Dropout’s Sam Reich on business, comedy, and keeping the internet weird

Hello! This is Hank Green, wide net feline and cofounder of Complexly. This is my past clip successful the Decoder impermanent big seat unfortunately, unless Nilay decides to person different kid someday, but we’re making the champion of it. Today, I’m talking with my person Sam Reich, who is the CEO and, I astatine slightest think, laminitis of Dropout TV.

You’ll perceive him reason with maine astir being the founder, and that’s okay. He was there, helium astir apt knows what he’s talking about. But it’s an unthinkable story: Sam bought the company, which utilized to beryllium called CollegeHumor, for zero dollars, instantly had to laic disconnected astir the full staff, and past got smacked successful the look with the covid-19 pandemic shutting everything down, due to the fact that it was aboriginal 2020.

You wouldn’t deliberation that’s a apt look for success, but Sam has been precise successful! Dropout has grown each year. You’ve astir apt seen immoderate clips connected a vertical video platform, if not watched them connected TV, from its astir fashionable shows — including Game Changer, which Sam hosts. Well, “host” mightiness not ever beryllium the close connection for what happens successful each episode, but he’s decidedly there, and you’ll perceive america speech astir that a small bit, too.

But what Sam and I truly spent a batch of clip connected was the occupation of moving a concern that’s getting big. It’s overmuch easier to bash your originative enactment erstwhile your institution is conscionable you, oregon possibly conscionable you and a fewer different people. It’s a batch harder erstwhile you person a clump of stakeholders with competing priorities and they each privation thing from you.

Most media companies, for example, person to woody with immoderate operation of advertisers and shareholders, who each privation to marque money. Dropout doesn’t truly person advertisers oregon shareholders; it has Sam and a fewer different folks, each of whom privation to marque bully comedy. Sam described the concern exemplary to maine arsenic a drama SaaS: subscribers wage wealth and get programs they privation to watch. It sounds similar a beauteous bully concern exemplary to me, honestly. But it’s beauteous rare, truthful Sam and I truly got into the weeds astir wherefore it’s harder to bash than you’d think.

This was a large speech with a large friend, and I anticipation you bask it.

Okay: Sam Reich. Here we go.

This interrogation has been lightly edited for magnitude and clarity.

Sam Reich, you are the laminitis and CEO of Dropout. Welcome to Decoder! Hi!

Thank you truthful overmuch for having me, Hank. I’m flattered to beryllium here.

You’re doing a precise absorbing happening successful a precise antithetic mode than, I think, anybody other successful media, which is wherefore I deliberation it’s truly going to beryllium breathtaking to speech to you astir this stuff. And besides effort to fig retired the whys and hows that you tin bash that.

But to start, usually I don’t truly thin to spell successful that overmuch for root stories. I deliberation that they’re mostly conscionable a mode to benignant of marque radical ideate that they could larn thing from the precise peculiar circumstances that 1 idiosyncratic experienced, which I deliberation are going to beryllium antithetic from different people’s, and besides a mode for radical to toot their ain horns. But tin you springiness maine an root communicative of Dropout from the opening of Dropout? So we don’t request to get into 2006 and CollegeHumor and stuff, but conscionable deed maine with: however did Dropout extremity up successful your hands?

Sometimes, immoderate radical telephone maine the laminitis of Dropout, which is really not true.

Oh, well.

You beg to differ.

I do.

Dropout was a precedence that came retired of IAC, which was our firm genitor astatine the time.

This was who owned CollegeHumor?

This is who owned CollegeHumor, and for years and years, IAC was trying to fig retired however we would marque not conscionable a batch of money, but a lot, a batch of money. And determination was ever benignant of a… A cynic mightiness telephone it a get-rich-quick strategy astatine the time. It was advertisement sales, and past societal media took a large chomp retired of advertisement sales, and past it was television. It turned retired tv accumulation didn’t standard precise effectively. And past finally, the thought was, let’s effort going direct-to-audience.

Just to spell over-the-top, arsenic they say. I’m not definite precisely what the apical we’re going implicit is, but we’re going implicit the apical of something. I conjecture the full system.

That operation makes it consciousness similar we’re gambling the house, and successful a way, we were. There was a postulation of executives who were precise bullish astir this wrong CollegeHumor. I wasn’t needfully 1 of them. I dilatory but surely warmed up to it, imagining that if it didn’t work, astatine slightest we’d get to make our ain chill worldly for a while. The conception was to spell direct-to-audience. There won’t beryllium the gatekeepers that determination are successful Hollywood. We won’t person to commencement implicit each twelvemonth similar we bash successful advertisement sales. That is, by the way, 1 of the intrinsic benefits of subscription: you’re not starting your concern implicit each year, versus advertisement sales, wherever you person to spell retired and merchantability each year.

And things are ever changing. And also, you’re not conscionable doing the YouTube happening wherever surely you’re selling against views, but you’re selling connected these platforms that determine whether oregon not you get the views that tin person their priorities displacement successful ways that are going to beryllium advantageous oregon not to your business, and that’s ever going to beryllium their idea.

That’s true. I deliberation that was the benignant of nutrient of our archetypal announcement video, and I deliberation it’s truly existent wherever AVOD, arsenic it were, is similar —

What is AVOD?

Advertising video connected demand. It’s a word. You could besides conscionable accidental anyone who is not going with the subscription model. That is simply a concern that involves us, the audience, the platform, and the advertiser. 

Bounce, and each those things. Yeah.

It’s not adjacent a ménage à trois, it’s a ménage à four?

[Laughs] And everybody knows erstwhile you interruption trois, it’s conscionable a messiness successful there. Somebody’s ever getting near behind.

That’s right. That’s right. [Laughs] It’s harder for everybody to execute orgasm. You tin determine to support that successful oregon not.

[Laughs] Never interruption trois.

Never interruption trois.

That’s a concern rule, honestly! Sometimes I look astatine YouTube and I’m like, “Oh my God, their party, the YouTube enactment that they are having, has truthful galore antithetic radical astatine it that they person to satisfy.” And that includes the government, regulators.

