It’s rare that a private media company opens up about its financials, so I was surprised that Nick Quah, in an interview on the Longform podcast, did just that. Quah launched Hot Pod, a newsletter that covers the podcast industry, back in 2014, and he ran it as a side hustle while working at media companies like Business Insider, BuzzFeed, and Panoply. About three years ago, he quit his Panoply job to work on Hot Pod full-time, and he monetizes it through a combination of paid subscriptions and classified ads. The newsletter is mostly a one-man operation, but recently it’s worked with a few freelancers and entered into a business partnership with another newsletter.
In the Longform interview, host Max Linsky asked about Hot Pod’s business model, and Quah revealed that it generates $150,000 a year (not counting what he makes from various side gigs that stem from the newsletter). What’s more, Quah stated that his highest annual salary while working at a media company was $57,000.
Looking at it one way, you could conclude that Quah found his calling with running Hot Pod, and his financial success stems from his hard work in building the newsletter. And that certainly is true. But I also can’t help but look at the gulf between what he was paid while working at traditional media companies ($57k) and the income he generates from Hot Pod ($150k) and draw some larger conclusions about the state of the media industry.
For the past decade, we’ve been treated to the near-constant narrative that the industry is in sharp decline. Local newspapers have shut down at an alarming rate, with many of those still in existence shedding employees in round after round of layoffs. National publishers like Time and Fortune have struggled to find a footing and were sold off to billionaires. Even digital natives like BuzzFeed and Vice have stumbled, causing most venture capitalists to hit pause on their media investing.
But, as I’ve argued in the past, I think it’s wrong and reductive to measure the health of the media industry by only considering the health of traditionally structured media companies. Ever since the birth of Web 2.0, we’ve witnessed a great unbundling of media, one that has fundamentally upended how we create, deliver, and monetize content. But despite the fact that we’re so consistently exposed to success stories like Quah’s, we never consider them when assessing the state of media.
We’ve entered an era when content creators have access to many of the monetization mechanisms that were previously only available within larger publishing operations. These include:
There are many ways that individual content creators can sell products directly to the public, with online platforms like Etsy generating billions of dollars for those who leverage content to drive merchandise sales online. This is why your favorite YouTubers, podcasters, and bloggers spend so much time driving you to their online stores. Crowdfunding sites like Indiegogo and Kickstarter allow creators to drum up demand and generate upfront capital for their products. For those who don’t have the resources to design and produce their own products, there’s a thriving affiliate marketing industry that generates $6.8 billion a year for content creators.
There are also plenty of ways for creators to sell their content directly to the public. Kindle and other self-publishing platforms drive north of a billion dollars a year for authors. Creators can also package content into online courses and sell them on sites like Udemy and Teachable, with some sellers making millions of dollars a year via this method.
About a decade ago, YouTube rolled out its Partner Program, which allowed creators on its platform to take a share of the advertising revenue generated by their content. Since then, a number of platforms across several mediums — Twitch, Facebook Watch, Anchor, Pandora — have launched revenue-sharing agreements with creators.
There’s also growing demand for influencer marketing, with platforms like Famebit and Podcorn serving as marketplaces to facilitate partnerships between creators and brands. Today, influencer marketing is a $6.5 billion industry.
In many ways, the maturation of several major subscription platforms has been the most exciting development in recent years.
One of the earliest success stories in this realm is Patreon. By the end of this year, it will have paid out over a billion dollars to creators. Patreon has been a crucial monetization tool for creators who have loyal followings but struggle to generate enough demand for steady advertising revenue.
Over the past few years, several new subscription tools have come onto the market. The newsletter platform Substack recently announced it’s reached 50,000 paying subscribers, a run rate north of $3 million that’s being paid out to individual newsletter writers. BuzzFeed reported in April that its top 12 writers make over $160,000 a year each. Medium, which pivoted to subscriptions in 2017, paid out an estimated $5 million to its writers. According to its monthly updates it sends out to its partner program participants, its top writers made as much as $30,000 in September alone.
Is it possible to put a monetary figure on how much solo creators like Quah are generating each year? Re:Create Coalition, an organization that produces an annual report tracking the money made by online creators in the U.S., estimated that they earned $6.8 billion in 2017. But it only tracks money generated through a handful of platforms, and by its own admission that number falls far short of the actual earnings generated by individual creators.
I’m not arguing that there aren’t certain sectors of the media industry that are genuinely hurting, and I think there’s an important discussion going on about the Facebook/Google duoply and the role it’s played in siphoning money away from publishers. But I also think we should recognize that the industry is reshaping itself so that the act of content creation is being decoupled from the organizations that typically funded that very content in the past. And in some cases, that plays to the content creator’s advantage. When discussing the jobs lost in the major upheaval of online media, we should at least acknowledge that new jobs are being created as well.