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MX News Update 2024

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The 2023-24 Escape Collective Transparency Report

Wade Wallace

Note: This is an update to our initial six-month Transparency Report. Our next full-year report, covering March 2024 to March 2025, will be released in April 2025.

It’s been one year since we launched Escape Collective and we wanted to give you an update on where we’re headed and provide a level of transparency that I hope you, our members, will appreciate. It’s your money that’s built this, after all.

Purpose of this report

We feel a responsibility to provide a level of transparency to our members who directly fund our operations. We aim for this report to give you insight into our business operations, how we intend on becoming a sustainable business, and how we aspire to be the largest and most impactful cycling community in the world.

This report covers the time period between March 2023 and March 2024, the 12 months since we launched Escape Collective.

This report is broken down into the following sections:

Overview and background

Escape Collective is a business dedicated to showcasing the most beautiful sport in the world – cycling. We believe that a cycling publication should not live or die by its ability to sell you other company’s stuff. We value our independence, and that cycling media shouldn’t be 100% reliant on the industry whose sponsorships, products, and athletes we aim to cover with honesty and integrity. 

We are built on the premise of independence. We answer to our members and are guided by their feedback and interests. 

You can read our founding story here.

Mission statement

To inform, inspire, entertain, connect, and improve the lives of people around the world through our common love of cycling and the power of the bike.

Vision

To be the world’s largest and most significant cycling community.

Values

  • Our members are the center of our universe. 
  • Independence: As a member-led organization, we are proudly independent, allowing us to operate fully in the best interests of our community. 
  • Inclusivity: Whoever you are, whatever kind of bike you ride, and however you like to ride it, we will welcome you as a member.
  • Comprehensive: We provide a wide range of content and services to inspire, educate, and entertain our members to be the best people on bikes that they can be.
  • The highest standards: In everything we choose to do, we do it to the best of our ability and creativity, in service of our members. 

Company

Investors

Before embarking on this endeavour we did a small friends and family fundraise to ensure we made it past the first couple of years. That money would ensure that we have the cash flow to sustain operations given the nature of starting this business and the staggered revenue that results at the beginning of our financial model. 

The business is currently not trading profitably, but we we forecast member growth and costs to position us for break-even in 2025.

Without this seed money we could not have started this business with a minimum viable product (i.e. our editorial team) and the foundational elements that will allow for future success.

Governance

We have decided that at this stage of the business we will not assemble a non-executive board. We are not burning significant amounts of cash such that we need extra oversight and governance. We also want to remain nimble, keep administrative overheads to a minimum, and refrain from taking cash out of the business for external board member involvement. 

We have formalized an Advisory Board who we meet with monthly to challenge our thinking, provide guidance on difficult decisions, offer practical advice, keep us accountable, and keep us on track with what’s best for our stakeholders. This Advisory Board is comprised of David McQuillen and Mark Wells at this time, and we are searching for one more person who has expertise in the area of media to join this board. 

We have a Financial Controller working behind the scenes who knows our business well. He was our Controller in our former business also. He not only has experience and expertise in analysing our financial performance which help guide our decisions, but he creates the necessary systems, processes, and checks and balances for sound financial discipline.

High-level roadmap

Our first year goals were modest. We wanted to:

  1. Establish the community and set the foundation for the business.
  2. Establish the Escape website, podcast network, build and launch our fantasy competitions.
  3. Launch editorial operations in road cycling (podcasts/website), cover XCO World Cups and MTB tech. 
  4. Establish a team for all critical roles.

We achieved all of this and more. We also recently held our first Member Summit, and also launched Classifieds and a daily game called BikeGrid which we’ll speak more about below.

What we aim to accomplish in year two:

  1. Increased editorial coverage in gravel, MTB, and industry reporting.
  2. Execute and build upon the foundations laid in year 1. 

Financial summary

As stated above, we are not yet profitable. We have made it through our first 12 months but are still in a vulnerable stage of the business. 

Most of what we do is on a shoestring budget. We work remotely. Travel costs are usually offset by piggybacking onto product launches or other events. Staff remuneration is something we prioritize while balancing the need for new staff to grow into new areas. That is to say, your membership dollars directly fund job creation. 

In the 12 months of our existence, nearly 100% of our revenue has been generated from our members. We could not exist without our member’s support as we rely on their contribution to directly fund our editorial operations and the vision towards our future. 