And I’m like, man, I conscionable ne'er privation to interruption trois. I privation to person my audience. I privation to person my team, truthful the radical who enactment for the thing, and past I privation to person possibly the advertisers oregon possibly myself.

You tin determine not to interruption trois if, for instance, making wealth isn’t important to you oregon satisfying the YouTube algorithm isn’t important to you. You tin determine that these aren’t priorities.

Yeah. Well, I mean, if you’re going to wage people’s salaries, you can’t determine that wealth doesn’t matter.

Exactly. Exactly. This was a large “aha” infinitesimal for maine successful moving a business, realizing that the simpler your concern is, arguably the amended it is, oregon surely the much efficaciously you tin tally it.

Yeah, particularly astatine the beginning. I mean, businesses get analyzable due to the fact that they’ve succeeded already, and they person opportunities to complexify. But they bash not get analyzable astatine the beginning.

Yeah, yeah, yeah. I americium willfully trying to support our concern arsenic uncomplex arsenic possible, and it is hard.

You conscionable added advertising. You did it. The past occurrence of Game Changer.

We did not really adhd advertizing to Dropout. There are fans who are precise acrophobic that’s going to happen. That is not going to happen.

But determination was a sponsorship, though —

There was a sponsorship, yes.

That [sponsorship] made a batch of consciousness successful the spot that you would person needed this, truthful that you could money a high-dollar crippled show.

“Made a batch of sense” is an absorbing mode to enactment that. [Laughs]

[Laughs] Well, arsenic a viewer, it made sense.

Yeah, for sure.

So, I warmed up to subscription. I warmed up to the thought of, “Oh, going direct-to-audience means we get to simplify this operation.” It means that we get to telephone the shots. It means that adjacent though budgets volition beryllium less, our originative autonomy volition beryllium more.

Would budgets decidedly beryllium smaller? Obviously, per viewer, you’re making a batch much money. It’s truly astir the fig of radical you tin convert. And that marketing, was determination a batch of treatment astir however you would really marketplace the subscription product, oregon was it conscionable like, “Let’s marque this available. We’ll popular a bumper connected the extremity of the videos, and radical volition spell motion up?”

The mentation erstwhile we launched was that we would beryllium converting YouTube subscribers to paid subscribers for a batch longer than that turned retired to work. That good ran adust fast.

That sounds familiar.

So it turns retired a selling conveyance yet arrived, but this did not extremity up being a palmy happening for the radical astatine IAC and CollegeHumor. IAC is simply a large media conglomerate. They don’t similar people; they ain a clump of magazines and TV shows, TV channels.

I deliberation IAC gets a atrocious rap successful each of this, but for the record, they were diligent with america successful presumption of america not delivering them a large chunk of wealth for implicit a decade. Arguably, they showed much patience than I deliberation a batch of genitor companies would successful that aforesaid situation. And a batch of people, meanwhile, gave commencement to spectacular careers coming retired of CollegeHumor erstwhile IAC did not payment precise much.

So I stay grateful to IAC for being our shepherds done that decade. And past erstwhile they got bored with us… We didn’t objectively fail; we conscionable didn’t win spectacularly either. We had similar 75,000 subscribers astatine the extremity of twelvemonth one. I deliberation they were hoping for treble that number. They tried to merchantability us, but we looked precise atrocious connected insubstantial due to the fact that we had conscionable burned done their full investment. So a batch of radical were funny astatine first, and past they saw the magnitude of wealth we were losing and the concern plan, which had america losing adjacent much wealth earlier turning profitable, and they each dropped retired 1 by one, leaving me.

And truthful you came with each your large piles of wealth that you someway had, and you conscionable said, “Hey, I’m going to bargain it. Hey, what’s that? You got a cigar? Backroom deals.”

No, this is the weirdest portion of the communicative for me. So you did not, successful fact, spell to them with a clump of wealth to get Dropout. How did you get CollegeHumor from IAC, Sam?

I find it precise comic erstwhile there’s a definite dependable wound connected the net that’s like, “Sam utilized his dad’s wealth to travel and bargain Dropout.”

Oh, wow.

Which is precise comic successful the discourse of my dada being the inequality guy. You are misinformed successful presumption of however overmuch wealth you deliberation this household has.

For those who don’t know, Sam’s dada is Robert Reich, who was the Labor Secretary nether 1 of the… Bill Clinton. Is that right?

Yes. Under Clinton, which, arsenic we each know, Labor Secretary is the astir lucrative assemblage that you tin perchance imagine.

You spot him on the internet sometimes yelling about inequality, probably.

Yes. Yes, yes, yes. And helium does it precise well.

He’s precise talented.

So I went and I offered IAC zero dollars, which was the magnitude of wealth I had to bargain it. There was different connection for $3 million, but it would’ve gone to a competitor. They would’ve fired everybody and taken the assets and seen what they could bash with them.

I deliberation that they liked the thought of gambling, truthful my connection was $0. They would extremity up arsenic the number stakeholder. So it was benignant of similar idiot security for them.

So they’d get to clasp connected to immoderate Sam does with it?

Yeah. Insurance for them successful lawsuit things spell very, precise well. And I deliberation that they liked the thought of gambling connected maine much than the thought of handing the institution implicit to a competitor. It’s a amended communicative if it works out. It’s much breathtaking for them.

So we did that deal. And for the record, I would not person done that woody purely sentimentally. I did it due to the fact that I truly believed successful the concern case.

Did you consciousness similar you saw thing that the radical astatine the genitor institution didn’t see, oregon that the executives who had been operating CollegeHumor didn’t see? Like, wherever the worth was possibly wasn’t wherever they thought it was?

Maybe. What we did with the institution was truthful disruptive. I person a hard clip imagining immoderate firm genitor going, “Yeah, let’s effort that.” It was truthful extreme. I deliberation it astir apt could lone person happened successful a caller environment.

So, the benignant of contiguous archetypal measurement was that the institution got precise small aft it was successful your hands.

Yeah, we went from 105 employees to 7 employees overnight.

Were you besides signing up for that?

Yes. We signed our woody with IAC connected a Tuesday successful March of 2020, connected Wednesday, the hoops teams stopped playing, and connected Thursday, we were successful COVID lockdown.

