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Louis CK's self distributed special up to 1MM revenue in 12 days
- georgemcbay 15y agoGiven various horror stories regarding paypal account freezes, seeing that much money in a paypal account (even when it isn't mine), gives me the cold sweats. Of course, in his case the backlash to an account freeze would probably kill paypal (would be so widely reported that the feds would have to get involved, I'd guess), but still...
- herbivore 15y agoWould not surprise me to learn that this whole "experiment" was a ploy to eventually have PayPal freeze the account and finally bring to its demise.
- rcfox 15y agoLouis C.K. strikes me as a guy with better things to do with his time. Besides, the people having issues with PayPal have (almost?) always been using terminology implying that they were taking donations without being registered as a non-profit, or were taking money with the promise of a return in the future. I'm not trying to defend PayPal here; I'm just pointing out that there is specific behaviour that is likely to invoke their wrath, and Louis C.K. does not appear to be doing those sorts of things.
- SquareWheel 15y agoPaypal has frozen the accounts of many large people. Notch, for instance.
- redthrowaway 15y agoYes, but Louis CK is way, way more well-known than Notch is. The dollar amounts might be similar, but Louis CK is regularly on late night talk shows and the like. The backlash would be far greater.
- staunch 15y agoThe dollar amounts are not similar. Notch is earning a hell of a lot more and he's not in the US. He's making like $220k/day. Something like $70+ million total sales.
- redthrowaway 15y agoI doubt that $70MM is sitting around in his paypal account, though. IIRC, he had something like $350k frozen.
- kenjackson 15y agoReally? Is there a source for that? Not that I don't believe you, but I'd love to cite this data myself. That's incredible.
- deleted 15y ago[deleted]
- ugh 15y agoMinecraft.net has a stats page: http://www.minecraft.net/stats http://www.minecraft.net/stats I’m pretty sure that someone somewhere on the web has recorded those numbers – but I’m too lazy to search right now. Calculating the average is something I can do, though: On January 12, 2011 Minecraft had sold one million copies. Since then Minecraft sold another 3.4 million copies in 345 days – that works out to an average of a little less than 10,000 copies per day. That works out to €150k daily revenue for 309 of those days (during beta, €15 per copy) and €190k daily revenue for the rest of the time (after the release, €20 per copy), resulting in a revenue around €50m for 2011.
- georgieporgie 15y agoHoly cow, seriously? Apparently, yes: http://texyt.com/minecraft+persson+notch+indie+game+success+00127 http://texyt.com/minecraft+persson+notch+indie+game+success+... At the end, they note that sales were settled in to about $100k/day in September 2010, from a relatively brief peak of $350k/day. Amazing numbers.
- izak30 15y agoNo reason to bring weight into this. I don't think that PayPal is fighting against Louie's crotch belly.
- dangrossman 15y agoUnlike Notch and other indie game developers, Louis thought this out with advisers and lawyers, and no doubt notified PayPal of the plans. If they already know what he's selling and have his ID on file, they have no reason to temporarily suspend the account to ask those things.
- drivebyacct2 15y ago(Random, honest question)... is this acceptable? Should one have to pre-clear it with PayPal if they think they might hit some non-specified limit upon which PayPal will seize your funds?
