On Substack
Thursday, August 17, 2017
“Email is the largest social network”

Inside, an email-only news network started by online media pioneer Jason Calacanis, is a year old and closing in on 300,000 subscribers. While that number is not particularly interesting in itself, Inside’s approach to publishing certainly is. The company is a big believer in email exclusivity. Its publications aren’t available on websites or even shared on social networks. “Email,” says Inside, “is the largest social network.”

We suspect that Inside is onto something.

The rise of social networks and mobile messaging is supposed by some to have killed email, good and proper. But the statistics tell a different story. More than three billion legitimate emails are sent every hour, according to the latest numbers, and there are more than 3.7 billion email users worldwide. But when it comes to distributing written content, email’s scale is only one of its advantages. What Inside knows, and other savvy publishers are finding, is that email is the most personal, direct, and effective way to reach the readers who want to hear from you.

If your story is in a reader’s inbox, it’s because they have invited it in there, or because one of their friends personally passed it on. As we’re inundated with low-nutrition content from our unrelenting social feeds, inbox presence offers a strong signal that a story is likely to be high quality and highly relevant. Meanwhile, there’s no middleman watching to gather data on how you interact with that story or publisher. By taking traffic incentives and shareability completely out of the equation, the publisher is incentivized instead to focus on what is best for the reader.

Email is likely to be a feature of many successful subscription publications because all of the above factors are even more important in a membership-type context, where trust and direct relationships are critical to the model. When a reader makes a decision to pay for your content, they’re effectively accepting you into their trusted friend group. The inbox is the gathering place for that exclusive group. What’s more, it ensures they will see every item you publish–or at least that they’ll notice you have published something. Ever since Google crippled RSS by shutting down Google Reader, it’s been difficult for publishers to find a channel that reliably puts every piece of content in front of a committed reader’s eyes. In fact, email offers a useful variation of RSS–not “Really Simple Syndication,” but “Really Simple Subscription.”

For publications for whom it is important to offer easy access to content on the web, email exclusivity won’t be the best choice. But for many others, it may make more sense to be email exclusive than web exclusive. Subscription publishing is about trust, quality, and the relationship between producer and consumer. For that, there is no medium more powerful, nor more personal.

Wednesday, August 2, 2017
How to fund journalism that matters

In the annals of the death of clickbait, one of the most important entries will be reserved for 2017. The Athletic, a forerunner in a new era of subscription publishing, is a big reason for that.

On July 25, The Athletic announced that it has raised $5.4 million in funding—on top of a previously announced $2.6 million—and hired some top writers from ESPN and Sports Illustrated to staff their city- and niche-focused sports publications. The company so far has publications in five cities, with the San Francisco Bay Area being its latest addition. Its Toronto publication, launched in December last year, has more than ten thousand subscribers and is already profitable.

The Athletic’s credo was summed up by Stewart Mandel, the former Fox Sports reporter who has signed on as editor-of-chief of an upcoming Athletic publication that will focus on college football:

“The Athletic’s subscriber model allows us to focus entirely on high-quality written content. NO ads, NO auto-play videos, NO clickbait.”

We at Substack share Mandel’s enthusiasm for quality, ad-free journalism. They’re key reasons we are such big believers in subscription publishing.

In a recent interview with Ben Thompson, The Athletic’s CEO Alex Mather said that the early success the company has found in attracting subscribers could be explained not so much by technology, but by the quality of its writers. “I obsess over the product perhaps too much,” Mather, an engineer and designer by trade, said. “I have come to realize that in this opportunity with sports that talent is absolutely what we lead with.”

Mather’s comments suggest that the big opportunity in media today is in figuring out how to fund the great talent that already exists. Even in sports journalism, advertising doesn’t cut it anymore, as recent layoffs at ESPN, Yahoo Sports, Vice Sports, and Fox Sports attest. But the appetite for great sports writing hasn’t gone away. Like Substack, Mather and his co-founder, Adam Hansmann, believe that readers are willing to pay for sufficiently distinctive content, and that there are plenty of writers who can make money from producing it.

“[O]ur pitch to writers is, ‘Come do the best work of your life’ by not worrying about deadlines, not focusing on the games themselves,” Mather said. “[W]e don’t need another game recap, we need deeper analysis, we need minutiae, we need you to take us inside and tell stories that no one else is telling and we know that takes time.” Under this model, volume doesn’t matter as much. “If we can get three stories that you can’t get anywhere else in a city, we see unbelievable subscriber yield.”

