Updated Nov 21, 2021 - Economy & Business

Big media strikes back at Substack

Illustration of a newspaper with a Substack logo cut out of it
Illustration: Sarah Grillo/Axios

Pressure from new publishing platforms has finally pushed newsrooms to create programs that give writers more pay, autonomy and flexibility. Those changes are attracting some independent writers back to traditional news companies.

Why it matters: The Substack threat to newsrooms was overblown. Newsrooms have been quick to react to the idea of the independent-operator model while journalists have been sharing its challenges or detailing why they decided to return to newsrooms.

Driving the news: The Information is in early stages of launching "The Information Newsletter Network," a platform to power independent newsletter writers on The Information's tech stack.

  • "Everyone in publishing knows the hard part happens after you hit send," says CEO and founder Jessica Lessin.
  • "We are the only solution I've seen that gets that. We've got eight years of experience about how to scale premium subscription publications. No tech platform has that in their DNA, and it shows in their products."
  • The company's first member is Parqor from Andrew Rosen. Rosen's newsletter was previously on Substack. Lessin says the first batch of newsletters are business-related, "but our lens for inviting writers to participate is really just whether we love their content."
  • The platform, she adds, is "designed for subscription newsletters and the vast majority will be paid, but one of the next to launch is currently free and exploring paid related products."

Other news outlets are revamping their strategies to meet the demand.

  • The Atlantic earlier this month rolled out its new newsletter program with nine contracted writers, giving them the ability to take on projects outside of the company while also reportedly giving them a cut of subscriber revenue.
  • The New York Times recently put a bunch of opinion newsletters behind its paywall. Some newsletters will be written by non-Times employees.
  • Puck, a newsletter-based startup that focuses on covering people in power, launched explicitly to give independent writers the support of a brand to help them build their audiences.
  • Forbes in January debuted a newsletter platform that lets journalists launch their own paid newsletters and split the revenue.

Between the lines: Substack on Monday said there are more than 1 million paid subscriptions to publications on its platform, up from about 250,000 in December 2020.

  • "These are subscriptions that didn’t exist before — they’re not being siphoned off from traditional media outlets or redistributed from other platforms," wrote Substack co-founder Hamish McKenzie.

Despite losing a few writers, news executives feel mostly optimistic that Substack's success will help encourage people to get in the habit of paying for quality content, thus bolstering their own subscription efforts.

  • "I would regard anything that is about helping make the market for paid digital journalism is good," New York Times CEO Meredith Kopit Levien told investors this month in response to a question about Substack.

By the numbers: Over the past few months, it's become increasingly clear that Substack — now four years old — has become a haven for controversial writers, given its lack of editorial oversight.

  • Bari Weiss, the former New York Times writer who left the paper, now makes roughly $800,000 on Substack.
  • Alex Berenson reportedly earns around $720,000 per year on Substack.
  • Glenn Greenwald, according to an estimate from The Financial Times earlier this year, is on track to make between $1 and $2 million per year on Substack.

"Substack is way more reliant on political controversy," says Uri Bram, publisher of The Browser, and the author of Thinking Statistically. Bram left Substack for publishing platform Ghost last year.

By comparison, a few top journalists that left mainstream platforms have recently revealed data that showed how building an audience on Substack can be more challenging than anticipated.

  • Eric Newcomer, a Bloomberg veteran, wrote last month he has 1,374 paid subscribers after one year on Substack. The "Newcomer" newsletter is one of the top technology paid publications on Substack.
  • Casey Newton, who authors the most popular paid technology newsletter on Substack, said in September said that he converted a smaller percentage of subscribers to paid than he thought he would in his first year.
  • Charlie Warzel recently wrote when he left Substack for The Atlantic that he accrued 1,600 paid subscribers since leaving The New York Times in April.

What to watch: The newsletter boom will birth new platforms catering to creators looking for a happy middle ground between newsroom support and independence.

  • Workweek launched last week to give business writers full-time support to work independently.
  • Lede, the publishing platform that powers Defector Media, was spun out from its parent company called The Alley Group, to focus more on helping writers spread beyond newsletters and into things like podcasts.

The bottom line: Journalists that crave the infrastructure and editorial support offered by newsrooms are finding more happy mediums as the newsletter industry grows.

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