It’s A Funny Business: A Case Study In Comedy

For all the passion and skill and talent and blood and sweat and tears and risk that producers bring to the mix the one most often looked over yet is the most important is that of business person. Because when the lights go out, the talent and crew go home the business of film and TV really starts. Like all businesses the goal is to make money. It is something that ‘creatives’ don’t like to talk about because their driving force is the ‘art’ or ‘craft’. In the pilot of ‘Studio 60 on the Sunset Strip’, Aaron Sorkin writes ‘…there’s a struggle between art and commerce. Well there’s always been a struggle between art and commerce and now I’m telling you art is getting its ass kicked.’ In the scene the producer of a Saturday Night Live style sketch comedy show angrily laments the way in which the network panders to their conservative, vocal, right-wing, Christian minority audience in an effort to not offend anyone while simultaneously limiting the breadth of creative input the show requires to be appreciated by the masses.

In the decade since ‘Studio 60 on the Sunset Strip’ premiered the struggle between art and commerce continues but the lines have changed and multiplied. Many disruptive technologies have risen in popularity and technologies have become faster and smarter to allow audiences instant access to what they want, when they want it. Some exceptions apply especially for news (although apps provide an ever increasing alternative), sport (again, apps) and reality format programing and other live events. As an aside, the ten Thursday night games of the 2016 NFL season will be broadcast on twitter, in a ten million dollar deal that co-presents the game on the NFL’s own cable network and traditional free-to-air broadcaster CBS, and positions twitter as a new platform for live TV.
Not surprisingly many producers are holding on to the old traditional distribution model; make a programme, sell it to a network who make money off of advertisers, then repeat. The problem is that model doesn’t take into account any of the struggles that traditional distribution models face. The primary one being; where is the audience?

Content Creators (the social media title for a producer) are more savvy and accommodating of risk. Take for example Louis CK who is an American stand-up comedian, writer, director, actor, producer and editor. But those talents and skillsets are not why Louis CK is a subject of this case study. In 2011 he produced a 90 minute stand up show entitled ‘Live at the Beacon Theatre’ which he recorded. So far, nothing too clever. Many comedians and other performing artists, including Louis CK himself have recorded live shows for sale to networks. In this instance Louis took over the distribution process himself. He set up a website to sell the show directly to his audience. The purchase process was made as easy as possible and in just 12 days the show had been downloaded 200,000 times at US$5.00 per download earning a million dollars and nearly a Guinness World Record for most downloaded show. CK gave away 75% of earnings to staff as bonuses and donations to charities. Social media exploded with the news and proclaimed this disruption to distribution as the new model for content creators and producers to earn revenue. Until then the majority of alternative distribution models required some kind of advertising or sponsor supported revenue model to even approach revenue neutral status let alone be profitable.

Shortly afterwards Jerry Seinfeld launched his new show, Comedians In Cars Getting Coffee (CiCGC). The format is a weekly webisode of varying duration featuring one of Mr Seinfeld’s favourite stand-up comedians or comedy writers with the exception of President Barack Obama who used the show as a vehicle to promote his ObamaCare policy. The show starts with Jerry introducing the classic car and the interviewee for that episode. In each episode there is a product placement ‘bit’ for car company Acura (the US version of Honda). The show is available to stream on its own website and on Crackle, a free streaming service supported by in program and pre-roll advertising. In this way, Crackle is merely replicating the traditional distribution revenue model but using technology to provide audiences with the two biggest revolutions in digital media consumption; watch what you want when you want (time shifting), where you want (device agnostic portability). It’s no surprise then that Crackle is a wholly owned subsidiary of Sony Pictures Entertainment which owns the rights to one of the largest libraries of television and cinema as well as production companies around the world. Crackle offers Sony greater reach with their library of content to an audience more comfortable with smart phones and tablets (iOS and Android), gaming consoles (PS4 & Xbox), streaming devices (AppleTV, Chromecast etc) and smart TVs (Sony, Samsung et al).

So while the product of both Louis CK’s show and Jerry Seinfeld’s show were similar in so far as they bypassed traditional free-to-air broadcast television, Mr Seinfeld’s was much closer to the original distribution model. Since its inception, CiCGC has had eight series ranging between five to 10 episodes, 53 in total and has been renewed for a ninth season. Additionally, a weekly ‘Short Shot’ episode is produced and streamed in the weeks where there is no regular show. The show has been nominated for three Primetime Emmys (won zero) and two Producers Guild of America Awards (won both)!

