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It lets newsletter writers sell subscriptions to their work, and it takes 10 percent of any revenue the writers generate writers also have to fork over another 3 percent to Stripe, the digital payments company �. The money that Substack and its writers are generating � and how that money is split up and distributed � is of intense interest to media makers and observers, for obvious reasons. From YouTube to Facebook to Snapchat to TikTok, big tech companies have long been trying to figure out ways they can convince people and publishers to make content for them without having to hire them as full-time content creators.
That often involves cash: YouTube set the template in , when it set up a system that let some video makers keep 55 percent of any ad revenue their clips generated�Like Substack, YouTube and the other big consumer tech sites fundamentally think of themselves as platforms: software set up to let users distribute their own content to as many people as possible, with as little friction as possible.
Substack is a tool for Newton and Bishop to run their own business, no different than, say, mine; Kafka writes:.
Ben Thompson, the business and technology writer whose successful newsletter served as the inspiration for Substack, built his own infrastructure cobbling together several services; my former colleague Dan Frommer does the same thing for his New Consumer newsletter. Memberful is a tool I happen to use to run my business, but it has no ownership of or responsibility for what I write. Substack is a tool for the sovereign writer; the sovereign writer is not a Substack employee, creator, contractor, nothing.
Back in I wrote a post called Books and Blogs that explained why subscriptions were a much better model for writers than books:. A book, at least a successful one, has a great business model: spend a lot of time and effort writing, editing, and revising it up front, and then make money selling as many identical copies as you can.
The more you sell the more you profit, because the work has already been done. Of course if you are successful, the pressure is immense to write another; the payoff, though, is usually greater as well: it is much easier to sell to customers you have already sold to before than it is to find customers for the very first time�.
Since then it has been an incredible journey, especially intellectually: instead of writing with a final goal in mind � a manuscript that can be printed at scale � Stratechery has become in many respects a journal of my own attempts to understand technology specifically and the way in which it is changing every aspect of society broadly.
And, it turns, out, the business model is even better: instead of taking on the risk of writing a book with the hope of one-time payment from customers at the end, Stratechery subscribers fund that intellectual exploration directly and on an ongoing basis; all they ask is that I send them my journals of said exploration every day in email form.
Recurring revenue is much better than selling a book once; however, just as you have to spend time to write a book before you can sell it, you need time to build up a subscriber base that supports a full-time subscription.
This is where Substack Pro comes in; from Kafka:. But in some cases, Substack has also shelled out one-off payments to help convince some writers to become Substack writers, and in some cases those deals are significant.
In short, the best Boat Building Companies In Canada 012 analogy to Substack Pro are book advances, which are definitely something that publishers do. This is where the comparison to YouTube et al falls flat: YouTube wants to be permanently in the middle of the creator-viewer relationship, while Substack remains to the side; from this perspective Substack Pro is more akin to an unsecured bank loan � success or failure is still determined by the readers.
Now granted, there may be some number of Substack Pro participants who end up earning less than their advance, particularly if Substack sees Substack Pro as more of a marketing tool to shape who uses Substack; if Substack actually runs Substack Pro like a business, though, I would expect lots of deals like the Yglesias one, which has turned out to be quite profitable for Substack.
As Yglesias himself noted:. Substack is making money off of Slow Boring. More money in fact than they would have made without the deal. They needed upside growth more than I did and I needed to minimize downside risk more than they did. Substack Pro made it possible for Yglesias to launch Slow Boring without worrying about paying the bills, and is making a profit as a reward for bearing the risk of Yglesias not succeeding or succeeding more slowly than he needed.
This, needless to say, is not a scam, which is what Annalee Newitz argued :. Until Substack reveals who exactly is on its payroll, its promises that anyone can make money on a newsletter are tainted. It is, for the reasons I laid out above, easier to get started with a subscription business if you have an advance. No question. Those are real people paying real dollars of their own volition, not because Substack is somehow magically making them do it.
This overstates things, to be sure; while Yglesias built his following on his own, starting with his own blog in , Vox, which Yglesias co-founded, was a team effort, including capital from Vox Media. Still, if we accept the fact that Yglesias charging readers directly is the best measurement of the value those readers ascribe to his writing, then by definition he was severely under-compensated by Vox. But Mr. When the magazine politely showed him the door last month, Mr. Sullivan left legacy media entirely and began charging his fans directly to read his column through the newsletter platform Substack, increasingly a home for star writers who strike out on their own.
That he along with other lightning-rod writers ended up on Substack is more a matter of where else would they go? The fact that Google and Facebook now make a lot of money from advertising is unrelated.
This is also why Substack Pro is a good idea. I am by no means an impartial observer here; obviously I believe in the viability of the sovereign writer. I would also like to believe that Stratechery is an example of how this model can make for a better world: I went the independent publishing route because I had no other choice believe me, I tried.
At the Boat Building Companies In Canada Data Science same time, I suspect we have only begun to appreciate how destructive this new reality will be for many media organizations. Sovereign writers, particularly those focused on analysis and opinion, depend on journalists actually reporting the news. This second unbundling, though, will divert more and more revenue to the former at the expense of the latter. Maybe one day Substack, if it succeeds, might be the steward of a Substack Journalism program that offers a way for opinion writers and analysts to support those that undergird their work.
What is important to understand, though, is that Substack is not in control of this process. The sovereign writer is another product of the Internet, and Substack will succeed to the extent it serves their interests, and be discarded if it does not.
