Decoder with Nilay Patel: CEO Sam Reich on the Business of Subscription Comedy

Podcast: Decoder (The Verge)
Guest Host: Hank Green
Guest: Sam Reich, CEO of Dropout
Release Date: January 12, 2026

Episode Overview

This episode features Hank Green interviewing Sam Reich, CEO of Dropout, for a deep dive into the unconventional business strategy and creative ethos behind Dropout, the subscription-based comedy streaming platform. The discussion covers the founding of Dropout, the dynamics of running a creator-led company, the economics of subscription comedy, and the cultural impact of keeping things "weird" in an increasingly business-driven media landscape.

Main Discussion Points & Key Insights

1. The Founding Story of Dropout

• Origins and the Acquisition

  • Sam is often mistakenly referred to as the founder of Dropout. In reality, Dropout was an initiative by CollegeHumor’s then-parent company, IAC, to experiment with direct-to-consumer business without intermediary gatekeepers (03:00).
  • After years of mixed success with ad-driven and broadcast TV models, Dropout was envisioned as a subscription platform so that “you’re not starting your business over every year versus ad sales, where you have to go out and sell every year, start from zero.”

    “One of the intrinsic benefits of subscription is that you’re not starting your business over every year.”
    — Sam Reich, [04:46]

• The “$0 Buyout”

  • When IAC wanted to divest, Sam wound up acquiring Dropout for no cash up front, offering instead to keep IAC as a minority stakeholder. A competing $3M offer from another company would have gutted the team.

    “So I went and I offered IAC $0... They would end up in the minority, the minority stakeholder...it was sort of like idiot insurance for them.”
    — Sam Reich, [11:55]

• Radical Downsizing & COVID Timing

  • The team shrunk from 105 to 7 employees just as COVID lockdowns began, catapulting Dropout into a true indie phase;
    [13:15–13:39].

    “We signed our deal with IAC on a Tuesday in March 2020. On Wednesday the basketball team stopped playing and on Thursday we were in COVID lockdown.”
    — Sam Reich, [13:26]

2. A Different Kind of Media CEO

• Creative-Driven Leadership

  • Sam actively creates, hosts, ideates, and writes for the platform’s shows (“Game Changer,” “Dimension 20”) and maintains close creative involvement.

    “You are the creative vision behind, I think probably, what is your most successful show, Game Changer.”
    — Hank Green, [17:20]

  • On creative escalation and challenges:

    “You have got a real sort of creative problem with Game Changer...you continue to escalate and eventually there’s no more rungs on the ladder you can...”
    — Hank Green, [19:12]

• Why So Few Creatives at the Top?

  • Business people increasingly helm media companies, with creative-led orgs considered riskier and more vulnerable, even as they offer unique opportunities.

    “The middle class of our industry has been hollowed out... we are run mostly by people who would be doing something like this, regardless of how successful it was, because we’re so passionate about it. Which means that we need to be creators because no savvy business person would do this.”
    — Sam Reich, [23:53]

3. Dropout’s Subscription Model & Marketing Funnel

• Not a Utility, But a Creative Brand

  • Sam rejects grandiose “disruptor” narratives, likening Dropout to “comedy SaaS.”

    “If you were to really corner me, I would basically say I run a comedy SaaS.”
    — Sam Reich, [24:50]

• Organic Social as a Growth Engine

  • Clips on platforms like TikTok, Instagram, and YouTube Shorts drive most subscriber conversions ([28:09–31:16]).

    “The dominant [user acquisition method] is through organic social, meaning they’ve watched clips from our shows on largely Instagram and TikTok and YouTube Shorts.”
    — Sam Reich, [28:09]

• High Retention, High Engagement

  • Dropout’s focus on sticky, fandom-driven shows keeps churn low and engagement high.

    “What’s working... is that people subscribe and they stay subscribed...”
    — Sam Reich, [27:23]

4. Originality, Brand Control, and Content Strategy

• No Conventional Licensing

  • Dropout only hosts content they can actively market and run social for; traditional licensing dilutes the brand and doesn’t allow for Dropout’s social-driven amplification.

    “[If] we were to go license a mainstream show, there’s no way that they would allow us to power their social channels. So there’s no point to us doing that unless we get to do that.”
    — Sam Reich, [37:47]

• Production Scale & Company Structure

  • From 7 employees post-buyout to ~40 full-timers, with much talent on contract basis to enable nimble, project-based creative teams ([38:56–39:44]).
  • Emphasis on flexibility for cast and crew, resisting industry norms around exclusivity:

    “We are trying to position ourselves as everyone’s favorite second job, unless they don’t have a first job, in which case... we want for them to be very happy to be working with us...”
    — Sam Reich, [44:04]

5. Worker-Friendliness, Profit-Sharing, and the "Never Break Twa" Principle

• Profit-Sharing for Talent

  • Dropout offers straightforward profit share for key contributors; this is both an ethical choice and an artifact of not having outside shareholders to please.