At this time our only other small source of revenue is merchandise, which has a 30% gross margin (which is low) because we have chosen to use print-on-demand suppliers. This means we don’t need to worry about exposure to stock or carrying out fulfilment. It might not be the large selection that we desire, but e-commerce is not our core business competency and our scale will always be too small for this to be a meaningful revenue source. We think of merchandise as a marketing opportunity that’s absolutely important to us, but not an area of dependency for revenue.

As we are a private company that is very young, we prefer to not publicise our financial statements. We also prefer to keep our member numbers private for the time being as this is a fairly meaningless scorecard. We don’t want to get into the game of publishing vanity numbers and employing all the tricks available to make our membership look as large as possible. We focus on cash in the bank, because this is our lifeblood. Our goal is to achieve profitability, reinvest back into the business, and serve our members for years to come.

As of March 2024, our member split is 2% lifetime members, 80% annual members, and 18% monthly members. 

We began with only lifetime and annual memberships available as it was necessary for our front-loaded cost base to get the business up and running. We were happy with how this started, however we knew upfront that annual memberships were not the norm in many areas of the world and we would see more signups with monthly memberships. In July, after yearly memberships began to slow, we offered monthly memberships as well as a more affordable tier that doesn’t include the community-based benefits. We did this because we knew that many people don’t have the time or desire to take part in our community activities, but still want to consume our content and support what we do. 

We also acknowledge that purchasing power in different countries varies. Outside of key markets (see below for details), one of our larger readerships is in South Africa, and we also have large audiences in regions such as Asia and South America. We have adjusted our prices in these regions to make memberships more affordable to those local currencies. 

Before we started we conducted a pricing survey using the Van Westendorp Model. Our prices landed where they are now, which wasn’t a surprise but was nonetheless valuable  to have a method that supported our assumptions. 

We have not yet discussed price increases in future years, but this will be something we monitor closely. Many of our large cost centres (IT, staff, subscriptions) push increases onto us each year, so it’s something we need to cover. If we can offset cost increases by way of other revenue sources (such as commercial partnerships/advertising) we will consider those if it means that we can deliver a better product with no price increases.

Operating expenses

Our largest OpEx (operating expenditures) are staff salaries and a small amount of travel. These accounted for 73% of our cost base.

The other significant portion of our OpEx comes from IT costs. This includes development of our website, hosting costs, our member management system, payment gateway fees, etc. 

Legal costs required to set up the business were considerable at the time, but a worthwhile investment. This ensured we were working within previous employment contracts and obligations, which we treated with great respect and seriousness. Legal admin (shareholder agreements, registration, ESOP scheme, etc.) and accounting fees behind establishing the business were also significant upstart costs.

We operated without an office in the first six months, but now we have one desk at a shared office space so we have a place for collaboration for those in Melbourne. We consider this a modest expense for the importance of seeing each other face-to-face and the culture that builds. 

In terms of budget, we are almost exactly on target in terms of OpEx, CapEx (capital expenditures), and revenue projections. We have overspent in some areas that we did not expect to be so costly, so we have cut back on others. Among those cuts are travel costs and we have also cut back on freelance budget as we did not find that it was an efficient use of money and resources at this stage of the business. 

Cost breakdown

Financial objectives and goals

As mentioned previously, we are not yet profitable. Nearly 100% of our revenue comes from membership dues and this does not yet cover our staff costs. 

We do not have a lot of cash to burn, so we have budgeted our increasing costs and forecasted our member growth such that we will come close to breaking even by 2025. 

After we are profitable we will continue to reinvest our profits back into the business for the foreseeable future. 

Once we are profitable we also intend on implementing an employee bonus plan where employees share in the success of the business. The details of that have not been finalized yet, however. We need to reach the most important milestone first – to make a profit. 

Employees

We currently have a total of 17 staff and regular contractors. These are comprised of our editorial team, along with a support team.

As a proportion of our overall staff, we invested early in creating a team and infrastructure around a positive membership experience and setting up this part of the business for success. This operations team comprises five of our 17 people (~17% of our cost base).

