel pretty okay with an impulse purchase is the key.  Adding DRM might have doubled the costs, and that could have killed the sales.  Would it have sold as many at 10 bucks each?  I highly doubt it.  Even further, if people were up for pirating the content when it’s only 5 bucks, are these people actually consumers in the first place?   Can you really put them in any purchasing equation without being disingenuous?  I don’t really think so!  At some point people have to understand that there are many people out there who when faced with the alternative of buy or pirate will never choose buy even if that means they go without the content.   So DRM is a waste.   Save your cash, make the product cheaper, everyone wins.  

          3. William Mougayar

            I get the moral of the experiment. But why is DRM so expensive? Does it really double the cost? Maybe there’s an opportunity to lower the cost of that technology. This was a no-frills experiment for sure. Other less known artists may have to spend more on marketing to get the same results.

      2. William Mougayar

        Fred, I just reread this excellent post from @bradburnham:disqus  and discussion from a couple of weeks ago, and I do understand it better. “I Believe In The Internet – The Content Industry Doesn’t”http://bradburnham.tumblr.c…

        1. leigh

          It’s interesting — i think the content industry (or the slice of it i’m talking to) doesn’t want to go down the path of the music industry and recognises that there is a lot of opportunity besides policy and policing. The key is finding the right one and figuring out how it fits or changes the current business models that are so seriously out of whack with the customer/technology world.  

          1. William Mougayar

            It appears the content industry has been unflexible in changing, and as if they think the Internet realities will go away.

  14. RV

    Great post. Thanks to Louis for being so transparent and sharing the knowledge.  This is the future to better content (i.e.authentic, uncensored), direct from creator to user.  Most web only producers are distributing independently online out of necessity (i.e. because the studio suits aren’t into their content) but in Louie’s case he is actually making the choice to invest and control his own content, and as consumers we get better, cheaper content.  Win.

  15. CJ

    I guess my biggest question is: will this scheme continue to work once the novelty has faded?  When the ‘kickstarter’ approach is the common approach and the word of mouth due to the novelty fades, will he and others still be able to turn a profit?  Is this the beginning of disruption and profit for the little guy and independant or just the beginning of the next youtube with a checkout basket attached? I guess that remains to be seen. 

    1. Derek

      I think Kickstarter will work over the long term. Entertainment is a bottomless need, and good talent will arise to fill it. Kickstarter and other businesses are unbundling the record labels, which succeeded for many, many years based on a simple process.

  16. Tom Labus

    For the “legislative process”, please.

  17. Clark Weber

    Bob Weir from the Grateful Dead has been experimenting with a similar business model at a much smaller scale with TRI Studios –….The audio and video quality of these shows are very impressive. Check it out.

  18. JamesHRH

    I saw a great comment on the pioneers of direct creative distribution, basically saying that only all time greats ( LouisCK, Radiohead, ) will be able to make a go of direct distribution.It is patently false. The costs will be so inducive that it will become a universal model.Maybe not every artist will be as curious about the business side of their affairs, but service providers will be there to make distribution a one stop affair.Absolutely a wave of the future.

  19. JimHirshfield

    I think LCK should also be lauded for his tone of voice. There’s a lot to be said for addressing your customers as fans in a down to earth humane voice and facing facts that regular people are tempted to torrent.

    1. Rohan

      Exactly. Acceptance!

  20. Dale Allyn

    I love the model Louis CK used for this type of project, and feel we’re going to see a lot more of it. I also appreciate that Louis CK retains copyright control over his material, as this model does not require or imply that copyright is released or forfeited. Some of the conversations in and around this topic have suggested the abolishment of copyrights, but there is no need for that. Cheers! to Louis CK. 

  21. jeffyablon

    Hi Fred. Let me get the requisite self-promotion out of the way right off the top: I wrote about this both on Monday (Louis released the film on Saturday) at (… and again on Wednesday, right after he threw the numbers you’ve cited/quoted at us (… )The more cynical comments I’ve seen since then, all over the web tend toward pointing out that (as Louis says) he might have received a larger gross to take the money and run from a production and distribution company, and for sure that’s all about being an established star. Those same comments tend to attack any thoughts that Louis was being altruistic toward his fans. Umm, OK, enjoy that jag.This story isn’t about either of those things. Some time will pass before we get (assuming Louis shares) any information on the former and the latter is a nice thought but lets face it: Louis wasn’t being a nice guy, he was being a smart business guy. In fact, if you click the first of my two links above you’ll see a clip from Conan, where just last month Louis CK stated very directly that the only reason he does social media is for promotion. He has no interest in “our” blabbering.What this is about is the shift in the media business—a favorite topic of mine at Answer Guy Central.Put simply, the middle man that your “label” (change to “distributor” for full effect) represents no longer means anything. Anyone can produce their art easily and cheaply and do something like what Louis did. And the radio exposure and the distribution/promotion that having a label once brought is now insignificant.My youngest son wants to be in management end of the music business, and we get to discuss this pretty often. He bemoans the fact that if you’re unknown you have a problem (well, duh!). Invariably, we end up talking about festival shows like Bamboozled, where the non-headlining acts are paid very little and travel to shows in beat up vans (70s flashback from THIS old guy).I point out that if they get a chance to play in front of thousands of people and are struggling to sell enough merch at the shows to make a decent living they need to do some more marketing. Something simple like “HEY! GIVE US YOUR EMAIL ADDRESS AND WE’LL ENTER YOU IN A DRAWING TO WIN BOB’S GUITAR!!!!!!” And Bob can play a $100 GuitarCenter Guitar for one song, and at the end of the tour the band can give that one guitar away … and have signed up tens or even hundreds of thousands of people on their email list.Not rocket science.This is, simply, a reality of the changes—and I say for the better—in business in general and media in particular. Even if he just “breaks even” (ha!), Louis CK is a genius. And now that Louis has done this “groundbreaking” work, imagine the money he can make if he becomes the distributor, through his successful, newly-minted … wait for it … “platform”.

