{"id":818328,"date":"2025-01-09T03:12:44","date_gmt":"2025-01-09T09:12:44","guid":{"rendered":"https:\/\/newsycanuse.com\/index.php\/2025\/01\/09\/substack-the-next-big-thing-or-another-media-bubble\/"},"modified":"2025-01-09T03:12:44","modified_gmt":"2025-01-09T09:12:44","slug":"substack-the-next-big-thing-or-another-media-bubble","status":"publish","type":"post","link":"https:\/\/newsycanuse.com\/index.php\/2025\/01\/09\/substack-the-next-big-thing-or-another-media-bubble\/","title":{"rendered":"Substack: The next big thing or another media bubble?"},"content":{"rendered":"
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<\/a>On Substack, Substack Substacks YOU<\/h2>\n

The media industry needs a savior. Maybe the entire knowledge economy does. Enter Substack, the newsletter platform that punches far above its weight in cultural impact, despite its mere $650 million valuation. Launched in 2017 by Chris Best, Hamish McKenzie, and Jairaj Sethi, Substack presents a simple yet alluring opportunity: Journalists, writers, and other creators can monetize their audiences directly, free from the crumbling institutions of traditional media, while Substack earns a cut of their sales.<\/p>\n

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Suggested Reading<\/h4>\n<\/div>\n
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Nvidia’s dominance in AI will continue, but be cautious with quantum computing stocks, strategist says<\/p>\n<\/div>\n

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Suggested Reading<\/h4>\n<\/div>\n

\u00a0It\u2019s a pitch tailor-made for the post-layoffs, post-bylines era. But even as the platform gains influence, it raises questions: Is Substack empowering writers to build sustainable careers, or is it just the latest iteration of pull-yourself-up-by-your-bootstraps optimism?<\/p>\n

Ironically or not, Substack itself thrives on this ouroboros-like discourse. Nowhere is its meaning debated more intensely than on Substack itself, where new and established newsletter operators argue about the viability of newsletter operations. Meanwhile, the company courts creators through direct cash incentives, occasional six-figure advances, and most bizarrely, funding campaigns that rely on its own user base. One thing is for sure: Starting a Substack is itself becoming a crowded trade. For more on that, sign up for our Substack,<\/strike> simply read on.<\/p>\n

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<\/a>By the digits<\/h2>\n

2 million:<\/a><\/span> The number of paid subscriptions on Substack as of February 2023, doubling from November 2021.<\/p>\n

$7 million:<\/a><\/span> Annualized revenue generated by Substack\u2019s top 10 publishers as of August 2021, reflecting the platform\u2019s profitability for leading writers.<\/p>\n

$7.8 million:<\/a><\/span> The amount raised by Substack through a community fundraising round on Wefunder, allowing writers and users to invest directly in the platform.<\/p>\n

$90.2 million:<\/a><\/span> The total funding raised by Substack across five rounds, with notable investors including Y Combinator and Andreessen Horowitz.<\/p>\n

$650 million:<\/a><\/span> Substack\u2019s valuation following its Series B funding round in March 2021, a significant increase from its $49 million valuation in July 2019.<\/p>\n

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<\/a>Your inbox, their soapbox<\/h2>\n

As long as there\u2019s been media, there\u2019s been some form of media disintermediation \u2014 the process of bypassing traditional gatekeepers (such as publishers, broadcasters, or editors) to directly reach an audience. In the 15th century, the printing press enabled writers and activists to disseminate ideas without church or state control. In the 1770s, Thomas Paine pioneered the direct sale of Common Sense<\/em> to reach a wider public. In the 19th century, penny press newspapers bypassed elite news outlets.<\/p>\n

At first glance, Substack appears to be just another stop on this road \u2014 a slicker, digital-age printing press enabling direct connections between writers and readers. But its dynamics are more intricate, combining disintermediation and a subscription model with 21st-century network effects. Writers connect with their readers and with each other, building communities and amplifying their reach. Readers join multiple audiences, paying for content they don\u2019t want to miss, and some may eventually start their own Substacks.<\/p>\n

Proponents say these network effects give Substack an edge over competitors like Ghost and Beehiv by fostering a more interconnected, self-sustaining ecosystem. In 2023, Substack raised more than $7 million through a community round on Wefunder \u2014 not from venture capitalists, but from its own readers and writers, making the platform\u2019s ecosystem even more self-referential. It\u2019s a move that felt both brilliant and a bit surreal, much like Substack itself.<\/p>\n

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<\/a>Quotable<\/h2>\n

\u201cAt the end of the day, talented, entrepreneurial writers with interesting things to say are finding audiences \u2014 and in many cases, paying audiences \u2014 to read and support their work. That\u2019s a beautiful thing.\u201d \u2014Andrew Boryga<\/a><\/span>, a journalist and author with a fast-growing Substack, in an email to Quartz.<\/p>\n

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Image: Gabby Jones\/Bloomberg (Getty Images)<\/figcaption><\/p>\n<\/div>\n

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<\/a>Pop quiz<\/h2>\n

Which of the following writers famously turned down a six-figure Substack Pro advance?<\/p>\n

A. Glenn Greenwald<\/p>\n

B. Heather Cox Richardson <\/p>\n

C. Roxane Gay<\/p>\n

D: Matthew Yglesias<\/p>\n

Check out the answer at the bottom of this email.<\/p>\n

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<\/a>Brief history<\/h2>\n

2017:<\/a><\/span>\u00a0Founded by Chris Best, Hamish McKenzie, and Jairaj Sethi, Substack emerges as a platform for writers to monetize newsletters and bypass traditional media gatekeepers.<\/p>\n

2019:<\/a><\/span> Substack gains traction as prominent journalists like The Atlantic\u2019s Andrew Sullivan start newsletters, inspiring others to jump ship.<\/p>\n

2021:<\/a><\/span> The platform begins offering six-figure \u201cSubstack Pro\u201d advances to lure established writers, fueling debates about its sustainability and fairness to smaller creators.<\/p>\n

2022:<\/a><\/span> Substack raises $65 million in a Series B round, pushing its valuation to $650 million while shunning top-tier VC firms in favor of investing users.<\/p>\n

2023:<\/a><\/span> The platform\u2019s influence dominates media circles, with writers debating its merits on Substack itself, as the platform boasts more than 35 million active free subscriptions.<\/p>\n

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<\/a>Fun fact!<\/h2>\n

Substack\u2019s \u201cSubstack Pro\u201d program provides select writers with significant upfront payments to join the platform. For instance, in 2021 Substack offered a $250,000 advance<\/a><\/span> to journalist Matthew Yglesias to launch his newsletter, Slow Boring<\/em>.<\/p>\n

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<\/a>Watch this<\/h2>\n

Substacks explains itself in this 2-minute YouTube video<\/a><\/span>.<\/p>\n

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<\/a>Take me down this ???? hole!<\/h2>\n

If you prefer not to read about Substack on Substack, Reddit\u2019s r\/Substack subreddit serves as a hub for discussions about the platform, including its features, controversies, and the broader implications of independent publishing.<\/p>\n

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<\/a>Poll<\/h2>\n

Why do you think you<\/em> haven\u2019t been offered a six-figure Substack Pro deal?<\/p>\n