In a recent post entitled, “Moderate success is the enemy of breakout success”, Jason Calacanis explained why he’s closing the Thisweekin.com network. The network currently has eight (8) shows listed on their website. I think at one time there may have been twice as many but were eventually culled. I remember when they held open casting calls for hosts and news show were popping up every week.
I have kept a close eye on the progress of this web network from the beginning since I also have a great interest in the new possibilities the internet brings to traditional television/film content. I even visited the studios and appeared on one of the shows as an “Executive Producer”. ( For the record, “This week in…” is an awful name for anything.)
Jason defines the network as a moderate success but not a breakout success and therefore is giving the investors back their money. He cites the main issue with his network model as the inability to scale. Therefore, he states, “It just doesn’t make sense to invest in a business with this kind of limited upside.” I actually thought he started the project more as an experiment rather than a business needing and seeking venture capital.
DEFINITION OF SUCCESS
So, what did Jason consider a “moderate success”? Jason provided some numbers during a candid conversation he had with Chris Sacca on episode #291. Jason stated that they started the business with about 75-100k in equipment which just 10 years ago would have cost 2 or 3 million. Jason goes on to say that each episode of “This Week in Startups” brought in 3k in sponsorship money. Overall, this one show brought in 500k/year in revenue with about 100k downloads per episode.
I know Jason has multiple revenue streams for his “This Week in Startups” show. One revenue stream is the sponsorships which he personally delivers throughout each show. There’s also an affiliate link to Amazon which I am guessing brings in a very small amount of revenue. A third, and perhaps most significant revenue stream is the membership model. He created a “This Week in Startups” email list and closed forum for members to interact with him and each other. There are four different levels of membership:
Executive Producer – $200/month or $2,000/year
Producer – $100/month or $1,000/year
Associate Producer – $40/month or $400/year
Supporter – $20/month or $200/year
Each level of membership includes a different set of benefits. This membership model and really the entire show proves out to me the theory of Kevin Kelly’s “1,000 true fans”. I’m guessing Jason would agree. However, Mr. Kelly’s now famous blog post was focused on solo artists or creatives. Those folks who would be happy to continue to be able to produce their “art”. Mr. Calacanis on the other hand is a tech/content entrepreneur interested in a business that can scale.
PROBLEMS WITH THE NETWORK
This was a very hard decision because we had all these ‘signs of life’ and critical acclaim. However, the truth is the long-form podcasting business works under a small set of circumstances:
* A host who is very notable (like Kevin Pollak, Leo Laporte, Adam Carolla, Kevin Rose or Mark Suster) in their industry.
* A notable host who is willing to work five or 10 hours a week on the show for three or four years to build a respectable audience.
* A notable host who is willing to work three years for five to 10 hours a week with little or no expectation of compensation!
I had not realized Jason viewed the business as “podcast Network”. The description on the website calls it a “web television network”. I think that description is more accurate. I thought of it more as a starting point; with initial focus on the interview format. It makes a lot of sense to focus on a “Charlie Rose” style interview shows. Obviously, the cost can be very low with this format.
CONTENT IS ALWAYS KING
Jason’s “set of circumstances” all have one thing in common – a “notable host”. By “notable”, he is downplaying the most important part of a successful interview show – the talent of the host. He states his show, “This Week in Startups” and Kevin Pollak’s show as two of the stand outs of the network. Both of the shows will continue. Both are very good at hosting their respective shows. So, in theory – maybe the network failed based on the hosting talent of the other shows? Surely, you can not expect every host to be “notable” at the outset of a web-only network with a small audience. The trick was to find enormous talent to fill those roles. Easier said than done.
Very, very few podcasts have made it to scale, and to me that says this business will never be big. Why? Well, you need folks like Leo or Adam to make millions of dollars and have breakout success, but if they decide to stop doing their show, the networks will shutter. That simple.
It just doesn’t make sense to invest in a business with this kind of limited upside.
What Jason is saying above is that unless you have something worth watching, people won’t watch. What did he expect? Of course, you need talented folks on screen. Of course, you need incredible valuable and/or entertaining content! Of course, if Leo or Adam leave their respective shows – they will fail. This is the content business.
Producing great content is not only mandatory to make it on the Web it’s even more important than in the past. I would argue there’s more great content in all forms now than every before… therefore making it extremely competitive in finding an audience.
“This week in Startups” was supposed to exploit that intersection between content and technology… not just produce content for the web. Where was the innovation in using the new medium to it’s full potential?
STILL TOO EARLY
I think it’s still early in regard to producing content and having easy distribution to the average viewer. I can not conveniently watch any “This Week in…” shows on my television at home. This day is coming however… and that’s when the real fun begins.
“This week in Startups” provides Jason with the ability to meet entrepreneurs and engage in important conversations. He does seem to really enjoy it. I do enjoy the content and know others do as well. These are also definitions of success.