• by Gary Holmes , May 1, 2012

Did you hear the one about the standup comedians who decided to become Internet entrepreneurs? First it was Louis C.K. and now it’s Aziz Ansari and Jim Gaffigan who are capitalizing on a new business model -- stand-up on demand -- that could theoretically alter the dynamic among performers, distributors and consumers of television comedy.

The three of them have essentially gone into business for themselves by cutting out the middleman (e.g., HBO and Comedy Central) and selling downloads of their acts directly to fans. They rented theatres, videotaped their shows in front of live audiences and began streaming them to online fans for five dollars each. (Here’s a sample.)  In other words, they are using the Internet to wrest control from producers and business executives and give it back to content providers and consumers.

This is the ultimate “a la carte” proposition, taking VOD one step further.  The quality is as good as “regular” TV. With a high-speed Internet connection and an HDMI cable, you can either stream the show live or download it onto a laptop and play it back on your television -- and you don’t need to subscribe to cable. 

In theory, then, comedians (and presumably musicians and other performers) could seize the means of production and take a chunk of business away from TV networks.  As Louis C.K. explained, the economics are simple. It cost him $250,000 to rent New York’s Beacon Theatre and produce the show. He had minimal marketing expenses because he was able to promote it on podcasts (Mark Maron’s WTF and Bill Simmons’ Sports Guy), radio shows (NPR’s Fresh Air) and newspaper interviews.  Within a couple of weeks he had 200,000 downloads, grossing over a million dollars, for a $750,000 profit (some of which he gave to charity and shared with his crew).

In an online statement, Louis concedes: “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. They would have given you an encrypted and regionally restricted video of limited value, and they would have owned your private information for their own use.”

Which leads to the question we’ve been asking for at least a decade:  Does the ability of the Internet to disintermediate traditional production organizations (TV networks, record companies, book publishing houses, movie studios, etc.) spell the end of those institutions?  Can a consumer cobble together enough TV viewing on the Internet to cut the cord with his cable or satellite provider?

To me, the answer remains: Not yet. I don’t think Comedy Central, HBO or any other network with a lot of stand-up comedians really needs to worry right now about the threat from the humor proletariat.  How many comedians are really entrepreneurial enough to go through the hassle of organizing a show like this? Louis C.K. risked a quarter of a million dollars not knowing if anyone would actually download the show; he could have made more money and assumed less risk if he’d sold the show to one of the major networks. 

But even if there were a thousand Louis C.Ks, we’re still a long way from being able to cut the cord. From a consumer’s perspective, it’s a lot easier to turn on the TV and flip around to see what’s playing than it is to proactively seek out a specific URL, go through the payment process, download a show and then sling it to the TV.  Maybe you’ll do this once a month for a special event, but the rest of the time you’ll probably be watching regular TV.

Having said that, if there’s any one genre of TV that’s vulnerable to online erosion, it’s comedy.  Comedy has fundamentally supplanted popular music as the medium that binds today’s teens and young adults (the very audience that is most open to online platforms). Baby Boomers had the Beatles, Springsteen and Michael Jackson as common touchpoints -- but with the fracturing of pop music, there is no musician today who speaks for the Millennial generation.

Comedy, however, appeals directly to this generation, especially young men. It exposes the absurdity of modern life and makes people feel like they’re not the only ones who think the rest of the world is crazy.  They love Comedy Central and late-night TV comics, but they also love YouTube clips, funny tweets, funny Facebook links, all-humor websites (http://www.funnyordie.com/ or http://www.collegehumor.com/) and other Internet formats.

We’ve heard dire predictions before.  New distribution systems always threaten the status quo.  Silent movies killed vaudeville, talkies killed silent movies, TV killed radio as a comedy platform, cable TV threatened network TV, and now the Internet threatens to put everyone out of business.  And all along the line people bemoaned the loss of the good old days. 

People are always going to laugh.  And they will continue to laugh at television programming for the foreseeable future, even if comedians do try to go straight to the consumer. But if someone figures out a way to easily aggregate and organize the Internet’s massive collection of online humor so that it plays easily on a TV set, all bets are off.   After all, the business of humor is no laughing matter.