Subscription newsletters = new battleground for Big Tech

Newsletters, like oat milk in your coffee, are very 2021 – but their rise dates back to 2017 when Substack – a platform that enabled writers to easily monetise their content by putting it behind a paywall was launched.

Jump to David Slack interview.

Of course that’s exactly what most large media companies are doing with their premium content, but with Substack that payment goes directly to the writer. It’s a great way for writers with a high profile to directly connect with a paying audience, a welcome development as media companies worldwide face cutbacks and layoffs.

Leading US tech journalist Casey Newton left theVerge.com to launch a Substack newsletter last year telling onezero.medium  – “When you look at the economics of newsletters, there are opportunities that are bigger for some writers than any media company can match. If you can find 10,000 people to pay you $100 a year, you’re making $1 million a year. No one in the media is going to pay you that unless you’re the anchor of a popular news show or something.”

There’s a kiwi connection too.

Substack was co-founded by one time Listener writer Hamish McKenzie, now living, very comfortably one would guess, in San Francisco. 

That’s because the platform he helped create has thrived. It now has more than 500 000 paying subscribers, many gained during Covid which accelerated the devastating trends happening in the media landscape (locally NZME laid off 200 workers as Covid hit).

The Substack model eschews advertising – “no ads ever” it promises – and instead relies on subscriptions.

Silicon Valley venture capital firms saw the potential and invested $15m USD in 2019. Substack’s now estimated to be worth over $900m NZD. 

Readers can choose from a variety of payment plans or choose a free model where you might get one or two newsletters a week.

Instead of a masthead deciding whether a writer’s story goes behind a paywall (something many journalists dislike as it immediately limits the story’s reach) the writer now holds that power.

The other upside for journalists is that they can say exactly what they want, how they want, and are not beholden to an editors’ pen, corporate influence or a house style – which has led to some controversial names like Glenn Greenwald and Bari Weiss leaving quality mastheads behind and joining the newsletter revolution. 

Earlier this month English columnist Julie Burchill fled to Substack after she was fired from The Telegraph after mocking the Sussexes’ baby daughter Lilibet Diana on social media.

Growing talent

But as well as giving big names a chance to go unfettered McKenzie also sees Substack as an incubator of new talent – (Substack runs fellowships, and a mentorship program) writing in May – “While we are proud that big-name writers have found a happy home on Substack, if that’s all we were able to achieve then we would consider our job not even half done. We think the true measure of Substack’s success will be in helping to create livelihoods for people who would otherwise never have had the opportunity to become professional writers. We succeed only when they succeed.”

The problem for new writers is similar to that of musicians on Spotify; yes, a very few, usually those with a big following, will make a lot of money but the majority will make very little, certainly nothing approaching the average wage of a name journalist.

Still, it’s a sector in transition.

Traditional media also has its eye on Substack. Instead of seeing the platform as a threat, some are embracing it and benefitting from its largesse. 

Stuff announced in April that it is partnering with Substack in an initiative designed to accelerate the launch and success of local news publications on the platform. Stuff is receiving funding to launch two newsletters from a programme called Substack Local, that awards US$1 million of funding for local news writers around the world.

Stuff editorial director Mark Stevens commented that he sees it as – “a great opportunity to learn about the rising popularity of paid newsletters, the type of newsletter content people in New Zealand are willing to pay for, and new revenue models that we might be able to tap into in the future.”

Unsurprisingly the success of Substack, which Mckenzie describes as an attempt to “unbreak the media ecosystem by taking the power away from the big platforms” hasn’t gone unnoticed by the tech giants. 

Twitter acquired Revue in January, another email service that lets writers publish newsletters, and Facebook – which has in the past assured anyone listening that it is not a media company or publisher – is launching a similar service called Bulletin. Unlike Substack – which takes a 10 percent cut – Facebook says it won’t take a fee from writers at launch stage and will likely get out its chequebook to entice top talent to migrate to its new platform. Other players like the non-profit, open-source model, Ghost are also gaining traction.

David Slack talks to theBit about how his Substack newsletter is going

The Substack model has caught on with some of our leading local journalists too.

Wellington-based music journalist and poet Simon Sweetman recently launched a Substack Sounds Good. This week he posted a great story – free for all — The Genius-Stroke of Uncut Gems; highlighting another advantage of Substack – writers don’t have to write about the latest releases, as they would be required to in a traditional journalism role.

Entertainment journalist Chris Schulz also has an excellent (and free) Substack called The Boiler Room.

Generally speaking it appears that New Zealand journalists have had a hard time generating enough subscribers to make the paywall system work, most, sensibly, keeping to the freemium model.

But one Substack that’s gained a loyal paid following is David Slack’s More Than A Feilding which he describes as “Current affairs commentary that’s not written in crayon block letters.”

Slack posts regularly, often in a diary form and most are paywalled. It’s smart, witty and – as he has done recently when reporting from his hospital bed – moving.

