The site’s approach mimcs an idea first pioneered by Louis CK a year ago, when the comedian sold a DRM-free download of one of his live sets for $5 online

The new offering, dubbed Chill Direct, is a self-serve marketplace, meaning that anyone can sign up within minutes. The site offers creators the option to determine their own price for their videos, and charge anywhere from $1.99 to $49.99. Seventy percent of that revenue is handed to the creator, and Chill retains 30 percent, which cover the fees for payment services as well as hosting.

Chill’s new self-serve marketplace.

Chill is launching its new offering with eight titles including the documentary film Thank you for judging by Ugly Betty’s Michael Urie as well as a previously-unreleased comedy special by Maria Bamford.

Louis CK was one of the first prominent entertainers to try his luck with digital direct-to-fan sales late last year, and fans rewarded him with $1 million in revenue in just 12 days. Since then, others have joined in as well: Comedian Aziz Ansari, known for his role in the NBC sitcom Parks & Recreation, started selling a standup special of his own in March. Ansari’s online efforts were powered by VHX.tv, which also has been moving from video curation to direct-to-fan distribution. VHX has since also powered digital sales of Indie Game: The Movie, and this week started distributing the grindhouse classic Miami Connection.

However, there are some differences between VHX’s and Chill’s approach: VHX has been a lot more selective about the creators it powers with, and is also putting an emphasis on selling goods on artist’s own sites. Chill, on the other hand, wants to use its own website as a central hub, and is giving everyone the ability to sign up from the very beginning. “I believe in the idea of self-service,” said Norgard.

This isn’t the first time Chill has tried something new: The company launched in August 2011 as a kind of Turntable.fm for video. It refocused on social experiences around live streams shortly after, and tried to provide group viewing for content from sites like Hulu.com by the end of 2011. In January, it finally moved to its social video curation model. Norgard told me that social video curation won’t go away any time soon, and that both offerings might be more closely integrated in the future.

Check out an interview I did with Norgard a few months ago:

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Comedian Louis CK raised some eyebrows earlier this year when he sold downloads of a live show through his website and pulled in more than $1 million in about a week, despite the fact that fans could easily download the content for free. Now, he has done it again: instead of a traditional tour, he decided to sell tickets through his website, and sold $4.5-million worth in under 48 hours. Content creators of all kinds — authors, musicians and others — would do well to learn from his example, and that of others like Amanda Palmer, who recently financed a new album and tour through Kickstarter. The main lesson? Building a community is more important than ever.

Louis CK (whose real name is Louis Szekely) was far from being an unknown when he launched his download experiment in December: he had a show on Comedy Central the FX network that was fairly successful, and had appeared on late-night talk shows — but he was far from being a top-tier name. But one thing CK did have was a community of fans, and he tapped into that when he offered a self-financed show to them as both a live-stream and a download. And he deliberately didn’t encrypt the show with digital-rights management locks or barriers, because he said he wanted to make it as frictionless as possible for fans.

As I pointed out at the time, media companies of all kinds could learn a lot from that approach — including the lack of DRM controls and the power of the community that CK was able to draw on. Tens of thousands of fans paid $5 for that show even though they could have easily downloaded it for nothing. His latest move, in which he offered single-price tickets for a 39-city tour through his website, built on that community and created a sold-out $4.5-million tour in less than 48 hours. That’s an incredibly powerful example of going direct to your fans.

Can giving content away result in more money?

This kind of model isn’t necessarily restricted to individuals either, as Union Square Ventures partner Andrew Weissman points out in a blog post about the TED conference entitled “What If We Give It Away.” As he notes, the conference has spent the past couple of years giving its content away for nothing — via videos on its website and elsewhere, and also through the branding of free TED spinoffs called TEDx conferences in cities around the world. As Weissman notes:

[B]y giving away what one would generally think of as a company’s (a media entity) greatest assets – its content, brand and business processes – the business has grown enormously in just a few short years.

On the individual front, musician Amanda Palmer is another great example of this approach: she quit her record label in 2010 and decided recently to fund a new album and tour directly by allowing her fans to donate through Kickstarter. Her original goal was $100,000 — but she blew through that figure in a matter of hours after the launch, and by the end of the campaign had raised ten times that amount or almost $1.2 million. In return for the funds, fans get a variety of rewards, including a signed art book, an invitation to special dinners and parties for fans in a number of cities, and so on.