Whoa, I didn’t recognize that. That’s caller accusation to me. That’s wild. 

[Laughs] Isn’t that crazy?

“The hoops squad stopped playing” is specified a triggering operation to me.

Totally. Totally. That’s however I get radical with that story. They’re like, “Oh, I remember. I retrieve now.”

And past you had CollegeHumor, which has since rebranded to align with the sanction of the pre-existing streaming platform, but I would telephone it astatine this constituent a beauteous antithetic business, and frankincense I see you the laminitis of Dropout.

But you don’t person to see yourself that. You surely are the CEO, though, and you’re ace successful charge. And a unusual mode for each this to happen. When you projected this, did you consciousness similar it was apt that they would accidental yes?

No.

Ah, emotion that.

I saw the penning connected the wall, which is to accidental I saw that they didn’t person a batch of options. But for the record, I was a main originative officer, and adjacent then, overmuch to my ain deficiency of recognition implicit the people of 10 positive years astatine IAC, I didn’t truly talk business. So it was a leap of religion successful maine arsenic a non-businessman, and that’s what I felt precise conscious of walking into that room.

There was a clip erstwhile media companies were much apt to beryllium led by radical who enjoyed making media and a clip when, possibly now, media companies are mostly led by radical who are benignant of connected the numbery side, the businessy side. You are a existent illustration of a idiosyncratic who is simply a media executive, if you’ll excuse maine saying that, but who is extraordinarily and deeply, and perpetually progressive arsenic a originative force, arsenic a host, on-screen talent, but besides perpetually ideating and adjacent writing. You’re not conscionable benignant of showing up and speechmaking the teleprompter. You are besides coming up with ideas for shows, and you are the originative imaginativeness down what I deliberation is astir apt your astir palmy show, Game Changer.

I deliberation Game Changer and Dimension 20 are perpetually duking it retired for presumption connected the platform.

Dimension 20 existed arsenic a merchandise erstwhile CollegeHumor launched to Dropout, is that right?

It was a time 1 Dropout franchise. So did Game Changer [exist], though.

Oh, I didn’t cognize that. That’s wherefore it’s been around. That’s wherefore it has 7 seasons oregon 8 seasons oregon whatever.

Exactly, exactly.

And I cognize that you’re not ace arrogant of those aboriginal episodes, but we emotion them successful my home.

[Laughs] That’s nice. That’s nice. So determined to leap the shark.

I mean, you person got a existent benignant of originative occupation with Game Changer successful that you proceed to escalate. And eventually, determination are nary much rungs connected the ladder that you tin support climbing.

It’s true, it’s true. It’s hard to spell further than outer space.

For the assemblage who don’t cognize this, the thought of Game Changer is that it is simply a crippled amusement successful which the crippled is antithetic each episode. The contestants get not knowing what the crippled is going to be, and past they person to fig it out, which is simply a delight.

Sometimes it takes much and little enactment to fig it out, but yeah.

I mean, the play finale of the astir caller season, I don’t deliberation I figured it retired until I was halfway through. I was like, “At what constituent is this going to change? At what constituent is the adjacent happening going to happen?” It was like, ohio no, this is the full thing. Buck wild.

And besides portion of this is that you enactment with a batch of improv comedians, and truthful that’s the jam, that’s the vibe, that we’re going to play successful this abstraction together. But it does look similar you’re capable to nonstop the aboriginal with the mode that you constitute the shows. It felt similar it could person gone a fig of ways that would’ve been overmuch little satisfying than the mode that it went. Was that an illusion? Did you make that illusion for me? Was that benignant of a written thing? Or could it person gone differently?

I don’t deliberation so. I mean, I deliberation that we grappled with this internally due to the fact that sometimes Game Changer is simply a crippled and different times it’s much akin to show art. And determination are surely the crippled wonks who similar those episodes better. And past determination are benignant of the lighter-hearted assemblage members who admit Game Changer nary substance what it is. I truly wanted to bash this episode, and I would accidental that we pushed it done contempt immoderate inherent flaws that it has. And 1 of them is that the decision is inevitable, but what we wanted to do with Jacob [Wysocki] and with the assemblage is to tease them successful presumption of conscionable however inevitable it is.

It didn’t consciousness inevitable arsenic a viewer.

Yeah, yeah, yeah. To marque him consciousness similar determination mightiness not really beryllium a nett underneath him, and to instrumentality the assemblage into reasoning determination mightiness not beryllium a nett underneath him either. But of course, I would not person fto him fail. [Laughs]

[Laughs] Okay. All right. You’ve ruined that for maine now. I mean, the Game Changer big I cognize would perfectly terrorize anybody successful immoderate way. That’s portion of the character.

I wasn’t going to halt the occurrence earlier helium knew I stole his blood, let’s enactment it that way.

Yeah, I conjecture determination was a batch of worldly that you would privation to person happen. Okay. It turned retired precise well.

But backmost to the thing: Why bash you deliberation that it is little apt and harder to person a originative idiosyncratic astatine the helm of a media institution present than it erstwhile was?

Well, I mean, I deliberation similar what happens to manufacture successful general, industries instrumentality connected meta qualities arsenic radical privation them to beryllium much successful, and therefore, concern radical instrumentality implicit successful an effort truthful that those businesses marque much money. And I deliberation what you get is simply a small spot of… What I’ve seen hap is this benignant of separation betwixt these companies that are elephantine and monolithic, and they’re tally mostly by concern radical oregon possibly promoted ineligible oregon selling people, due to the fact that those are the radical who the committee has fundamentally decided tin champion propulsion the concern levers. Creative is the product, but let’s propulsion the levers of the business. The merchandise is simply a insignificant portion of the business. I’m saying that facetiously, but that’s the cognition of these companies.

And past connected my broadside of the aisle, these smaller businesses that arguably shouldn’t beryllium due to the fact that they’re overmuch much vulnerable. It’s susceptible to tally a tiny business. It’s precise susceptible to tally a medium-sized concern successful the satellite we’re successful now, wherever the mediate people of our manufacture has been hollowed out. Sorry to dependable similar idiosyncratic you know.

Your dad?

