The Ripple Effect

Situated amid my social media hubs are two distinct groups of filmmakers.

One makes a living working in the production industry while the second group is either breaking into the business or pinning their career hopes on the future of new media platforms.

Both are intelligent and media savvy, updating regularly on the industry while spinning this news in whichever direction they hope the zeitgeist will respond –- responses that will impact the futures in which they are personally invested.

One such topic arose last week when Comedian Louis CK produced and released his own stand-up special online. At $5/purchase, CK gave buyers multiple downloads and streams of his show and rang up $200,000 in profits virtually overnight.

His venture eliminated all the media middlemen from development executives to distributors, all of whom take a cut of the work of most artists.

What’s more, no one had interfered with, attempted to enhance, censored or appended any other agenda to his artistic vision.

Louis CK had, in this single bold move, end run the gatekeepers and turned a quick dollar – the double Holy Grail for most media artists.

As CK described the process, “I paid for the production and posting of this video with my own money. I would like to be able to post more material to the fans in this way, which makes it cheaper for the buyer and more pleasant for me”.

The initial reaction among the non-mainstream set was that this was a “Game-Changer” finally opening the floodgates of internet media sales for all.

Meanwhile, the established applauded Louis CK’s success while pointing out he was an established artist who had garnered fame (and therefore the ability to exploit it) via mainstream television.

I tend to think they’re both right.

And they’re both wrong.

That’s because while our attention is always drawn to the big splash a rock makes when it lands in a pond, it is the ripples of the impact that change the surrounding environment.

What’s become clear over the last months is that both producers and consumers are realizing what threatens the current way shows are delivered while undermining piracy is price point and accessibility.

We’ve become an “On Demand” culture in which exposure drives audiences to seek content it has missed, can’t afford at the studio/network dictated price or doesn’t have access to because its geo-blocked or just unavailable.

It’s true that Louis CK has a high level of brand awareness because of his previous Stand-up specials, talk show appearances and the FX network series “Louie”. But his public profile is not as pervasive as some might think.

For all his appeal to a hip comedy crowd, “Louie” rarely attracts more than 700,000 weekly viewers and averages about 2/3 that audience in repeats.

Indeed, the show only found a place on FX because CK traded total creative autonomy (no network notes) in exchange for making his series at a MUCH lower budget than their other programming.

CK also told NPR this week that he has never made any money beyond his upfront fees for ANY of his previous specials.

So – Big Time TV Star? No.

And while this success at marketing his exceptional talent may finally earn him a decent pay check, it could mean much more for other comics while spelling trouble to HBO, Showtime and other Pay and Specialty networks who depend on comedy specials to draw an audience.

If Louis CK can sell 100,000 downloads in 4 days, what numbers might Chris Rock, Jerry Seinfeld, Russell Peters or even Russell Brand rack up?

And where do the networks depending on these stars turn if they are no longer available to them while competing online for the same audience?

Does it mean previously under-exposed comedians will now get shows or do networks break the bank to hang onto the big stars and their audiences?

And will audiences continue paying or even pay more to keep the current gatekeepers in business?

Dan Harmon, showrunner of NBC’s “Community” has suggested that he could deliver a 13 episode, uncensored “direct to viewers” version of his show for $50/subscriber.

But does that make sense to an audience who can already access the broadcast version, purchase a 20 episode NBC season for less than that via iTunes or wait for a DVD box-set season marketed for even less?

And what if Louis CK uses his newfound audience database to market his own slate of favorite, unknown or under-appreciated comics? Where do the networks turn then?

New Media advocates would suggest they will turn to them and that Louis CK’s marketing coup will convince investors that their product can be similarly marketed. But can it?

Louis CK’s show was developed over months of concert engagements, honed by an experienced master of Stand-up. The production itself was budgeted at $170,000 and filmed over two nights at New York’s Beacon Theatre, a venue that could draw exactly the right live-audience demographic.

The finished show is as polished as any HBO Special, for CK understood one thing many championing New Media do not.

Audiences know the difference between professional and crap.

And what they will endure for a few minutes of YouTube video or webisode is not what they will reach into their pockets to pay for.

CK then further invested $32,000 in a website that could correctly service the product while spending more to allow credit card and Paypal sales.

Therefore, anybody following the same model needs to come up with almost a quarter of a million dollars just to get into the game. For most of the new wave that’s not anywhere near a number that can be confidently crowd funded.

Yet this and other trends in online marketing may convince risk friendly investors to begin kicking their tires.

Last year, Lee Goldberg, an American author unable to sell any of his 15 novels to a publisher, dumped them all on Amazon’s Kindle site and 12 months later had earned $300,000 after fees and expenses.

Meanwhile, previously published British Psychologist Richard Wiseman discovered he couldn’t find a US publisher for his new book “Paranormality” unless he reversed its central premise that ghosts and psychics were bogus.   He went the kindle route as well – and suddenly had a mainstream best seller on his hands.

And then there’s “Lamb”, a barely known electronica duo from England who’d broken up in 2005. No record company would even advance them enough to cover the meagre studio costs of a comeback album. So, they announced they were back and took pre-orders online, tripling all of their past sales before they’d even stepped into a studio.

So the money is there.

Provided you have a product someone wants.

Provided you offer it a price that will both turn consumers from Corporate product and dissuade them from piracy.

And perhaps most important, provided you make it available in a format that does not restrict either your customer’s usage of the product or their ability to share it with their friends.

Ultimately, I don’t think “Louis CK Live At The Beacon” is a game changer. But if you follow where its ripple effect leads, you may begin to see major changes taking place.

And I think that means the New media crowd must start approaching the future much more pragmatically, while those already established need to consider that the system that’s always worked for them may soon begin to crumble.

Here’s an outtake from Louis CK’s Special. You can order your own copy of the full show here. Trust me, it’s well worth your time and money.