Why We’re Freaking Out About Substack

A company that makes it easy to charge for newsletters has captivated an anxious industry because it embodies larger forces and contradictions.

By Ben Smith

April 11, 2021, 6:44 p.m. ET

Danny Lavery had just agreed to a two-year, $430,000 contract with the newsletter platform Substack when I met him for coffee last week in Brooklyn, and he was deciding what to do with the money.

“I think the thing that I’m the most looking forward to about this is to start a retirement account,” said Mr. Lavery, who founded the feminist humor blog The Toast and will be giving up an advice column in Slate.

Mr. Lavery already has about 1,800 paying subscribers to his Substack newsletter, The Shatner Chatner, whose most popular piece is written from the perspective of a goose. Annual subscriptions cost $50.

The contract is structured a bit like a book advance: Substack’s bet is that it will make back its money by taking most of Mr. Lavery’s subscription income for those two years. The deal now means Mr. Lavery’s household has two Substack incomes. His wife, Grace Lavery, an associate English professor at the University of California, Berkeley, who edits the Transgender Studies Quarterly, had already signed on for a $125,000 advance.

Along with the revenue the Laverys will bring in, the move is good media politics for the company. Substack has been facing a mutiny from a group of writers who objected to sharing the platform with people who they said were anti-transgender, including a writer who made fun of people’s appearances on a dating app. Signing up two high-profile transgender writers was a signal that Substack was trying to remain a platform for people who sometimes hate one another, and who sometimes, like Dr. Lavery, heatedly criticize the company.

Refer someone to The Times.They’ll enjoy our special rate of $1 a week.

Feuds among and about Substack writers were a major category of media drama during the pandemic winter — a lot of drama for a company that mostly just makes it easy to email large groups for free. For those who want to charge subscribers on their email list, Substack takes a 10 percent fee. “The mindshare Substack has in media right now is insane,” said Casey Newton, who left The Verge to start a newsletter on Substack called Platformer. Substack, he said, has become a target for “a lot of people to project their anxieties.”

Substack has captivated an anxious industry because it embodies larger forces and contradictions. For one, the new media economy promises both to make some writers rich and to turn others into the content-creation equivalent of Uber drivers, even as journalists turn increasingly to labor unions to level out pay scales.

This new direct-to-consumer media also means that battles over the boundaries of acceptable views and the ensuing arguments about “cancel culture” — for instance, in New York Magazine’s firing of Andrew Sullivan — are no longer the kind of devastating career blows they once were. (Only Twitter retains that power.) Big media cancellation is often an offramp to a bigger income. Though Substack paid advances to a few dozen writers, most are simply making money from readers. That includes most of the top figures on the platform, who make seven-figure sums from more than 10,000 paying subscribers — among them Mr. Sullivan, the liberal historian Heather Cox Richardson, and the confrontational libertarian Gle nn Greenwald.

This new ability of individuals to make a living directly from their audiences isn’t just transforming journalism. It’s also been the case for adult performers on OnlyFans, musicians on Patreon, B-list celebrities on Cameo. In Hollywood, too, power has migrated toward talent, whether it’s marquee showrunners or actors. This power shift is a major headache for big institutions, from The New York Times to record labels. And Silicon Valley investors, eager to disrupt and angry at their portrayal in big media, have been gleefully backing it. Substack embodies this cultural shift, but it’s riding the wave, not creating it.

And despite a handful of departures over politics, that wave is growing for Substack. The writers moving there full time in recent days include not just Mr. Lavery, but also the former Yahoo News White House correspondent Hunter Walker, the legal writer David Lat and the columnist Heather Havrilevsky, who told me she will be taking Ask Polly from New York Magazine to “regain some of the indie spirit and sense of freedom that drew me to want to write online in the first place.”

(Speaking of that spirit: Bustle Digital Group confirmed to me that it’s reviving the legendary blog Gawker under a former Gawker writer, Leah Finnegan.)

And a New York Times opinion writer, Charlie Warzel, is departing to start a publication on Substack called Galaxy Brain. (Substack has courted a number of Times writers. I turned down an offer of an advance well above my Times salary, in part because of the editing and the platform The Times gives me, and in part because I didn’t think I’d make it back — media types often overvalue media writers.)

The Times wouldn’t comment on his move, but is among the media companies trying to develop its own answer to Substack and recently brought the columnist Paul Krugman’s free Substack newsletter to the Times platform. And newsrooms can offer all sorts of support that solo writers don’t get. Jessica Lessin, the founder and editor in chief of The Information, a newsletter-centric Silicon Valley subscription publication, said part of its edge was “sophisticated marketing around acquiring and retaining subscribers.”

Substack’s thesis is, in part, that media companies underpay their most prominent writers. So far, that seems to be bearing out. Mr. Warzel isn’t taking an advance, and many of the writers who took advances now regret doing so: They would have made more money by simply collecting subscription revenue, and paying Substack 10 percent, than making the more complex deals with money up front.

