Terry Carnation, and The Lean Sitcom Podcast Business Model

“Dark Air with Terry Carnation” is my new favorite podcast. It’s a fictional comedy about the redemption of a paranormal late night radio host, but it’s not just the content that keeps the show top of mind. Terry Carnation by Rainn Wilson could be a monumental example for how character creators can monetize the short and long tail of their creations.

It’s made by two creators, two producers, outsourced production assistance, six voice actors, and slew of guests. The weekly guests play characters who call into the show with paranormal issues like what to do when you find a dead witch in a wall during your house remodel, as well as, versions of themselves operating in Terry Carnation’s world (a great example being Nathan Fillion playing a hauntingly accurate version of himself at Comic Con).

Rainn Wilson is the co-creator and the star of the show. He decides what business his character does and does not do. Will Ferrell can go on to create a podcast as Anchorman because he is the co-creator on the character and the movies. While Jennifer Aniston and Courtney Cox made great money filming Friends and continue to get related business opportunities because of their work, they do not earn the same residuals from licensing agreements and do not have the right to create a podcast like “Rachel Green and Monica Geller Revisit Central Perk: Divorced and Ready to Mingle” or any other spinoff show, podcast, or really anything with the character. IMHO It’s better - or at least more likely to be true to character’s character - when the creator, and not the network, decide the fate of the character.

Rainn Wilson’s old Office co-stars via Office Ladies and The Office Deep Dive with Brian Baumgartner are walking this line in an interesting way, talking about their experiences in making The Office. It’s a viable way for an actor to monetize a past experience via podcasts, but it is not the actor playing the character in the present. If you can’t take a character to a new location, you don’t own it. Rainn Wilson on the other hand, if he wants to be a guest on a bunch of other podcasts acting as Terry Carnation, he can do it anytime. But more importantly, he owns the character and the concept so that if he wants to do a Terry Carnation movie, a Dr. Lizzie spinoff show, or turn Vernonica into the face of any spiritual pet products - that revenue and outcome is decided by the creator and not another entity. If you are looking to learn more about the value of owning characters, I highly recommend listening to this Planet Money podcast series on owning super heros.

According to its onsite credits, Dark Air’s core team is only about ten people. I’m unsure on the labor, distribution, and anything else provided by the outsourced production assistance of Imperial Mammoth, Audioboom and Kelly&Kelly. Either way, this lean team coupled with direct access to their fans (they choose when the publish), gives Dark Air “Lean Startup” vibes. A small podcast sitcom can produce episodes, learn from fans, and iterate on content or even produce new characters or shows much quicker than the traditional TV network sitcom model. Bill Wade, who has 15+ years ‘in the industry,’ summarized the makeup of a sitcom production as:

“For a major cable tv or broadcast network show it can easily number in the hundreds and sometimes thousands if it has multiple seasons. Consider the following: several producers, showrunners, dozens of cast members some with recurring roles others seen in only one show, writing staff can be dozens over several seasons and they have to be the very best for it to succeed, rotating episode directors, art direction teams, production designers, makeup artists, set designers, wardrobe and costume people, postproduction and editing staff (sometimes an entire postproduction company is put to work on a series/show including sound design, graphics, and editing as well as video editing)”

In 2020, Statista reported that 55 percent of US consumers listen to audio podcasts (up from 51 percent in the previous year), while 120M homes pay for cable and 62% of US adults pay for a streaming video service. So the consumer demand clearly remains higher for video shows than podcasts. But the margin isn’t as wide as it used to be. In the early 2000s according to BuzzSprout, only 22% of the adult population in the United States were even aware of what podcasting was.

We are still early days of the podcasting industry. People tend to think that the production approach of the early hits will be the production approach to future hits. Joe Rogan’s massive audience has convinced millions that a podcast structure should be deep winding conversations, and a top podcasters’ team is editing, scheduling, marketing, and business development (and whoever else Joe employs, I’m guessing from afar bruh). The interview style gave podcasting life, it will never die, but saying interviewing is the only way to make podcasts is like saying doing the news is the only way to make TV.

Serial’s breakthrough convinced many (new and experienced podcast listeners) that podcasting could be episodic. But Serial remained grounded in our nonfiction world. I think the majority of time watching TV is spent in the fictional world. Could fictional podcasts, centered around stories, characters, and scripted entertainment lead to another cataclysmic leap in podcast consumption? Some can certainly argue that people prefer topical informations in their podcasts - and that may be true right now - but I’d argue that the demand for fictional audio content is sizable and rising. Global Audiobooks Market estimated the audio book market at $2.67 billion in 2019 and expects it to reach $13.45 billion by 2027, growing at a compound annual growth rate (CAGR) of 22.4% during the period. Meanwhile, the global podcasting market size was valued at $9.28 billion in 2019 and is expected to grow at CAGR)of 27.5% yearly through 2027. I think fictional podcast series will thrive in the overlap of audiobooks and podcasts, meaning there’s a lot of potential to grow this lean sitcom-esque podcast production style.

Also, the ads are pretty clever. Sometimes they air during the actual Dark Air radio show within the context of the story, other times, they are just midplot like when Terry offers his therapist complementary MeUndies. His custom URLs are always “/Dark” which is short and direct. His customers will know if Dark Air creates customers for them. And they’ll get ad placements in content that will be listened to for a long time. Ideally, these direct relationships with sponsors make it easier to cover the upfront costs of creating new seasons, while retaining the long term business opportunities that will come Terry Carnation’s way. But the tradeoff is not selling the show up front for a large lump sum.

Do you think when The Office ended, the people who made the show anticipated that the viewership would be larger today than when it was airing? How about the people who own the streaming rights? Who knows how your character will resonate in the future? And who knows how you could generate future revenue on the next yet to be invented distribution channel? More than ever, it’s wise for talented creators like Rainn Wilson to hold on to their characters’ rights in the long run and find out.