Staff:

Wade Wallace (CEO)
Caley Fretz (Editor-in-Chief)
Andy van Bergen (Head of Membership)
Dane Cash (Reporter)
Lou Hudec (Financial Controller)
Matt de Neef (Senior Editor)
Jase de Puit (Head of Platform/Product)
Denis Dorushchuk (Web Developer)
James Huang (Head of Tech)
Joe Lindsey (Managing Editor)
Jonny Long (Senior Reporter)
Ronan Mc Laughlin (Tech Editor)
Jared McClintock (Member Satisfaction)
Abby Mickey (Reporter)
Kit Nicholson (Weekend Editor)
Dave Rome (Tech Editor)
Iain Treloar (Senior Reporter)

Regular contributors

Kate Wagner
Andy McGrath
José Been
Allen McCubbin
Rupert Guinness
Rob English
David McQuillen
The Secret Rider

We have made a conscious decision to not invest in an advertising operation going into our second year, which would typically include sales staff, account management, and operations staff. This may eventually come, but not until we feel like we’ve executed on our membership experience to our satisfaction. 

We see future commercial partnerships being a small but meaningful part of our overall revenue. This will help with one or more of the following:

  1. Build or strengthen services for our members.
  2. Help fund more content diversity.
  3. Help us produce content with expertise, access, or experiences that we couldn’t otherwise do without the partnership.

Volunteers 

One of the best things about the Escape Collective community is the volunteers who do so many jobs behind the scenes. We’ve had many offers for assistance in various areas of expertise and we apologise for not being able to take everyone up on their offers.

For those who we have been able to work with, we would like to thank the following:

  • Dhruv Chanchani and Jonah Jolly: Fantasy app frontend design
  • Luke Beuchat: Fantasy app backend design
  • Tom Clayton: Branding, website design
  • Hannah Nicklin, Luca Malatesta, Tom Javoroski, and Frank: Discord mods
  • Robert Merkel, Mark Steinwachs, and Jasper Croome: Zwift weekly ride leaders
  • … and many others in less frequent and less formalised roles, but that are just as important.

Operations

Editorial

Our core product is the content we create. The number one reason our members are here is to support this. In the past 12 months we’ve created over 2,000 stories and podcasts.

It’s frustratingly difficult to ascertain whether a single article brought in new members or not. Single articles give us very little information about what works from a content strategy perspective. Often it takes a number of touch points in the user journey to convert a reader to a member. We are starting to get an idea of what types of content converts to membership, but even big investigative pieces or original reporting do not result in as many direct conversions as we’d expect or hope for. 

If you’re curious about what our top 10 most-read articles in the past 12 months were, here they are:

  1. Things bike fitters wish all cyclists knew
  2. Things mechanics wish all cyclists knew about their bikes
  3. Jumbo-Visma will improvise Wout van Aert’s exit
  4. How did the bike industry get into such deep trouble?
  5. Behind F1’s Velvet Curtain
  6. Jumbo-Visma’s odd doping clause 
  7. Pinarello has been sold 
  8. It’s official: the pandemic bike boom is over
  9. The peloton reacts to Cavendish’s Tour exit
  10. The debrief: Analysing that Tour time trial

If we look at our various general content categories, we can clearly see that tech, industry, opinion/analysis, and performance content yields the most traffic and members per story. But the volume that lies in the news content is what keeps people coming back daily, and what makes our paywall work.

We do not see any conversion trends attributed to our content except for that commodity news does not often convert. However, what we do and what we don’t do is not completely guided by these stats. Perhaps the only thing we can determine is that the value we provide exists as an entire package and the whole is greater than the sum of the parts.  

We will continue to experiment and refine our paywall rules such that it does a more effective job of converting readers to members. 

Podcasts

In our 2023 survey, one of our main goals was to find out what content our members value and keeps them engaged. Overwhelmingly, podcasts were cited. 

Podcasts were always important to us, but we previously put far more effort into our written content than our podcast shows. None of us have any professional experience in radio or podcasting, and up until six months ago we were basically just winging it.

With this feedback we have embarked on efforts to make our podcasts far better. This doesn’t mean getting better mics (which we do sometimes need); it means investing in training/coaching on hosting and format designs, better planning, better post-production, and more projects (such as our Industry podcast series).

