I don't think their business model is reliant on THIS show being super-sucessful-- they're building a platform to sell to other folks who want to do live video over the web. Think Paris Hilton and porn (not necessarily two different markets).
This is EXACTLY what I've been saying. To me, thats just a testing/proving ground. Get some buzz about the idea, and then try to license it to reality tv shows/celebs/iraq war reporter/hot girls/anything else thats more entertaining than startup founders.