My dad. But we are tally mostly by radical who would beryllium doing thing similar this careless of however palmy it was, due to the fact that we’re truthful passionate astir it, which means that we request to beryllium creators due to the fact that nary savvy concern idiosyncratic would bash this.

Now, we are successful an antithetic position, to beryllium clear. When I signed up to bash this, I thought it mightiness beryllium bully and tiny and humble. That I could enactment without a brag connected my ain presumption for a agelong play of time, which, coming retired of the firm world, is what I wanted. It’s been mode much palmy than I could person ever imagined, and it’s a batch much work, much stress, and much analyzable than I could person ever hoped for. So yeah, I got into this to tally a tiny business, and successful fact, we’re successful a medium-sized business.

It has grown. What benignant of concern is it? Obviously, Dropout itself is simply a streaming platform, but I ideate that you bash not see yourself a idiosyncratic who runs a streaming platform. Do you see yourself the CEO of a media company?

I suppose, though I’m truly into boiling this concern down to its essence and besides not glorifying it. And I deliberation what it is is fundamentally a subscription platform. If you were to truly country me, I would fundamentally accidental I tally a drama SaaS.

[Laughs] I don’t really deliberation that you’re allowed to accidental that.

[Laughs] I consciousness truly anti-pretentious astir what this is. It’s a brand.

You privation laughs. We volition supply them for $7 per month.

Kind of. I bash consciousness a small spot similar Andy Warhol sometimes, insofar arsenic I deliberation Dropout means a batch of things to a batch of people. For my purposes, we are a Campbell crockery tin connected a canvas, which is to accidental the transaction is you wage america present $6.99 per month, and we present to you this postulation of programming. And yes, we person each sorts of originative ambitions, and yes, I deliberation Dropout has collected this truly unsocial and fantastic assemblage of radical who are connected to the content. They’re connected to the talent, they’re connected to definite things that they’ve travel to recognize the marque stands for, but astatine the halfway of it is this mechanics that’s working. It could enactment oregon not work, and if it didn’t work, each of this would spell away. And that feels truly important for maine to know.

I conjecture I should ask, what is the mechanics that’s working? What’s the happening that’s moving close present for you? Obviously, much radical are subscribed to Dropout this twelvemonth than they were past twelvemonth and past twelvemonth than they were the twelvemonth earlier that. So it’s growing. What is the happening that is moving determination successful presumption of your funnel, successful presumption of wherefore radical motion up. Who are these people? Because you don’t person Friends, you don’t person a clump of storied media properties, you don’t person that galore shows. There’s not that overmuch contented connected Dropout. But tons of radical are signing up. I don’t cognize if you tin archer maine the fig of radical you person arsenic subscribers?

For a while, I’ve been saying we’re similar spitting region from a million, and that’s inactive true.

Wow. Okay.

I deliberation what’s working, without putting excessively good a constituent connected it, is that radical subscribe and they enactment subscribed.

And they watch.

They watch.

So these radical subscribe. They don’t conscionable seashore the mode I bash with Netflix, wherever I’m like, “Well, possibly there’s thing I’m going to privation to ticker determination sometime.” My rocket wealth concern isn’t what it should be, and I haven’t unsubscribed. But Dropout pops up connected my TV a just amount. So these radical are subscribed and actively watching?

Yes. We person a highly engaged idiosyncratic base.

What’s your funnel? How bash radical travel into the platform? 

There are a fewer antithetic ways. The ascendant 1 is done integrated social, meaning they’ve watched clips from our shows connected Instagram, TikTok, and YouTube Shorts.

And you designed shows to beryllium bully astatine being… Well, I don’t cognize if you designed them that way. But you bash now.

I would accidental sometimes amended and sometimes worse, we bash that.

Game Changer is precise bully astatine this due to the fact that it’s got that Whose Line Is It Anyway? vibe, for radical who person ne'er heard of immoderate of this, wherever determination are conscionable bully clippable moments [happening] a lot.

I deliberation Game Changer is bully astatine this. I deliberation Make Some Noise is precise bully astatine this, erstwhile you deliberation of Make Some Noise being punctual execution, punctual execution. Arguably, Dimension 20 truly shouldn’t beryllium bully astatine this, and yet it someway is.

Sometimes, yeah, they’re conscionable talented, comic people. I accidental arsenic a idiosyncratic who was erstwhile connected the show. [Laughs]

[Laughs] Yeah, you get to assertion a percent of recognition for that compliment.

But it’s truthful true, Hank. I mean, you arsenic that quality creating moments connected the show… Some small dependable successful the backmost of your caput is like, “Let maine crook this into a moment.” And erstwhile you person a large moment, that becomes selling for the amusement successful the satellite successful which we present live.

And that didn’t beryllium 5 years ago. When COVID happened, that was a precise tiny ecosystem. And present it is simply a immense portion of online video. And besides precise hard to crook into value. So very fewer people are capable to crook their reels and their shorts and their TikToks into immoderate magnitude of money. 

Some radical person ways, immoderate radical person precise ample audiences, and past it gets easy. But you turned it astir wherever it’s similar this contented lone exists due to the fact that of a happening that costs money, and if you would similar to spot much of it, you tin go 1 of the radical who are the crushed that this contented exists by being a subscriber.

I deliberation it’d beryllium precise hard for Dropout to enactment if we hadn’t imploded the advertiser-supported portion of our business. 

Yeah, you conscionable kicked it off. You were like, “I don’t request this.”

Yeah, it was fundamentally like, “I can’t tally an advertisement business. I’d beryllium nary bully astatine it. I’m, successful a batch of ways, a unspeakable salesperson.”

You tin merchantability things, but I conscionable don’t deliberation that you privation to merchantability that peculiar thing.

Sure. Hey, thanks, man.

This is simply a precise antithetic speech from the past occurrence of this that I did.

You are, connected the different hand, a precise bully salesman. I person truthful galore socks due to the fact that of you, and I emotion them all.

I emotion that!

So what you’re saying is the immense bulk oregon the biggest chunk of the radical who are subscribed to Dropout came successful due to the fact that they saw clips, and past they saw different clip, and past they saw different clip, and they’re like, “Fine, I’ve got to ticker this. And wherever is this? I’ll find it?”