What this also means is that we’ve begun testing methods to better convert podcast listeners to members. We will do this in two ways to see a return on our investment:

  1. Continue to provide bonus episodes of Geek Warning and Wheel Talk to our members.
  2. Continue to publish the full version of the popular Performance Podcast to members only.

For many reasons, podcasts are very difficult to convert listeners to members. This is mostly because of the environment people consume the content in (i.e. while doing something else, which makes it difficult to get them to stop, go somewhere else, and subscribe). However, the techniques above have been relatively successful so far. The dilemma however is that while we want as many people to hear our podcasts as possible, we also need to be paid for it. Advertising used to be the answer to this, but is not a feasible nearterm solution for us.

As of March 2024, we have seven podcast products:

  1. Placeholders weekly show + bonus episodes
  2. Geek Warning + bonus episodes
  3. Wheel Talk + bonus episodes
  4. How the Race Was Won
  5. Overnight Success
  6. Rest Day with Jack Haig
  7. Performance Process

Obtaining good data insights for our podcasts is also difficult. Podcast platforms do little more than show how many downloads a podcast has gotten and what the completion rate is. In the next quarter, we will be sending out a survey from our listeners to better understand how they consume our podcasts, how they feel about the various shows, and what their appetite is for more. 

Lead generation

Creating good content is our most effective form of marketing. On-site paywall mechanisms and email promotions are our most effective means of generating leads and converting readers to members.

We have spent a small amount of money experimenting with social media campaigns but they’ve ultimately shown that they’re ineffective for our type of business. 

We’ve run many other types of campaigns, but the most effective was a $1 membership trial during the 2023 Tour de France. We managed to retain 77% of those who signed up, as full members. Offering trials and moving our free audience from the unknown to the known appears to be the most effective way to get people to experience our content and community, and convince them that being a member is worth their hard-earned money. 

In Q3 of 2023 we experienced a concerning plateau in our member growth and made substantial shifts to turn that around. In many cases this meant pairing podcasts with bonus episodes and creating newsletters in order to give something substantial to specific audience interests. Fortunately this worked and we saw healthy member growth in Q4 2023 and Q1 2024. 

Classifieds

Earlier this year we launched our Classifieds site. Although we didn’t announce it before it was built, it had been on our roadmap since the beginning.

The market need for a better C2C (consumer to consumer) buy and sell in the road and gravel space definitely exists. Facebook marketplaces are excellent for locality and the platform is ubiquitous, however it has many shortcomings. Scams and searchability are the two places we identified that we could do better.

The nature of a marketplace means that we decided to not limit Classifieds to members. The more buyers and sellers there are, the better it works for everyone. This meant creating a free service for everyone, with paying members being ‘Verified’ as a signal of trustworthiness, giving benefits for all buyers and sellers.

The other reason for creating Classifieds is that we’re very aware not every cyclist in the world is a news and reviews enthusiast like you may be. Offering a service that is relevant to nearly every cyclist out there is important to our mission of connecting the bike world.

As a ‘top of funnel’ activity, Classifieds allows people to discover us, and perhaps one day become a member through the various touch points we put in front of them if they become interested.

Games – BikeGrid and Fantasy

Connecting people in the cycling world through content and services is what we aspire to do, but this is not limited to creating traditional media (reporting, stories, podcasts, reviews, etc.)

Fantasy competitions have proven to be a wonderful way to give our race previews and results some utility to the people who play. It also gives people a stake in these races they wouldn’t otherwise have without these competitions to play with their friends and fellow members.

We launched with our Fantasy competition and scrambled to get it ready for the 2023 Tour de France. Thankfully, due to some hard volunteer work, we got our Fantasy app up and running and working well for future competitions. 

Our BikeGrid game was something that we did not have specifically planned, but we were keeping this type of game on our radar in case we found what we were looking for. This was it.

Grid games are popular in mainstream sports, but cycling has never had anything like it that we’re aware of. 

The purpose of BikeGrid is simply to provide a service that people can share with each other, play together, and challenge their understanding of pro cycling. 

BikeGrid also acts as a top-of-funnel activity for people to discover Escape Collective and have something relevant for them. If we do our jobs well, they will also become interested in our content and eventually become a member.

Challenges

Our biggest challenge is understanding what drives readers and listeners to become members and their user journey. We know that in the absence of heavy promotional efforts, member acquisition basically stops. We do not have sophisticated audience segmentation tools (or the personnel and technology) to allow for more targeted promotions and good data to make decisions on. As discussed above, with podcasts being our most popular channel, it is difficult to move free listeners to becoming paid members or collect any data to make decisions on. 

