Will Substack go beyond newsletters? A company is suspending its future.

There are things that newsletter writer Kirsten Han misses about Substack. They just aren’t enough to make up for the inconvenience.

He disliked how the platform presented itself as a haven for less resourceful freelance writers while offering six-figure breakthroughs to several prominent white men. The policy of moderation of hands-free content, which allowed for transphobic and anti-vaccine language, did not sit well with him. He also didn’t like earning $ 20,000 in subscription revenue and then giving up $ 2,600 in commissions to Substack and its payment processor.

So last year, Ms. Han moved her newsletter, We, The Citizens, to a competing service. He now pays $ 780 a year to post via Ghost, but said he still did about the same in subscriptions.

“It wasn’t too hard,” he said. “I looked at some options that people were talking about.”

Not long ago, Substack persecuted conventional media executives, threatening its star writers, attracting its readers, and, feared, threatening its viability. With risk money, the start-up was said to be “the future of the media.”

But now, Substack is no longer a prodigy, but a company facing a number of challenges. Depending on who you talk to, these challenges are standard start-up growth issues or threats to the company’s future.

Technology giants, the media and other companies have launched competition newsletter platforms over the past year. Consumers who loaded bulletins during the pandemic began to shrink. And many popular writers left, including English associate professor Grace Lavery and climate journalists. Mary Annaïse Heglar and Amy Westerveltoften complaining about the company’s moderation policy or the pressure to constantly deliver.

“Substack is at a pivotal point where you have to think about what it will be like when you grow up,” said Nikki Usher, an associate professor of journalism at the University of Illinois Urbana-Champaign.

The good news for the company, which is five years old this summer, is that it continues to grow. Paid subscriptions to its hundreds of thousands of newsletters rose to more than a million at the end of last year, from 50,000 in mid-2019. (The company will not disclose the number of free subscribers.) Recruitment season expects to get more than a dozen engineers, product managers and other specialists. Executives are expected to release the company, which has raised more than $ 82 million and is said to be valued at $ 650 million.

But to sustain that growth, Substack executives say, the company needs to offer more than just newsletters.

In an interview with the Substack office in downtown San Francisco, its co-founders spoke in forceful statements about the “great Substack theory” and the “master plan.” Chris Best, CEO, described the desire to “change how we experience culture on the Internet” and bring “art into the world.”

“Substack in its highest ambition is kind of this alternative universe to the Internet,” he said.

In practice, this means that Substack will not only be a channel for delivering written newsletters, but rather a multimedia community. Executives want users to create “personal media empires” through text, video, and audio, and communicate with subscribers through comments which could include 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 view of subscribers gathered around writers as fans at a concert.

“If you just give them a place to get together and interact with each other, there are some pretty interesting types of links,” he said.

In March, Substack introduced an app that consolidates subscriptions in one place instead of spreading them separately by email. This month, the company announced a podcasting expansion.

“From the beginning, we intended the company to do more than just provide subscription publishing tools,” wrote Hamish McKenzie, co-founder and chief operating officer, about the application.

But as Substack evolves beyond newsletters, it runs the risk of looking like another social network or news editor, which could make it less appealing to writers.

Ben Thompson, the technology-focused Stratechery newsletter inspired by Substack, wrote last month that Substack has gone from being a “faceless editor” behind the scenes to trying to put “the Substack brand at the front and center.” its application as a destination behind the backs of writers.

“This is a way for Substack to take its popularity out of building an alternative revenue model that involves readers paying for Substack first and publishers second, rather the other way around,” wrote Mr. Thompson.

Posting to Substack is free, but writers who charge for subscriptions pay 10% of their revenue to Substack and 3% to their payment processor, Stripe. The company also offers great breakthroughs to a small group of writers, whose identities it refuses to reveal.

Substack has a key difference with most other media companies: it refuses to pursue advertising money. “About my corpse”Wrote Mr. McKenzie once. “The antithesis of what it wants to be Substack,” Mr. Best.

“If, out of greed or error, we got into this game, we would effectively compete with the TikToks and Twitter and Facebooks of the world, which is not the competition we want to be in,” Best added. .

This means that Substack is still dependent on subscription revenue. Subscribers pay more than $ 20 million a year to read the top 10 Substack writers. The most successful is history teacher Heather Cox Richardson, who has more than a million subscribers. Other notable writers include novelist Salman Rushdie, award-winning punk poet Patti Smith and Eisner-winning comic book writer James Tynion IV.

Emily Oster, an author and professor of economics at Brown University who has offered divisive advice on how to manage the pandemic with children, joined Substack in 2020 after Mr. McKenzie recruited her. His newsletter, ParentData, has more than 100,000 subscribers, including more than 1,000 paid readers.

“Substack has certainly become a bigger part of the media landscape than I ever thought it would be,” he said.

But Dr. Oster’s main sources of income remain her teaching and her books; much of the revenue from your newsletters goes to publishing and support services. Most users have struggled to keep writing exclusively on the platform, and instead use their income to supplement other payment checks.

Elizabeth Spiers, a digital strategist and Democratic journalist, said she left her Substack last year because she didn’t have enough time or pay readers to justify her long weekly rehearsals.

“Also, I started getting more paid work elsewhere and it didn’t make much sense to keep putting things on Substack,” he said.

But Substack’s biggest conflict has been content moderation.

Mr. McKenzie, a former journalist, describes Substack as an antidote to the economy of attention, 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 the cultural war and is a hotbed of hate speech and misinformation. Last year, many writers left Substack for inaction on transphobic content. This year, The Center for Digital Hate Countering said vaccine bulletins at Substack generate at least $ 2.5 million in annual revenue. Technology writer Charlie Warzel, who left a job at The New York Times to write a Substack newsletter, described the platform as a place for “internal Internet meat.”

Substack has withstood the pressure to be more selective about what its platform allows. Twitter employees who were concerned that their content moderation policies should be relaxed by Elon Musk, the world’s richest man and largest shareholder on the platform, said don’t bother applying for a job a Substack.

“We don’t aspire to be the referee to say,‘ Eat your vegetables, ’” Mr. Best. “If we agree or like everything on Substack, it wouldn’t look like a healthy intellectual climate.”

Substack facilitates the separation of writers and deserters have a collection of fast-growing competitors waiting to welcome them.

Last year, newsletter offerings debuted from Twitter, LinkedIn, Facebook, Axios, Forbes, and a former Condé Nast editor. The Times made several newsletters only available to subscribers last year. Mr. Warzel moved its Substack Galaxy Brain to The Atlantic as part of its news bulletins in November.

The Ghost multimedia platform, introduced as “the independent alternative to Substack”, has a concierge service to help Substack users make the transition from their work. Medium narrowed its editorials to a more subtle model of “independent voice support.” Zestworld, a new subscription-based comics platform, has been dubbed “Substack Without Transphobia.”

Mr. Best said it welcomed the rivalry.

“The only thing worse than being copied is not being copied,” he said.

New Technology Era

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