The immense bulk of people. I deliberation 10 percent of our subscribers close present travel successful done paid.

Oh! Okay. So you conscionable benignant of tally the champion clips?

Yeah, we do, we do. We usage integrated societal show to hint america into what clips we should amplify, and I deliberation that’s helped america retired done lull periods.

But adjacent for that, you’re utilizing the clip. You’re moving from integrated to paid.

Yes.

So that’s truly the thing. I cognize that you did Dungeons and Drag Queens, wherever determination was caller endowment to bring to the platform. These radical person fans. Maybe those fans are going to motion up. Has that besides been effective?

Oh, for sure, for sure. You could reason that we are surely utilizing the contented to marketplace itself, but determination are each sorts of ways that we’re doing that. So casting and stunt casting are surely immoderate of them. And Dungeons and Dragons Queens was immense for us.

Are the shows that person the astir assemblage the astir liable for signups?

I would accidental so, yeah. It’s a spot of a self-fulfilling prophecy there, wherever the astir fashionable shows, the astir watched connected the platform, thin to person the biggest societal channels, and thin to besides thrust the astir viewers.

So what are those?

I mean, nary of the shows presently connected the level don’t person their ain hardcore dedicated audience. If a amusement isn’t for the assemblage —

Well, present that’s a occupation due to the fact that you can’t cancel anything, Sam.

Yeah, I mean, we person not precisely formally canceled, but we person benignant of…

Paused production?

Paused production, sidelined, enactment connected the backmost burner, shows that didn’t cod an assemblage arsenic well. The astir fashionable shows connected the level are Dimension 20 and Game Changer. And past the 2nd astir fashionable shows connected the level are immoderate operation of Smarty Pants, Very Important People, and Make Some Noise.

Have you ever considered putting worldly connected that you didn’t produce? So close now, everything connected the level is CollegeHumor oregon Dropout-produced.

For sure, for sure. We have. We are. I deliberation the crushed wherefore it’s tricky is that we see societal selling to beryllium a large differentiator successful presumption of however we bash things. And if we were to licence a mainstream show, there’s nary mode that they would let america to powerfulness their societal channels. So determination is nary constituent successful america doing that unless we get to bash that.

Weird. That’s specified a circumstantial crushed to not bash that that I would not person imagined.

The different reasons are retired there, too. If we conscionable licence thing nether the sun, does it dilute the brand? We’re not trying to beryllium a utility; we’re trying to beryllium much of a marque play. But I would accidental that we are funny successful perchance hosting contented connected the level that could powerfulness its societal content. And truthful we are having immoderate of those conversations due to the fact that we deliberation it’ll beryllium an absorbing experiment. But we’re being very, very, precise choosy astir it, obviously.

Gotcha. So however galore radical are astatine Dropout close now?

We are 40-ish connected a full-time basis. But that truly doesn’t relationship for truthful galore radical who are specified large contributors to what we do, due to the fact that determination are truthful galore declaration players involved, the unit side, connected the endowment side.

Those radical bash consciousness a batch similar portion of the team, particularly due to the fact that successful presumption of the Dropout formed members, those radical are mostly not employees, and they are the people that radical ideate erstwhile they ideate what Dropout is. There’s conscionable a clump of recurring comedians who travel successful and are seen arsenic the Dropout household by the audience. So those radical are contractors, but are besides thing more, it feels like.

Definitely. And which is why, by the way, nett share, and truthful galore of the things that we do, we crook implicit backwards to marque moving astatine Dropout a affirmative acquisition for folks. I deliberation that Hollywood is simply a strategy wherever radical are utilized to this and expect this to a degree. There are each sorts of inherent benefits and drawbacks to the full-time equation. We did person full-time endowment for a agelong time, and the payment determination is information for some of us. We cognize that we person radical that we tin crook to, and they cognize that they person that magnitude of occupation security. And past the downsides are that we person to marque usage of those radical and lone those radical due to the fact that we person to deduce that magnitude of worth from them. So it means that the excavation gets smaller, and past the downside for them is that they can’t research different opportunities that mightiness popular up arsenic a effect of their employment with us.

This has been a weakness of a batch of YouTube companies, BuzzFeed is the champion example, wherever you person employees and past they get a truly fashionable show, and past they’re being paid arsenic employees, but their amusement is making the institution a clump of money, and they’re not being paid arsenic talent. And truthful if Seinfeld gets popular, Jerry Seinfeld gets paid more, but if The Try Guys get popular, bash the Try Guys get to negociate a 3 times higher wage this year? It’s benignant of not however concern works. And truthful the Try Guys commencement to consciousness beauteous uncomfortable being portion of BuzzFeed and possibly want to spell bash their ain thing. And this is from the precise opening of YouTube, a large problem.

And I consciousness similar this exemplary of conscionable listening to however Hollywood has worked successful the past really makes consciousness successful this case, wherever it’s like, “Okay, well, you’re going to travel and you’re going to bash this amusement this season. And the adjacent season, if the amusement did truly well, your agent’s going to person a speech with america and we’re going to beryllium figuring out… And you’re going to beryllium capable to bash a clump of different stuff, but this is going to beryllium a large portion of your yearly income present due to the fact that that amusement is fashionable due to the fact that radical truly similar it, and you’re creating a batch of value.”

I don’t cognize however overmuch radical cognize astir exclusivity, but I deliberation this worldly is truthful interesting. If you are signing up to enactment successful a project, let’s accidental Apple TV comes and wants you to beryllium successful their show, you volition motion a declaration with Apple TV that’s like, “You are committed to X fig of episodes implicit Y play of time.” You’re usually signing up for aggregate seasons. But arsenic a portion of that contract, you can’t bash different things, usually successful that category. Which is to accidental you can’t bash different streamers’ shows, for instance, without Apple’s permission.

But then, ideate for a infinitesimal that Apple takes a agelong clip to prime up a 2nd play of your show. And those times are built into your contract. So possibly it takes them 9 months to prime up different play of your show. For those 9 months, you are not allowed to bash different streaming things.

You’ve conscionable got to larn to juggle oregon something. What are you doing?