- dangrossman 15y ago> (Random, honest question)... is this acceptable? That's how it works everywhere. It's written into any merchant account agreement with any payment provider. If your average ticket size, average monthly volume, or the business you're in changes, you have to notify them and get approval because it changes your risk profile. Because Visa and MasterCard mandate a <1% average chargeback rate from their members, that carries through to every level of payment processing service to make risk management a core piece of the business. 3rd party processors make it easy to sell an item or two on eBay without having to fill out pages of work history and references as you'd have to in order to accept credit cards directly... because there's very little risk. If you scam someone out of $100 and they charge it back, that $100 is going to be too small a portion of the processor's business to impact their rate. But if the next month you sell $100k of product, and they don't even know who you are or what you're selling, it's time to pull back and ask you who you are. PayPal will do this. Amazon Payments will do this. Google Checkout will do this. 2Checkout will do this. Heck, 2Checkout will also call a random sampling of your customers to make sure you're actually selling what you say you're selling. So in exchange for not having to fill out a 6 page application up front and tie yourself to a contract with monthly fees, PayPal and every other 3rd party processor will suspend your account for a business day or two to get the information from you only when it becomes necessary, then set you back on your way to continue doing business. Most people never think about things like chargeback rates and risk to the processor, so when their account gets suspended, they freak out and spam a blog post assuming someone's trying to steal their money. A few days later they always have to follow up that everything's actually OK... there's no conspiracy to lock accounts and earn interest on the balance (reserve funds are held in non-interest-bearing accounts), they really just want to make sure you're not something so risky it's going to hurt their average chargeback rate.
- phillco 15y agoI just noticed that Stripe's payment fee (2.9% + $0.30) is the exact same as PayPal's. Definitely not a coincidence.
- downandout 15y agoI would say there is a 99% chance that the moment he requests to have the money transferred to his bank account, his PayPal account will be limited. In the screenshot it shows that there are already 43 disputes. While this is a small percentage, PayPal will use this to point to the possibility of many more chargebacks arising in the future. Granted, he will eventually receive it (after 180 days). But, he will not receive it before then. This is a matter of standard operating procedure for PayPal.
- dangrossman 15y agoHighly unlikely. 43 disputes out of ~201,000 payments is nothing. 0.02% of his purchases. It's a maximum liability to PayPal of something like $800 (including typical chargeback fees) out of a million dollars in revenue. Most of those disputes are probably just disputes, not chargebacks, anyway -- people clicking "item not received" because they weren't tech-savvy and had trouble with the download process or the video didn't play on their computer right. PayPal isn't worried until your chargebacks are more than 1-2% of your volume. With a dispute rate that low on so much volume, he's helping bring down PayPal's overall CB rate with their banks (Wells Fargo and Chase), doing the company a favor. Not only will Louis's account not be frozen when he withdraws the money, but his dispute rate as a percentage of volume is so low, the mails he gets about them will say "because your chargeback rate is so low, we are allowing you to keep the funds until the end of the investigation". I know this because that's what they send me, too. This is standard operating procedure at PayPal. Louis CK is their optimal merchant in almost every way. Even if their business processes were so terrible as to want to close this account, which they aren't, it's not a company of fools -- this account is run by a celebrity selling a virtually no-risk product and brings in $50,000 a month in fee revenues for PayPal.
- downandout 15y agoApparently you've never been on the receiving end of PayPal's unending wrath. It isn't pretty when it occurs. If you haven't experienced it, you won't believe that there is even a possibility that they would do it to a legitimate business. You think that it only happens to people that are committing fraud, have excessive chargebacks, or are at the very least violating their TOS in some way. But the reality is that PayPal freezes accounts every single day that belong to entirely legitimate merchants operating well within the TOS. The only thing he has going for him is his fame. This makes freezing of funds slightly less likely, though still not entirely implausible, solely because he could actually cause a large amount of negative publicity.
- weaksauce 15y agoI like it. Taking care of the people who helped you make it super seamless to buy, quick to download, advised you on drm issues. Donating to charity is an excellent way to gain real life karma. That man is a real class act(well not on stage).
- niravshah 15y agoWhat a great contrast to anyone defending SOPA.
- LukeHoersten 15y agoThis is awesome. I love stuff like this. Wasteful distribution companies being cut out and still hitting a wider audience for less money.
- jessedhillon 15y agoIt's funny that one of his segments in this special is about how he's a bad person -- he has charitable thoughts toward others, only so he can use them feel good about himself without having actually acted on those thoughts. In reality, he is probably in the top 10% of best humans ever.
