There are things that newsletter writer Kirsten Han misses about Substack. They just aren’t enough to outweigh the drawbacks.
She didn’t like how the platform portrayed itself as a haven for independent writers with fewer resources, while offering six-figure advances to a number of prominent white men. The hands-off content moderation policy, which allowed transphobic and anti-vaccine language, didn’t sit well with her. She also didn’t like making $20,000 in subscription revenue and then giving up $2,600 in fees to Substack and its payment processor.
So last year Ms. Han moved her newsletter, We, The Citizens, to a competing service. She now pays $780 a year to publish through Ghost, but said she still made about the same from subscriptions.
“It wasn’t that hard,” she said. “I looked at a few options that people were talking about.”
Not long ago, Substack chased mainstream media executives, stripped their star writers, lured their readers and, they feared, threatened their viability. Strong with venture capital, the start-up would be ‘the media future’.
But now Substack is no longer a child prodigy, but a company facing numerous challenges. Depending on who you talk to, those challenges are either standard startup growing pains or threats to the company’s future.
Tech giants, news outlets and other companies have launched competing newsletter platforms in the past year. Consumers who loaded newsletters during the pandemic began to scale back. And many popular writers left, such as the associate professor of English Grace Lavery and the climate journalists Mary Annaise Heglar and Amy Westerveltoften complain about the company’s moderation policies or the pressure to deliver constantly.
“Substack is at a turning point where it has to think about what it will be like when it grows up,” said Nikki Usher, an associate professor of journalism at the University of Illinois Urbana-Champaign.
The good news for the company, which will be turning five this summer, is that it is still growing. Paid subscriptions to its hundreds of thousands of newsletters exploded from 50,000 late last year to more than a million by mid-2019 (The company won’t disclose the number of free subscribers.) A recruitment wave hopes to bring in more than a dozen engineers, product managers and other specialists. Executives eventually hope to make the company — which has raised more than $82 million and is reportedly worth $650 million — public.
But to sustain that growth, Substack executives say, the company needs to offer more than just newsletters.
In an interview at Substack’s downtown San Francisco office, the co-founders spoke in sweeping statements about the “great Substack theory” and “master plan.” Chris Best, the chief executive, described a desire to “change the way we experience culture on the Internet” and bring “art into the world”.
“Substack in its fullest ambition is kind of an alternate universe on the Internet,” he said.
In practice, this means that Substack will not only become a delivery channel for written newsletters, but more of a multimedia community. Executives want users to create “personal media empires” using text, video, and audio, and communicate with subscribers through extensive comments which may contain GIF images and profiles for readers. This week, Substack announced new tools for writers to recommend other newsletters.
Jairaj Sethi, co-founder and chief technology officer, described a vision of subscribers gathering around writers like fans at a concert.
“If you just give them a place to get together and hang out, it creates a pretty cool kind of bond,” he said.
In March, Substack introduced an app that consolidates subscriptions into one place instead of distributing them separately via email. This month, the company announced an expansion of podcasting.
“From the start, we wanted the company to do more than just subscription publishing tools,” wrote Hamish McKenzie, co-founder and chief operating officer of the app.
But as Substack evolves beyond newsletters, it threatens to look like any other social network or news publisher — which could make it less appealing to writers.
Ben Thompson, whose tech-focused Stratechery newsletter inspired Substack, wrote last month that Substack has turned behind the scenes from a “Faceless Publisher” in an effort to “put the Substack brand front and center,” building its app as a destination. on the backs of writers.
“This is a way for Substack to get rid of their popularity to build an alternative revenue model where readers pay for Substack first, and publishers second, rather than the other way around,” wrote Mr. Thompson.
Publishing to Substack is free, but writers requesting subscriptions pay 10 percent of their earnings to Substack and 3 percent to payment processor, Stripe. The company also offers hefty advances to a small group of writers, whose identities it refuses to disclose.
Substack has one key difference from most other media companies: it refuses to chase advertising dollars. †Over my dead body‘ Mr McKenzie once wrote. “The antithesis of what Substack wants to be,” said Mr. Best.
“If, through greed or error, we got into that game, we would basically be competing with the TikToks and the Twitters and the Facebooks of the world, which is just not the competition we want to be in,” added the Mr Best to it. †
This means that Substack remains dependent on subscription revenue. Subscribers pay more than $20 million a year to read Substack’s 10 best writers. The most successful is history professor Heather Cox Richardson, who has over a million paid and unpaid subscribers. Other notable writers include knighted novelist Salman Rushdie, punk poet laureate Patti Smith, and Eisner-winning comic book writer James Tynion IV.
Emily Oster, an author and economics professor at Brown University who has been divisive in dealing with the pandemic involving children, joined Substack in 2020 after Mr. McKenzie recruited her. Its newsletter, ParentData, has more than 100,000 subscribers, including more than 1,000 paying readers.
“Substack has definitely become a bigger part of the media landscape than I ever imagined,” she said.
But Dr. Oster’s main sources of income remain her teaching and her books; a large part of its newsletter revenues goes to editorial and support services. Most users struggle to support themselves by writing solely on the platform and instead use their earnings to supplement other paychecks.
Elizabeth Spiers, a Democratic digital strategist and journalist, said she gave up her Substack last year because she didn’t have enough time or paying readers to justify her long weekly essays.
“Plus, I started getting more paid jobs elsewhere, and it didn’t make much sense to keep posting stuff on Substack,” she said.
But Substack’s biggest conflict was over content moderation.
Mr. McKenzie, a former journalist, describes Substack as an antidote to the attention economy, a “nicer place” where writers are “rewarded for different things, not throwing tomatoes at their opponents.”
Critics say the platform recruits (and therefore endorses) provocateurs of cultural wars and is a hotbed for hate speech and misinformation. Last year, many writers left Substack because of its passivity to transphobic content. This year, The Center for Countering Digital Hate said anti-vaccine newsletters on Substack generate at least $2.5 million in annual revenue. Technology writer Charlie Warzel, who quit a job at The New York Times to write a Substack newsletter, described the platform as a place for “internecine internet beefs.”
Substack has resisted pressure to be more selective about what it allows on its platform. Twitter employees who feared content moderation policies would be relaxed by Elon Musk, the world’s richest man and the platform’s largest shareholder, were told they were don’t bother applying at Substack.
“We don’t aim to be the referee by saying, ‘Eat your veggies,'” Mr. Best said. “If we agree with or like everything on Substack, that wouldn’t satisfy what a healthy intellectual climate looks like.”
Substack makes it easy for writers to break away, and defectors have a burgeoning collection of competitors waiting to welcome them.
Over the past year, newsletters have appeared from Twitter, LinkedIn, Facebook, Axios, Forbes and a former Condé Nast editor. Last year, The Times made several newsletters available only to subscribers. mr. Warzel moved his Galaxy Brain from Substack to The Atlantic as part of his November newsletters.
The Ghost media platform, billed as “the independent Substack alternative,” has a concierge service to help Substack users transition their work. Medium has scaled back its editorial publications to pursue a more Substackian model of “supportive independent voices.” Zestworld, a new subscription-based comics platform, has been dubbed “Substack without the transphobia.”
Mr Best said he welcomed the rivalry.
“The only thing worse than being copied is not being copied,” he said.