One thing that’s important to note about both of these examples is that CK and Palmer didn’t just pull in a huge amount of money and walk off to do whatever they wanted with it: both of them have spent a lot of time detailing what exactly will happen to the funds, with Palmer in particular posting an itemized breakdown of her expenses for the album and the tour so that her fan community realizes what is involved. Louis CK, meanwhile, gave a substantial portion of the money he made from his downloadable show to charity, and wrote about that.

Building on those “1,000 true fans”

Authors can also benefit from this kind of community, and there are any number of examples: self-published young-adult fiction writer Amanda Hocking made more than $2 million without an agent or a traditional publisher by distributing her e-books through Amazon’s Kindle platform, and author John Green managed to get his new e-book to the number one spot on the best-seller list before the book was even completed — because his community of fans was already connected to him on multiple levels, including Twitter, Facebook and YouTube.

This kind of community engagement has always been important: the band The Grateful Dead was legendary for allowing fans to tape its live shows and share that content, and other artists such as Jonathan Coulton have also made a living while still giving away much of their content for free (Coulton is also a thoughtful commenter on the issues around copyright infringement). Radiohead and Girl Talk have both used the “pay what you want” model for album downloads, which show — just as Louis CK has — that fans will pay even when they can get the content for nothing.

What has happened is that the web and social media — along with crowdfunding platforms such as Kickstarter and Indiegogo — have added more horsepower to the concept that Wired magazine founding editor Kevin Kelly described as “1,000 True Fans.” In that model, trying to become the next global superstar through traditional media is replaced by connecting with a loyal fan base and then engaging with them, whether it’s to fund a tour or an album or a book (marketer and author Seth Godin is funding his new book through Kickstarter).

Can anyone make use of this new model? Obviously it helps to have already established a brand, as Louis CK and Amanda Palmer have (or Seth Godin and TED). And there may be no easy parallel to the concert tour when it comes to some kinds of content — but the power of connecting directly to your fans, however small that group might be, can’t be underestimated. And whether its record labels or publishing houses or media companies, former intermediaries and gatekeepers of all kinds are going to have to try a lot harder to prove that they are adding some value to that process in order to survive.

Post and thumbnail images courtesy of Flickr users Christian Scholz and Giuseppe Bognanni

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Ansari released his comedy special on his website today, asking fans to pay $5 to instantly stream or download the one-hour show. The offering is powered by VHX, which has until now mostly been focused on social video discovery. Ansari’s special is kicking off VHX’s new artist program, which is meant to help artists to monetize their video assets in a direct-to-fan fashion. So far, things are off to a great start: Wilkinson and his co-founder Casey Pugh told me that they’ve been working non-stop to deal with the heavy demand for the special. “It’s much better than we ever imagined,” said Pugh.

Louis CK pioneered the idea of selling downloads of stand-up specials directly to fans in December, and cutting out gatekeepers like iTunes worked really well for him: CK’s special reportedly brought in more than $1 million within the first 12 days. Making downloads available without any DRM restrictions is key to this kind of approach, believes Wilkinson: “If you treat the consumer like a smart person… people really respond to that.”

Pugh told me that the new artist program is additive to what VHX has been offering in the video discovery space. But there is definitely potential for it to become something bigger: Artists could use eventually use Kickstarter to raise funds for production, and VHX to sell their wares to fans, the duo told me. Of course, others are looking at the space of crowd-funding as well, but they didn’t seem to worried about competition. Said Pugh: “Video is a pretty hard problem to solve.”

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Of the seven years I’ve been writing about our namesake topic here at paidContent, 2011 is the hands-down winner when it comes people paying for digital content. The numbers aren’t all in yet and some of it will be hard to quantify given the lack of complete transparency but it’s clear that more people are willing to pay for digital access to music, news, movies, TV, games, books and magazines.

That doesn’t mean everyone is willing to pay cash for content and it doesn’t mean that every pay plan is working. It also doesn’t mean that there are more people willing to pay for content — some are swapping print or pay TV bills for digital editions and streaming. Others are taking advantage of subscriptions that have expanded to include multiple platforms: subscribe to the print New York Times, New Yorker or Sports Illustrated and get digital included. The quick adoption of tablets led by the iPad combined with app-based or app-like pay models and the expansion of e-readers with newsstands and cross-device platforms played key roles and will continue to do so. Ditto with expanded access to video online and online windowing changes that make subscriptions or downloads more attractive,

A few numbers to consider:

324,000: That’s the number of paying digital subs to NYTimes.com (NYSE: NYT) at the end of Q3, six months into first year of the paper’s metered paywall. Between digital-only subs, access for home-delivery subs and sponsored relationships like a deal with Lincoln, NYTimes.com claimed more than 1.2 million users had full access via digital. In a related note, home delivery circulation was up. It took digital subscription pioneer WSJ.com more than a year to hit 100,000 paying subs when it launched in the ’90s.