Our second challenge is awareness and reach. As the world moves increasingly towards social media we feel inclined to have more presence on these platforms. However, putting too much time and money into social media does not add value to our members, and offers a very questionable ROI when we consider how effective it would be in eventually pulling across an Instagram or TikTok user towards becoming a member.

For now, we have chosen to put minimal effort into social media activities and concentrate on making the best content we can. We’ve seen countless times before that great content gets shared organically, so that’s what we’ll focus on. 

Our members

Member retention

A large portion of our members signed up before we even launched, so it is extremely important for us to keep a pulse on how our members feel about the job we’re doing and if they intended on staying around. Otherwise it could lead to disastrous consequences for us.

Far earlier than anticipated, we hired for a member support / retention role as we expected that problems might occur, and we were not equipped to handle the potential for hundreds or even thousands of issues and feedback, while also proactively making sure our members were sufficiently engaged and that we were keeping our promises to our members. We operate under the premise that keeping a member is far more important than getting a new one, so we feel this investment is money well spent.

Survey/feedback/NPS

In July 2023, we designed and sent out our first of many member surveys. From this, we wanted to do three things:

  1. Find out the primary reasons why our members joined. 
  2. Find out what content our members value, and what can be done better.
  3. Establish our Net Promoter Score (NPS) which is a strong indicator of member retention when renewals come up. We wanted to do this early so that we had time to fix things if we weren’t hitting the mark.

What we discovered was the following:

1. Members joined to support independent journalism; to access the work of beloved editors they knew from previous outlets; to help form or join a community of like-minded members.

2a. Members value tech, investigative journalism, racing news and insights, and editorial that was an expression of the unique EC voice (Tangents from Iain, Kate’s expositions, Jonny’s Spin Cycle).

Also, there was a strong indication that members were returning to the site frequently to check for content that would catch their attention (34% visit the site seven or more times per week; “New content that interests me” was the second most common reason given.)

2b. Podcasts are hugely popular amongst members (38% listen to at least three episodes a week) and a top lead generator/referral source. Based on qualitative feedback, podcasts were somewhat polarising when it came to quality and the topics covered/areas of focus. The takeaway was that members were mostly satisfied with the foundations and looking forward to us maturing these products.

3. Our NPS score is +65, which in absolute and relative terms is exceptional. An NPS score above +50 is considered to be excellent and the benchmark in our industry is +39.

Finally, we combed the qualitative feedback for issues and concerns raised by members and responded to, addressed, or discussed the issues raised (for resolution or better understanding).

Discord

The primary way members connect with the Escape Collective staff and with each other is through our member Discord server. 

Discord is a lively social platform where our members discuss racing, get advice, speak with staff about various topics, chat with each other about common interests (sometimes not even cycling related), and where we host our live podcasts. It’s incredibly powerful and important to us.

The Discord community and the Discord platform are polarising. There are thousands of members who are active on this platform which understandably creates a cacophony for those unfamiliar with how to use it effectively. We will forge ahead with using Discord as our community platform, but we will work to improve the experience as best we can. We’ll do this by:

  1. Improving the onboarding of new members.
  2. Finding ways to tame the chaos and the sense of feeling overwhelmed.
  3. Fostering an open and inclusive community where members can learn, contribute and thrive.
  4. Continuing to educate users on how to effectively use the platform to its advantages. 

Member renewal cliff

In our March 2023 launch, when enough members signed up to give us confidence we could get up and running, we had a unique situation where a large proportion of our revenue came in all at once. Just as March 2023 was ‘do or die’, March 2024 was the same. The member survey above would help inform us of our position with our founding members, and afforded us time to improve before the renewal cliff.

Our first big renewal period (March 2024) is now behind us and we are happy with the results. Approximately 7% of our founding members churned, which was roughly what we expected. We knew that our friends, families, and general supporters would become members to see us get off the ground, but they wouldn’t carry on since they’re not our core members. We also lost members because of passive churn, such as credit card failures, a change in financial situation, or because they’ve lost interest in cycling.  

