November 21, 2022

Worried that your Twitter blue check verification mark is going away or that the scuttled plan to charge $8 a month for it is coming back? Newsletter publishing platform Substack has a deal for you.

Ten days ago, Substack announced that authors who charge for subscriptions can earn and post Bestseller badges (if they choose to) – purple for those with tens of thousands of subscribers, orange for thousands and white for hundreds.

It is one of a number of new features the platform has chosen to roll out concurrent with Elon Musk’s takeover of Twitter. Others include a Chat option, cross-posts and recommendations – gradual steps to making the site at least a bit more social for authors and readers.

More broadly, Musk’s right-leaning version of free speech and deep job cuts, reducing the level of policing false or objectionable content, leaves some wondering whether Twitter is a place they still want to use for public posting.

I asked Substack co-founder Hamish McKenzie why those dissatisfied with seemingly dissimilar Twitter, with its short format tweets, might want to switch to Substack.

 “For as long as Substack’s been around,” he emailed, “it’s been the place where people can directly connect with their audience, far removed from the noise of social media and other ad-based models. That hasn’t changed, but this moment around Twitter has provided an opportunity to highlight what’s different about Substack: that it is a place where they can do their best work, get paid for it, and retain ownership over all the things that matter (their content, their IP, their mailing lists, and even their payments relationships).

“For readers, Substack is a place where they can support independent writers and spend their attention on things they care about, rather than doom-scrolling through feeds full of ads.” 

McKenzie added, “While Twitter and Substack both allow writers to share their thoughts, the similarities pretty much end there.” 

That was my sense. Even pre-Musk, Twitter has been a noisy, crowded space, home to everything from mini-essays (in threads), to funny pet photos and to who knows what else.

Substack, by comparison, is orderly and tranquil. You pick some newsletters you want to read, pay if the author charges for them, and that’s it.

That doesn’t mean moderation is a non-issue for Substack. Its content policy bans hate speech and pornography, but it also wrestles with what, if anything, to do about falsehoods and offensive views. 

The five-year-old private company is sparing in releasing numbers, not saying how many total writers it has or how many will qualify for the new badges. It does boast that its top 10 earners, led by Heather Cox Richardson and her “Letters from an American,” together take in $25 million a year.

Substack now has more than 1.5 million total subscribers, McKenzie said.

Elsewhere it has been reported that Substack has raised $82.4 million in venture capital, implying a valuation of $650 million.

The business model is straightforward. Writers can produce their newsletters on the site for free. If they choose to charge ($5 a month is the minimum), Substack gets 10% with another 3% going to payment processor Stripe.

The niche digital self-publishing market was pioneered by Substack’s main competitor, Medium, started five years earlier and developed by Twitter co-founder Evan Williams. Medium was immediately appealing to writers because of its elegant typographical design and ease of use. It has experimented with several revenue models including a $5-a-month blanket subscription, opening access to a range of content and additional features.

When Substack came along, the newsletter format was gaining steam.  Substack was built less around display features and more on the premise that writers could make money – a lot if they were popular but some if they were hobbyists or using the newsletter as a side gig.

Substack has recruited established writers (like Bari Weiss, formerly of the New York Times) who think they have a strong personal brand and can increase their earnings and impact. In some cases, it has paid signing bonus advances.

While still primarily text-based, the platform is beta testing video and investing in various audio features, McKenzie said.

I asked where Substack stands as a business after five years and where it is headed next. McKenzie’s reply: “We’re in a strong position, and we’re growing as new writers start Substacks every day. We’re proud of the work we’ve done to make it possible for writers to go independent and make a living, or even a fortune, on the platform. …

“In terms of what’s to come, we’re excited about continuing to build out the Substack network. … This is just the beginning. We’ve got so much more to do.”

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Rick Edmonds is media business analyst for the Poynter Institute where he has done research and writing for the last fifteen years. His commentary on…
Rick Edmonds

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