How Dropout found success streaming comedy for $6 a month
Oct 26, 2023
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Sam Reich turned around CollegeHumor by focusing on the subscription streaming service, Dropout. They created improvised comedy content perfect for viral clips on TikTok and YouTube. Dropout now has a thriving fanbase and is considering revenue sharing with employees. The podcast delves into the history of CollegeHumor, challenges faced, launching a subscription service, ownership structure, unique talent relationships, and the affordability and identity of the service.
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Quick takeaways
Dropout, the subscription streaming part of CollegeHumor, found success by leaning into improvised comedy content that could go viral on social media.
Dropout is targeting a young adult audience by offering a mix of scripted and unscripted shows, with plans for profit sharing and a residuals program for all contributors.
Deep dives
The Origins of Dropout and Its Evolution
Dropout is the evolution of CollegeHumor, a comedic website that started in 1999. Initially, CollegeHumor served as an aggregator of humorous college and internet content. Over the years, it grew to become a hub for comedy writing and video production. However, under the ownership of IAC, CollegeHumor's attempts to become a giant successful company fell short. In late 2019, Sam Reich seized the opportunity and took over the company, now known as Dropout. The subscription-based platform offers a mix of long-form unscripted and scripted shows, targeting an audience in their early twenties.
The Transition to Subscription-Based Business Model
Under the IAC ownership, CollegeHumor experimented with various business models, including television production and creating content similar to the 'Louis CK model' of comedians independently selling their shows. However, these endeavors did not yield the desired results. Recognizing the potential of a subscription-based model, Dropout was launched, initially offering content for $5 a month, which has now increased to $6. While shorter clips are shared on social media as a 'window shopping' experience, the full shows are reserved for subscribers. Dropout currently has a subscriber base in the mid-hundreds of thousands, exceeding CollegeHumor's past success.
The Unique Appeal of Dropout's Content
Dropout's content caters to comedy enthusiasts who appreciate a mix of scripted and unscripted formats. While initially trying to convert existing CollegeHumor fans, the platform has expanded its audience demographic. Dropout engages audiences through new shows and reboots of old series. The platform's hit show, 'Dimension 20,' a humorous Dungeons and Dragons gameplay series, emerged as a quick success. The combination of ensemble casts, recurring performers, and a blend of premium and authentic content resonates with viewers who seek a middle ground between traditional television and podcasts. The audience primarily consists of individuals in their early twenties, but encompasses a broader age range.
Long-Term Goals and Slow Responsible Growth
With steady growth and a loyal subscriber base, Dropout aims to continue producing new content and pursuing responsible growth. Sam Reich envisions a trajectory similar to Crunchyroll, an anime streaming service that thrives within a niche market. Dropout's affordability, commitment to talent, and community building contribute to its appeal and potential for future success. The company plans to introduce profit sharing and develop a residuals program to reward all contributors, including both talent and crew members. While aware of the concept of subscription fatigue, Dropout remains confident that the unique identity and enjoyment subscribers derive from the platform set it apart from other subscription offerings.
When Sam Reich bought CollegeHumor from Barry Diller’s IAC for pennies in January 2020, the comedy site was long past its heyday. A few months later, the pandemic hit. It wouldn’t have been a surprise if CollegeHumor had vanished entirely. Instead, Reich pushed the company to lean into Dropout, the subscription streaming part of the business, and create more improvised comedy content that lent itself well to viral clips on TikTok and YouTube. Today, Dropout has a dedicated fanbase of hundreds of thousands of subscribers and is even talking about establishing a revenue-sharing model with its employees. Vox’s Peter Kafka talks with Reich about how he turned it all around, and what it’s like to be on-camera talent and everyone’s boss.
Host: Peter Kafka (@pkafka), Senior Editor at Recode
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