We’re aware that we’ve churned members who haven’t been satisfied with our product, and improving so that we get those people back and attract more members is something we will always be working towards.

About our members

Through surveys conducted we have identified that our members (on average): 

  • Lead a healthy lifestyle.
  • Are highly affluent.
  • Are well educated.
  • Are socially aware.

Demographics are:

  • 70% male, 30% female.
  • Between 25-54 years old.
  • 50% have an individual income of over $100,000 per annum.
  • 80% have a university or postgraduate degree.
  • 80% ride over three days per week.

Geography top 10

The top 10 locations our members come from are the following:

Community activities

We currently have a number of ways of engaging the Escape Collective community with our staff and with each other:

  1. Weekly Zwift rides.
  2. Our private Discord server.
  3. Fantasy competitions and BikeGrid.
  4. Our comments section.
  5. Our members newsletter.
  6. Member Summit.

In April 2024 we held our first Member Summit in Belgium. The purpose of this was two-fold:

  1. To host a physical meet-up where we could spend time with our members and experience some bucket-list moments together. Some 27 guests joined us to ride the historic roads of Belgium and watch the Tour of Flanders and Paris-Roubaix, which was one of the highlights of our first year. You can read more about that here. 
  2. To afford to pay for an Escape Collective employee off-site. Many of us have never met one another in person and it was incredibly important that we get together to discuss and set the priorities of the business and have time to connect. This was the best way our profits from the Member Summit could have been spent as it was very productive. 

We aim to have more community services in the future, which we’ll carefully consider as we move forward.

Future outlook and goals

The longterm vision for Escape Collective is to become the largest and most impactful cycling community in the world. We will do this through creating the best content possible and providing services that connect, inform, entertain, and inspire our members. 

In the past 12 months we have laid the foundation for that to eventually happen, and the next 12 months will be executing on the things we’ve built. That means building out more niches we see as important to cover (gravel, mountain biking, and industry reporting) as well as making Fantasy, BikeGrid, and Classifieds the best and most useful products they can possibly be. 

Internally, our priorities are mostly centred around building a strong and high-performing team culture, and ways for us to embrace experimentation with different storytelling techniques, mediums, and formats.  

The groundwork we’ve laid is intended to get us to profitability in 2025 so that we can invest more back into the business – which will deliver you a better product, as well as reward our employees for their hard and creative work through a bonus plan. 

Call-to-action for members

Year two marks a pivotal moment in our journey – this is a make-or-break period for our future. Here’s what you can help us with:

Share your feedback: We welcome your thoughts, suggestions, and constructive feedback on our operations, initiatives, and performance. You can share your feedback through our Discord server or by emailing us at one of the addresses at the bottom of the page. We will also be performing surveys in the coming months and your feedback will help us improve. 

Take on volunteer, intern, and job opportunities: For those interested in contributing your time and skills in places we need help with, we would love to hear from you. Visit our careers page for information on our full time job opportunities.

Collaborate on projects or partnerships: We are always open to exploring collaborative projects or partnerships with stakeholders that align with our mission and values. If you have an idea or proposal, please reach out to us at one of the the email addresses below.

Tell your friends: On account of you being a member, you are our most powerful advocates. We cannot do this without you and simply sharing our articles, podcasts, games, and Classifieds goes a long way. 

Our members’ input is what guides Escape Collective’s direction and we welcome your voice. We’re proud of the business we’ve built in this short amount of time, and we couldn’t have done it without our members’ trust in us, valuing our work, and putting their money where their mouth is. Where we are now is nothing like where we want to be. There will always be room for improvement and we welcome your constructive feedback, advice or help that you would like to offer.

Thank you for your continued support. 

The Escape Collective team

Join us in a live Q&A session on Tuesday, May 14 at 12:00pm AEST | Monday May 13, 7pm PST | 2am, May 13 GMT (we’re sorry Europe!) where we will speak about the direction of the business, answer some of the most frequently asked questions from our members, and cover anything you have for us during that time.

Participants

Wade Wallace, CEO
Caley Fretz, Editor-in-Chief
Andy van Bergen, Head of Membership

Prior to this, we will be on our Discord server collecting and answering questions in the #transparency channel from May 9, 2024. If you would prefer, you can email us at (email protected), (email protected), or (email protected) but please note that we may not be able to respond to all emails if the volume is high.

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