$5: Comedian Louis CK skipped the middle man for his latest special, producing it and then offering it directly to consumers for $5 a download earlier this month. He reported grossing $500,000 in the first four days and hitting $1 million in 12 days. The breakdown so far via Louis CK on his site: $250,000 to cover production and distribution costs — yes, that means he was in the black within days; $250,000 to his staff as a bonus; $280,000 to charity and $220,000 for him. Another kind of breakdown: 200,000 people were willing to pay. Left to be seen: will they pay the second time and a third or was this a lightening strike?

21.4 million: Amid the bad PR from its pricing and branding missteps and the fascination with its wilting stock price, it’s easy to miss one of the most important numbers from Netflix: at the end of Q3, it had more than 21.4 million subscribers for streaming and 13.9 million for DVD. The 23.8 million total was down due to a 60 percent increase in pricing for some subscribers when Netflix (NSDQ: NFLX) split charges for streaming and DVD but the company had more than 4 million net adds year over year. It also expanded its streaming-only international footprint from Canada to Latin America. Whatever you think about Reed Hastings and the strategic blunders of 2011, getting 21 million people to pay $8 a month for streaming video access through Netflix has to be acknowledged.

1 million: Hulu Plus, the subscription video service from online video portal Hulu, was on target to hit 1 million paying subscribers this year. Meanwhile, subscription music service Rhapsody just announced it has hit 1 million paying subs. Granted, that would sound a lot more impressive if it hadn’t taken a decade to accomplish but it’s a sign of how much has changed since Rhapsody launched its subscription service. Ease of use across devices and platforms makes all the difference.

$48.8 billion: From Google (NSDQ: GOOG) to LinkedIn (NYSE: LNKD) and United Online (NSDQ: UNTD), the companies in our inaugural paidContent 50 accounted for an estimated nearly $50 billion in digital revenue. How much is from consumers paying directly for digital access or content? Impossible to say. But it’s safe to say both numbers are going up. It’s also safe to say that traditional media will continue to see more dollars move to digital access and that the full impact of that transition has yet to be felt.

Read the rest of the posts in our Highlights of 2011 archives.

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CK’s gambit was to record an expensive New York production and then to sell recordings of it via his website. He upped the ante by selling the videos for only $5 and letting people play it however and where ever they chose. With a season’s worth of his best jokes at stake, the comedian said the experiment was like a farmer betting his annual crop.

The bet seems to have paid off. CK reports that he has already grossed $500,000 in four days and hopes that people will keep paying so that he can make “sh*tloads of money.” He also says the scheme will produce a greater profit than what he would have made by turning over the production to an outside licensing company that charged users $20 a pop.

The actual numbers listed in CK’s letter go like this. Costs: $170,000 to produce and direct the video himself + $32,000 for a high quality website + unstated cost to rent “elite” Manhattan theater venue. Revenues: $500,000 from over 110,000 downloads minus PayPal processing fees + ticket sales from two shows at said elite venue.

The bottom line: $200,000 in profit (I’m not quite sure how CK gets to this number but that’s what he states in his letter).

The comedian’s account is interesting in itself but more so for what it might mean for other creative types. Has he hit a pricing sweet spot? Recall that Radiohead’s pay-what-you-want scheme for its 2007 “In Rainbow” album was hardly a smashing success after “what-you-want” for most people turned out to be exactly zero. According to reports, most people paid nothing at all for the popular album while those who did paid around $6.

But if pay-what-you-want isn’t a viable option, asking $20 for a digital performance is also likely to leave many consumers willing to forgo the purchase altogether or acquire it through other means.

With his $5 pricing point, CK may have found the right middle ground — a price that is higher than nothing but low enough to attract a mass volume. And what of the decision to impose no rights restrictions on the video? For now, it seems to have produced an outcome that is at least revenue-neutral. This may because the video is easy to swap but, at the same time, the price is so low that many will opt for the convenience of simply buying their own copy.

Louis CK’s account can be found here on his website.

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