Friday morning pinged into life with a mobile alert that my newsletter is now the 97th fastest growing news site on Substack. 🏅📈
It was early - 4.45am - but I was up and about because I was preparing for a very special interview with the Kiwi co-founder of Substack itself
.Substack’s growing fast. It’s now one of the largest news sites in the world, leaving many of the world’s most famous brands trailing in its wake.
Hamish is one of the more thoughtful voices on the future of media, and we’ve compared notes several times over the years.
But with traditional media in a hole, Substack on the rise, and a new funding round in the bank, he’s now looking at ideas for better monetisation - and was willing to share.
Substack has passed five million paying subscriptions.
Sponsorships, ticketing, merch, paid recommendations “are interesting”.
Advertising is over for publishers “because Meta and Google exist”.
Programmatic ads are a hard no and “monetising Notes” is out too.
Winning on Substack is about “earning and maximising trust relationships”.
Many writers are now getting “really wealthy and accruing power”, and
It’s easier than at any time in history to “make a living from the media”.
I also share my experience of quitting big media to build my own audience, and how I’ve diversified to generate my personal income from Substack.
Thank you to , , , , , and more than 100 others for tuning into the chat live via the Substack app.
Thank you to paid subs from the C-suite at UK telco BT, from Condé Nast in New York, another from Yahoo Finance in San Francisco, and also from The Daily Mail in London.
And g’day to new free subs from the UK’s Department for Culture, Media and Sport (DCMS), Amazon in Seattle, FIPP (the International Federation of Periodical Publishers) which represents more than 700 global publishers and is celebrating its centenary, Turkish news outfit and streamer TRT World in Istanbul, Lauren Schell Creative in Toronto, award-winning production company Bondi Rocks Media in Sydney, and newsletter MyFrenchLife. among others…
Headlines
🚨 Here are breaking headlines from sources you can trust
Meta, ByteDance, Google and Snap facing new trial over addiction - Bloomberg
Epic Google deal in doubt as judge doubts they’re “suddenly BFFs” - The Verge
OpenAI seeks government backing to boost AI at $1 trillion valuation - Barrons
YouTube TV pays customers $20 to apologise for Disney blackout - The Verge
Spyware stole personal data from Samsung smartphones for a year - Ars Technica
Kill your commute
🫣 Watch: AFP tells me how its retraining 17,000 in 150 countries for AI’s future.
📖 Read: Publishers debate whether Discovery has become a “worthless dopamine hit”.
📻 Listen: Social justice groups sue ChatGPT alleging it acted as a “suicide coach”.
The Big Story: Founder’s four new ideas for monetising Substack
We began by sharing what we’ve been hearing from publishers. More and more of them are giving Substack a go, and inviting their journalists to give it a go.
Hamish shared that he’s saying that too, but the real power was accruing to independent writers in the creator community - many ex-journalists like us.
“Monetisation through advertising is basically over for traditional media
because Facebook and Google exist”
Hamish: “One simple way to talk about it is that Substack is new land to build on, and that there’s never been a better time to build a media business.
“Whether that’s a traditional publisher built for the previous generation - on models and assumptions that made sense 100 years ago that’s adapting to this new world…
“Or for individuals who see an opportunity to build their own little empire or even something quite big - a new institution - there has never been better infrastructure for starting an outlet like this.
“Subscribing, following and sharing is supporting writers and helping
shape the culture we want to exist”
Chris: “There’s never been more ability to start a media company in a day, and to have access to publish in different formats - video, live, audio - and get it to an audience.
“It’s a greenfield site where people can experiment and see what this form of publishing looks like.”
I asked Hamish about Substack’s momentum.
“Honestly, this might sound like overstating it, but I think it’s more than momentum. I think it’s a revolution.
“There’s more than five million paid subscriptions on Substack now. They didn’t exist eight years ago. It’s a found economy, and that’s not slowing down. The growth is very consistent.
“It’s not about bloggers suddenly being able to make money. It’s about writers generally getting autonomy and power that was previously blocked off to them because of the whole infrastructure they’re operating within.
“Not because that infrastructure was evil, but it favoured centralised institutions. Now we’re in an era where independents can build the next kinds of institutions.”
“It’s not only possible to make a living, it’s possible to get really wealthy
and accrue power you can share”
Next we talked about Substack’s secret sauce, because the landscape is littered with failed attempts to scale independent journalism.
Hamish said they had learned a lot from others’ failed attempts: “Timing. We learned from those who came before, including traditional media.
“We didn’t start with foundational technology. We’re not innovating tech that much. Live video existed already for example.
“But we’re building an entire system, and the system starts with the business model, which is simple and transparent and it works.
“Getting the business model right has been fundamental to laying the groundwork for what follows.”
Next I asked him whether he believed writers can make a sustainable living on Substack, and whether he was looking to extend its monetisation models.
