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Illustration: Aïda Amer/Axios

A slew of high-profile journalists have recently announced they are leaving newsrooms to launch their own, independent brands, mostly via email newsletters.

Context: Many of those writers, working with new technology companies like Substack, TinyLetter, Lede, or Ghost, have made the transition amid the pandemic.

  • The pandemic strained the finances of traditional newsrooms and publications and sent most journalists to work from home.
  • "I think many people in the journalism world saw how quickly their business fortunes can change during COVID and decided they would rather run their own business as opposed to be dependent on another businesses' ebbs and flows," says Alex Kantrowitz, former Buzzfeed reporter turned author of the Big Technology newsletter on Substack.

Driving the news: Several prominent business, technology or political journalists have left their news companies to launch their own newsletters, including:

  • Alex Kantrowitz (formerly of Buzzfeed), Casey Newton (formerly of The Verge), Josh Constine (formerly of TechCrunch), Andrew Sullivan (formerly of New York Magazine), Emily Atkin (formerly of The New Republic), Anne Helen Petersen (formerly of Buzzfeed) and Matt Taibbi, (formerly of Rolling Stone).
  • They join a wider cohort of journalists and pundits that have started independent newsletters in the past few years, including Ben Thompson (Stratechery) and Bill Bishop (Sinocism).

By the numbers: Substack today has more than 250,000 paying subscribers across its network, and its top 10 publishers bring in $7 million collectively in annualized revenue, according to co-founder Hamish McKenzie.

Of note: The majority of these independent writers are white men working in topic areas like technology, business, or politics where they can blend punditry and analysis with some original reporting.

  • The independent model doesn't work as well for journalists who cover topics that demand daily beat coverage or investigative reporting, or work in areas that require technical support or legal resources.
  • Giving up a regular salary and health insurance is harder for those who lack savings.
  • "You have to have the heart of an entrepreneur," says Kantrowitz. "You have to be willing to take ups and downs."

It can take writers months to develop large and loyal enough audiences to make a decent living — but once they do, the payoff can be substantial.

  • "Building an audience is probably the trickiest part for most folks. Especially getting your first thousand subscribers," says Judd Legum, author of the "Popular Information" newsletter and formerly the editor-in-chief of ThinkProgress. "That's why many people who are successful have started off with some audience. But I do think it's possible to start from scratch."
  • Substack has been piloting programs to provide writers with more institutional support, including advance payment.
  • Its legal program, Substack Defender, is designed to give writers the confidence to pursue tough stories, McKenzie says.

How it works:

  • Most newsletters charge subscribers $60 to $100 annually, meaning they can assemble a personal income without building a huge list. Substack typically takes a 10% cut.
  • Unlike most traditional newsrooms, Substack writers are allowed to keep their subscriber lists and own their Stripe (payment) accounts, giving them a direct billing relationship with subscribers. This makes it easier for writers to take their lists and subscribers elsewhere if they so chose and gives them a direct business relationship with their readers.
  • McKenzie says Substack is "100% focused on subscriptions. We will never build advertising technology into Substack." The subscription approach “better aligns incentives for writers and the platform," he says.

The big picture: The independent model has empowered many journalists and non-journalists to start their own newsletters, pursuing stories that they couldn't write in a traditional newsroom.

  • The model recalls the early days of blogging, with authors free to write in their own voice on topics they have expertise in, but absent newsroom support and editing.
  • "A paid newsletter provides the right incentives for writers because it's not about gaming the Google algorithm or the Facebook algorithm," says Legum.
  • "You actually have to provide something that a reader finds valuable enough to pull out their credit card. The writer is rewarded for doing the best work, which is not the case with most other models."

Yes, but: It also means that writers aren't tied to old-school journalistic institutions and practices that sometimes safeguard them from editorial malpractice or mistakes.

  • Still, most authors that start their own ventures have enough experience and trust amongst their readership that they are willing to address shortcomings or errors with their audience directly.
  • For companies like Substack or others, the biggest risk at this point isn't keeping their authors from making mistakes, but instead stopping their talent from moving their lists and business to other platforms.

What's next: As the newsletter phenomenon grows in popularity, the industry will have to contend with the prospect of newsletter overload and newsletter fatigue.

  • McKenzie doesn’t see Substack as limited to email newsletters and says writers can add podcasts and other media: “Really, a Substack is a mini media empire built around a mailing list, but that’s hard to put on a bumper sticker... Most of the time it’s simpler to just say it’s a newsletter."

Axios' Kia Kokalitcheva contributed to this report.

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