This point about distinctive content has also been made by other subscription publishing success stories. “We’re asking reporters to spend their days writing stories no one else is writing,” Jessica Lessin, founder of the tech industry news publication The Information, said in a recent interview. “That’s very different from how other reporters spend their days, which is reacting to news.” (Last week, The Information announced an accelerator program to promote the development of subscription publications for other industries.)

Luke Timmerman, who publishes The Timmerman Report, a subscription news site about the biotech industry, shares Lessin’s view. “[T]here are other industries where [the subscriber model] can work, where you have readers who have a lot disposable income and clearly see a value in your distinctive content,” Timmerman said in an interview earlier this year.

What The Athletic, Jessica Lessin, Luke Timmerman, and Ben Thompson have all discovered is that there’s one really effective solution to the revenue problem that currently ails the media business: produce high-quality, distinctive content for an audience that cares about your niche, treat your readers with respect, and then ask them to pay.

That’s a business idea that you can have for free.

Friday, July 21, 2017
Get in on the ground floor with Substack

We are looking to add a few more writers to Substack’s crew of founding publishers. If you, or anyone you know, is interested in starting a publication that makes money from subscriptions, now is the time. We’d love to work with you to make it a success.

One of the inspirations for Substack is Ben Thompson’s Stratechery, a publication focused on tech business strategy. Since starting Stratechery in 2013, Thompson has attracted thousands of subscribers in 30 different countries who pay $100 a year. As a one-man operation, it has proven to be not only a valuable resource for readers, but also a highly profitable enterprise. “It’s more than a business,” Thompson has said.

We believe that there are many thousands of opportunities for Stratechery-like publications in almost any editorial niche imaginable. Are you an expert on your local college basketball team? There might be a valuable subscription publication in that. How about local-level politics in your city? Do the theater buffs in your state have a good way to read about the latest plays? Is anyone writing intelligently about your passion for artificial intelligence or The Handmaid’s Tale?

If you’re a writer who’s passionate about a niche and has a proven ability to build an audience around your work, we want to hear from you. We will make it easy for you to start a subscription publication by providing great tech tools and personalized support for your administrative and business needs, including hands-on help to grow your subscriber base.

While some writers will build huge businesses on our platform by attracting enormous subscriber bases, the beauty of the Substack model is that highly focused publications can be profitable even with small (but committed) readerships. So if you think some people would pay to read your work, please get in touch. Our goal will be to help you get to your magic number as quickly as possible.

In the meantime, if anyone out there is up for starting a high-quality subscription publication about the Highlanders rugby team, then let me know! I’ll be your first paying customer.

For more details and background, read our first post: A better future for news.

Any questions? Please send them to hamish@substack.com

Tuesday, July 18, 2017
Why we’re building Substack

In September 1833, Benjamin Day, the 23-year-old son of a hatter, put the New York Sun on sale for a sixth of the price of its competitors. The sensationalism-stuffed Sun, selling for a penny an issue, quickly became the most-read newspaper in America. The key to its low price and popularity was a business model innovation that would change the news industry forever: advertising.

The ad-supported model would undergird a golden age of newspapers that lasted 180 years. Those days are all but over. Today, as a result of a mass shift of advertising revenue to Google and Facebook, the news business is in crisis. The great journalistic totems of the last century are dying. News organizations—and other entities that masquerade as them—are turning to increasingly desperate measures for survival. And so we have content farms, clickbait, listicles, inane but viral debates over optical illusions, and a “fake news” epidemic. Just as damaging is that, in the eyes of consumers, journalistic content has lost much of its perceived value—especially as measured in dollars.

It’s easy to feel discouraged by these dire developments, but in every crisis there is opportunity. We believe that journalistic content has intrinsic value and that it doesn’t have to be given away for free. We believe that what you read matters. And we believe that there has never been a better time to bolster and protect those ideals. Now, more than ever, publishers of news and similar content can be profitable through direct payments from readers. In fact, we are so convinced by this notion that we have started a company to accelerate the advent of what we are convinced will be a new golden age for publishing. The company is called Substack.

Benjamin Day radically altered the future of journalism with a tweak to its funding model. Almost two centuries later, the news industry is ready for another reinvention.

