Louis C.K. was making a TV show: Of course he went into debt

Horace and PeteYou’ve seen the headlines, I’m sure: Louis C.K. went into debt to make Horace and Pete, his self-distributed, star-studded drama series. It came to light during a Howard Stern interview that, ultimately, represents C.K.’s most mainstream marketing yet for the project, and so his revelation comes as an implicit appeal: “buy my show so I can pay back my creditors.”

When I began reading reports about this interview, I made a joke on Twitter that Louis C.K. thought he was Beyonce, but he was really just Louis C.K. A few people thought that I was taking the piss out of him, but I wasn’t, really—I was just pointing out that he drastically misread the current TV marketplace, failing to realize that the “surprise launch” that rocketed Beyonce’s self-titled album to cultural event status in 2013 was never going to work for a TV series; it is impossible to create the type of sustained financial investment he imagined for this project. Being Louis C.K. still means his project was seen, purchased, and now covered by mainstream media, and will likely recoup its costs (and potentially profit) once additional sales and an eventual licensing deal are factored in—however, the idea that he could bankroll the production of additional episodes through the sales from the first four was a classic case of hubris, driven by that healthy combination of ego and entrepreneurism that has generally served him well but “failed” him here.

But the more I read news reports about C.K.’s apparent financial hardship, I struggle with the idea that we’re treating this as newsworthy. Have we forgotten that “going into debt to make a TV show” is actually the dominant way television gets made? Louis C.K. bypassed the studio/network/channel system to make his TV show, but he ultimately ended up funding it the same way everything gets made: you take a short-term loss in the interest of long-term gain, spending more than you’ll make from license fees (or in this case direct sales to consumers) knowing that you’ll eventually make money when the show enters into secondary markets. It’s called “deficit financing,” and while it’s true that these debts are typically not personal, usually weathered by multi-billion-dollar conglomerates who own TV studios, this is fundamentally what C.K. signed up for when he chose to self-produce an ongoing television series.

There are ways that content—especially web content—is getting made that could have bypassed this model. The Kickstarter model—have your audience pay upfront—is one option, and C.K. could have also instituted some type of option that allowed you to pay for the whole season upfront, using those funds as a sort of zero-interest loan to ensure production of the additional episodes. C.K. chose not to go this route because he admits to loving the idea of dropping the show as a complete surprise and retaining a sense of mystery, but that’s a choice he made, and the second he made it he pretty much guaranteed he would be running a deficit financing model. In such a crowded TV marketplace, the idea of viewers investing money—or even time—in a series of indeterminate length with no sense of what it was about was a stretch, and the idea that enough of those people would keep watching weekly doesn’t fit current viewing patterns: whether out of disinterest or just a lack of time, people were going to fall behind or drop off, and thus there would be no way to sustain even initial sampling at a reasonable level. Combine with a complete lack of marketing outside of critics and fans, and a niche premise that was never going to break into the mainstream, and you have a show that was completely ill-suited to the model C.K. designed to release it.

And so the fact that C.K. was forced to go into debt is neither surprising nor, I would argue, any type of personal hardship or failing. The story here is that Louis C.K.’s efforts to work “outside the system” eventually forced him to adopt the system’s business model—yes, he was able to make the show on his own terms without network interference, and he didn’t have to foreground the financial elements of the series when making decisions (like maximizing its future value by making it more marketable or toning down language to open up basic cable options), but at the end of the day he had to do what every studio does when they’re trying to sell shows in the marketplace: he lost money to make money. And the only thing newsworthy about this is the way it reinforces the fact that business models still haven’t evolved to allow high-budget, high-profile projects like Horace & Pete to work “outside the system” in ways that are sustainable to independent producers who aren’t in a position to open a line of credit based on the fact they are in fact very wealthy individuals to begin with.

Put in simpler terms: Horace and Pete only exists because it was made by somebody who was in the financial position to become his own television studio when it became clear that no model of TV production is able to bypass the deficit financing model that runs the industry at large.


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