    1. nirvdrum

      Most of the people I see on Twitter are just self-promoting.  I really don’t have an issue with him being honest about that.  Likewise, I’d imagine it’d be difficult to keep up with all the tweets he gets.  Although I have seen him engage with his audience on Twitter before, so maybe the reality is somewhere in between.I’m going to give him the benefit of the doubt on wanting to help out his fans.  Maybe he only promotes himself on Twitter, but the last time I saw him perform live, he stuck around after the show along with Todd Barry and did merchandise autographs and pictures.  Obviously that does help sell merchandise, but he could have just not done it all, as many other acts have. And he definitely was friendly with those just getting a picture or a ticket stub signed (i.e., not buying anything at the table).That’s a really long-winded way of saying his intentions could have been pure and it could have turned out to be a smart business move.  I fail to see how they’re mutually exclusive.



      2. jeffyablon

        I happen to agree with you. Sorry I wasn’t more specific!

        1. nirvdrum

          Ahh.  Intonation on the Web strikes again.

    2. LE

      ‘” imagine the money he can make if he becomes the distributor, through his successful, newly-minted … wait for it … “platform”‘The self publishing platform of course has always existed for books and even records and CD’s. Forgetting for a second the differences now with the availability of social media for publicity (vs. getting as you mentioned radio station airplay) I would suspect that there will be many businesses that will pop up to separate an artist and their money!!! And many more artists will go for the brass ring simply because it seems so much more possible to achieve success (because of whatever that psychological principle is that causes you to overestimate something because of it’s apparent ubiquity).One example (that was in the comments today) is: which charges $5000 to authors for a “coaching” and “web development package”. I wonder how many of those spending the $5000 are going to recoup that investment?

      1. jeffyablon

        Love that comment, LE; thank you.Yes, there’s the “separate the artist from his money” angle, but I’m thinking, at least short term, that the artist can be (CAN BE, not IS) well served. Louis CK, having done what he’s done, can offer to be the publisher and by the shear power of aggregation do the acts that take him up on that a real solid. And of course, monetize his position.Louis won’t stray over to bad guy, will he?I happen to have come across and written, this A.M., about Seth Godin’s latest project, in which he’s being, in the book world, what Louis’ “platform” could be to comedians and musicians. My musings on The Domino Project are here:…

  22. kidmercury

    of course SOPA is terribly flawed, i do not deny that (although they will try to get that same degree of control via any of the tyrannical laws being passed/declared; for instance NDAA has passed the congress and will likely be signed into law by president soetoro, and the web can already be shutdown and managed as needed under various national emergency declarations). but i think the premises made in this blog entry are flawed for a couple of reasons. i made these points on albert’s entry on louis CK a few days ago which i will re-iterate here:1. there is still an enormous opportunity for media aggregators. rhapsody, soundcloud, amazon, netflix, etc. the next step is for those aggregators to fund the creation of new media so that they have the licensing rights they need. amazon, netflix, and rhapsody already do this or have plans to do it.2. those of us who know that all the people crying wolf about how jobs are disappearing and we’re all going to die because of internet piracy are wrong need to do a better job of explaining disruptive theory, how it is a valid science (not just speculation), and how it is playing out in the media industry. social media revenue (such as game play), brand revenue, and personalized media/merchandise/experience are part of the emerging value network that will disrupt and commoditize the old value network. as entrepreneurs and investors we need to make this happen and when it does, creators will WANT to give away their content; they will see piracy as advertising. fred licenses his blog under a CC-BY license, he makes money off it via his portfolio. i am quite confident he would make less money, not more, if this was a premium blog. 3. as for internet architecture, it is going to need a re-birth no matter what. at 15 trillion in debt the US government, like many nation-state governments, is desperately flailing around for its own survival. it will collapse and we have the opportunity to re-build the internet experience under an entirely new architecture with an alternate DNS system as the ICANN system and its ties to the US military are not sustainable. the “app internet” (or “multiple webs” is the jargon i’ll be lobbying for) is the first signs of this, though of course the best is yet to come. #fs

  23. howardlindzon

    Yet another reason why I focus on reading people that talk opportunity because its just out there in insane quantities like never before.

    1. William Mougayar

      Yup. Reminds of “You see things and you say, Why? But I dream things that never were; and say, Why not?” – George Bernard Shaw

    2. Rohan

      Always, isn’t it? “In this world, things are getting worse and better at the same time, although the worse is more apparent because it makes so much ‘noise” – Eckhart Tolle

  24. gregorylent

    hoping some industry-types gulped

  25. Mike Caprio

    Success doesn’t come from “being a star” – it comes from having excellent content.  Nina Paley’s animated feature film “Sita Sings The Blues” is an international success critically and culturally because it’s an amazing piece of work, and had nothing to do with her being already famous or having a massive multi-million dollar marketing machine behind her.  It’s all about content quality.  Her numbers may not have been updated lately, but the salient details are here: http://questioncopyright.or

    1. Otto

      Jersey Shore?Excellent content is subjective and what is popular say’s more about the culture than it does about the individual performer. Take Christopher Hitchens. Yes he worked hard and had extraordinary armchair “talent”, but I always thought of him as a pretentious wordsmith. He wasn’t any more talented than a hack sports columnist from a small or mid-market newspaper. Hitchens just wrote fancy prose about what other people were doing because he could do very little himself except smoke, drink, and bloviate for psuedo-intellectuals. I don’t recall him ever creating anything original. I see more orginal and more interesting creation on Tumblr in one day from a few “unknown” people than I ever did from Hitchens. His Twitter eulogy the other night was written mostly by people who probably never read him, but he was on the Tee Vee a lot… so, you know, party time on Twitter!Being fortunate enough to feature on legacy media gives you a big competitive advantage on the Internet when many users are still passive consumers of media and notice little difference between the two distribution methods. Until people do away entirely with cable TV, newspapers, and stuff like Time magazine this will continue.