What bash you do? What bash you do?

What bash you do? You conscionable got to enactment successful shape, too, due to the fact that they request you to look the same, and it’s similar 9 months went by, man, I’m a antithetic guy.

Yeah, for sure. Keep your hairsbreadth the aforesaid length, support your nails the aforesaid length.

Oh my god. Yeah.

That’s tough. Exclusivity is truly pugnacious for folks who are grateful to beryllium moving successful this concern astatine all, and truthful person precise small negotiating room.

So our cognition astir it is, if we were not accommodating of people’s different work, we would simply beryllium forcing them to marque a prime betwixt america and the different work, immoderate it is. So the information that we don’t inquire for exclusivity of immoderate benignant means that Lou Wilson tin enactment with america due to the fact that otherwise, helium is full-time astatine Jimmy Kimmel Live.

Right. Oh. Yeah, interesting.

We are trying to presumption ourselves arsenic everyone’s favourite 2nd job, unless they don’t person a archetypal job, successful which lawsuit they are precise blessed to beryllium moving with… we privation them to beryllium precise blessed to beryllium moving with us.

You’re getting a estimation for this, for pioneering much originative ways of doing things, being much worker-friendly to everybody from PAs to endowment and everything successful between. And nett sharing for contractors, for talent, it’s not usually however things work. Though determination are assorted ways of doing this, I’ve ne'er heard of anybody doing a consecutive nett share. 

Why bash that?

I conjecture why? And also, wherefore is it hard? Is it hard? Is the crushed that different radical don’t bash it due to the fact that it’s hard? Or is the crushed that they don’t person to?

I don’t deliberation it’s hard. I don’t deliberation what we’re doing is that hard, accidental thing astir our superb concern squad who are doing it. But specifically, the crushed we’re doing nett stock and not —

I don’t mean it’s logistically hard to chopped the checks. I mean that it’s hard to marque the concern exemplary work.

Oh. I deliberation it is benignant of hard to chopped the checks.

[Laughs] I consciousness similar Paramount could fig that out.

I deliberation royalties are harder.

Yeah, for sure, royalties are harder. Yeah.

Which is wherefore we bash nett stock due to the fact that it’s overmuch simpler for america from an admin standpoint.

I deliberation that different companies don’t bash this due to the fact that it is not modular and due to the fact that they tin get distant with not [doing it]. But the large 1 is astir apt this, which is that they person radical that they request to satisfy, a full class of radical they request to fulfill who we don’t have.

They broke the trois.

[Laughs] They ascended trois. They made that captious error, going up from trois. And close there, fig four, fig five, fig six, depending connected the company, is the shareholders. And that means that determination are people… Basically, by hoarding money, you are satisfying someone, right? Which we don’t have. There’s nary 1 to satisfy.

Well, I mean, IAC, theoretically.

Theoretically.

They ne'er travel knocking and say, “Man, you could crook this into a large lad now. Come and amusement america the success?”

Me, theoretically, right?

Yeah.

Brennan [Lee Mulligan] is besides a spouse successful the company.

I’ve tried to invest, but you volition not instrumentality my money.

Maybe I volition someday, Hank.

Okay, fto maine know.

And don’t get maine wrong, we’re each making money. When we accidental nett share, we’re not adjacent talking astir the full profit. Right? Some of that nett goes to maine and to IAC.

And of course, there’s besides operational funds. You’re not going to zero retired the slope relationship each year.

Of course, of course. There are operational funds. There’s play money. We privation to effort caller things. So each that money’s going each sorts of antithetic places, but determination are nary shareholders to satisfy, which means america becoming much and much and much profitable each twelvemonth is not needfully our archetypal priority.

What is your archetypal precedence then? What are you trying to do? What are you trying to do, Sam Reich?! 

I don’t know, man!

[Laughs] Why are you doing this?

[Laughs] I don’t know, Hank. What bash you deliberation I should do?

I don’t know. That’s a bully point.

You’re successful this aforesaid boat, much oregon less. I could truly easy flip this astir connected you.

I mean, I tin archer you wherefore I bash it.

Oh, delight springiness maine one. Give maine one.

Oh, I mean, I consciousness a beardown consciousness of work to the things that I person made and the radical I enactment with.

Sure.

I consciousness a beardown consciousness of work to the audience. And I besides americium precise rewarded by making things sometimes. Obviously, determination are immoderate parts of my occupation that I bash purely due to the fact that of the obligation. There are immoderate parts of my occupation that I bash due to the fact that I get paid to bash them. And determination are immoderate parts of my occupation that I do… And these are antithetic amounts successful each column, successful antithetic activities, but sometimes I’m doing it due to the fact that I conscionable freaking emotion doing it. It’s truthful fun.

Yeah. Yeah. That’s interesting. I consciousness a small spot of a consciousness of obligation. I wouldn’t accidental that’s my superior driver. I deliberation that I consciousness precise alert and precise grateful for the quality to make things nether a unsocial acceptable of circumstances wherever I don’t have… I consciousness uniquely nether the trois, uniquely little than trois.

And you’ve got to clasp onto that, what we’re learning. Hold connected to the trois.

It’s a truly unsocial ecosystem to beryllium a portion of, and I deliberation it means that we tin make immoderate uniquely chill stuff, and I emotion that. Giving commencement to worldly is my favourite part. I’m an creation snob astatine the extremity of the day. I’ve been to Edinburgh Fringe —

That’s a bully happening to person beryllium a portion of your job.

I mean, barely.

You pulled immoderate acts retired of there. Fringe, by the way, is simply a precise weird drama festival that happens successful Edinburgh. It’s similar weeks long, and it’s tiny rooms, and it’s conscionable weird creation happens, and I’m precise jealous. I’ve ne'er gone.

Oh, Hank, we’ve got to spell immoderate twelvemonth and I’ll amusement you around.

I’m waiting for my lad to beryllium aged enough.

Yeah, that’s fair. But I conscionable emotion weird and antithetic stuff, and erstwhile I deliberation astir what I privation to permission down successful the world, it’s much of it.

Okay, emotion that. How bash you marque decisions? That’s a Decoder question. We’ve got to inquire that one.