However, where both creators and their shows are simultaneously different to traditional free-to-air broadcast television is that the creators both have a large and loyal fan base from which to bring a substantive audience for their programs. In reality, an audience of just 200,000 as Mr CK’s comedy special achieved for a 90-minute program on US primetime would in any language and by any metric be an unmitigated disaster. As Andrew Lipman argues in ComScore.com “… I’d argue that if you can get consumers to pay for content that is almost always the better choice, since you would need to reach an audience many times larger to derive anywhere near the same amount of revenue via a pay-for-content model.” Similarly, it would be impossible for Mr Seinfeld to be so hap hazard with duration of each show and irregular season length of his series for it to be at all programmable on a commercial network.
What these two content creators are essentially disrupting is what I will call the traditional linear distribution model. This is the model that flows from idea to concept to backing to production to audience and is then repeated.

The newer non-linear distribution model starts like the linear model but at any point can branch out and return to the beginning. For example, Mr CK conceives a TV show which he writes, directs and stars, while receiving fees for each. Simultaneously he is selling out large stadiums for his stand-up show. This is filmed and either sold to a network (as he has done with HBO in the past) or sold via his website. He has also recently co-starred in two feature films; one with Bryan CranstonTrumbo’ and in Woody Allen’sBlue Jasmine’.

As both Mr CK and Mr Seinfeld have other strings to their bows they derive both personal income and corporate revenue from more than just one source. Mr Seinfeld focuses on stand-up shows (ticket revenue) and ghost writing or scripting doctoring (fee for service) for other comedy writers.

In January 2016, Louis CK started production on Horace and Pete, a multi camera stage play style production. As he had had success before selling directly to his audience he again used the same methodology. Interestingly he did not promote the show at all, not even to his own fan base. He simply emailed his mailing list letting them know a new show was available. The show featured a star studded cast including Alan Alda, Steve Buscemi, Jessica Lange and Edie Falco. It cost $500,000 per ep and sold for $5 for the first episode, $2 for the next and $3 each for the remaining eight episodes. He financed the first four episodes himself and had to raise money to produce the final six. The critics loved Horace and Pete. The fans, not as much. As reported in The Atlantic, “…he (CK) told Howard Stern, ‘he was millions in debt’” Sims, J, 2016 The Atlantic. To that end, there are many reasons why his methodology did not work this time. Primarily Horace and Pete is a drama, not a comedy which is what his fan base would have expected. Secondly, with no pre-marketing, PR, interviews etc no one knew what the show was about which led to disappointing sales.

In conclusion, it is important to note the old adage that new doesn’t mean better. Risk, the great enemy of both creativity and profit, ensures this. Even the old distribution formula, in all its versions from the familiar studio model through to the disrupted tech based model is not a guarantee of revenue success. Just like cars and catwalks, new models appear regularly all promising something better. YouTube was supposed to be the end of free-to-air. It isn’t and won’t be but they sure are doing some interesting things. Even their advertising supported revenue model has run its course with the introduction of YouTube Red, a paid subscription model which removes the ads. And YouTubers were aghast when YouTube changed their policy under which advertising revenue would be paid; no longer content that is overtly sexual, violent, vulgar, drug related or controversial would earn revenue from embedded advertising for the creator. One could be forgiven for thinking the conservative, vocal, right-wing, Christian minority that threatened traditional distribution is doing the same thing all over again, but this time, digitally.

Bibliography

CK, L., 2011, “Another Statement from Louis CK” louisck.net
Comedians In Cars Getting Coffee, 2012, Sony Pictures International, Los Angeles, California, USA

Horace and Pete, 2016, Pig Newton Productions, New York City, New York, USA

Lipma, A., 2012, “What does the Louis CK Experiment Mean for the Future of Digital Content Distribution?”, ComScore.com

Live at the Beacon Theatre, 2011, Pig Newton Productions, New York City, New York, USA

Sims, J, 2016 The Atlantic, “The Show That Left Louis C.K. With Millions in Debt

Studio 60 on the Sunset Strip, 2006, Warner Bros. Television, Hollywood, California, USA