- DeusExMachina 15y agoI take for granted that during a show he says bad things only for the sake of entertainment. I never thought that most of the things he says about himself are true, as I guess a lot of people do. Making people laugh is hard. One of the way is to point at things that are true. This is also one of the purpose of satire, make people think through a liberating laughter. But people might get offended, so a good way to avoid that is to point at yourself instead.
- AgentConundrum 15y ago> I take for granted that during a show he says bad things only for the sake of entertainment. Indeed. In the Beacon Theater show, he tells a story about an asshole kid in his childs class, and about shaking the kid up a bit when he was volunteering at the school one recess. During his AMA on reddit, someone asked him if there had been any fallout from the school/parent on that, and he simply replied that the kid in the story was entirely fictitious. He's also apparently said before that when he tells the story of a stupid person he meets (like the guy on the airplane who gets pissed off that the internet, something which the guy had only discovered minutes earlier, was broken/slow - an example of fast entitlement), he's actually talking about himself.
- TheBiv 15y agoWhat about taxes? I see that he broke that money into 4 parts, but none of those parts contained taxes.
- cburgas 15y agoThat's a good point. I hope someone stops him before he becomes another famous tax evader :)
- bira 15y agoHe's probably going to pay taxes on the 220k he's keeping for himself.
- mattblalock 15y agoThose donations put a pretty big dent in that evaluation, he may be near the clear.
- aidenn0 15y agoMy guess is that the bonus to those who helped produce it is probably a business expense, as is the production costs. The charitable gifts are probably tax-deductible, although AMT can hit you there.
- cottonseed 15y agoI wonder if he's charging too much, given that he's giving away 1/3 of his profit.
- rcfox 15y agoThis is a weird thing to say. If he kept the whole $1 million, would the $5 still be acceptable? The price of an artifact (especially one with zero incremental cost to produce) should be dependent on the value created, not the need of the producer. The fact that people spent $10 to have the privilege of travelling to see a fraction of this show, and then went away saying good things about the show implies that he charged too little.
- HotKFreshSwag 15y agoHe only charged too little if his goal was to extract as much profit as possible from his customers.
- adamtmca 15y agoYou couldn't know that without information about demand elasticity on his product. Decreasing the price could have increased the profit he extracted from his customers.
- cottonseed 15y agoRight. Based on what he has said (and done), I don't imagine that was his goal. I imagine several goals: to entertain people, to make a reasonable profit, and show he could successfully develop and distribute his own content unencumbered. Did $5 maximize those goals? That's what I was wondering with the original (brutally downvoted) OP. Suppose he charged $1, 5x as many people saw it, and he made the same amount. Would that have a been a better price point?
- rcfox 15y agoIt's a little naive to expect a linear relation between dollars and viewers. Charging $1 would have increased sales, but probably no more than 10-20%.
- thesash 15y agoThe most inspiring thing about the whole story to me is how he was able to generate a massively successful marketing campaign simply by being authentic, and engaging his fans directly. I think this follows a lot of the "Thank You Economy" concepts that Gary Vaynerchuck promotes to a T, and I hope that other artists, companies, and brands take note of how powerful that strategy can be after seeing this success.
- tpowell 15y agoJust wow.
- mattberg 15y agoa little off topic, but ... all that money on his website and you can't get a permalink to a news article? what the?
- MichaelApproved 15y ago"the first 250k is going to pay back what the special cost to produce and the website to build. " I agree that it's a strange setup for the website but all the money didn't go just to building it. I bet (hope) that most of that money was what the special cost to produce and not much was spent on the site.
- dwynings 15y agoCost of the website was 30k.
- mcobrien 15y agoA million dollars and a public paypal email address (check the screenshot). I really hope he has a secure password.
- redthrowaway 15y agoI'm more concerned about his having a secure, patched server and his website having no vulnerabilities. Non-idiotic passwords are hard to guess; SQL injection is easy.
