How standup comedy is adapting to the lockdown

14 ways comics make money in the old and new worlds

I’ve seen a lot of posts from friends and strangers about how artists are impacted by the lockdown. It’s bad news: the comedy clubs have closed, some will go bankrupt, so when they open again there’s going to be a lot of competition for pay and stage time.

I used to run comedy nights so I thought I’d put that experience together with my MBA and startup knowledge to analyse how standup comics make money.

Part 1: Traditional standup comic business models

The traditional business model of standup comedy often evolves over time as the comic’s value proposition strengthens.

When they’re just starting out, the standup comic might be considered a “customer”, having to pay a venue for some stage time in front of an audience. The comedian is in it not for money, but opportunity in the form of stage time in front of an audience. This might be at an open-mic night where everyone has to pay for entry, and comics put their name down in the hope of getting 3–5 minutes on stage.

The venue makes money on ticket sales and drinks from both comics and audience members.

Business-world examples: Online multiplayer games. Foxtel/cable TV where viewers pay for access and advertisers pay to get in front of viewers. Dodgy ‘self-publishing’ shops that charge authors to print their books, and also charge readers to buy those books.

Other open-mic nights might be free for comics to attend and perform. Some might have a ‘freemium’ model (aka “bringer gigs”) where comics are encouraged to bring (free or paying) audience members, which increases their chances or frequency of getting on stage. Here the venue makes money on drinks, and possibly on audience ticket sales.

In the case of shows with a curated line-up, comics might perform in return for a couple of free drinks. In this contra deal it’s low-cost for the comic to perform, and low-cost for the venue to provide tap beer, but both parties generally get more value out of the deal than they are spending. The venue makes money on audience ticket sales and drinks, though may have other costs — see B2B2C.

Business-world examples: user-generated content platforms like Quora, YouTube, Facebook, Medium. Gumtree. Amazon affiliate links.

In a B2B2C model, the comic (the first “business”) sells their ‘product’ to the venue (a second “business”), which then sells the comic’s product to the audience (“consumers”). The comic gets paid by the venue, and the venue gets paid (ideally more) by the audience in the form of ticket sales and drinks.

MCs and headline acts would fit the B2B2C model. In a curated comedy show you might have free-to-play comics, an MC (paid) and a headline act or two (paid). This would be a higher-quality show than an open-mic night, and the MC and headline acts might be established names that attract an audience, so the ticket prices are generally higher than open-mic nights.

Business-world examples: OpenTable (diners [C] book a restaurant visit [middle B] through OpenTable platform [first B]). Amazon (consumers [C] buy product from 3rd-party sellers [middle B] through [first B].

When a comic is ready to do a solo show and attract their own audience, as well as take on some of the production and marketing responsibilities, they shift business models again. This might occur during a comedy or fringe festival, or just when the comic has a big enough following that they can be confident of selling tickets.

Usually the deal is for the venue and promoter (festival managers) to be paid a flat fee, and then a share of revenue from ticket sales. In return the venue and promoter assist with marketing and production. But unlike in the above models, where the comic is focused on doing a good job on stage, they are often also responsible for creating marketing copy and assets, PR, planning, and potentially organising and paying for managers, techs etc. In return they have the potential for a bigger share of the takings.

Business-world examples: Hulu (News Corp, NBC, Walk Disney). Amazon Kindle Self-Publishing. Apple and Google joining forces on COVID-19 contact tracing tech.

Comics can diversify their revenue by using the skills, strengths and reputation from standup comedy in other channels, e.g. paid writing gigs for magazines and newspapers / sketch / TV / other comics. Or getting on talk shows. Or a job as a radio host.

They can also move to a licensing / royalty model by selling or licensing rights to recorded performances, merchandise sales etc.

And if they have the right ‘persona’ and contacts they might be paid for corporate gigs.

Business-world examples: Uber using their drivers, customer base and technology to power Uber Eats. Creators teaching courses on MasterClass.

Part 2: Recent business model shifts

In the past decade or so the emergence of new technologies, channels and behaviours has opened up new opportunities and, perhaps, requirements.

Comics put free content on platforms such as Twitter or podcasts to gain followers and fans. Metrics from these can be used to demonstrate traction to other businesses, e.g. publishers and producers. And the fanbase can be converted to revenue (upselling) via merchandise sales, ticket sales, and Patreon sponsorship.

With each new platform comes new opportunities to gain an audience, and also pressure to have a presence. Youtube, Soundcloud, Instagram, Snapchat, Vine, Tiktok.

Business-world examples: Mattel creating a free-to-air cartoon series as a way of advertising their toy lines e.g. He-Man and the Masters of the Universe.

As above: Create free content. Advertisers pay for access to users e.g. podcast ads, banner ads, promoted posts. The difference here is ownership and control — if you control the medium and command an audience then you can make money from 3rd parties.

Business-world examples: Facebook. Google.