  26. im2b_dl

    Fred …wildly oversimplifying what he has for an already existing infrastructure to gain those revenues.  What he actually did with the real numbers of distribution vs. what he had going into it (including the free infrastructure he inherently already has on a massive scale that .00001 % of artists will ever have) …is hand the pro-DRM people a massive argument why piracy is a problem because the revenue #’s (when you do the REAL math for 99.999999% of the industry) will be hurt by it.There are good examples that are coming up…but we have a long way to go.This is a horrific example to use in arguing for direct to consumer.  500k return with the massive marketing and ideology sell he put forward.. is a weak return for anybody never mind the fact that his structure supports a very different model than complex media content like 90% of TV and film (he is a singular artist with a minimal crew on this project).Everyone keeps putting this up as a successful venture and to some extent for him and his concert promotion and series promotion…it is… but the real numbers for anything outside of that are bad. There is no secret shrink in distribution and marketing costs, yet, that competitive large distribution companies have not figured out yet. The model of the content itself has to change for complex collaborative content.If this was not a marketing tool for his other revenue streams this would be definitively a one time deal. As it is like many who gave away free ventures/content architectures in the past , my guess he will like they did …quietly do back to what everyone else was doing because in reality those #’s (as large as they seem) still don’t work without temporary celebrity and “pseudo-political” hype.

    1. Pedro Batista

      How can 500k in FOUR DAYS for a “singular artist with a minimal crew on this project” as you said, can not be considered a success?He used ” temporary celebrity and “pseudo-political” hype”, but big media companies do all of that minus the “political” plus the backroom deals.

      1. im2b_dl

        Easily. If you understand budgets of marketing & distribution …and all the extraneous powerful infrastructure that Louis CK has that is not included in his costs but assisted in him distributing this. Never mind if he had to sign signatory agreements with the teamsters & entertainment unions (& residual payouts) if it was not a “concert film”

      2. Hal O'Brien

        “How can 500k in FOUR DAYS for a “singular artist with a minimal crew on this project” as you said, can not be considered a success?”Shorter version of im2b_dl’s reply to you:Because he says so.  Now, shut up, ignorant peon. Who ya gonna believe, him, or Louis CK’s own lyin’ balance sheet?

    2. ShanaC

      Did you see yesterday’s “friday” section of the WSJ?  They were talking about orchestral costs when it comes to movies (especially in terms of John Williams) and how now many studios are treating sound as its own line budget, paid for up front.  If you are a young John Williams, you cover your costs, and keep the leftovers.  Doing crazy doesn’t work, you won’t make money.And I think that is what is going to happen.  we’re going to see haiku style creativity in production.  Doing a lot more with less.  Treating those groups not as employees, but as freelancers/entrepreneurs with the expectation that they know and understand their own budgetary requirements.It will get interesting.  It may not be sustainable from a talent perspective, but it will get interesting as production essentially forms into indie groups.

      1. im2b_dl

        Yeah.. What will happen very soon is all those pieces will have their own retail and the content will be the platform. It will dramatically change not only the licensing but all of this piracy vs. censorship polarity will be a non-issue. If people had a better understanding of both sides of this that would alleviate the problems and these bad arguments on either side of getting these bad bills.

        1. ShanaC

          Right. I am more than a bit surprised that this new context of payment hasn’t been mentioned in the SOPA debates at all. It definitely complicates things and it makes the studio system seem greedy.

  27. brendonjwilson

    I find it odd that everyone has piled on questioning the $32,000 cost to build the site, yet no one has really asked “why?”. Yes, it’s only three pages. But it also had support for real-time streaming and download of what is essentially a HD movie.Let’s do some calculations: he sold 110,000 copies in 12 hours. I don’t think it’s unreasonable to assume that most of those people chose to immediately consume that purchase, meaning they either downloaded the source file, streamed the file, or possibly did both. The download was a piffling 1.2GB.So, doing the math, he pushed 132TB in 12 hours, or about 11TB an hour, or 3GB a second in that period. And, as near as I can tell, nobody is complaining that they couldn’t complete the purchase and download the file.Now, I confess to know nothing about the costs or complexity of setting up the backend to support that…obviously there are content distribution services like Amazon CloudFront that can handle that kind of load, and are relatively easy to use. But I’m pretty sure that the integration costs more than simply developing a 3 page website.

    1. LE

      “odd that everyone has piled on questing (sic) the $32,000 cost to build the site””Now, I confess to know nothing about the costs or complexity of setting up the backend to support that”Exactly. And neither does Louis CK. And that’s the point. So if you were advising Louis would you want him to spend $10,000 and have a failure that you would be blamed for?  And why not post the job to elance and get some overseas people to do the job for $150 for that matter? And I’m guessing that some people would have done the work for free just to meet Louis and get the publicity for that which would lead to other work.The cost of things to insure success is considerably higher (and not linear) which is why a medical drill is ridiculously expensive compared to one that you can buy from Home Depot. Not everything is price price price. And there are other reasons why people spend money (which is not a judgement on whether the correct number is $32k or not since we don’t know how much of that might have been meetings with Louis to consult etc (or what else is included) we don’t have the full picture in all fairness. )  And we don’t know whether this had to be pulled together on an expedited basis (rush jobs cost more) or what resources had to be pulled off other projects.

      1. leigh

        I’ve tried to quickly prototype stuff for clients before and know what?  It doesn’t work.  They want different concepts, different desigbn versions, can you change this, can you present to the 40 other people who all need to give input, they want me on the phone, get the CD to go over it — yada yada —  A quick 5K little no big thing that our creative tech guy bangs out all of a sudden takes 4 weeks and costs 30K.  moving on……

        1. JamesHRH

          A friend who runs a creative firm on the only difference between a $4000 client bill & a $40,000 client bill:Client readiness.

          1. FAKE GRIMLOCK


    2. Mark Essel

      Spot on. Pay a premium on having a reliable architecture.