Subscribe now

Subscriptions were pioneered by periodicals, including, in 1688, the first illustrated edition of Milton’s Paradise Lost. Now, through the power of the internet, they’re also used to sell things as varied as razor blades, meals, software, and underpants. At Substack, we believe that the time has again come for journalists to thrive on payments from readers. The news business—and here we interpret the word “news” in its broadest sense—is unsustainable if it continues to rely on advertising. But a model based on subscriptions can trigger an explosion of independent publishing, eventually leading to a future in which the aggregate market value of subscription-based content is larger than the value of the news industry we know today.

Times have certainly changed since the advent of the penny paper. The internet has saturated us with an information deluge that has changed the economics of news. No one wants to add more noise to their lives, let alone pay for the privilege. But that is the very reason that the right kind of subscription content can be even more valuable in the digital age.

Precisely targeted and curated content means less noise. In fact, by attributing a dollar value to such content, people can make more focused decisions about their consumption habits. Instead of allowing ourselves as readers to be vulnerable to the social media platforms that war with each other to monopolize our attention, we can instead be selective with our media choices, honing in on the interests, writers, and localities that we find most meaningful. We can have direct relationships with the writers we trust to do high-value work. And, because online distribution is basically free and universal, writers can find paying readers for content that would otherwise reach only modestly sized or dispersed audiences that are unattractive to advertisers.

So why aren’t a million subscription-based flowers already blooming on the internet?

Well, if you know where to look, you can see the first shoots of growth. The media future is here—it’s just not yet evenly distributed.

Deep value

In 2013, the journalist Andrew Sullivan moved his politics blog, The Dish, from the Daily Beast to its own website and attracted 30,000 subscribers who paid $20 a year. The site employed seven writers and, according to Sullivan, had more than a million dollars in revenue—without ads.

Later in 2013, Jessica Lessin founded The Information, a tech industry news site that charges subscribers $399 a year. Lessin has used that revenue to build up a staff of about 20 people, including a dozen reporters based in the San Francisco Bay Area and a small bureau in China. The Information has more than 10,000 subscribers and is profitable, according to Lessin.

Also in 2013, Ben Thompson, an American based in Taiwan, started charging $100 a year for his newsletter-first publication, Stratechery, in which he dispenses analysis of tech industry news. Two years later, Thompson had more than two thousand subscribers, representing upwards of $200,000 in annual revenue. He hasn’t disclosed subscriber figures since, but in February 2017 he characterized the financial viability of his one-man publication as “more than a business.”

“[B]y making something scarce, and worth paying for, you are by definition limiting your number of readers,” Thompson wrote in 2015. “Stratechery, though, serves a niche, and niches are best served by making more from customers who really care than from milking pennies from everyone.”

In 2015, following Thompson’s lead, former Bloomberg reporter Luke Timmerman established his own biotech news service, The Timmerman Report. It took him less than a year to reach a thousand subscribers—mostly biotech professionals—who at the time were paying $100 annually. He has since increased the price to $150 a year, with no apparent effect on the subscriber base. Timmerman does most of the writing for the publication, but he has also hired a couple of contributors.

Sullivan aside, however, these publications serve niche tech audiences. Can a subscription model work anywhere else?

Consider Patreon, a crowdfunding platform for creators. Patreon was launched in 2013 to help writers, artists, and other creatives solicit donations from people who love their work. The company recently claimed that a million people every month are making payments via its service, collectively supporting the work of 50,000 creators. It expected Patreon payments to total $150 million in 2017.

A glance at the top Patreon writers list proves that distinctive niche content does well. Video game critic Jim Sterling has more than 5,500 patrons, netting him $12,000 a month. The War Nerd has a following of more than two thousand patrons, who collectively pay him $9,000 per podcast, of which he produces two per month. And former USA Today reporter Jeff Gluck has amassed more than 850 supporters to fund his in-depth NASCAR reporting, which is available for free on his website. Although he has been on the platform for just half a year, Gluck’s Patreon donations amount to more than $6,500 a month.

If there is a community of people willing to pay a few dollars a month to get their fix of high-quality NASCAR writing, might there also be a community willing to pay for writing that is exclusively about their favorite sports team? (Actually, yes—more than two thousand patrons pay to support Derek Bodner’s writing about the Philadelphia 76ers.) And if a critical mass of people are willing to pay for local sports writing, might they also be willing to pay for quality news about podcasting? (Yep—Nick Quah has already found that with Hot Pod.) Or how about a hobbyist blog about foreign affairs? (World Politics Review started as a grad student’s side project). And are there any good reasons why a quality publication about, say, Game of Thrones could not support itself on subscriptions? How about a dedicated news site about your neighborhood—not one supported by ad revenue, but paid for directly by residents? Maybe there could even be paid publications about model trains, or League of Legends, or carbon sequestration.

