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Laughing All the Way to the Bank

With new one-hour specials coming from Dave Chappelle, Amy Schumer, and Chris Rock, Netflix has officially taken over the stand-up comedy market. Here’s how.

(Getty Images/Ringer illustration)
(Getty Images/Ringer illustration)

Before a stand-up comic can poke fun at anybody else, they often have to make fun of themselves. Mike Birbiglia gets this, which is why he opens his latest stand-up special, Thank God for Jokes, with a self-inflicted dig. “At some point this week, you told someone where you were going tonight, and that person said, ‘Who?’” he tells his Brooklyn audience. “I’m a niche. I understand that.”

But many more people have been able to discover Birbiglia’s niche — tightly wound, self-referential narratives, as many thoughtful reflections as punch lines, a spot-on impression of an incensed David O. Russell — thanks to the digital platform he’s called home. Thank God for Jokes premiered on Netflix in February, helping to kick off an unprecedented year in stand-up comedy on the streaming service.

When fans first started telling Birbiglia they had discovered him through Netflix (his first 2008 special for Comedy Central was licensed to the company), he didn’t even know Netflix had a streaming service. Thank God for Jokes is now his second special to premiere on the platform. “What’s fascinating about Netflix is it’s simultaneously a distribution platform and a marketing platform,” he says. “I spend more time on my Netflix home screen than I do on my Facebook homepage, you know what I mean? [Thank God for Jokes] is right there. People are being fed, at the very least, the artwork for it, if not the trailer for it. Your special is immediately available to millions upon millions and millions of people.”

Dave Chappelle (Netflix)
Dave Chappelle (Netflix)

Birbiglia is now one of dozens of comics helping Netflix orchestrate an an all-out assault on the gatekeepers of stand-up. HBO has been airing stand-up specials for 40 years, and Comedy Central has for decades as well. But Netflix, now in only its sixth year of trying to woo comics, has effectively taken over the genre. This week, Dave Chappelle will premiere his first two TV specials in 13 years, following on the heels of Amy Schumer’s first Netflix special in early March. In two weeks, Louis C.K. will offer the first of two Netflix specials. After that, Netflix still has Sarah Silverman, Chris Rock, and Jerry Seinfeld on deck, which will help round out a 2017 catalog that already includes exclusives from Jim Gaffigan, Trevor Noah, and Bill Burr. Overall, the streaming service aims to air one special per week for the rest of 2017, an unparalleled output.

The rise of Netflix has aligned perfectly with the desire of comics to push beyond the boundaries of linear television. Burr quietly premiered his special You People Are All the Same exclusively on Netflix in August 2012, about six months before the service began a concerted campaign to rebrand itself as a home for original content with House of Cards. The previous December, Louis C.K. chose to sell his latest special, Live at the Beacon Theater, directly to consumers rather than airing it on television. After the success of his distribution strategy, other comics like Gaffigan and Aziz Ansari followed suit. Comics have always felt more accessible than movie stars, and their work is tied up in fewer Byzantine production contracts than films, scripted shows, or live sports. It makes sense that the genre would be rife with digital experimentation aimed at connecting directly with fans.

But Netflix has brought forth a scale of disruption hard to imagine even a year ago. “From everything I’ve seen in my own career and everything I’ve heard from talking to people who have been doing this for 40, 50 years, this is without a doubt the greatest time in the history of the world for stand-up comedy,” says Brian Volk-Weiss, the CEO of Comedy Dynamics, a leading producer of stand-up specials for comics such as Ansari, Gaffigan, and Tom Segura. “There’s almost no part of the stand-up special business that wasn’t affected by [Netflix] jumping in.”

Netflix has been aggressive in its pursuit of all types of video content, including scripted shows, reality television, documentaries, and movies. But the stand-up land grab is still unique in how suddenly and comprehensively it happened (the Louis C.K., Silverman, Seinfeld, and Schumer specials were all announced in the span of six weeks). The overnight dominance is proof that Netflix’s ability to upend the norms of the entertainment industry is not yet stabilizing — in fact, it’s only gaining steam.

In the early days of television, stand-up comics were confined to brief, punch-line-driven monologues on The Ed Sullivan Show or Johnny Carson’s The Tonight Show. HBO, a largely unknown premium cable network that launched as we know it in Wilkes-Barre, Pennsylvania, in 1975, was the first to give comics a full hour to unspool their stories on TV. “The beauty of it was, you didn’t have to pack everything quickly,” Robert Klein, who starred in HBO’s first stand-up special in 1975, told CNN in a retrospective on the ’70s. “You can warm up and get to know and take the stage, so to speak. It wasn’t just contrived. It was a full-throated performance.”