    3. andyidsinga

      awesome awesome comment ! so often underlying complexities and costs are non obvious to those not involved or with less direct experience in the subject.ive been fortunate on several occasions to have good mentors who said ‘go back and check that estimate / those numbers / that design something doesnt smell right’

  28. Jeff

    Interesting points all around.  But, I suspect that if that if the data were looked at it would show that(1)  content creators who become well known enough through self-distribution go on to partner with studios/labels (film, music, etc.) do so; and (2)  the content creators who have gotten famous through working with studios/labels are the ones most likely to use self distribution.And if that’s right, it’s probably some combination of (1) economics; and(2) Groucho Marx syndrome (wouldn’t want to be a member of a club that would have me)

  29. Mark Gannon

    I think an interesting question about this and other efforts to directly sell creative content is who or how many can make a living versus just do it for fun.  My suspicion is that profit for individuals in such an environment follows a power distribution.  That is a few people make a lot of money and most make comparatively small amounts.  An example of this phenomena can be seen in the 1999 Chicago Bulls Salary where Michael Jordan make $33 million (without endorsement income counted), while the person at the other end made $272k. While Jordan was clearly an extraordinary player, it would be difficult to make the case he was the 12,000% better player the salary difference implies.While there is no doubt money to made enabling transactions in the long tail the power distribution provides, it isn’t clear to me if there is a living for the 25th best comedian in such schemes. 

  30. Dmitry Gudkov

    YouTube would be an ideal platform for performances of such kind — artists would have no hassle of building up a separate web site, it already is a perfect networking and sharing environment with high traffic. I don’t know why Google still don’t want to make YouTube a platform with direct monetization. It’s so obvious.

  31. David Saintloth

    Proof of something I’ve literally been building technology to enable any business to do…except between their employees and partners. Cut out inefficient intermediate routing costs, direct to consuming agents…while giving those agents more value.http://sent2null.blogspot.c

  32. Michael Shafrir

    Sounds very much like how Phish (the band) and before them the Grateful Dead thought about how to best distribute their works to their rabid fanbase and make gobs of money in the process.

  33. Aaron Klein

    “$200,000 (after taxes $75.58)”That was my laugh for the morning! The sad thing is, it’s almost true.

    1. andyidsinga

      i got a kick out of that too 🙂

      1. fredwilson

        unless you are like me and are in the 1% and pay less than 30% effective tax rateour tax system is so fucked up. the rich pay less and the poor pay more but the rich own congress and so the system stays the way it isi just give away the difference to good causes just so i can sleep at night

  34. goldwerger

    Saw this few days ago late at night and laughed so hard I woke the house…;)I love what he did. He’s also started a direct relationship with his audience (I got an email from him like everyone else with a follow up), and the direct relationship in itself will become more and more valuable over time as more artists learn how to create direct channels, leveraging social media for distribution.I also love how Louis CK put this in both streaming and unlimited download. Flexible, non-nonsense, non-dogmatic take on digital distribution.

  35. leigh

    A friend of mine and i were just debating the different models the other day.  She was in a popular BBC comedy and is a brilliant writer producer.  She has 6 (seriously 6!) scripts that are “in development” as we speak…this means she gets paid a small fee while the work sits around waiting for someone to produce it (ala get the money). She had done her own online series which started to get a lot of traffic and momentum but ran out of money after 6 shows (this is one of the scripts in development at a production house). (Kickstarter wasn’t an option but can’t recall why)…. If you aren’t Louis CK, the money isn’t there yet to do it yourself.  But it’s just a matter of time.  The entertainment business (transmedia, deep media whatever you wanna call it) is in desperate need to be disrupted.  Just when and how …. that becomes the really interesting part to watch.   But in her own words — she almost doesn’t care she just wants to get to be able to do the work….

    1. Rohan

      That’s a common place to be among artists, fortunately or unfortunately.. 🙁

  36. Josh Haas

    I love this business model.  But is this particular experiment really a success when you factor in sweat equity?  He calculated the financial costs, but it sounds like months of human effort went into this as well.  For an established content-creator who already is well-known and has a large audience, is $200K that impressive a return?  (Of course, there’s still the ongoing revenue it will continue to bring in, but I assume that will trail off logarithmically over time…)

    1. LE

      “But is this particular experiment really a success when you factor in sweat equity?”Agree. Louis is entrepreneurial and I suspect this is not just about what he says it’s about. He is also savvy and clued in enough to pull this off with that sweat equity.  A relative of mine is a young opera singer. I can’t for the life of me get him to recognize and take advantage of many opportunities for him to increase his brand. He’s an artist. He just doesn’t think that way (same with another relative who is a painter ‘”opportunity? No such file or directory”‘)”there’s still the ongoing revenue it will continue to bring in”Not to mention the additional revenue that will come in solely because of the publicity in the tech community of what he has done. That alone has legs that will distort the true outcome for anyone else doing the same. And there will be articles about this going forward (assuming he releases future numbers) that will be quoted that won’t take into effect the result of the early publicity he has generated.

    2. Paul

      Are you suggesting that earning a $200,000 profit for a few months work within a week of the release of the material is not enough?  Like the article says,  sure he could have made more money the traditional way but he’s made plenty this way while retaining full control of the material, and releasing it on his terms.  I’d call that a success.

    3. fredwilson

      that’s the return in two weeksi bet he makes well over a million bucks on this over the life of this piece of content, possibly 2-3x that

    4. ¯_(ツ)_/¯

      If you told any artist at all, that they could make 200k doing what they love to do without having to deal with anyone from a record label or television network, I guarantee you anyone who just wants to perform and making a living would say that it’s absolutely a success.  If you’re like Louis CK and you have the potential to pull off 2-3 of these per year potentially (especially now that you have and understand the infrastructure as well as a fairly high quality list of email addresses of people who feel your product is worth at least 5 bucks) doesn’t that somewhat change the entire game?What if you’re an influential person in your field that now will also be fielding phone calls from everyone they know who wants to follow up on your example?   Couldn’t that be considered an amazing success if just one other artist follows suit and revolutionary if multiples end up ditching the major label concept entirely once they get a decent following?  

  37. Marc Lemay

    I learned about Louis CK almost at the same time as I learned about Dwolla, so as soon as I learned about his successful experiment I wondered how it could have been even more successful: Paypal’s “Standard Merchant Service” is 2.9% plus $0.30 a transaction. So 110,000 copies sold at $5 a pop means that it cost Louis CK $48,950 to use Paypa. Dwolla, by contrast, would have cost him… nothing. They charge $0.25 per transaction for everything over $10, nothing below that. Of course, in the immortal poetry of Ken Blanchard and Sheldon Bowles, “Costs can kill, but for profits to soar it’s big sales you must score,” and there Louis CK’s got it made no matter how you slice it.

