What do newsletters titled griefbacon, Shan't We Tell the Vicar?, The Shatner Chatner, Sinocism and Off the Chain have in common?
If you answered they're part of some British/Chinese, Trekkie BLT network, you're a bit off. They are all hosted by new SIPA member Substack, a platform that "makes it simple for a writer to start an email newsletter that makes money from subscriptions."
As of July, there were about 11,000 subscribers of Substack newsletters—now there are many more, the founders say—paying around $80 a year to read some of their favorite writers. Open rates soar to 90% on many of the newsletters, and frequency can be 4 or 5 times a week to twice a month.
Recently, Substack has been mostly focused on making platform improvements. They've added a discussion feature for their paying subscribers and built up the analytics end so writers can see critical metrics like how visitors are finding them and open-rate patterns.
I spoke with Hamish McKenzie, one of the three founders, about the realities and hopes for this writer-friendly platform:
SIPA: How did you get the idea?
Hamish McKenzie: I'm a journalist and had just completed a book project. My friend Chris Best and I were frustrated by the deterioration of quality discourse in media—the breakdown of the business models, jobs disappearing, and being forced to play the game where attention is the #1 metric. Chris and I both believed online ads were problematic, and we needed to be bold and put payments back in the center of the media ecosystem. We were both subscribers to Ben Thompson's Stratechery—Ben has been telling anyone who listens that his model is great, and others should try it.
How does Substack work?
It's free for anyone to start. The only way we make money is if our writers are making money. Then we'll start taking a 10% cut. Even if writers are tech savvy, [putting together a paid newsletter] is still a pain in the ass. There's so much overhead. We want to unleash people to focus on writing, not administration. Philosophically, we believe advertising is an inferior model. Subscriptions are a great model. Publishers should be rewarded for quality, not eyeballs and tricks.
As a writer, I see the appeal in that.
It's difficult for the individual to cobble together the tools to run a subscription business like Ben Thompson does—as well as having the business sense to figure out how to make this sustainable. If we can lower the barrier for other writers, it could result in interesting things. So we decided to build a package—a paid newsletter in a box—though it's not without challenges.
How much do subscriptions cost?
They can range from $5 a month for The Shatner Chatner and The Second Arrangement [an NBA blog by veteran sportswriter Kelly Dwyer] to as much as $30 a month for Off the Chain by crypto investor Anthony "Pomp" Pompliano.
Where do audiences come from?
The writers bring and build their own audience—which takes an investment of time and energy. The layout makes it easy to share. Our default font looks good and loads fast so it's very audience-friendly. The writer can also add video, tweets and photos.
And, from an interest standpoint, you have different levels of readers?
Yes, there might be thousands of subscribers casually interested who read occasionally. But then there's another level of reader who is completely devoted; they trust [the writer's] perspective and voice.
And all kinds of writers.
Yes, it's working well for both crowds so far, B2C and B2B. Bill Bishop writes a very popular newsletter about China for investors and academics called Sinocism. Then there's The Shatner Chatner, which is a twice-weekly newsletter based on comedic riffs on literature and bible passages. It really runs the gamut.
It's good to see that paying for quality content is showing life.
We strongly believe that in 5 years there will be a very obvious critical mass of people who will pay for content from writers who they trust. And it will be a mainstream, accepted part of the ecosystem. In the meantime, we have this induction period where people are figuring it out. This can work. People are learning how good an experience it is to be subscribed to an independent writer you love. We're really focused on building that relationship—to get people interested in that model. We'll keep looking for allies.
Editor's note: McKenzie also has a book coming out Nov. 27 titled Insane Mode: How Elon Musk's Tesla Sparked an Electric Revolution to End the Age of Oil. In it, he tells how a Silicon Valley start-up's wild dream came true. Tesla is a car company that stood up against, not only the might of the government-backed Detroit car manufacturers, but also the massive power of Big Oil and its benefactors, the infamous Koch brothers.