I wrote a follow-up to this article in this Daily Update. These fears led to lots of common carrier and public utilities law covering various industries � railways, the telegraph, etc.
In a speech given 99 years ago next week, Bertrand Russell said that various economic impediments to the exercise of free speech were a bigger obstacle than legal penalties. Exactly the same kind of restraints upon freedom of thought are bound to occur in every country where economic organization has been carried to the point of practical monopoly. Therefore the safeguarding of liberty in the world which is growing up is far more difficult than it was in the nineteenth century, when free competition was still a reality.
Whoever cares about the freedom of the mind must face this situation fully and frankly, realizing the inapplicability of methods which answered well enough while industrialism was in its infancy. What is certainly true is that those powers, at least in terms of social media, feel more centralized than ever. It was a decision I argued for; from Trump and Twitter :. My highest priority, even beyond respect for democracy, is the inviolability of liberalism, because it is the foundation of said democracy.
That includes the right for private individuals and companies to think and act for themselves, particularly when they believe they have a moral responsibility to do so, and the belief that no one else will. Yes, respecting democracy is a reason to not act over policy disagreements, no matter how horrible those policies may be, but preserving democracy is, by definition, even higher on the priority stack.
Merkel sees the Twitter ban of Donald Trump as "problematic". Freedom of speech can be restricted only by the legislator, not by the management a private company. I do suspect that tech company actions will have international repercussions for years to come, but for the record, there is reason to be concerned from an American perspective as well: you can argue, as I did, that Facebook and Twitter have the right to police their platform, and, given their viral nature, even an obligation.
The balance to that power, though, should be the openness of the Internet, which means the infrastructure companies that undergird the Internet have very different responsibilities and obligations. I have made the case in A Framework for Moderation that moderation decisions should be based on where you are in the stack; with regards to Facebook and Twitter:. At the top of the stack are the service providers that people publish to directly; this includes Facebook, YouTube, Reddit, and other social networks.
These platforms have absolute discretion in their moderation policies, and rightly so. First, because of Section , they can moderate anything they want. Second, none of these platforms have a monopoly on online expression; someone who is banned from Facebook can publish on Twitter, or set up their own website. Third, these platforms, particularly those with algorithmic timelines or recommendation engines, have an obligation to moderate more aggressively because they are not simply Boat Building Companies In Canada 2020 distributors but also amplifiers.
This is where much of the debate on moderation has centered; it is also not what this Article is about;. It makes sense to think about these positions of the stack very differently: the top of the stack is about broadcasting � reaching as many people as possible � and while you may have the right to say anything you want, there is no right to be heard.
Internet service providers, though, are about access � having the opportunity to speak or hear in the first place. In other words, the further down the stack, the more legality should be the sole criteria for moderation; the further up, the more discretion and even responsibility there should be for content:.
As that simple illustration suggests, there is more room for action than the access layer, but more reticence is in order relative to broadcast platforms.
To figure out how infrastructure companies should think about moderation, I talked to four CEOs at various layers of infrastructure:. What I found compelling about these interviews was the commonality in responses; to that end, instead of my making pronouncements on how infrastructure companies should think about issues of moderation, I thought it might be helpful to let these executives make their own case. The first overarching principle was very much in line with the argument I laid out above: infrastructure is very different from user-facing applications, and should be approached differently.
The industry is looking at the stack and almost putting it in two layers. At the top half of the stack are services that basically tend to meet three criteria or close to it. One is it is a service that has control over the postings or removal of individual pieces of content. The second is that the service is publicly facing, and the third is that the content itself has a greater proclivity to go viral. Especially when all three or even when say two of those three criteria are met, I think that there is an expectation, especially in certain content categories like violent extremism or child exploitative images and the like that the service itself has a responsibility to be reviewing individual postings in some appropriate way.
However, I do think that in some of the collective reckoning with the effects of social media, the debate sometimes underrates the importance of neutrality at the infrastructure level. The idea of trusting and empowering platforms built on infrastructure to take care of their layer of the stack was a universal one.
Collison made the case that to try and police the entire stack was unworkable in a free society and that this explained why Stripe kicked the Trump campaign off after January 6th, but still supported the campaign indirectly :. This gets into platform governance, which is one of the most important dimensions of all of this, I think.
We expect platforms that are built on Stripe to implement their own moderation and governance policies and we think that they should have the latitude to do so.
The test for, at the platform level, is therefore whether the service as a whole has a reasonable infrastructure and is making reasonable efforts to fulfill its responsibilities with respect to individualized content issues. This middle way � give responsibility to the companies and services on top of your infrastructure, but if they fail, have a predictable process in place to move them off of the platform � requires a proactive approach. Smith again:. Typically what we try to do is identify these issues or issues early on.
Kurian made the same argument against arbitrary decision-making and in favor of proactive process:. We evolve our Acceptable Use Policies on a periodic basis. Remember, we need to evolve it in a thoughtful way, not react to individual crisis.
Secondly, we also need to evolve it in a way with a certain frequency, otherwise customers stop trusting the platform. So we have a fairly well thought out cadence, typically once every six months to once every twelve months, when we reevaluate that based on what we see�. This makes sense as I write this on March 16, , while the world is relatively calm; the challenge is holding to a commitment to this default when the heat is on, like it was in January.
Prince noted:. We are a company that operates, we have equipment running in over countries around the world, we have to comply with the laws in all those countries, but more than that, we have to comply with the norms in all of those countries. That makes us super uncomfortable. Parler was a good case study.
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