These niches can support meaningful businesses. After all, a niche is just something that at least a few people care about a great deal—and perhaps enough to pay for. A subscription publication, then, doesn’t need to be the New York Times in breadth and scale. In some cases, it could be just one person writing for a small audience and earning pocket money. Others might attempt to professionalize their operations. Perhaps the NASCAR guy decides to hire another writer who covers racing in Europe. Maybe that move attracts more subscribers, allowing him to add more writers and editors to the team. Perhaps a writer covering happenings in her local neighborhood joins forces with someone in the adjacent neighborhood and grows the audience. Then, they might add a copy editor, or a writer who covers City Hall. Soon enough, it could be the best local news publication in the area. A group of writers and editors could raise funding to start a publication about, say, geoengineering, white-collar crime, or even the White House. One day, they could be counting subscribers in the millions.

Once the old rules are gone, a new world of possibility opens up.

Substack’s mission

While writers possess many powers, cobbling together an array of tech tools in order to start and manage a subscription-based business tends not to be one of them. Ben Thompson, Luke Timmerman, and Nick Quah have all made similar observations about how surprisingly difficult it is to figure out a payments system that is both flexible and reliable, manage administrative work, and handle customer support, all while running an intensive journalistic operation. In his first year of operating The Timmerman Report, for instance, Timmerman estimated that 40 percent of his time was spent attending to business matters. To many, these barriers are deal-breakers.

Substack’s mission, then, can be summed up in one sentence:

Make it simple to start a publication that makes money from subscriptions.

We are developing an all-in-one service to let writers get paid by reaching audiences that value them. Our tools will include easy-to-use editing software that can handle the simultaneous publication of stories and newsletters; a payments solution that makes subscriptions intuitive and manageable for both publisher and reader; sharing features that allow stories to find large audiences outside the paywalls; and design templates so that publishers can create beautiful reading experiences. We make money only when our publishers make money, taking a small cut of subscription revenue or charging recurring fees based on earnings thresholds.

Over time, we will introduce an ever-evolving suite of features and services to better serve independent publishers, helping them do the best work they can and build strong, enduring businesses. Publishers will be able to use our tools and resources to communicate with subscribers, grow their audiences, and find the help they need to get to the next level. They’ll also be able to participate in a meta community that encourages the growth of the whole ecosystem.

Our focus on subscriptions and creating a great user experience comes at the expense of advertising. All Substack publications without exception will have subscriptions, and we will not accommodate ads in the design of our publishing system. Publishers will own their data, which we will never attempt to sell or distribute, and we won’t place ads next to any of our own or our customers’ products.

Substack serves writers who are striking out on their own. Some of these will be professionals who can quit their jobs and financially support themselves by channeling their expertise into publications that they control. Others will be part-timers who are otherwise employed as teachers, academics, laborers, insurance agents, administrators, salespeople—or any number of other jobs—but can now earn money by writing about their passions. Entrepreneurial writers and editors may band together to bootstrap media companies focused on subjects that aren’t well covered in the existing media marketplace.

We’re not claiming that this model will work for all types of news, and we don’t think it should be the only model. Perhaps it will co-exist with a non-profit model like ProPublica, a government-supported model like the BBC, or, perhaps something new, like a non-partisan fund for journalism paid into by the tech platforms that rely on the work of others to fill their newsfeeds. Whatever the case may be, however, it is clear to us that subscriptions will be a giant and important part of a new media ecosystem. It’s the biggest opportunity for news since Benjamin Day invented the penny paper.

A new Day

At the core of Substack’s mission is the belief that, by democratizing the tools that they need to create independent businesses, we can help writers succeed in an era in which the overall market for news grows dramatically. When it has reached maturity, the subscription-based news industry could well be much larger than the newspaper business ever was, much like the ride-hailing industry in San Francisco is bigger than the taxi industry was before Lyft and Uber. Democratizing this subscription-based future will enable more writers to earn more money by writing about what truly matters. It puts the media’s destiny into the right hands.

One hundred and eighty-four years since the New York Sun first went on sale, we are standing on the cusp of a new revolution in the news business. The time for mourning the loss of the old media model is over. Now is the time to look ahead to the next two centuries.