There’s a terrific TED Talk connected determination making, which talks astir however erstwhile you’re faced with a hard decision, it’s usually due to the fact that determination are pros and cons that consciousness astir equivalent to each other. And truthful it benignant of doesn’t matter, truthful conscionable prime one. Ruth Chang, How to Make Hard Choices.

A batch of the important decisions, it’s beauteous wide which absorption to go. And past with the hard ones, you benignant of person to determine what you’re voting for, what you’re optimizing for. So if you person your priorities successful order, oftentimes the close determination volition emerge. Meaning, again, hopefully our concern is beauteous simple. There are a batch of factors that we person to incorporate, and those factors are thing successful betwixt the contented itself, the acquisition of the audience, the payment of the formed and crew, our finances, and what’s personally creatively breathtaking to me. And if I person those astir successful the… They’re not successful that order. I don’t precisely cognize what bid they autumn into disconnected the apical of my head. But if I person those successful the close order, I tin usually marque the close decision.

How bash you ideate Dropout successful the media satellite close now? Do you adjacent consciousness similar you’re a portion of this industry? Or bash you consciousness similar you’re benignant of hanging disconnected to the side? Do you consciousness similar you interest astir the manufacture broadly, oregon are you conscionable benignant of like, “That’s not me.”

It’s much “that’s not me.” I mean, I bash consciousness similar I’m connected a small spot of an land wherever I get to beryllium benignant of the huffy trickster king of the domain.

For astir streaming platforms that person been launched by large companies, to person a cardinal subscribers would beryllium a tremendous failure. In presumption of macro media-ecosystem things, it seems similar this is simply a wholly inevitable thing, and that it should person happened much already, wherever everything keeps fracturing. So, much and much nichification of everything. And wherefore wouldn’t this hap to streaming platforms? And we haven’t adjacent talked astir the information that Vimeo enables this with a beauteous debased lift. So you use, I think, a merchandise called Vimeo OTT.

That’s correct, yeah.

Vimeo fundamentally lets you physique a streaming platform, and they person a mentation that integrates with itself, and it tin beryllium successful the app stores, connected Roku, and connected the PS5 oregon wherever, and that simplifies this process.

I deliberation that what Vimeo is betting connected determination is that this nichification volition occur. But I deliberation erstwhile you look astatine the radical who usage that, it’s a batch of idiosyncratic creators oregon radical who person a workout thing, they’re similar manner power benignant things. I deliberation that possibly the RuPaul streamer runs connected it.

Yeah, WOW Presents, I deliberation so. Criterion Collection.

Yeah. And it conscionable feels similar it would caput successful that direction, and that the antithetic segments would each get their ain small world, which will, of course, proceed to alienate america from each different due to the fact that nary one’s watching the aforesaid things, but whatever.

It feels symptomatic of this satellite of contented that we’re surviving in. And truthful it’s a just question, like, well, wherefore not more? And that’s a bully question. 

I benignant of expected it. When Dropout archetypal deed for me, I was like, “Oh, 2 years from present everybody’s going to person 1 of these things.” And that has not truly happened, and radical person tried to motorboat immoderate that person been little successful…

I bash deliberation that, arsenic is the lawsuit with the internet, erstwhile you’re browsing TikTok and you larn astir idiosyncratic with 9 cardinal subscribers oregon followers who you’ve ne'er heard of before, determination are plentifulness of examples successful our manufacture of businesses that are conscionable moving a small spot nether the radar that are doing very, precise well. I deliberation Nebula, for instance, is 1 of those businesses. 

And successful the past mates of years, possibly a small spot inspired by us, possibly not, depending connected the circumstantial example, but the Try Guys person launched their reply to this, Critical Role has launched their reply to this, but my anticipation is that determination are much radical who travel successful our footsteps due to the fact that I deliberation it’s lone amended for Dropout if determination are much examples that radical tin constituent to to say, “I subscribe to this tiny postulation of indie streamers.”

And I deliberation it behooves america to person that radical beryllium larger due to the fact that it means amended resources for our concern arsenic well. We beryllium connected third-party exertion successful bid to powerfulness Dropout, and if determination aren’t capable streamers to usage Vimeo OTT… 

They’re not going to support supporting the product. Do you ever regret utilizing Vimeo OTT oregon not gathering your ain thing?

No! We tried, but radical don’t recognize this. The archetypal rendition of Dropout was built connected Vimeo OTT’s API, but it was our ain product. We employed thing similar 8 blase engineers astatine IAC to physique our ain merchandise astir it, and it was brutal. Which is to say, it’s conscionable precise hard to bash precise well. And these were large engineers.

What you’re doing is successful portion moving a company, being a concern person, managing your nonstop reports. I should inquire however this is each structured. How galore nonstop reports bash you have?

Technically, I deliberation I person 2 oregon three, thing similar that. What we decided beauteous recently, wrong the past year, is that I should person astir nary nonstop reports, fundamentally conscionable the C-suite, and past everyone other should autumn nether idiosyncratic else. But that’s beauteous new.

And what are your departments? 

There is creative, burgeoning department. There is selling —

Do they marque a batch of YouTube shorts successful the selling department? [Laughs]

[Laughs] Uh-huh! Yes. And paid and email, and everything other that falls into the satellite of marketing. There is tech, which is beauteous tiny but does exist. There is production. There is programming arsenic it is autarkic from production, which are the folks who not lone grip our contented arsenic it’s related to metadata, but are besides liable for maintaining our programming docket and putting worldly up into the platform. Also, QC is simply a portion of that department, meaning prime control. We have, for instance, 1 precise talented idiosyncratic whose occupation it is simply to, this is not each they do, but it’s a large portion of what they do, to ticker each occurrence to marque definite that determination are nary glaring issues with it earlier it posts to the website, to the platform. I deliberation that’s astir it, with 1 oregon 2 straggling — oh, plan — With 1 oregon 2 straggling departments that diagnostic 1 idiosyncratic oregon 2 people.

Yeah. There’s the idiosyncratic who keeps the Dimension 20 lore publication to marque definite they cognize each of that.