Part 3: Virus Lockdown and Economic Meltdown business model innovations

Comedy clubs have closed. Without that live and direct link to a stage and paying audience, subsidised by alcohol sales, standup comics are forced to explore new ways to make a living.

Direct-to-consumer business models have disrupted traditional sales channels over the past decade, with famous examples such as Dollar Shave Club (razors), Glossier (cosmetics), Casper (mattresses), Allbirds (shoes), Warby Parker (eyeglasses). Even Soylent (meal replacement). They all found a way to cut out the middle of the supply chain and sell products directly to consumers via subscriptions and ecommerce.

The closure of the middle of the standup comedy supply chain is the catalyst for disruption. Probably the most obvious next step is for comics to look at connecting directly with audiences. There are two big hurdles to overcome: the experience and monetisation (i.e. getting paid). (The same is true for most of the COVID-comedy business models.)

The experience. While the corporate world has embraced Zoom, Teams, Skype and other tech to replace face-to-face communication, it’s not an ideal solution for standup comedy. The experience is not the same as being at a comedy show, with the comic on stage under lights and the audience an anonymous mass in the darkness. For starters, audio feed is binary, i.e. it’s on or off. For a comedy show the audience wants to hear the crowd laughing — social laughter is infectious and releases endorphins. And the comic wants to hear the crowd laughing, too. But with everyone’s audio on, at the same level, it will be a different dynamic to a usual comedy room. Further, rather than mixing two people’s audio if they are both speaking at once, Zoom chooses one or the other. So everyone would hear one person laughing, rather than everyone laughing together. It also means that if someone coughs or there is a loud background noise, an audience member’s audio would briefly override the comic’s.

Monetisation. Getting people to pay for a ‘substitute’ comedy show would be much harder than getting them to pay for a ticket to a live show. The traditional ticket platforms would work the same, but the psychology is different. Here’s where we go back to startups 101: look for the innovators and early adopters. That will help gain some momentum on comedy shows in the new world, and create word-of-mouth referrals and press coverage. Be indie, underground, and cultivate a feeling of scarcity and being part of the in-crowd.

In the improv world, theatre companies are recreating the traditional B2B2C model via virtual shows. (Well, it’s B2B2C if the performers are getting paid.)

This has the same technical barriers as the D2C model, though having the support of a theatre company means the costs of the tech etc can be spread across more shows (higher asset utilisation) and the people running it would get better from more experimentation and practice.

I saw this Linkedin post a few weeks ago.

As with the traditional corporate client model, it’s a good option for those with the right profile and/or connections. Managers and senior leaders are probably open to trying new things — they’re likely trying new ways of working now anyway — and supporting their staff through a challenging time. Expect pay to be lower than the traditional corporate gigs due to the economic downturn, and also because it’s not coming out of a dedicated ‘conference’ budget.

You’ve probably seen this video about Spanish comedy theatre co TeatreNeu, who tried a “pay per laughs” business model.

We have technology such as so using AI to detect a laughing face/sound is probably pretty easy (for the right people) to implement. A pay-per-laughs business model might be a nice way to remove the risk for some hesitant potential audience members.

I’ve put on “pay what you feel” shows where we pass a hat around at the end to collect cash. And I have a shirt from UCB Theatre with the slogan “free to get in, pay to leave”. Lots of options exist for ad hoc payments, e.g. PayPal, Beem, Patreon.

“free to get in, pay to leave” — UCB shirt bought in 2007… and still in reasonable condition!

Business-world examples: Free walking tours. Water / Electricity companies. Old-school SMS/phone/data charges.

Not all solutions have to be tech-driven.

Drive-Up Confession, via Reading The Pictures. Photo: Shawn Thew @shawno66 @epaphotos.

Drive for a ride-sharing service and tell jokes for tips? Trade jokes with a barista for free coffee? The possibilities are limited!

Business-world examples: Lemonade stand.

Software-as-a-Service (Saas) is a darling of the tech startup world. The idea is that by providing cloud-based software — such as Slack, Salesforce, Jira, Canva , or Google Docs — marginal costs are minimal so a very large number of users can be served, each with a healthy profit margin.

A standup comedy equivalent might be some kind of Artificial Intelligence-driven comedian, like a chatbot meets Gorillaz. Or maybe an automated drip campaign email / video campaign. The goal here would be to recreate the feeling of a live comedy experience but personalised and on-demand.

Not sure what this would look like in the comedy-during-COVID world. Telling jokes as a public service, maybe. Looking after the mental health of parents and essential workers. 1800-laughter.

This came up in an image search for “charity”. 🤷‍♀ Photo by Major Tom Agency on Unsplash

Lots of smart, funny people are thinking and experimenting with this right now. I’d love to hear your ideas and examples of standup comedy in the lockdown world.

I work with startups, teach entrepreneurship, and freelance in improv and leadership coaching.

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