- dangrossman 15y agoEven if someone else were to log into his PayPal account, there's no damage they could do. They can't withdraw his money to another bank account; adding a bank account takes 3-4 days while you wait for PayPal to deposit some money which you confirm the amount of to prove ownership. All the 'hacker' could do is send the money to another PayPal account, which is trivially reversible as long as someone notices in less than 3-4 business days, before the receiving account can complete a withdrawal to a pre-confirmed bank account. That's all assuming the account isn't immediately locked. If you log into a PayPal account from a different computer and far away location, they'll usually lock the account until you call in to say that's you and not a hacker doing so. At the end of the day, PayPal's core business is fraud detection, not payments. Anyone can do payments; they're just a software layer on top of two Wells Fargo and Chase merchant accounts. Your PayPal account e-mail address should be considered public knowledge as soon as you put up a PayPal button. It's given out with every transaction and, if you don't use PayPal's encrypted button generator, it's in plain text in the payment form or URL.
- mhd 15y agoAnyone got a better idea of what he would get for a HBO special (including DVD rights), just for contrast?
- JL2010 15y agoThis doesn't help much, but an excerpt from his previous news update when the special hit $500K: "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." So somewhere north of $200K.
- Benjo 15y agoOn his 12/13 post, he gave a floor. Presumably it's in the same ballpark as well. 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
- jpdoctor 15y agoThe part that spoke the loudest to me: I never viewed money as being "my money" I always saw it as "The money" It's a resource. if it pools up around me then it needs to be flushed back out into the system. Many of you know exactly what he means by that, and also subscribe to the same philosophy. I just thought it was a very apt way of putting it into words.
- UrLicht 15y agoKudos to him for redistributing his own wealth the way he deems fit. I admire that. But let's not try to push this way of thinking on everyone else (not saying that's what you're doing here) - for any given person the potential for abundance and wealth is so damn near infinite let's just call it that. Edit - meaning to say there is no proverbial "pie" that you can only have a small slice of. Your pie is as big as you make it.
- swombat 15y agoI'm not sure I actually feel good about paying those $5 knowing that most of it won't end up in Louis's pocket, actually. If I wanted to donate to charities, I'd do it myself. I don't want to, I believe there are better ways to use money - so I feel that money is kind of wasted. More importantly, I felt good about paying $5 because I felt I was giving $5 to Louis CK to support a great effort and an awesome artist. The fact that he's keeping only 22% of it makes me feel like 78% of it was rejected. If so, I might as well have kept my $5. Honestly, right now what I'm thinking is that I'll probably get the next version off BitTorrent. I'm not happy paying for a download with 80% of overhead, especially if that overhead is voluntary. Most of the $5 should end up in Louis' pocket, and if it doesn't, I don't feel like throwing it down the drain, I have better uses for my money.
- mononcqc 15y agoYou gave the money to Louis, he spent it however he felt like, which includes giving to charity. Where's the problem?
- swombat 15y agoYou give your son $100 as a birthday present. He spends $20 on himself and throws the rest in the bin. That's his choice, but next time, will you give him money? I wouldn't.
- bsphil 15y agoExcept that's a terribly inaccurate analogy. This isn't a $5 gift, it's a transaction for a product. He's not throwing away the rest, he's paying bills and donating to charities. How you came up with "throwing $80 in the bin" is beyond me.
- johnthedebs 15y agoJust wanted to add to this (not that it's needed to make the point): Louis C.K. isn't your child.
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- mkramlich 15y agoSo the lesson reinforced here, again, is that once you're already famous for something, the Internet makes it easy to sell things to fans directly. We already knew this. But it's great to see it happen.
- jamesbritt 15y agoWe already knew this. We needed people like Louis CK to know this, and now he does, and so (presumably) will other artists otherwise fearful of such an open approach.
- kin 15y agoamong all the SOPA news today, seeing this is refreshing. I'm so glad this model worked for him, and I hope others follow in his foot steps. Distribution is over valued.