I asked him this week if it was the end of his Stuff column that led him to starting the Substack.

“It was. It happened at the start of level 4. I got ditched along with a bunch of other freelancers. Then Bauer folded and prospects looked even more dire. I more or less gave up on old media at that point and decided to take my writing back to a subscriber platform. I’d gone that way before when I wrote blogs for free on Public Address and made a living from my speeches website.

“I’ve long liked the concept of 1000 True Fans – https://kk.org/thetechnium/1000-true-fans/ –  which proposed that to make a living as a craftsperson, photographer, musician, designer, author, animator, app maker, entrepreneur, or inventor you need only thousands of true fans. 

“I was thinking about doing that by reviving my speeches website and adding a subscriber blog. But while I was thinking about that, Arthur Meek was doing some recruiting of NZ names for Substack and he’s very persuasive, Arthur, so next thing I’m setting one up.

“I’ll just copy and paste from a recent newsletter to tell the next bit:

This newsletter takes this form because last year when I was getting it underway I was beset by a sense of barely-contained chaos.

It felt bewildering, an onslaught. We were driving through the night in a raging storm and the windscreen wipers were hammering, and all manner of airborne debris was hitting the windscreen as we tried to make out where we were, and where we were going, and hoping the road ahead wasn’t washed away.

This was not going to be contemplative stuff, it was going to be writing on the run. 

The only manageable thing to do, it seemed to me, was to write down my impressions of each piece of flying debris as it smacked against the windscreen and maybe give it a further look in the rear view mirror as it fell behind us.

So I made entries by the minute. What I wrote down at 10.00am might very well be overtaken at 1.00pm by the press conference with Dr Saint Ashley and the ministers. But that was fine, it made an accurate picture.

These days I’m not feeling that sense of hour by hour precariousness so much. Trump’s no longer president and it feels more that we have hold of the virus than it has hold of us.

But I like doing things the diary way. It remains a good system for addressing a sundry procession of roadkill.

What I like to think I’m doing; what I aim to be doing; at least, is getting some perspective; taking a first run at putting things in context; and making suggestions about the drive ahead.

“So I started turning out a free newsletter seven days a week and it got a quick and positive pickup with plenty of subscribers. I followed the Substack suggestion to let people get to know what you’re offering and then invite them to become paid subscribers.

“I did that after about two months, and switched from a free post seven days a week to a free Monday and Thursday edition and five days a week plus a Sunday column for paying subscribers.

Reassuringly, several hundred signed up right away, and each week a bunch more come onboard.”

Do you miss the broad reach of traditional media?

“It’s occasionally frustrating. You’ll see some hack doing a mediocre job and think god there are so many ways you could be doing that better but I’m mostly finding this a more enjoyable richer experience with people who are keen to engage cordially and positively on the same wavelength. I don’t mean to say I prefer an echo chamber, just that it feels more productive and enjoyable to be connecting with people who are happy to talk through ideas and feel free to differ, but without any of the personal attack or tribal bristling that can make comments sections so dismal.”

Does the Substack pay off financially compared to a more regular media column and do you think this is the way forward for writers who have a profile?

“It’s not enough to make a living yet, but it’s not too far off now. It’s a much better deal than any column writing ever was, although it’s also a larger claim on my time. I’m enjoying this hugely. That 1000 True Fans thesis is looking pretty accurate to me.”

How does it differ, writing a newsletter and writing a column for someone like Stuff?

“I love being able to cuss at will, and not having to put a label at the beginning and end saying This Is Satire

“I was able to write in Sunday magazine about giving up drinking, and wrote also in columns about some other moments of family anguish so it’s not the first time I’ve taken this track. I’m not sure, though, if I’d have been able to share all the moments of my adventures in prostate surgery in a Sunday column. Also I’m often finding it’s great to have no word limit getting in the way.”

What sort of feedback do you get from your subscribers, I feel like I know you better from the Substack stuff…

“I love how much exchange I’m getting from this. The people at Substack say, and I’m finding it to be true, that your readers like to have you share and like to see you flourish. Whenever I write something introspective, people really seem to appreciate it. 

“I’ve always been conscious that in comedy, in drama, and speeches, the more willing you are to get naked, to reveal the parts we more generally keep to ourselves, the more it connects. 

“There was a great moment when I was in hospital that Paul Brislen suggested readers might pitch in to help keep the content coming. That evolved into the idea of getting people to share their favourite song from their Fourth Form year. It was wonderful because rather than becoming some bragging exercise about music cred, people shared their anecdotes about teen torment and insecurities and corny music selection and it became this wonderful collection of stories about growing up in a faraway past New Zealand.”

Finally – is this subscription model a big wake up call for traditional media in NZ?

“Hard to say. The one thing I’m certain of is that readers deserve better than they’re getting.”

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