    1. fredwilson

      do you like dwolla?

    2. Mark Essel

      Is a Dwolla account required, if so that’s a substantial friction to fans.

    3. ¯_(ツ)_/¯

      I’d never heard of Dwolla until I read this, so I wouldn’t be comfortable putting my money through it.I also significantly dislike sites that can’t type out something for me to read or skim and I absolutely hate sites that force me to watch a video to learn anything.   If I click on their consumers tab, I get a video.  If I click on their merchants tab, I get a video.  All I wanted to know is what countries and currencies they can accept money from.  The known quantity with paypal, is that they can take your money from almost anywhere and convert it to your local currency just fine.   Most payment systems can’t, and that’s a real shame because I’d personally rather not deal with paypal ever if I could help it.   I’d love a good alternative, but this one is not ready for anyone but US based etsy sellers and definitely not a thing for a worldwide known comedian to be able to sell their goods with.  

  38. jason wright

    Wouldn’t it be great if an artist could make so much money in this way that their live performances become free to attend events, with admission granted based on criteria other than having the money? That would be socially disruptive, the haves and the have nots present at the same place at the same time for a shared experience. Where does that happen these days?

  39. Alexander Close

     Looks like Lous CK’s experiment was a success, hopefully more follow his lead.Favourite part about this model is that it cuts out any faceless organizations and brings things back down to good business – a fair exchange of value between people with both sides benefiting.  100% of customers are people, and 100% of companies are people.  When things get so tiered that people get hidden behind policies or structure, everyone’s loosing.Lous CK showed his cards with complete transparency, and again proved that when fans/customers can see who they are supporting and find value in their work, they will happily pay in exchange.  Everyone wins.

  40. Brad

    Now that he has created the platform he should allow up and coming artists to publish on his site with the same rules in tact. Giving back and opening up an audience to new talent.

  41. Bala

    the same idea is being implemented by a company here in Iceland for music artists. They struggle with the idea of finding an audience. 

  42. Jan Schultink

    1) The cost of the sites look a bit high, but hey, “the crazy ones” need to do things until they feel it’s 100% right. 2) Another example of how paying media audiences also exist outside the U.S.



  44. ZongHoo

    Fascinating, now why didnt I ever think of that.www.Total-Privacy dot US

  45. Kevin Pillow

    I hope I had something to do with this post……

    1. fredwilson

      i hope so too

  46. Mr. Kapowski

    This is awesome. Control your content and take out the middleman.

  47. David Abraham

    Excellent, disintermediation will be the word of the year in 2012.

  48. Yoram Wijngaarde

    Louis CK is probably in the sweet-spot to do this and make it a success: while he is popular enough, having a close almost cult-like following, but not too main stream either. For smaller artists this is not yet a viable option I think and for big main stream artists (Lady Gaga, Rihanna, etc), the do-it-yourself approach of Louis CK would not work either because of piracy. Having said that, yes I loved the idea too and bought it immediately when it was released.

  49. Eric Friedman

    Hi Fred,I think Louis is drafting off of what he has spent a lifetime building.  Forgive the self serving link, but I wrote about this awhile back and called it The Lifetime Lift…He is doing what Guy Kawasaki defined on the slides in my post – $0 marketing, but a lifetime building up a community.  Its certainly brilliant, but he has paid his 10,000 hour tax in building a following and a craft that he can now use as a platform for himself.

  50. Dan Epstein

    2 quick comments.If you’re a fan of Louis at all, check out his NPR appearance from Fresh Air Weekend (just aired). Not funny per se, but makes you appreciate how smart and thoughtful Louis is.…The band Phish has been doing something similar since 2002.  Every concert they perform is available for download from their site within 24 hours of the show.  They’ve just recently been “baking in” free downloads with every ticket purchase, so if you go to the show, you can download the MP3s/FLACs for free the next day. No video downloads yet (they do some web simulcasts), but I think that has to do with getting video rights to cover songs.

  51. Kevin Davis

    love it. we are trying something similar with limited licensing of user generated content. good to see others taking the same approach!

  52. paramendra

    This is one wonderful business model. Go straight to the audience. 

  53. timraleigh

    Great post! Very inspiring.

