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Do you remember how we used to say “Skype with me”? Well, nobody says that anymore. It’s been successfully replaced by “FaceTime me” or more recently “let’s have a Zoom call”.
I’ve had many conversations during the pandemic where a “Zoom call” didn’t even mean an actual Zoom call. Instead, the request was immediately followed by a question about which platform to use.
It’s rare for a company to become a verb – the highest form of praise if you can manage it. Google is the obvious example. We have simply googled stuff for more than two decades now. Few others have come close (in an alternative reality, Australians could be “binging stuff” in the near future).
Sure, there are other such instances. But the one media have been obsessing about (mainly in the United States) is Substack.
Why is Substack haunting media executives
I, too, jumped on the Substack train. It was so easy to set up and with no upfront payments required. The editor reminded me of the simplicity (and constraints) of Medium when I first discovered it years ago.
The platform was straight up intuitive to use from the get-go. You could also take your email list away anytime, so no lock-in.
Launched four years ago it immediately went up on the radar of media reporters. Modelled along the lines of popular technology blog/newsletter Stratechery by Ben Thompson, it wanted to provide independent writers with a no-friction entry into paid content.
Just forward a few years and Substack is grabbing headlines at The New York Times. NYT’s media columnist Ben Smith mentioned the company in his Media Equation column five times since last August.
His most recent piece (Why We’re Freaking Out About Substack), featured something that has bugged me for a while:
This new ability of individuals to make a living directly from their audiences isn’t just transforming journalism. It’s also been the case for adult performers on OnlyFans, musicians on Patreon, B-list celebrities on Cameo. In Hollywood, too, power has migrated toward talent, whether it’s marquee show runners or actors. This power shift is a major headache for big institutions, from The New York Times to record labels. And Silicon Valley investors, eager to disrupt and angry at their portrayal in big media, have been gleefully backing it. Substack embodies this cultural shift, but it’s riding the wave, not creating it.
Smith touched on something Thompson has written about when analyzing his own success with independent publishing. Both conclude Substack is a really great tool. But what’s more interesting is the impact of journalists realizing they can earn more by going independent. At least that is the promise (not all succeed).
Some will come back and some will join forces and create mini publisher hubs.
I have written about the opportunity of the creator economy, its tools and benefits for journalists and headaches for newsroom leaders. That piece is still relevant today.
As I wrote in the beginning, some brand names tend to replace common words if successful. Substack has done this with “frictionless, independent publishing”.
Substack is not the only alternative
There are a few reasons why it’s not all about Substack – or at least it shouldn’t be.
As much as I like the platform, compared to alternatives it takes a relatively big cut (10%). Although the company is straightforward about it (“We only make money when you do.”).
Once you do the math you can pay lower fees with Substack’s competitors like Ghost or Lede. Or even Revue, which was recently acquired by Twitter and takes 5%.
All that said it comes down to this: Substack is having its moment. It has most definitely helped to push writers, journalists and others to try and make an independent living. That was also helped by Substack Pro, a program which resembles book advance deals:
‘With Substack Pro, we pay a writer an upfront sum to cover their first year on the platform. The idea is that the payment can be more attractive to a writer than a salary, so they don’t have to stay in a job (or take one) that’s less interesting to them than being independent. In return for that financial security, a Pro writer agrees to let Substack keep 85% of the subscription revenue in that first year. After that year, the deal flips, so that the writer no longer gets a minimum guarantee but from then on keeps 90% of the subscription revenue – which, if we’ve made our bet well, will be a larger overall dollar amount.
We like this structure because, while some who get these deals are already well off, it gives financially constrained writers the ability to start building a sustainable enterprise. We take most of the risk for them. In return, their work contributes to the quality of the Substack ecosystem and they become long-term customers. ‘
In this case there is a one-year contractual lock-in, in turn the writer gets money up front. Of course many have cited the example of Vox co-founder Matthew Yglesias, who left Vox for the Pro deal and soon realized that he could be earning way more than the $250,000 he agreed to get upfront from Substack.
Substack founders say they are confident they will be around for long and that they welcome alternatives. Still, I suppose, as I am one of them, journalists and writers like to leave the “boring business stuff” to others.
So there will always be a group looking for a simple tool that makes everything for them, and they can focus on writing. In the past that was called being part of a newsroom. Today it is Substack and its alternatives. In the future it might be something else.
This piece was originally published in The Fix and is re-published with permission. The Fix is a solutions-oriented publication focusing on the European media scene. Subscribe to its weekly newsletter here.