The former Vox writer Matthew Yglesias calculated that taking the advance wound up costing him nearly $400,000 in subscription revenue paid to Substack. The writer Roxane Gay told me she earned back her advance within two months of starting The Audacity ($60 a year) with an audience of 36,000, about 20 percent of them paying. She also wrestles with what she sees as Substack “trying to have it both ways” as a neutral platform and a publisher that supports writers she finds “odious,” she said, but has concluded that her dislike of someone’s work is “not enough for them to not be allowed on the platform.”

Isaac Saul, who told me his nonpartisan political newsletter Tangle brought in $190,000 in its first year, wrote recently that he came to Substack “specifically to avoid being associated with anyone else” after being frustrated by readers’ assumptions about his biases when he worked for HuffPost.

One of the writers who left Substack over transgender issues, Jude Doyle, argued that its system of advances amounted to a kind of editorial policy. But the analogy to a media company isn’t clear. Grace Lavery said she wanted Substack to broaden its definition of harassment, but said she didn’t think threats to boycott the email service over writers she disagrees with made political sense. She has had bitter public disputes with other Substack writers, including the journalist Jesse Singal, over their writing on gender policy. “Boycotting Substack because of Jesse Singal would be like boycotting a paper company” over a writer who has books printed on their paper, she said.

Mr. Singal compared Substack with the unregulated, decentralized internet of a decade ago. “In the golden age of blogging, writers hated each other but they went back and forth over each other’s ideas. Now, people call the manager all the time,” he said.

So the biggest threat to Substack is unlikely to be the Twitter-centric political battles among some of its writers. The real threat is competing platforms with a different model. The most technically powerful of those is probably Ghost, which allows writers to send and charge for newsletters, with monthly fees starting at $9. While Substack is backed by the venture capital firm Andreessen Horowitz, Ghost has Wikipedia vibes: It is open-source software developed by a nonprofit.

One of Substack’s biggest newsletters, The Browser, with 11,000 paid subscribers, left for Ghost last August. Nathan Tankus, an economics writer who is leaving Substack over trans issues, has also moved to Ghost. David Sirota, who runs the left-leaning investigative site The Daily Poster, said he was considering leaving for Outpost, a system built on Ghost, because “we want our operation and our brand to stand on its own.”

And it’s easy to leave. Unlike on Facebook or Twitter, Substack writers can simply take their email lists and direct connections to their readers with them.

Substack’s model of taking 10 percent of its writers’ subscriptions is “too greedy of a slice to take of anyone’s business with very little in return,” said Ghost’s founder and chief executive, John O’Nolan, a tattooed, nomadic Irishman who is bivouacked in Hollywood, Fla. He said he believed subscription newsletter publishing was “destined to be commoditized.”

But Ghost represents an even purer departure from legacy media. More than half of the sites on the platform simply run the software off their own servers.

“The technology is designed to be decentralized, and there’s no one institution or one corporation that can decide what is OK,” he said.

Ghost isn’t the only alternative, of course. Twitter recently bought the newsletter platform Revue, and Facebook is developing ambitious plans for a rival that will provide a platform for local journalists, among other writers. The left-wing commentary site Discourse Blog moved to a rival platform called Lede. Others, like the tech analyst Ben Thompson, cobble together email, blogging and payment services to be what he calls “sovereign writers.”

Substack and its backers are alert to the risk that the service could be replaced by someone charging a few dollars a month. But they note that many writers simply don’t want to be bothered with anything other than writing, and happily pay the premium for that. (“I don’t have time to sit around trying to figure out platforms,” Ms. Gay said.) Substack is also racing to add elements of centralized support, like helping readers with their lost passwords and limited legal and editing help. And communities of writers on the same platform may gain subscribers through cross-promotion. Mr. Sullivan, who said he saw Substack as his tech platform, not his publisher, has begun deliberately promoting smaller writers in an “In the Stacks” section and said he was interested in figuring out how to bundle subscriptions.

This week, eight writers who cover tech, media and culture — Mr. Warzel, Mr. Newton, Anne Helen Petersen, Nick Quah, Eric Newcomer, Delia Cai, Ryan Broderick and Kim Zetter — are starting a “virtual newsroom” called Sidechannel on Discord, a platform for text and voice conversations, Mr. Newton said. The Discord server will be open to a subscriber to any of their publications.

It’s unclear if this kind of bundling will ultimately make Substack stronger — or make it dispensable. One of the group, Mr. Quah, does not use Substack, and Mr. Newton said, “We all think of this as a vehicle for us to build our independent businesses, rather than as an extension of Substack itself.”

One of Substack’s co-founders, Hamish McKenzie, told me in an interview from Wellington, New Zealand, that he welcomed the competition on technical features because he thinks Substack will distinguish itself on “the human stuff.”

“We’re coming out of this era where platforms own people, and moving into this era where people own platforms,” he said. “We have to prove to the writers we’re delivering enough value to them to keep them happy and help them succeed.”

The story of Substack, the company, is interesting and, of course, meaningful to its investors. But the shift in power toward individual writers and direct payments has broader implications. And my informal survey of Substack writers found that most are fond of the company and plan to stick around for now — but not out of the sense of loyalty, shared mission or deep identification that used to run through media companies.

“Taking V.C. money does not create in me a sense of obligation,” Mr. Lavery said.