  54. Valentin

    I do understand that there is a lot of hatred towards labels/distributors/etc due to the history of the music business. And this is speaking about the major record labels.What many people seem to be missing out, is that labels for the large part are playing a curatorial role in this brave new world, and this is a very important one, since the abundance of content is so big and filtering through the net for quality content is just way too laborious.That is why people follow particular record labels, and music blogs and etc, which help them navigate through the mess. I respect very much labels like Warp, Ninja tune, Hessle, Hotflush, and many others, since I know that the music they choose to put out, would be very likely that I’d enjoy it.The lack of a support infrastructure in the current days leads simply to one thing – a very short sighted and conservative approach towards creativity. The thing is, if you are making a record, there is only a limited amount of time you can spend in your garage/bedroom doing just that and there is a big tendency to copycat what is hot at the moment because you’d want to go on tour as fast as possible to actually earn a living. There is less and less innovation in music because of this vicious cycle. Of course, there is a lot of huge amount of creativity at the moment, since all the tools have so dramatically droped in their price, and as a result there are a lot of hobbyists that are fucking around in the craziest way with their equipment. But this is nowhere near a professional attitude towards the craft and clearly does not lead to anything sustainable, to any coherent artistic vision, to consisten musicianship, etc.Kickstarter is a clever way for crowdfunding, and I see a lot of value for products that are in development, such as, what caught my attention lately, a very unique MIDI controller.But, to be honest, most of the musicians are plainly looking as beggars there. Get this – Can you picture something like Nirvana raising money there to fund Bleach? Or Guns n’Roses funding Appetite for Destruction? Or Pink Floyd funding The Wall? “Give us 100 quid and we’re gonna write a song for your girlfriend…Give us 500 quid and we’re gonna come over to play in your bedroom.” No way! Part of the charm and the artistic statement is exactly this sense of spiritual independence, the fact that they’re saying in your face “fuck off, we are doing something special here, that is making a statement, and nobody is owning us, and certainly not your bedroom or your girlfriend”. Such type of non-conformism has no place on Kickstarter because the artists is approaching this from the position of the whiner who can’t make it any other way and when you are such a whiner, you implicitly have to respect the average type of wisdom and values that the community is holding, and this effectively wipes out 80% of what artistry is about.Sorry, this is kind of negative, but it is honest. There are very interesting projects there, some related to music, like this one company raising funds to invite bands record a song in couple of days, and film the process and so on, this is awesome stuff. But hoping to raise funds for a band which is telling you effectively “I’d like to laugh in your face and piss you off at the type of scum you are (or we are), and you are going to enjoy it” has no place on kickstarter. And this is what really constitutes the essence of punk/grunge/etc, is not a bunch of guys with gel on their hair, piercings and tattoos.What really, annoys the hell out of me in the current state of affairs is that this so called architecture benefits again some kind of middlemen, which are much more evil than the Big 4, because they earn on top of your creativity without giving you aboslutely no value in exchange. Yes, that’s google, of course, and all these other parasites that feed on that system by providing clicks and eyeballs for uploading pirated content (very visual explanation on how this happens and how our current means of fighting it are inefficient : Everyone participating in this practice is sharing the blame. You cannot claim that the Internet should not conform to the same moral standards that the physical world adheres to. If you keeo doing this on consistent basis, the values, or lack thereof, will start to creep in your real world. The London looting is showing some signs of this already – there are so many young people who were there just because others were there, and were picking up a set of sports shoes without even thinking of it as a crime. Well, if they are consistently able to do this in the virtual world, these digital natives, then it is quite obvious it won’t seem such a big deal in the real world either?Finally, we cannot defend the free markets theory completely blindfolded – look what happened with the mortage markets and all that. Or what would happen to our natural environment if we did follow? Coal and oil are still times cheaper than renewable energy sources, so our best incentive in the free market doctrine is to completely exhaust them and then think of something different. Free markets are very short term oriented and their immediate concern is immediate profit rather than long term wealth. So in order to prevent ourselves from self destruction we need to apply appropriate regulatory mechanisms in order to correct such design faults.I went really far astray from my original point. But I have been thinking actively about these issues lately. I have no agenda, no big vested interest. I’m a semi-professional musician, and above all a music lover. And I like to think about stuff 🙂…

    1. fredwilson

      i don’t think we need A&R people to curate for usand i don’t think we need the labels to spend huge dollars buying airtime on radio anymore either

      1. jimthom

        More stupidity. We all need curators: Friends, A & R, Radio, internet, etc. Even Pandora is a curator.You are clueless about how radio and media works, as well.

        1. fredwilson

          i didn’t say we don’t need curators. we always need them.and i’ve been investing in and around radio for over fifteen years. if there is a business i do know, its radio.

          1. jimthom

            You don’t “buy airtime on radio.”Radio has always been crowdsourced more than you think. It’s actually the original crowdsourced technology.Radio is even more so fan-driven now with PPM (people meters).

          2. fredwilson

            you are wrong about that jim. there is still plenty of money changing hands for airplay. if you dont’ see it, you aren’t paying attention.

      2. Valentin

        Well, Fred, you are in the 1%, as we know, so that’s kind of all right you don’t need A&R 😉 I’m kidding, of courseMost people, however do.There are a number of media businesses, especially in this internet reality, that are making a good amount of money by having acquired a status of ‘taste makers’. The way they review new releases can have huge impacts on musicians’ careers.Examples: Pitchfork, Resident Advisor, etcAs of big labels having to spend big amounts of money – they still do employ “pluggers” and it’s an important strategy to drive sales, because by going on radio the music can reach more mainstram audience part of which is also not so hi-tech and maybe more likely to pick up a CD from the record store. I can’t help thinking of this joke about Adele, that she made so much sales simply because her target audience is not able to use torrents 🙂

  55. Mark McLaughlin

    Fred. The trend of going direct to consumer in ticketing is increasing especially for artists fan club pre-sales that are usually 10-25% of the tickets. At the top end artists like U2 or Kanye could sell 100% of the tickets for shows if they chose to. New artists use social media to build a direct to consumer relationship that they can leverage to sell tickets and merchandise with music given away for free. The 2 ends of the artist spectrum are going to meet at some point. The 2 main barriers for selling tickets previously were that paper tickets were a pain to manage from a postage and customer service point of view and that artists were afraid of losing the marketing power of Ticketmaster. These 2 barriers have been broken down as tickets are now issued as e-tickets / SMS tickets and social media is used as the database with tickets put on sale in real time. We introduced a simple “Buy Tickets” button this year that you can put on any Facebook page and 20% of all our clients sales is now coming via Facebook and this will only increase. One of our clubs fabric has 114k fans on Facebook so they don’t have to sweat that database a huge amount to sell out a 1,700 capacity venue. On the Kickstarter model I wonder why more artists don’t put tickets on sale for say 30 cities and they only play the cities where at least 1,000 tickets are sold. There are issues like refunding the cities where demand wasn’t met but this can be overcome. Artists will start to crowdsource their tour and sell tickets to raise the money. Ticket agencies today are where travel agencies were 10-15 years ago with the internet reducing their importance as the content owners such as artists and venues have the database and the software (like Ticket ABC) to sell the tickets themselves. 

    1. fredwilson

      i agree. i would so rather buy my tickets directly from louis ck than from ticketmaster

      1. Mark McLaughlin

        Ticketmaster pay cash advances to secure clients for 3-5 years e.g. $1-2 a ticket and then charge that venue, promoter or artist’s fans $5-7 ticket and the figures vary depending on the value of the client. Venues and promoters then wonder why sales are poor when customer has to pay 20-45% extra for tickets. We talked to a client that ended up doing 60% of tickets at Will Call because their fans didn’t want to pay $3-4 on a $10 ticket so their ticketing deal messed with their operations. An artist wants to build a relationship with their fans over time while Ticketmaster wants to maximise the online transaction as is their only point of contact with the customer so they take 2/3 to 3/4 of the booking fee revenues.Ticket agencies are facing the same technological head winds as record companies did following Napster’s impact at the start of the Millennium.  