Over time, a televised special became the signature achievement to indicate a comic had arrived. “It’s kind of like that crowning moment for us,” says Jo Koy, a longtime comic whose third stand-up special (and first on Netflix) debuts in March. “We go on tour, every week we’re in a different city. We tell these jokes to everybody, and then once we leave that city, it kind of just stays there. When you get that first special, it just makes you feel so good knowing that your jokes are always going to be out there, that someone’s always going to be able to see it. It’s something we work really hard for.”

As the appeal of televised stand-up grew in the 1980s, a hierarchy of prestige emerged. Every successive comedic star of the moment — Eddie Murphy, Jerry Seinfeld, Chris Rock, Ellen DeGeneres, Dave Chappelle, Dane Cook, Louis C.K., Amy Schumer — landed an hour on HBO. (Richard Pryor and Kevin Hart, the A-list comics who bookend HBO’s unchallenged reign, released most of their specials as theatrical films.) A larger group of less-famous comics could be seen on Comedy Central or Showtime. Up-and-coming comedians often cut their teeth on variety hours such as A&E’s An Evening at the Improv and HBO’s own Def Comedy Jam. For a long time, the pecking order was clear and unchallenged. “The HBO stand-up special was the most prestigious spot for decades,” says Jason Zinoman, a comedy critic for The New York Times and author of an upcoming book about David Letterman. “That meant the most.”

Aziz Asnari (Getty Images)
Aziz Asnari (Getty Images)

Netflix, which launched its streaming service a decade ago, began licensing some of these older specials after they’d had a broadcast run. The comedians were often not household names — remember, HBO produced and controlled many of the most famous specials — but they resonated with young audiences and sometimes had crossover appeal with some of Netflix’s biggest licensed shows. Ansari was a breakout star on the heavily binged Parks and Recreation, and he also had an older special that was available on Netflix. Over time, he found that many of his fans were discovering his stand-up via the streaming service. In 2013, he became an early high-profile act to make a Netflix-exclusive special.

That wasn’t a one-off case. Both Birbiglia and Koy realized they were attracting more fans when their older Comedy Central sets were added to the streaming service. “I noticed on Twitter that people were commenting on the special a lot,” Koy says. “I was getting more love from Netflix [viewers] than when it was on Comedy Central. When people were watching on Netflix, they would post right away. On Comedy Central, it was so far in between. You had to wait until they aired it again.”

Volk-Weiss, the Comedy Dynamics CEO, says he had a “front-row seat” to Netflix’s emergence as a stand-up giant. In those early days, though, some comics were reluctant to risk their big break on an unproven platform. Volk-Weiss recalls having to plead with one comic to persuade her to choose Netflix over Comedy Central for a 2013 special. “The Netflix offer was more than the Comedy Central offer,” he says. “The money obviously didn’t mean anything to her. She wanted to go with Comedy Central because she felt that everybody was used to watching Comedy Central and nobody watched Netflix. I literally had to beg her for weeks to go with Netflix.”

Opinion started to shift when comics realized how a constant presence on Netflix, as opposed to sporadic broadcasts on linear television, could help build a larger loyal audience. For most comedians, specials are a means to boosting their key revenue source: regular ticket sales on the road. TV specials have always translated into additional fans showing up on tour stops, but the lift from a Netflix special exceeded what a lot of comics were seeing from regular TV. “The amount of time it took to see the bump was drastically reduced from years to … six or seven months after an artist’s special is on Netflix,” says Volk-Weiss. “Their touring business goes up by hundreds of [percent]. When word got out that Netflix could do that for an artist, that was very, very appealing to all the agents and managers.”

Netflix slowly started recruiting more comics for its roster and marketing its specials under the new “Netflix Originals” moniker. The early relationship with Ansari paid off, as he was a full-blown star playing Madison Square Garden by the time of his second Netflix special. Now, his well-received series Master of None is one of the streaming service’s signature shows. Chelsea Handler inked a deal that included stand-up work and her talk show on Netflix. Rising stars like Jen Kirkman, Hannibal Buress, and John Mulaney began migrating to the platform. The specials didn’t get the widespread attention of, say, Orange Is the New Black or Fuller House, but they appeared in users’ feeds persistently. Netflix watchers couldn’t avoid stand-up specials. “It levels the playing field for smaller productions,” Birbiglia says. “The icon for Thank God for Jokes is the same size as the icon for Erin Brockovich or The Avengers.”

