Comedian Louis CK proves you dont need DRM to make money

Can a person make money by offering a paid video download via the Internet? If you are comedian Louis CK, the answer is, "Yes." A few days ago he released a concert video of a recent performance in New York City via his web site. The video cost just $5 and didn't have any DRM set up. The only limits were that you could stream the video twice from the web site and downloaded it twice from the site.

On Tuesday, Louis CK posted up an update on the video's downloads and overall sales. He revealed that the production of the video, which he directed, cost $170,000 which he says was mostly paid for via tickets to see the live shows that were taped for the video download. The actual construction of the web site to host the video download cost about $32,000.

At the time of his post, Louis CK said that there have been 110,000 downloads of the video, generating revenues of $500,000. Minus the production costs, the web site costs and charges to Paypal, Louis CK says that the video has now created a profit, so far, of $200,000.

Louis CK believes that this proves that the Internet can be a place to earn some money via video if the cost is kept low enough so that consumers can purchase the video without the need to pirate it. He states, "I really hope people keep buying it a lot, so I can have s***loads of money, but at this point I think we can safely say that the experiment really worked. If anybody stole it, it wasn't many of you. Pretty much everybody bought it. And so now we all get to know that about people and stuff. I'm really glad I put this out here this way and I'll certainly do it again. "

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WTF

The second paragraph clearly states that production costs were covered by ticket sales

Yet the those vet production costs are substructed again from the revenue figures for the digital download.

It's a pretty huge difference!!!

panacea said,
WTF

The second paragraph clearly states that production costs were covered by ticket sales

Yet the those vet production costs are substructed again from the revenue figures for the digital download.

It's a pretty huge difference!!!

Business does not work that way however. When you calculate the worth of a project, you don't pay for the project through other means and then claim the project made that much more money. If that were the case, the Microsoft Kin was a complete success, which we all know is false. The video/website didn't make $500,000 in profit, it made $500,000 in revenues and $200,000 in profit.

My only question is, $500 - $32 - $170 = $298. Where is the missing $98,000?

ILikeTobacco said,

Business does not work that way however. When you calculate the worth of a project, you don't pay for the project through other means and then claim the project made that much more money. If that were the case, the Microsoft Kin was a complete success, which we all know is false. The video/website didn't make $500,000 in profit, it made $500,000 in revenues and $200,000 in profit.

My only question is, $500 - $32 - $170 = $298. Where is the missing $98,000?

Taxes? Who knows. Haha.

ILikeTobacco said,

Business does not work that way however. When you calculate the worth of a project, you don't pay for the project through other means and then claim the project made that much more money. If that were the case, the Microsoft Kin was a complete success, which we all know is false. The video/website didn't make $500,000 in profit, it made $500,000 in revenues and $200,000 in profit.

My only question is, $500 - $32 - $170 = $298. Where is the missing $98,000?

PayPal fees.

Edited by rpsgc, Dec 15 2011, 9:48pm :

adam7288 said,
lok 32k to build this simple site someone got ripped off!

Not this again...

Did Google get taken for a ride too? I mean their pages look so simple. What about Facebook? Or companies like GrubHub. They shouldn't pay anything because the site looks simple...

Web programming is a lot like an ice berg. You only see the surface and it looks so small and easy. If you looked under the hood though it is far more complicated. There is far more to the site than you see...

It has to handle large volumes of traffic which takes planning and good code. There is also a lot that has to be done on a security level.

There is a reason web devs are not paid minimum wage even though everyone like you thinks it can be done for free by kids in their bedrooms while playing Skyrim.


From: http://www.neowin.net/forum/to...iew__findpost__p__594520127

I do web design I know the rates people charge in the industry. Take a look at the site. Look at the functionality. I do not believe bandwidth costs are factored into "construction".

As far as security - please tell me how, besides a simple login script, they are protecting the valuable commodity here? Have you visited the site?

I think you are missing the point of the article - they are explaining how such a hands off approach, without DRM and the such can still lead to a successful results. However, because of the simplicity, one would not expect a price tag so high. It does not take much code to have a login script, and stream video.

adam7288 said,
lok 32k to build this simple site someone got ripped off!

I agree. That's way overpriced for such a website. Actually, for 32k I'd expect a custom cms, custom forum, custom blog and plenty of features all together. But that website has only a login?

adam7288 said,
I do web design I know the rates people charge in the industry. Take a look at the site. Look at the functionality. I do not believe bandwidth costs are factored into "construction".

As far as security - please tell me how, besides a simple login script, they are protecting the valuable commodity here? Have you visited the site?

I think you are missing the point of the article - they are explaining how such a hands off approach, without DRM and the such can still lead to a successful results. However, because of the simplicity, one would not expect a price tag so high. It does not take much code to have a login script, and stream video.

Read my post again, I think you missed it while commenting on it.

Without seeing the code and the specification you have no idea how complicated it is or isn't. For all you know the site integrates with Amazon/Azure to handle the downloads via their CDN while automatically spinning up and down instances in the cloud to adjust to traffic spikes. Security is a lot more than DRM. They still might want to keep hackers out from accessing the files without paying...

As, I said earlier. It is like an ice berg.

If you actually do this for a living and you're any good at it then you would understand this.

Unfortunately I doubt this is occurring - unless he expected to be serving up thousands of videos concurrently. Judging by the sales, he is not. However, if he did pay for such an over specification - he still got ripped off.

One can use context clues to judge that it is very likely such a system is not being used.

adam7288 said,
Unfortunately I doubt this is occurring - unless he expected to be serving up thousands of videos concurrently. Judging by the sales, he is not. However, if he did pay for such an over specification - he still got ripped off.

One can use context clues to judge that it is very likely such a system is not being used.

My point is simple. You can't say anything conclusive without knowing the facts.

It might be a pretty good chunk of change, but when taking into account that the site works perfectly, performs well, and is exceptionally simple to navigate, it's easy to view the development cost as money well spent..

And the show was definitely worth the $5 to boot. :-)

adam7288 said,
How sad that the metric we now use to justify a high price for things is that they work as advertised.

No, that has always been the measure. Hence the common American expression, "you get what you pay for."

Ugh 32k should not be the minimum to pay for a simple login and video streaming site. Why is this such a hard point to understand?

adam7288 said,
Ugh 32k should not be the minimum to pay for a simple login and video streaming site. Why is this such a hard point to understand?
Because you're wrong. It costs money to build a website, to advertise it, to pay for the bandwidth costs and to ensure that it is secure when you're talking about a professional website. And we don't know what support system he had in place, as if he is providing telephone and email support that further increases the cost.

It's great that you can build a website for a fraction of the cost but if you're only talking about a few thousand hits with very little bandwidth usage then it obviously doesn't compare. I think it is arrogant to even rule out the possibility that the website legitimately cost that much to build.