    “The big one is probably this... basically, by hoarding money, you are satisfying someone. Which, like, we don’t have. There’s no one to satisfy.”
    — Sam Reich, [45:01–46:10]

• The “Menage Twa” Rule for Simplicity

  • Sam and Hank joke about business models getting unwieldy (“never break twa”), advocating for direct relationships between creator, platform, and audience whenever possible and resisting the temptation to add more complicating stakeholders ([06:06–06:52]).

6. Decision-Making, Leadership Challenges, & The CEO’s Role

• Priorities and Making Hard Choices

  • Sam references a Ruth Chang TED talk: big decisions are hard because pros and cons are balanced, and often it’s best to “just pick one.”

    “If you have your priorities in order, oftentimes the right decision will emerge.” — Sam Reich, [50:36]

• Public Persona & “Perfect Person” Problem

  • Being “the CEO who’s trying to do things the right way” means audience and staff expect exceptional conduct (the “perfect person problem”).

    “If you tell people you’re trying to do things well... people will expect you to do it perfect. And there’s no such thing as perfect.”
    — Hank Green, [59:25]

  • Sam’s approach: transparency about imperfection, commitment to decency, and comfort with criticism.

    "What I’ve claimed to be the case, and I really do still think is the case, is...I’m trying to, like, set maybe some new standards for decency, but I would underline that word.”
    — Sam Reich, [62:15]

7. Cultural Aspirations: Keeping Things Weird

• The Value of Weirdness
  • Sam sees Dropout as a platform for unique, unconventional comedy, aspiring to be a “walled garden of weird” akin to the spirit of early web series like Homestar Runner.

    “I wish that I could plant a forest full of weird trees on the Internet. I wish that the Internet was still a place where just, like, there was really fun, mysterious, hopeful stuff that existed a URL away. I would hope that Dropout can just be one of those things.”
    — Sam Reich, [64:15]

Notable Quotes

• “One of the intrinsic benefits of subscription is that you’re not starting your business over every year.”
  — Sam Reich, [04:46]

• “I went and I offered IAC $0... They would end up in the minority, the minority stakeholder. So it was sort of like idiot insurance for them.”
  — Sam Reich, [11:55]

• "The simpler your business is, arguably the better it is or certainly the more effective you can run it."
  — Sam Reich, [06:57]

• “We are trying to position ourselves as everyone’s favorite second job...”
  — Sam Reich, [44:04]

• “I, I feel really anti-pretentious about what this is... you want laughs, we will provide them for $7 a month.”
  — Sam Reich, [25:20]

• “I wish that I could plant a forest full of weird trees on the Internet.”
  — Sam Reich, [64:15]

Timestamps for Important Segments

• [03:00] — How Dropout originated under IAC and why Sam ended up running it
• [11:55] — The $0 acquisition and what really happened when CollegeHumor "sold" Dropout
• [13:26] — The timing of the buyout and COVID's impact
• [19:12] — The creative escalation of "Game Changer"
• [24:50] — Defining Dropout: “comedy SaaS”
• [27:23] — High retention and engagement as Dropout’s strategic driver
• [28:09] — Organic social as the subscriber funnel
• [38:56] — Company structure, full-time staff, and contractors
• [44:04] — Dropout’s approach to contractor/talent relations and non-exclusivity
• [46:10] — Profit sharing and not answering to outside shareholders
• [50:36] — How Sam makes decisions and keeps priorities clear
• [59:25] — Navigating the “perfect person problem” as a public-facing, idealistic CEO
• [64:15] — The aspiration to make Dropout “a forest full of weird trees”

Memorable Moments

• Hank and Sam’s recurring joke about the dangers of overcomplicating business models ("never break twa") injects levity into otherwise technical business talk.
• Sam’s candor regarding the $0 buyout and corporate realities post-acquisition demystifies the process of “taking control” in digital media.
• The discussion on profit sharing, second jobs, and keeping creative workers happy provides a rare look at ethical choices in a cutthroat industry.

Summary Conclusion

This episode offers a rare, conversational, and deeply insightful look into one of the internet’s most successful independent media companies. Sam Reich positions Dropout as a test case for the future of sustainable, audience-driven, weird internet comedy—and explains, in practical and philosophical terms, what it means to lead with creativity and ethics in a business that usually rewards neither. Listeners leave with a sense of both the business mechanics and the cultural aspirations of Dropout, and what might be possible as more “weird trees” take root on the internet.

[End of summary.]