- zaroth 15y agoBut... What's an "MM"?
- jfarmer 15y agoI know you're not serious, but MM stands for "million." "M" stands for "mille," French for "thousand." So MM is a thousand thousand, or one million.
- malkia 15y agoAwesome dude!
- mml 15y agoI hope he merely forgot to mention the 300k for uncle sam & co. presumably he has accountants. i hope, for his sake.
- vidarh 15y agoWhich 300k? I don't think you understand the US tax system. Most of the $1M is not taxable profits given the breakdown he's given.
- jerfelix 15y agoI had a spirited debate yesterday with my 22 year old son about "Occupy" and increasing taxes on the 1%. Since this puts Louis CK firmly in the 1% (if he wasn't there already), it will be interesting to look at him as a case study. At the risk of down votes, and converting this to a political argument... According to my son, in order for the 1% to "win", many of the 99% had to "lose". This seems like a clear case where we (collectively, mostly 99%-ers) decided to "reward" Louis CK with a million dollars, and none of us "lost" in the transaction. We decided willingly to fork over $5 for great comedy (arguably worth more!). The only potential losers are the traditional distribution outlets - which got zero from the transaction (so neutral, not a loss). So, Son, what do you think of that? Explain again why you think we should penalize Louis CK for this? Don't vote me down, kid. (My son will probably read this. I suspect there are probably few father-son combos on HN.) Edit: My son said he's not going to answer me publicly. However, he says "I reserve the right to vote on the comment".
- vidarh 15y agoSo your son won't answer publicly, but here's my perspective: It's not about penalizing him, or anyone else who are wealthy. I don't consider myself rich - I live in a normal terraced house in a London suburb the same size as my decidedly working class neighbors, and I don't have huge piles of cash anywhere, though I do have some investments But I'm well enough off to have it nice and comfortable, and I make several times what most of my neighbors do with according benefits in terms of how I lead my life. Yet despite paying significantly higher taxes (about 10% points more than someone on an average UK salary), the net effect of the reduction in my spending ability from taxes is far less than the effect on my neighbors. I won't even notice a 1% difference in my tax rate. I don't even know how much I spend on groceries each month - it doesn't matter and isn't worth my attention; I waste more than 1% each month on stuff from Amazon I probably don't really need. A 5% difference would be noticeable, but not painful. For my neighbors, a 1% difference can easily mean the difference between making rent next month, or wait longer before fixing the car they depend on to get to work, or having to count the coins and watch every penny to even be able to make the paycheck last the whole month. A 5% tax hike for most of my neighbors would mean they'd be in big, serious trouble. This is one large reason why many people believe higher taxes on top earners is justified. Whether in the US or UK, or most other places, the current tax bands most places means the burden of tax in terms of the effect it actually has on peoples lives is far greater on those who makes least to start with. Yet people argued the economy would collapse with a new 10% higher tax band for people making even far more than I do.. Any argument about what's "fair" is arbitrary and based on personal value systems anyway. Why is a specific function of income to tax rate more fair than another? It boils down to your values. Personally I don't consider it fair that many of those who take all the shitty jobs I don't want to do, and who struggle to keep things afloat, carry a heavier burden than me. After all - without a well functioning society around me, there would have been no basis for me to achieve the relative wealth I do have. In another vein, I'd also prefer to have less misery around me. I can pay to move somewhere where it's better hidden behind fences, or I can support changes that actually helps make life better for others, whether in terms of the tax system or others. The latter seems like a better investment.
- vermontdevil 15y agoIs the video subtitled or captioned? The website says nothing and I did not want to spend $5 without knowing in advance. I've emailed to the support email account listed on the website. But I'm sure it'll take time for someone to give me an answer through the email. Am hoping someone here could chime in and give me a quick answer. Thanks
- vermontdevil 15y agoFollow up: I got an email from the support team. They said they plan to add captions or subtitles after the holidays. I'm hopeful. Just passing along to those who depend on captions.