        1. jimthom

          Record companies are stronger and more viable post-Napster.You know how many huge advances Sony, Universal, etc. get from digital companies? It’s HUGE.

          1. Mark McLaughlin

            Jim,Record companies aren’t stronger. The recent purchase of EMI’s live division by Universal would never have happened 5 years ago but as the overall market gets smaller these deals are getting done. The top selling US album in 1999 sold 9.4m copies (Backstreet Boys) compared with 3.4m in 2010 (Eminem). Record labels used to sign around 360 artists a year and this figure is now closer to 60. It’s true that record labels get huge advances from digital companies but that doesn’t replace the declining sales. Universal who now dominate the majors have purchased 2 ticketing agencies in France and UK as live is where the money is.   

          2. jimthom

            Learn your history. Majors have always been on the brink of being bought and sold, even in the so-called heyday of the 90’s.It’s the way Majors work.EMI is an isolated problem. A problem when venture capital folks get involved who know nothing about music.EMI is actually doing really well, just some moron who bought it at too high a price and could not honor debt.Majors have more control of the digital space than you think.

          3. Mark McLaughlin

            Jim,I can’t reply to your comment below so replying here. In terms of “learning” my history; 2000 – EMI blocked from buying Warner2006 – Sony and BMG merger annulledBoth of these were because the combined market share was over 25%Universal’s market share post EMI purchase in 2011 is 35% which shows how the market has changed. I agree that Terra Firma’s acquisition was a disaster and that they overpaid but record sales will continue to decline and so will publishing due to mechanical royalties (though at a slower level). EMI not isolated case as Warner lost $205m for the year ended 30th September. Major’s do control the digital space but Apple is the company that has made the most money from selling hardware. ThanksMark

      2. Andy

        Corporations own most clubs. End of story. Self-ticketing is limited.Sites that do direct ticketing pray Ticketmaster, etc. buys them.Everyone should stop living in la la land.

        1. Mark McLaughlin

          Andy, There are close to 2,600 venues over 1,000 capacity in the US and 3 major Canadian cities and Live Nation / AEG own or operate close to 150 of those so they don’t own most clubs. Where Ticketmaster dominate is in arenas and higher value tickets as they are the tickets that they can charge the highest booking fees for and the lines between primary and secondary ticketing is blurring. Ticketfly a new ticketing agency has signed up over 100 new clubs in just over a year so the market is changing. The main reason why Ticketmaster would buy a directing ticketing site would be to close them down as moving to the direct ticketing model would cannibalise their existing business. Ticketmaster aren’t going to offer their clients a solution where they make less money. Outside of the US which is nearly 60% of the market tickets aren’t all sold by the venue which is the main model used in the US. Tickets are sold by allocation with the promoter, artist, venue and in some cases the sponsor selling tickets also. If artists are going to increasingly pursue a direct to consumer business model there will be less tickets for venues and promoters to sell so the question will be how quickly that change occurs. ThanksMark

          1. jimthom

            Good luck setting up new venues with proper accomodations, etc.Corporations control most of the clubs and if they don’t… they soon buy any competitor.There isn’t much reason for U2 or similar artists to go direct cause they make most of the money anyway.Direct to consumer for ticketing is niche. That’s not a bad thing.

    2. ShanaC

      You know, this would be useful for more than concerts when it comes to fan outreach.Look at dance companies: they are superconservative in their outreach.  Meanwhile, Merce Cunningham is shutting down, and ABT (etc) are now being supported by the Nutcracker Suite.Meanwhile, dance fan still remain  – why isn’t there more outreach and easier ways to ticket for dance?  Or small concerts?  Or something else?

      1. Mark McLaughlin

        Shana,It is easy to ticket for dance and small concerts. We’re chatting with dance companies who are now beginning to look at doing this. They weren’t going to be the early adopters but will start to move towards this model as they begin to get a better understanding of the benefits. ThanksMark

        1. ShanaC

          Well, good, keep me updated, because I want to see ticket prices drop and more money going directly to the company.

  56. JBalloonist

    This reminded me of a recent (and ongoing) Kickstarter success story. A ska band from the late 90’s to early 2000s that I was a fan of recently got back together and decided they want to record a new album. Instead of dealing with a label, they went straight to their fans via Kickstarter.Their goal was to raise $30k over the course of the project. They raised it in 55 minutes. This is proof of how important (and awesome) it is to have dedicated fans, whatever it is you are working on.Here is the project page:…

  57. RacerRick

    What I loved about Louis’s experiment is how much he was involved right down to the the text instructions which seems to have been written and added to the site by Louis.

  58. Prokofy

    Not science.First law of any experiment in science is that the results *must be replicable*.NOT REPLICABLE.NOT SCIENCE.

  59. Paul Smith

    Not only can Louis continue to do this for himself, but he can also do it for _others_. His star power is a value-add and worth some percentage of profit to lesser known artists.It’s the perfect bridge between walled-garden and crowdsourced distribution models. Stars who do this will compete, and those who overvalue their star power or service level will lose share to those who undervalue same.It’s a win, win, win for stars, up-and-comers and consumers alike. This is exciting!

  60. Ira Gold

    Louis CK is awesome. This is such a cool concept, and it does not surprise me that he of all people would venture out to do this and reveal his whole financial report. He seems to have such a perfect blend of intelligence and humor with a spectacular tact to know when to implement each. It’s funny that you said “Some will say that Louis can do this because he is a star.” I ponder if it isn’t vice versa, that is it in doing those things beforehand that makes someone a star. Man he is also one funny guy, I have watched some of his videos on repeat for an unknown amount of time, just cracking up. Thanks for posting this, I love hearing cool stuff like this. He gets lots of props from me.

  61. Peter G

    Thanks for sharing the nitty-gritty on this. We need more people opening up their books and sharing both success and horror stories. At we have built a platform that lets anyone try the same experiment and turn direct-to-fan film distribution into a sustainable business model. It’s a good point that the scale of Louis’s success has to do with the fact that he’s a star, but it certainly doesn’t mean that direct-to-fan will only work for stars. We’ve seen new independent filmmakers use our direct-to-fan tools and have their films go viral. The scale of success has meant that some of our users have made enough money to produce their next film. Louis clearly operates on a very different scale from many independents – $170k would go a long way for a documentary filmmaker or even on animation or feature film. And very few people need to spend $32k on a website. In fact, we built the beta version of for less than that. So when a no-budget filmmaker starts making more from their film than they were making at their day-job, all because of direct-to-fan, we’re confident this model can work at all scales.

