THE RISE OF SUBSTACK
The media industry has been among the hardest hit by the pandemic. In the U.S., the media industry was besieged by more than 30,000 job cuts in 2020—an increase of more than 200% over 2019 levels. Overall sentiment related to the media industry—especially social media—has also taken a nosedive. From these ashes, a new era of media is seemingly being born—the rise of newsletters, led by Substack.
Substack—which allows writers to send digital newsletters directly to their readers and monetize their work by putting it behind a paywall—has been growing steadily ever since its launch in 2017. A Y Combinator graduate that is also backed by Andreessen Horowitz, Substack now has more than 250,000 paying subscribers. Perhaps even more impressive, its top ten publishers collectively bring in $7 million in annualized revenue. While some are skeptical about whether the shift from algorithm-powered news feeds to age-old email newsletters will be long-lasting, others are optimistic that, in fact, what’s old is a new age of media.
Finding freedom
Beholden to editors, advertisers, and page-view metrics, the freedom of journalists has long been constrained. Journalists are flocking to Substack in hopes of gaining back this freedom—creative, editorial, as well as financial freedom. Substack offers journalists a platform to say whatever they want, unencumbered by editors. The independent writers that join the platform own their own content, as well as their subscription lists. They also have no obligation to stay on the platform. They can leave at any time—and bring their subscribers with them. Ultimately, Substack changes the incentives for writers. As Substack author, Judd Legum has said, “It’s not about gaming the Google algorithm or the Facebook algorithm.” Instead, it’s about writing compelling content that wins hearts and minds.
On Substack, journalists are also able to find financial freedom. As Substack CEO Chris Best has said, the overarching goal is “to allow writers and creators to run their own personal media empire.” While Substack takes a 10% cut of earnings and payment company Stripe takes another 3%, writers pocket the rest. But the opportunity to find financial freedom goes beyond pocketing the majority of earnings. Substack also offers its writers various grants ranging from $3,000 to $100,000. It also offers grants—often six figures—similar to book advances that empower writers to get started building a lucrative audience without needing to publish a lot of content first.
Perhaps most empowering, Substack supports its writers to pursue tough stories. Its legal program—called Substack Defender—offers writers access to top-notch lawyers who provide advice on legal uncertainty or complexity related to their work. This includes pre-publication legal review of stories, as well as responses to cease-and-desist letters. Substack has committed to covering fees up to $1 million (sometimes more) once a case is picked up by Defender lawyers.
The freedom appeal of Substack seems to only have heightened as the pandemic has unfolded. As Alex Kantrowitz, a former Buzzfeed reporter who now authors the Big Technology newsletter on Substack, has explained, “I think many people in the journalism world saw how quickly their business fortunes can change during COVID and decided they would rather run their own business as opposed to be dependent on another businesses’ ebbs and flows.” Those decisions seem to be paying off. Substack has said readership and writership doubled during the first three months of the pandemic.
Transforming trust
Trust in the media has declined steadily over the years. In 2019, one estimate pegged the percentage of people who had a great deal of confidence in the press at only 6%. Substack aims to repair this severed trust. Not incentivized to game view metrics or algorithms writers are motivated to produce work that readers find interesting and engaging
As a result of freedom—especially financial freedom—Substack also fosters trust. Not incentivized to game the algorithm, writers are pressed to do the work to discover what a reader finds interesting and engaging. Substack producer Valerio Bassan has argued, “As a publishing tool, newsletters provide a solid answer to the number one question in media today: how can we rebuild trust between us and our readers?”
Substack also promises to foster trust through intimacy and authenticity. In Substack, writers are able to engage in a more one-to-one conversation than in the past as the newsletters arrive directly in a reader’s inbox. And it feels authentic. As Vanity Fair has said, “Newsletters retain some of the intimacy of the early digital-media days, when online writing felt less polished, more vital.” And Substack gives journalists that opportunity to be authentic. Once writers receive payments on Substack, they unlock the ability to write preambles to their newsletters. As Substack writer, Emily Atkin, has said, “That’s where I did my marketing. I went personal on it. I was like, ‘Guys, I’m scared. I quit my job to do this. Please don’t let me fail.’”
Revamping recognition
Trust often leads to loyalty. By building trust, Substack writers are able to build recognized brands. Consider Emily Atkin, previously at The New Republic and ThinkProgress, and now author of the climate-focused Substack newsletter, Heated. Emily is earning more recognition and money on Substack than she earned at any salaried journalism job. That’s not, of course, to say recognition has come easy. It hasn’t. Recognition comes at a cost of being vulnerable and developing that intimate connection with readers. As Emily advises, “Market your newsletter in a way that will almost make you uncomfortable, because it sounds like you’re just talking and promoting yourself all the time.”
In years and decades past, readers might follow a large media publication on social media, but, rarely, individual journalists. Now, as journalists are taking control of the distribution on Substack, we’re seeing the pendulum shift. Research shows that readers have started to gravitate more towards the individual creator compared to large media publications that employ them. 66% of journalists now say that their readers first followed them as journalists or as people rather than their publications.
The future of Substack
In launching Substack, its founders were “fed up about the effects of the social-media diet.” Substack’s mission statement cries, “The great journalistic totems of the last century are dying…content farms, clickbait, listicles, inane but viral debates over optical illusions, and a fake news’ epidemic.” Substack promises to flip the status quo on its head and, just maybe, help restore trust in the media.