Then, in October 2016, Netflix announced a very big name and a very big number, and its stand-up takeover shifted into high gear.

Chris Rock is perhaps the last person on earth to become world-renowned almost exclusively for his talent as a stand-up comic. (I love Down to Earth as much as the next guy, but let’s be serious.) His iconic 1996 HBO special, Bring the Pain, is famous enough to have spawned its own Office bit. Most comics reach a new tier of fame via movies or sitcoms or sketch comedy; Rock has done all three, but none of them resonated quite as widely as his jokes. “He’s one of the few people who became famous through stand-up specials,” Zinoman says. Koy calls him the “Michael Jordan” of the genre.

That’s why Netflix reportedly signed Rock to perform two new exclusive specials for $20 million each, a staggering number that has no precedent in stand-up. Several people I interviewed for this story assumed the figure for Rock’s deal is $20 million total; it’s $20 million per special. The Rock signing was the signal that Netflix had ambitions beyond up-and-comers and “comic’s comics.” They wanted everyone. “The dollar amounts involved and the volume at which they’re operating is unprecedented,” Volk-Weiss says. “It’s never happened before, ever.”

Chris Rock (Getty Images)
Chris Rock (Getty Images)

If Netflix is offering even half of what it’s reportedly giving Rock to his peers such as Chappelle, Schumer, and Seinfeld, the money adds up quickly (the company declined to comment for this story). Some cocktail-napkin math suggests Netflix’s investment in stand-up could easily top $100 million for 2017 alone. “The top, top tier of artists are getting paid more than they’ve ever been paid before,” Volk-Weiss says. “It’s the person that before got $6 million, he or she now might get 10 or 15.” Lower-tier comics aren’t necessarily making more money, he says, but they’re getting more opportunities to get a heavily promoted hour that can translate into boosted ticket sales on the road.

Why would Netflix spend so much for an hour of TV? For one thing, it’s getting used to doing so. House of Cards’ 2013 budget turned heads when it was pegged at $4.5 million per episode. Marco Polo reportedly cost $9 million per episode the next year. 2016’s The Get Down may have cost as much as $16 million per episode. More of the money for a Chris Rock special may be funneling to a single person, but on a cost-per-hour basis, the investment is similar. And on a risk-per-hour basis, there’s almost no doubt for Netflix that these super-famous comics will be big draws.

“They learned from HBO a generation ago,” says Sean McCarthy, founder of the comedy news website The Comic’s Comic. “You can have all these movies, you can even have original programming, but the way you drive the subscriptions … is to give [people] known quantities. And nothing says that like the top stand-up comedians in the world.”

Netflix operates by a different set of financial rules than its competitors. Comedy Central earned just 25 cents on average per month from each of its cable subscribers in 2016 and has been forced to cut down on ads in recent years because viewers have become accustomed to ad-free shows on Netflix. HBO brings in big revenue, but it’s expected to produce huge profits for parent company Time Warner every year — $1.9 billion in 2016 on $5.9 billion in sales. Netflix’s profits are comparatively paltry — $380 million in operating income in 2016 — but its revenues are now massive, rising to $8.8 billion last year. With its original-content gambit, the 20-year-old company has tapped into a virtuous financial cycle where investors celebrate Netflix reinvesting its money like a disruptive startup rather than generating big profits like a mature firm. That’s why Netflix stock rallies tend to be tied to subscriber figures rather than financial performance. “In broad terms, Netflix is still in growth mode. As such, it is investing very heavily in its own content and its own future,” says Dan Cryan, senior director of broadband media at IHS. “The principles that are generally applied to established companies like HBO are rather different.”

Netflix, seeking surefire hits that contribute to its growth narrative, is incentivized to keep the comedy boom going as long as possible. Comics are obviously happy to oblige. Across Netflix, HBO, Comedy Central, and the NBC-owned streaming-comedy network Seeso, McCarthy says more than 100 comedy specials will be broadcast this year. A decade ago the number was just a fraction of that. But the industry has been teased by the notion of a comic utopia before. It never lasts.

The last big stand-up boom came in the 1980s, when comedy clubs spread from New York and Los Angeles to cities across America. People not living in entertainment hubs were exposed to live stand-up for the first time, and comics could find more work traveling the country rather than fighting over limited slots in the coastal cities.

But the boom spread too far, too fast. Ultimately there were more clubs than there were talented comics, and venues started closing in the early ’90s amid waning attendance. “People were going to a comedy club for the first time not knowing what stand-up was,” McCarthy says, “and they weren’t seeing the best out there.”