“It’s more realistic with Substack to make a living from media
than at any point in history”
Hamish: “You can look at the leaderboards ranked by revenue. That’s why you’re at 97 today and you’re going to be at 54 tomorrow.
“The Free Press is at the top of politics. It has about 50 staffers and just sold for $150 million plus to Paramount (which I reported on a fortnight ago).
“Below that, you might see an individual like Heather Cox Richardson with maybe one assistant - a very different model - who’s clearly making millions.
“It’s not only possible to make a living, it’s possible to get really wealthy and accrue power you can share with others.
“Deeper down the leaderboard you’ll find many making good livings whose names you might not recognise across fashion, finance, business, technology and so on.
“What’s happening is the support of a new creative middle class. The numbers don’t have to be crazy. You don’t need millions of YouTube followers before monetisation.
“Start now, build an audience. Get 50 subscribers, five might pay, and you’re earning something you can reinvest or pay bills with.
“Get to 1,000 paying subscribers - it’s hard, not everyone does it - but it’s much more attainable than millions on YouTube. Then you’ve got enough to live on.
“Direct subscriptions align the publisher’s interests with the audience’s. The audience is the customer, not the product. That’s key to the cultural shift. But having subscriptions as the bedrock doesn’t foreclose other monetisation options.”
The three of us then discussed whether subs was a better incentive for premium journalism than advertising.
Hamish: “I think the financial model makes it very realistic for many more people to make a living from doing media work than has been possible at any point in history.
“When it comes to other monetisation forms, direct subscriptions are incredibly powerful and interesting and make sure that the publisher’s interests are aligned with the audiences’.
“The direct subscription model really makes the audience the customer instead of the product, and that’s key to a whole audience sea-change in culture that platforms like Substack allow.
“But that’s not to say we’re against other forms of monetisation, but it’s the bedrock.”
“The way to win the Substack game is to maximise the number of
trust relationships you can earn”
Next we discuss how digital advertising corrupted the open web, and how Substack intended to avoid creating similar toxic incentives.
Hamish: “Fundamental to everything we’re trying to build at Substack is creating a better, healthier environment and discourse system than traditional media.
“Monetising from advertising is one thing, but that game is basically over for traditional media because Facebook and Google exist.
“It used to work in the pre-Facebook and Google days because you could build a monopoly in a market and then Macy’s would buy an ad.
“With social media, everyone could have a voice, but the power still accrued to a few at the top, so you didn’t have true democratisation.
“Direct subscriptions are people subscribing to the writers, not subscribing to the platform. That gives direct power to the writers.
“They’re the best proxy we have found for a trust relationship, where writers actually have to earn the respect and trust of an audience over time and hold on to it.
“That requires a different kind of behaviour from the publisher than trying to win a moment in a timeline or a news feed on social media.
“If I had to crystallise the difference with Substack, I’d boil it down to those trust relationships being at the centre of everything.
“And incentivising and creating a different kind of culture entirely.
“If you hang out in Substack, even in the notes feed - which is noisier than the quiet inbox space - the culture is just totally different.
“It’s worlds apart from what you find in Twitter or Facebook or Instagram.
“And that’s because the way to win the Substack game is to maximise the number of trust relationships you can earn.”
Next, I share how I cracked monetisation after two years of trial and error, and explain why I share it with everyone .
“I had no intention of turning on paid subscriptions when I started, but six months in, one of my readers sent a note saying:
“I can’t continue in good conscience reading your newsletter that I value for free.” He then paid me $480, which was a totally random number.
“The result was that I felt permissioned to turn on payments, and told the newsletter’s audience - which was then nearing 1,000 subs - that was what I intended to do.
“Suddenly, other people started paying. Now about seven per cent of my audience pay, and many of them pay more than I charge through founder subscriptions.
“That was mind-blowing and made me feel validated and valued because it was voluntary.”
“Subs are enthusiastically paying because they feel they’re participating in the
mission and the causes they represent”
Hamish: “It’s a different game. You’re trading on your credibility and your integrity, and you don’t get that with one tweet. You don’t get that with a viral moment.
“Something going viral can still serve your need, but your reward is not just internet points.
“It’s some portion of the people who saw that viral post become your sustained and retained subscribers over time.
“And that connection with your audience is your insurance from the volatility of the cruel world and the current media environment.
“People wanting to pay you more than you charge is such an interesting dynamic. I’m so glad that has been uncovered about the world to be a true thing.
“Looking at it as a subscriber myself, I don’t begrudgingly pay for my favourite writers on Substack. I’m enthusiastically paying for them because I feel I’m participating in the mission and the cause that they represent.
“And my act of paying - or just giving my email address - is also like a form of paying and supporting them. Sharing their work is another way of paying them. Through that I’m actually helping to shape the culture that I want to exist.
“While it looks like traditional media in some ways, or it looks like social media in other ways, the whole game is fundamentally different.”