  62. Dino Dogan

    I love Louis CK and have seen the video. #FunnyAsHellI also love what he did here…great model for us all. 

  63. Richard Reisman

    What I would add to this interesting discussion to raise a radically new variation, outlined in my blog post from last year (…An Open Letter to Radiohead and Seth Godin — How to Make Much More MoneyI have a suggestion on how you (and others like you) can make much more money than you realize.You both obviously know that by ditching the middleman and going straight to your public, you get a much larger piece of what you sell. And you both clearly know how to reach your public without the help of a middleman, and that you and your public are partners in a collaboration.But what you probably don’t know is how a radical new pricing process, a sort of Pay-What-You-Want (PWYW) on steroids, can significantly increase your total revenues — and profits. Radiohead knows that PWYW can be a very effective way to reach your market, getting far more people to buy, and many of them to pay reasonably well. But both of you know that many pay nothing at all. …PWYW is is participative, but flawed.FairPay (Fair PWYW) is a radically new pricing process that builds on the flexibility and participation that PWYW offers to buyers, but motivates them to pay fairly. It works where there is an ongoing relationship of continuing sales, and tracks how fairly buyers pay. If they pay fairly, the seller continues to extend more FairPay offers to them. If they do not pay fairly, they lose the privilege of continuing to buy on a FairPay basis, and must pay a conventional set price for future purchases. Unlike PWYW, FairPay is a two-way dialog that creates consequences for not paying fairly.Because of this cycle, this FairPay process may not work so well for single sales, like one album or one book, but can be very powerful for an ongoing series of sales. For example:–Individual songs from a collection of albums, offered in series, one at a time, or in small bundles…–Individual items from a catalog of book chapters, articles, podcasts, or videos…The process begins with one of a few low-value items, to test how the buyer sets prices. If the prices are reasonable, a few more items are offered. As the buyer builds a reputation for pricing fairly, more FairPay credit is extended (but never so much that there is too much risk that the buyer is done and will pay nothing for a valuable bundle). So perhaps it might better be called Pay-What-You-Think-Fair, because that is the result.I suggest FairPay can produce far more sales than any set-price offer, and far more revenue and profit than any simple PWYW offer….To Radiohead and Seth, I suggest you think about this. If you want to try it, I would be happy to assist.To other content creators (including video, games, apps, software, etc.), I suggest the same. Think of this as the next step in C2C (Creator to Consumer) commerce.To entrepreneurs and developers looking for a killer business opportunity, I suggest this is it. Again, I would be happy to help.[***And to Fred and other VC’s — any help getting this to entrepreneurs is welcome.***]

    1. Richard Reisman

      Corrected URL for the blog post referenced above (sorry the parentheses mangled it):

  64. awaldstein

    This idea has been going on for as long as technology has been able to support it.Hand printed broadsides for poetry readings and bootleg 45s for the early acid rock bands out of SF.Fan communities have been an economic base for as long as there have been fans.

  65. William Mougayar

    Can’t any one do this on YouTube if they had a paid download option? 



  67. Derek

    It would be cool if instead of handing out a CD, which costs money to produce, they could instead give out a coupon code that expires at the end of the show.

  68. William Mougayar

    I agree. Hopefully with less than 30% cut.

  69. Derek

    Either one would work, but I suspect the scarcity factor of “tonight only!” would spur sales. Fun concept to a/b test.

  70. awaldstein

    The behavior is ageless, but the idea of a niche has been redefined.Concepts of global local, niche as focus rather than niche as small all speak to the possibilities that the web has provided if we are smart and lucky enough to play it right. This is part of what Fred is talking about.We hit on a bit of this from a slightly different perspective in the comments in the myth of the niche post .

  71. ShanaC

    That too will change.  Artists tend to know each other.  They gossip much like the rest of us.

  72. Mark Essel


  73. TyDanco

    My favorite example of this is the band Phish, which was in the right place at the right time for their band to take off:  existing fans flocked to as the internet took off, and they filled the void left when Jerry Garcia died to quickly emerge as the dominant jam band–all without being pushed by a label or being a mainstream band. Phish would be a fantastic case study–relatively little of their revenues has come from being signed to a record label (they went to their own label), and more comes from live shows which drive paid downloads of those shows. Merchandise, a staple of many bands, used to be done inhouse with lots of employees, but eventually got outsourced. They embraced fans doing their own taping–which only grew the market for their own higher quality product, which didn’t come with DRM.

  74. awaldstein

    True… My son was a big Phish fan and I watched this this happen first hand.Great example.

  75. Valentin

    Well, Phish is a name from the pre-Internet times. And for artists like that it’s pretty self evident that it’s the right way.Nine Inch Nails also did some pretty amazing innovations – giving away an entire album for free, and then selling premium box sets, etc. Engaging fans in a virtual reality game.But again, Trent Reznor was already a millionaire before all the internet craze and had a huge and loyal following (also an ‘anti-establishment’ one), so he also did a very sound business decision.

  76. William Mougayar

    Why do you think they haven’t done it yet? Is it because advertising is the only revenue model they believe in?

  77. andyidsinga

    haha – the other week ago i was up really late – a little after 2.30 am pst and i got this crazy idea that i should poll freds site waiting for his post so i could get the first comment in :)short story long, i went to bed, woke up a few hours later and there were already like 30 comments 🙂



  79. fredwilson

    i love their email producti love google docsi love their mobile OSand i love youtube



  81. William Mougayar

    Pretty much.

  82. fredwilson

    ah, yesi agree with you on thatit is a strategic weakness on their partthat i’m interesting in exploiting

  83. Mark Essel

    I read some insightful criticism of gmail on the developer experience site. A major flaw is blocking the user interface on send.I’m not too happy with the gmail UI redesign. It doesn’t feel more efficient. I wish shortmail would take off, lover their ios app and messaging vision.