March 7, 2018

It’s been nearly 40 years since the Columbus Dispatch teamed up with CompuServe to put the first newspaper on the Internet.

In those 40 years, news organizations have yet to find a proven solution for earning revenue online. Paywalls might be the answer. Or, without massive organizational change, maybe not.

But despite the long-held internet ethos that “information wants to be free,” a growing voice has declared that good work deserves pay. A new platform called Substack blends that belief with online media’s favorite old-is-new format, email newsletters, to make getting paid for writing a whole lot easier.

Substack combines newsletter, membership management, splash page and payment tools in what co-founder and chief operating officer Hamish McKenzie calls “almost a media business for dummies.”

For inspiration, McKenzie and co-founder/CEO Chris Best looked to Stratechery, a one-man publication about the business of technology and the media. While Stratechery has proven to be a successful business model — author Ben Thompson says he is “fully supported” by his work — McKenzie found that those looking to take a similar path would have to “cobble together an array of tools” that weren’t designed for subscriptions.

Mailchimp to send the newsletter. WordPress to host the sign-up page and non-newsletter content. A membership plugin or a service like Patreon to keep track of subscriptions. A payment portal such as PayPal or Stripe. An application platform like Heroku to link them.

“If you’re tech-savvy enough to put it together, it’s good enough,” Hamish said. “But not great.”

“We thought we could do a business that helps writers by making it easy for them to copy Ben’s model,” he said. “You still have to do the writing but we take everything off the table for you. You don’t have to know the business models or the technology.”

Substack allows writers to set a subscription cost ($5 per month is the lowest chargeable amount due to transaction fees) and the service takes a flat 10 percent cut. Including transaction fees, writers keep $86 of every $100 they earn. Or writers can choose to charge nothing. Either way, Substack doesn’t collect any fees beyond the cut from paid newsletters.  

One of Substack’s first converts was Helena Fitzgerald, a freelancer and author of a newsletter called Griefbacon (the title comes from a German word, kummerspeck, that roughly means the weight gained during grief). The newsletter was previously hosted on TinyLetter and, after publishing somewhere between weekly and monthly for two years, it helped Fitzgerald earn enough paid gigs to quit her job and go freelance full time.

But once she was independent, Fitzgerald found that publishing free essays through Tinyletter was no longer worth her time. So she turned to Substack to get paid for her writing, which she now publishes more frequently.

“It feels like this amount of content is being compensated in a way that allows me to keep producing it,” she said. “The time is worth it now. It’s been pretty lucrative so far.”

Fitzgerald said the newsletter is more a source of supplementary income for now and not something she could do full time, but also that it generates a “similar amount” to if she was writing the piece for a magazine or website.

And she said that though not all of her TinyLetter subscribers have moved over to Substack, a lot of them have, and “a lot of people have been enthusiastic about it.”

“There's so much of a move now to pay people for the work they’re making,” she said.

Substack is appealing to more than individual writers. On Monday, Outside Magazine announced that they were launching paid newsletters with the platform, starting with a weekly newsletter about women’s gear called Dawn Patrol.

The goal is to use Substack to build newsletters around big-name writers, said Scott Rosenfield, Outside’s digital general manager. Rosenfeld said that the magazine has a “ton of specific verticals” but is challenged by audiences who might choose to go to more specific magazines, such as biking, to read about those topics. So Outside brought in “trusted names who have mini brands.”

Some of the money earned will go toward a revenue share for those writers.

That compensation for good work is a big piece of the reason McKenzie and Best started the company. The other piece, Best said, is that they believe it leads to better and more substantial work.

When readers reward work with pageviews, it leads to “superficially compelling but empty calorie content” like clickbait and cheap autoplay videos.

“When you pay writers with money instead of clicks, you buy their best work,” Best said. “And it allows them to get paid but also to do the kind of work that they prefer to do.”

And though the online revenue question is far from answered, Substack’s successes so far have left McKenzie hopeful about the future. At least for those willing to try something new.

“It’s difficult for the publications and outlets that exist to figure out the way forward. The people who are starting anew and going directly to readers for payment … we’ think there are great times ahead and this industry could be bigger than it ever was,” he said. “There’s a long road to go but the early signs we’re seeing are really encouraging.”

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Ren LaForme is the Managing Editor of He was previously Poynter's digital tools reporter, chronicling tools and technology for journalists, and a producer for…
Ren LaForme

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