There is some worry that a similar dynamic could play out with the glut of stand-up specials now on offer. “There might be people who stumble onto Netflix or Seeso or one of these platforms, and they’re just looking at the app’s stand-up options and they pick someone at random and they think that’s what stand-up is, and they might get turned off on it,” McCarthy says.

Amy Schumer (Netflix)
Amy Schumer (Netflix)

HBO had fine-tuned the stand-up special into a television event; comics knew they’d have to bring their A-game if they wanted an invite back. Fans knew that network mainstays such as George Carlin would reliably provide them with an hour of laughs every couple of years. (Carlin made a dozen specials on HBO.) Netflix is taking the opposite approach by inundating users with specials of varying merit and assuming its algorithms will help match the right subscriber with the right content. It is a company that values quantity over quality and has pushed back hard against the idea that quality matters at all beyond the recommendation score its algorithm can produce for each user. (Consider: Chief content officer Ted Sarandos defends Adam Sandler’s poorly reviewed Netflix movies by citing their popularity.) Schumer’s new special has received a mixed response from critics, but it will ultimately be judged by how many people watch it (and probably, given Netflix’s data-obsessed workflows, how many people rate it favorably or how many people stop watching in the first 10 minutes).

More broadly, the arrival of “Peak Comedy,” as McCarthy puts it, raises questions about just how much any individual voice can resonate amid an unending deluge of jokes. Chappelle’s Netflix specials airing this week are a watershed event. How excited will people be when he has a third special soon after? The challenge of sustaining excitement will be even bigger for lesser-known stars.

“When I interviewed Hannibal Buress last year, Hannibal came out with a Netflix special and he told me that the advice he got from Chris Rock was to make a ‘special,’ and not a ‘normal,’” McCarthy says. “When you have 85 specials in 2016 and now you’ll have easily more than 100 this year in 2017, they can’t all be special, can they? In that respect, it’s trickier.”

The fractured media environment doesn’t help. Like all forms of entertainment, specific stand-up routines have lost the ubiquity they had in previous eras. Comedians today are more likely to gain fame via a YouTube skit or a bit that plays well on a talk show. (Louis C.K.’s most famous monologue, “Everything’s amazing and nobody’s happy,” happened in a sit-down interview with Conan O’Brien). It’s hard to imagine a Netflix comedy special single-handedly rocketing an artist to stardom the way Bring the Pain elevated Chris Rock in 1996.

“That was a case where the advertising power of HBO, the prestige of HBO helped turn this guy who was well regarded but not super famous into someone who was at an elite level,” Zinoman says. “I think what hasn’t been demonstrated yet is that a Netflix special for someone who’s not famous can make someone famous.”

There are some examples of Netflix bringing immediate success on a smaller scale. Ali Wong, a writer for ABC’s Fresh Off the Boat, used Groupon discounts to sell tickets at a comedy club in San Francisco. After her hourlong special, Baby Cobra, debuted on Netflix in May 2016, the same 400-seat club sold out her show in minutes. On Twitter, Wong went from an unknown to someone who’s mentioned online hundreds of times per day, according to social analytics firm Keyhole. Volk-Weiss, whose company produced Baby Cobra, calls her the biggest overnight success story he’s seen in his career.

For comics, though, the big-picture worry with Netflix has less to do with whether it will make them mega-famous and more about what happens if the money spigot suddenly runs dry. Netflix is highly reliant on viewership metrics — metrics it doesn’t share with anyone else — to drive its purchasing decisions. (When I asked Volk-Weiss if Netflix had shared how many people have watched his company’s specials, he laughed.) What critics say hardly matters, but if viewers aren’t tuning in, the company will pull the plug. Netflix’s pricey Game of Thrones rejoinder Marco Polo was canceled after two seasons; Bloodline has been canned after three. Netflix will give almost anything a shot, but it’s also happy to cut its losses when necessary.

“They have a track record now of being quite aggressive on the content side of things in going where the data takes them,” Cryan says. “If stand-up as a genre doesn’t do for them what they want it to, in terms of helping to drive consumer behavior, then it is entirely possible that we could see them exit the genre almost as quickly as they moved in.”

But that’s a concern for another year. As it stands today, Netflix is the center of the stand-up universe, and its investment has largely been additive to the industry’s fortunes, giving a lot more comics a chance at the spotlight.

“It’s kind of like we’re at the forefront of this whole thing right now,” says Koy, “and it feels good to be on that winning team.”

Disclosure: HBO is an initial investor in The Ringer.