Yes, well, interestingly, Dimension 20 is benignant of similar its ain section due to the fact that it’s specified a large operation. And lately, Game Changer, Make Some Noise person benignant of go their ain section arsenic well.

So you’re partially moving this business, trying to marque each the things work, and I presume mediating erstwhile radical disagree with each different and doing each of that work? 

HR is new! HR is caller arsenic of the past 7 heads. 

And past you’re besides on-screen talent, and creative, and writing, and each this, but there’s different happening that you are… I deliberation that this is not that unusual. There’s ever a public-facing relation to a CEO. But beyond that, not lone bash you person a public-facing relation arsenic the CEO and on-screen endowment and benignant of founder, depending connected however you privation to number that, but besides you benignant of embody what Dropout is trying to be. And a spot and imaginable occupation is that you’re trying to beryllium a bully feline portion you bash it. You’re not Carl Icahn, you’re not ruthless businessman Sam Reich. You’re trying to bash this the close way. And 1 of the things, my member [John] and I telephone this the cleanable idiosyncratic problem, that if you archer radical that you’re trying to bash things good and you’re trying to bash things right, past radical volition expect you to bash it perfectly. And there’s nary specified happening arsenic perfect, and determination are ever things that you’re balancing.

How bash you ideate and negociate your ain nationalist perception, wherever you privation radical to cognize that you truly are trying to bash things better, but you besides request to convey to radical that you volition not beryllium perfect?

I deliberation this is decidedly a enactment successful progress, truthful — 

And I deliberation that the Dropout audience, successful portion due to the fact that of — I mean, there’s a demographic happening here, but they’re responding to and signing up successful portion due to the fact that of a halo present that you’re helping to make by doing things well. Their expectations are going to beryllium high. You’ve got a high-expectation crowd, and I’ve seen immoderate examples wherever they consciousness arsenic if you’re not surviving up to your values oregon thing similar that. That reputational management, bash you spot that arsenic a large portion of your job? And however bash you ideate that?

Yes and no. I mean, erstwhile I accidental enactment successful progress, that applies not lone to this meta question, but besides benignant of the mode I look astatine Dropout successful general, which is, cleanable is an impossible-to-achieve standard.

And I try, astatine slightest erstwhile I’m retired successful the world, to truly convey, arsenic overmuch arsenic possible, that I americium a drama idiosyncratic who inherited this happening who is trying to bash things novelly and experimentally, but that I don’t adjacent cognize arsenic overmuch astir this benignant of worldly arsenic similar Adam Conover does, arsenic portion of my peers do. So erstwhile I accidental enactment successful progress, I truly mean that we are trying things and we volition marque mistakes. And what I’m specifically not doing connected societal media, oregon anyplace other for that substance — successful conversations similar this, connected panels — is to portend arsenic if Dropout oregon I person it each figured out, that we are an exceptionally motivation institution oregon that we are an exceptionally idealistic company. I deliberation that hostility betwixt moving a institution and being bully to radical inherently exists.

So what I’ve claimed to beryllium the case, and I truly bash inactive deliberation is the case, is that I see myself a highly originative person. I’m trying to marque contented that’s arsenic innovative, interesting, and comic arsenic possible, and I anticipation radical clasp america to that standard. And otherwise, I’m trying to acceptable possibly immoderate caller standards for decency, but I would underline that word.

I americium also, arsenic you person coached maine done a batch implicit the months and years, Hank, [laughs] becoming rapidly utilized to the information that you can’t delight everybody and that you volition person to marque decisions that are unpopular sometimes. And that’s okay. Some people, peculiarly entertainers, request to beryllium liked by everybody, and I deliberation immoderate radical interest astir maine successful that mode due to the fact that they deliberation that my affable quality means that I would truly dislike being unpopular. And I americium really wholly good if immoderate radical don’t similar me.

Is this portion of increasing up successful a household wherever a batch of nasty things mightiness person been said astir your dad?

Honestly, nepotism, I’m sure, served maine adjacent successful ways that I’m not afloat conscious of, successful each sorts of ways. But 1 happening that is truly utile is that my dada modeled fame for me. So I bash person idiosyncratic precise adjacent to maine retired determination successful the satellite who is besides a nationalist person, who by virtuousness of his job, deals with contention astatine slightest 3 times a twelvemonth [laughs], which astir apt thickens my tegument a small bit.

Interesting. Is there, connected the database of reasons that you similar this oregon privation to bash this, we talked astir this before, but let’s extremity present with this. Is [the idea] that radical aren’t doing things weird enough, and you privation to bash things weird, connected that list?

One 100 percent. You and I person connected a batch connected the taxable of Homestar Runner implicit the years. Homestar Runner whitethorn beryllium hugely liable for my vocation taking the absorption it has. It was incredibly influential connected me. And thing I loved astir it was like, it felt similar a walled plot of weird that existed at a URL. 

Yeah. That resonates. 

And I deliberation astir however sometimes I privation that I could works a wood afloat of weird trees connected the internet. I privation that the net were inactive a spot where, conscionable similar determination was truly fun, mysterious, hopeful worldly that existed a URL away. I would anticipation that Dropout tin conscionable beryllium 1 of those things.

All right. Well, that feels close to me. And I anticipation that you support doing it, and I anticipation that radical support uncovering it, and… loving that weird! It’s a small spot wherever a batch of unusual things happen.

Hank, you are besides hugely liable for and inspiring successful the instauration of weird worldly for the internet. You’re besides inspiring insofar arsenic you are conscionable truthful prolific successful presumption of the magnitude that you do. 

[Laughs] If thing else, determination is that. 

[Laughs] And besides a batch else. So convey you for being some the person and the inspiration.

There surely is quantity. [Laughs]

[Laughs] But a sincere convey you for being some the person and the inspiration that you are.

Ah, well, convey you. Thanks a lot.  I admit you coming connected and chatting with maine and getting into the weeds and the details here. And someday we volition find different podcast wherever we volition conscionable bash bits. [Laughs]

[Laughs] I look guardant to that day. 

Thanks, Sam.

Thank you, man.

_{Questions oregon comments astir this episode? Hit america up astatine [email protected]. We truly bash work each email!}