Comedian Louis CK Accepts Bitcoin, Shuns DRM
Louis CK has set precedents in the past, selling content directly to consumers with no digital rights restrictions. Now he is accepting Bitcoin payments for his online shows, and introducing a new group to digital currencies.
Louis CK is a globally recognised comedian. He is leading the pack by becoming the first major comedian to accept bitcoin as a payment method. The company he has chosen to use is BitPay, a pioneering payment processor in the Bitcoin space. CK’s choice to utilise their processing system mirrors his past, bypassing traditional outlets with a direct to consumer model.
In 2011, CK financed his own stand-up comedy special. He sold it directly to consumers on his website using no digital rights management (DRM). DRM a set of access control technologies, imposing a range of restrictions on what users can do with digital media.
“This way, you only paid $5, you can use the video any way you want, and you can watch it in Dublin, whatever the city is in Belgium, or Dubai. I got paid nice, and I still own the video (as do you). You never have to join anything, and you never have to hear from us again.”
— – CK
According to CK, large companies which use DRM charge a higher fee for content, along with restrictions. “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. They would have withheld international availability indefinitely.”
The choice to provide DRM free content is perceived as risky by publishers, copyright holders, and individuals, as users can share the content at will, without penalisation. CK explained, “If I put out a brand new standup special at a drastically low price ($5) and make it as easy as possible to buy, download and enjoy, free of any restrictions, will everyone just go and steal it? Will they pay for it? And how much money can be made by an individual in this manner?”
CK’s described his approach as an “experiment,” and he found that fans are happy to spend money on content. Within 12 hours of being on sale the show had covered the cost of production, and the cost of running the site. “We had over 50,000 purchases and had earned $250,000.”
“I really hope people keep buying it a lot, so I can have […] 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.”
— – Louis CK
The CK experiment went on to earn gross over $1 million in 12 days, and it appears to have set a precedent in comedic circles. Aziz Ansari, star of the show Parks and Recreation, soon followed suit, offering a DRM free live standup show for $5 a copy.
CK also introduced Todd Barry to the mix, another comedian selling his content via CK’s site. While the majority of content available to fans on the site is priced at $5, consumers can choose to pay anywhere between $1 to $85. Anything more than that, CK explained, would be “crazy money.”
The experiment, according to CK, taught him a lot about money and what it could be. “It can be something that is hoarded, fought over, protected, stolen and withheld. Or it can be like an energy, fueled by the desire, will, creative interest, need to laugh, of large groups of people. And it can be shuffled and pushed around and pooled together to fuel a common interest, jokes about garbage, penises and parenthood.”
BitPay will be another interesting experiment for CK, although he has not yet commented on the results thus far. BitPay currently has three packages available for merchants, ranging from a zero fee scheme to an ‘on request basis’. The zero fees offer unlimited processing volume, free and instant conversion from Bitcoin to the currency of choice, daily bank deposits, retail POS solutions, over 40 integrations and email support.
BitPay is currently used by over 60,000 businesses and organizations around the world and has raised over $32 million from investors such as Index Ventures, Founders Fund and Sir Richard Branson. Recently they announced further partnerships with Sonic Payments, BillPro, Ixopay further strengthening their position in the payments industry.
“During the last two quarters, BitPay has seen interest in bitcoin increase exponentially from traditional payment companies. Some of BitPay’s recent partners have been happy to share why they feel bitcoin is such an important innovation for the payments industry.”
— – BitPay press release
Bitcoin payment, through BitPay, is only one of four payment options available on CK’s site. The industry leader for online payments in the US, PayPal, is also listed. PayPal charges merchants a significantly larger fee, although in line with the amount charged by major credit card companies. “There’s no fee to use PayPal to purchase goods or services. However, if you receive money for goods or services (such as from selling an item on eBay), the fee for each transaction is 2.9% plus $0.30 USD of the amount you receive,” states PayPals terms and conditions.
International fees imposed by the industry titan are also calculated country by country, and currency conversions incur additional costs. “There is a fee when you send a payment to someone in another country or if you receive a payment from someone in another country. Please note that exchange rate fees also apply if there is a currency conversion,” states PayPal
While these fees are in line with legacy providers, the $1 million in sales from CK’s experiment, would have cost CK $32,000 to process, if PayPal had been the sole payment provider, plus any additional currency conversion fees for international sales.
Dwolla Inc is also listed on the site as a payment option, and is an agent of Veridian Credit Union. Dwolla previously charged a 25c transaction fee, until June in 2015. The merchant services provider now offers packages which range from $25 to $1500, depending on the user’s requirements.
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