Original Coverage & Source Attribution: www.michigandaily.com
The modern media landscape can seem bleak. There are monolithic major media corporations becoming exponentially more powerful, like the new Skydance, Comcast and Walt Disney. This power is only further exacerbated when already billionaire tech bros get a piece of the action, with Elon Musk recently making a $1 billion investment in the new corporate powerhouse Skydance. On the other hand, you have the content creator economy, which mostly benefits the social media companies whose platforms get their revenue generated for them without any effort from the corporation. Media today is either controlled by giant corporate overlords whose goal is to make money for their investors, or individual creators who make their own content, which still ends up padding the pockets of more corporate media overlords.
In comes Dropout. Formerly CollegeHumor, Dropout is the perfect middle ground between the power of corporate backing and the creative freedom of content creators. The CollegeHumor channel started in the early days of the internet, created in 1999 by two college freshmen who wanted to make a website devoted to comedy sketches and articles. In 2006, InterActiveCorp purchased CollegeHumor for $26 million, but the road to making money for this new investor wasn’t easy. As a new venture in 2018, they launched their own streaming platform titled “Dropout.” On the platform, they would post exclusively CollegeHumor content, including extra shows that weren’t available on their YouTube channel.
Even with the new platform, the success of the channel was decreasing, and it was only about a year later that their parent company aggressively tried to sell them off for parts. That was until CEO Sam Reich came in with an offer of $0. Reich got IAC to sell him the company for nothing, promising that, as a small stakeholder, he would make more for IAC than $3 million — the largest of outside business offers they received. In 2020, Dropout graduated from being simply the streaming platform to the name of the conglomerate, leaving CollegeHumor and IAC behind.
The crazy thing about Reich’s plan is that it worked — far better than he ever imagined. This is in large part thanks to the company’s unwavering commercial and moral ethics. Reich’s own values for the company help the comedians, producers and their audience. Foundationally, the company is different than most: They are a streaming platform that generates their own content, so everything is self-contained. That also gives them the freedom to treat their talent and shows differently. In an interview with Charlie Warzel from the podcast “Galaxy Brain,” Reich said he wanted Dropout to be “better internet and not worse Netflix.”
In that same interview with Warzel, Reich explained how Dropout’s ensemble cast is a key to their success. They introduced a cast of recurring characters, having no particular star players. Instead, Dropout functions as a team they can draw from for different projects that best suit the cast member and the series, rather than relying on a main star. The actors are contractually for-hire, so it allows them to have the creative freedom to pursue other opportunities when they want — perhaps best demonstrated by Jeremy Culhane who, while simultaneously being featured on many Dropout projects, is now also entering his second year on “Saturday Night Live.”
Dropout does a lot of successful zagging from the industry standards. Reich further discusses how they are “hands in the mess with the creatives” when making new shows. Rather than pitching a full-baked show, the company helps create it alongside the artists. They also pay for auditions, something that Reich highlighted on The Downside with comedian Gianmarco Soresi. Part of Reich’s ethos comes from a natural place of being the son of Robert Reich, secretary of labor for former President Bill Clinton’s administration, and believing in a need for regulation within the entertainment industry. When questioned about this very zagging on “Galaxy Brain,” Reich said, “either zagging has its own commercial benefit, or everyone else is doing something wrong.”
While creating their moral ethics of labor, Dropout stands heavily by their audience. They include little touches like encouraging password sharing for people with Dropout accounts. Or, when raising the price of their subscription by $1, they only raised it for new and returning customers, so the price wouldn’t go up for those who already had subscriptions. Their audience is so loyal to them that when they made this announcement, some fans said they actually wanted to pay more for their subscriptions. Dropout then added a new tier called “Superfan” for those who wanted to pay more, which costs $129.99 per year. The new tier features no new polished content, but has small perks like bonus behind-the-scenes clips, a 10% discount on merchandise and early access to live events. The perks aren’t designed to stretch their viewers for more money for more shows, but instead to give an opportunity for those who have the means to pay more if they so choose.
Dropout is a closed circuit: Everything they do is put back into the company. Rather than playing by modern media’s rules of either selling your content to a corporation or relying on a social media platform, they generate content solely for themselves. They get to play by their own rules — rules of respecting actors, writers and their fans. Reich saw the brutal tactics of Hollywood and simply said no. Five months ago, Dropout hosted their first For Your Consideration Emmy campaign event for their show “Very Important People” with comedian Vic Michaelis. The company is now getting recognition from The Academy Awards, something that was beyond their wildest dreams when Reich bought the company for $0 six years ago. Dropout, as a company and community, has proved that you don’t have to stand by the unfair rules of the industry to still be an industry success.
Daily Arts Contributor Harrison Slutzky can be reached at haileysl@umich.edu.
