Newsletter start-up Substack hits 1m subscribers

Newsletter start-up Substack has reached one million paying subscribers, underlining the growing power of à la carte journalism by individual writers as a business model for news.

Substack offers writers a tech platform to self-publish and create their own freelance business, charging a fee for access to their newsletters. After print advertising collapsed with the rise of the internet, both news companies and individual writers began turning to subscriptions, selling their work directly to readers.

The number of people paying to subscribe to a Substack newsletter has risen from 250,000 last December to 1m this November. Substack, which launched four years ago, has 73 employees.

Revenue

High-profile writers have been lured to Substack through cash advances and the prospect of editorial freedom. Some earn serious money: the top 10 writers on Substack together make more than $20 million (€17 million) in revenue a year, far in excess of typical newsroom salaries. Most writers on Substack, however, offer their newsletters for free.

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Chief executive and co-founder Chris Best tsaid that his company’s fast growth proved that “great writing is valuable”.

“What you read matters,” he said. “Nobody thought this was possible, when we first started out.”

Substack takes a 10 per cent cut of the revenue writers make from subscriptions. The company, which is not profitable, would not provide its revenue figures. Top writers on Substack include Anne Helen Petersen, Kareem Abdul-Jabbar and Michael Moore.

In the past year, traditional publishers such as the New York Times have lost top talent to Substack, with writers such as Casey Newton and Marc Stein abandoning their jobs at big media companies to go it alone.

Best now faces competition in what had previously been a niche market. Facebook in June launched a newsletter product, Bulletin, with high-profile writers such as Malcolm Gladwell, while Twitter earlier this year acquired newsletter start-up Revue.

“The only thing worse than being copied by Twitter and Facebook is not being copied by Twitter and Facebook,” Best said. He added that “Facebook caused a lot of the problems we are trying to solve”, referring to how the company prioritises page views and advertising revenue over quality news.

“Social media is focused on maximising global feeds and attention, and you end up with bad behaviours,” he said. “That model doesn’t reward great writing.”

Journalists

Leaving plum newsroom jobs has not worked out for all writers, and traditional media companies are now trying to poach journalists back through their own newsletters. The New York Times this year pulled some of its newsletters behind a paywall, while The Atlantic magazine this month introduced nine newsletters to paying subscribers.

Tech reporter Charlie Warzel had left the New York Times to launch a newsletter on Substack, but this month said he was leaving the platform.

“Multiple pundits suggested that I’d soon be making at least a million dollars off of sweet, sweet subscriptions. This did not happen,” he wrote in a Substack post. “Over seven months on Substack . . . I made considerably less than I did working at the Times.” Warzel has joined The Atlantic. – Copyright The Financial Times Limited 2021