Solving Online Piracy Problems with the @LouisCK Business Model
With the evolution of the internet and especially torrents, sharing media has become incredibly easy. This has the recording and movie industries pissed off because they are losing a lot of money.
In fact, they are so pissed off, they want to pass laws that would allow the government to essentially censor the internet (see SOPA and PIPA).
The worst part about these laws is that there is so much money behind them that they may actually be passed. If either of these laws were to be passed, it would be a devastating failure for our democracy. Both laws are extremely unpopular with the public and therefore should not be supported by our representatives.
But what other choices do these industries have? The public is stealing their intellectual property and without a SOPA/PIPA-type law, there is nothing they can do to stop it.
I think there needs to be a radical change in perspective which would empower the recording and movie industries to solve their problem.
Why Are People Stealing?
I think this is the most important question that every person with intellectual property needs to ask.
The free market has spoken and the answer is clear: Movies, albums, and software programs cost too much money and are too easy to steal.
This leaves us with two possible solutions to the online piracy problem:
- Reduce the cost.
- Reduce accessibility.
It is really that simple. The sad thing is that the recording and movie industries have chosen the wrong solution. They have opted for solution #2 – reduce accessibility. Instead of focusing on how to make the final price point cheaper for the consumer, they are focusing on how to make their intellectual property harder to steal. They have poured millions of dollars into lawsuits and lobbying that they think will stop piracy. The absurdity of this solution has culminated with SOPA and PIPA.
Even the name “SOPA” is absurd. Do they really think they can Stop Online Piracy with an Act?
Show ‘Em How It’s Done Louis CK
Louis CK has the right idea. You can purchase his latest 1-hour comedy special directly from his own website (buy.louisck.net/purchase) for $5. He has created valuable intellectual property and is selling it for a very low price in an very accessible format. So how did he do it?
- He’s already a really famous comedian, allowing him to spend very little on marketing.
- He has made the comedy special very accessible for anyone with an internet connection. You don’t need to buy a DVD, sign up on Amazon, or buy a special program to play it on your computer. High accessibility translates to low distribution costs.
- The money saved on marketing and distribution allows him to sell his comedy special at an affordable price – $5.
- This combination of accessibility and affordability makes people more likely to buy then to steal.
- He asked as nicely as possible for people to not steal his property (see his message at the bottom of the purchase page – buy.louisck.net/purchase).
- He was committed to generosity when it came to compensating the people that helped him produce and sell the special.
In a matter of days, over 250,000 people paid for his comedy special. At $5 a purchase, he made over $1,000,000 just in the few week or so. He then invested back $250,000 into this business, gave $250,000 in bonuses to his staff, and gave away $280,000 to various charities. That leaves him with about $220,000 (minus PayPal fees). Oh, and it’s still selling.
People still decided to steal his comedy special, but it didn’t matter because his business model was so profitable. I don’t have any numbers, but I would be willing to bet that less people stole this comedy special compared to a traditional DVD release.
A Whole Different Perspective
Louis CK looked at this comedy special with a completely different perspective. His most important revelation was that online piracy isn’t going to be stopped. So instead of trying to prevent piracy completely, he did his best to minimize it. This led him to a business model that featured a low price, easy access, and an authentic “please don’t steal” message.
The success speaks for itself. If you are an intellectual property owner, please take some time to learn from Louis CK. Creative thinking like this will solve the online piracy problem, not brute force.
P.S. If you haven’t seen his comedy special, I encourage you to buy it now…or steal it…Louis won’t care