Next, we talked about new monetisation ideas, interrogating whether subscriber bundles might be a growth engine.
“Good culture, good writing, good journalism, which helps shape how we think and
who we are in the world, has been totally undervalued”
Hamish: “Media nerds like us really feel the pain of too many good things that we want to pay for, which starts to add up in the bank account. And one of the things that I think of is: Well, thank f*ck. About time!
“Good culture, good writing, good journalism, which helps shape how we think and who we are in the world, has for too long been totally undervalued.
“It’s nice to have some sort of correction in that direction. People think nothing about paying £7 for a pint, but the piece of writing that changed your life, has to be worth more than one pint a month.
“So, I like the direction it’s going. At Substack, the bigger problem is getting one person to subscribe to more than one thing.”
He then shares some of the ideas the Substack team are working on.
“If we become like Spotify or Netflix - deciding how attention and money is distributed -
then I think we undermine something very important”
“Because of the design of the platform there are some interesting ways to approach bundling that become possible in ways that were difficult or impossible in social media and even traditional media.
“We’re not starting work on that. It’s still in the: Isn’t this interesting as an idea category, but there are two things that are kind of interesting to imagine.
“One is having a network of Substacks where someone who subscribes to one gets a cheaper rate for the second, third, fourth and fifth ones.
“Or maybe you want to team-up with your mates and offer a special deal for all your Substacks together.
“Another is what if you as a subscriber pay a set amount - say $50 bucks-a-month or something - that gives you access to a number of Substacks and you then decide which get the credit or the money from the payment.
“The thing that we want to be careful about doing is not undermining the secret sauce - the direct relationship between the publisher and the audience.
“If we become like Spotify or Netflix, where we are deciding how attention and money is distributed, then I think we undermine something very important.”
Next we discussed how Future Media went from my side hustle to a full time job that sustains my family of three children.
How it expanded organically from voluntary subscriptions into scaling subscriptions. That raised awareness which led to $1,000-a-month syndications to other news outlets.
That grew an influential audience, and when it passed 3,000 two years in, I began selling $20,000 monthly sponsorships.
As word spread, the quality of interviewees rose, leading me into podcasting. As that grew, it led to a world tour of live pods (London, Paris, New York, New Orleans, Madrid and Sydney).
That then led to multiple lucrative paid speaking engagements (US$15,000), addressing the United Nations and a Netflix documentary in Cuba.
And then to consulting.
We discuss how Substack has taught me to run my personal finances like the P&L of the major media companies I used to lead.
In order of value, my earnings now come from public speaking, followed by consulting, sponsorships (newsletter and podcast), subscriptions, syndication,
All of these things have been created and enabled because of the credibility I received from scaling a valuable audience on Substack.
Were there clues in there for Substack, we wondered.
“Direct subscription is the enabler, but sponsorships are interesting. So is ticketing, merchandising, paid recommendations…”
Hamish: “We’ve been pretty public about being interested in sponsorships. We raised a round of financing in July and announced it.
The New York Times hyped it a little bit saying Substack is getting interested in advertising. What we’re interested in is sponsorship that gives more power to writers.
“We would give them control and the lion’s share of the revenue of that money. That’s something that Substack is uniquely placed to help writers with, and set parameters around so it doesn’t degrade the experience for subscribers.
“You can imagine Substack could one day make it simple for you to connect with a sponsor in a way that feels good to you, the writer, and you get to say yes or no to them.
“There might be certain rules. Maybe you can’t put that sponsor in the paid version of your newsletter, only the free version.
“But there’s so much to be determined and discovered about that. Anything I say about it should be taken with a grain of salt.
“But I definitely think that once you’ve got a direct audience relationship and trust over time, then it’s a foundation for all sorts of monetisation opportunities.
“Direct subscription is the enabler, but sponsorships are interesting. So is ticketing, and merchandising. There are all sorts of possibilities.
“We’re definitely not saying programmatic advertising. That doesn’t care about the sacred relationship between a publisher and their audience.
“And we’re not talking about monetising the notes feed, or the social networking features.
“Perhaps there’s a way that writers could promote themselves or each other through the social features?
“Recommendations exist at the moment. Maybe there’s a paid recommendations thing in the future.
“I’m speaking about this all hypothetically, we don’t have any concrete plans, but these are interesting thoughts as the ecosystem matures.”
He added:
“There’s a major difference between programmatic advertising and the kinds of advertising you see showing up on social media feeds that actually have the power to warp the incentives of the whole system.
“And sponsorships - where there’s alignment between the publisher and the sponsor - where the audience doesn’t feel cheapened or used by the publisher...
“Where the sponsorship actually gives the writer more power and more revenue… I think that’s a really interesting opportunity.
“We haven’t seen many platforms deliver that kind of power to writers in that way.”
Then a warning:
“It’s easy to let subscriptions corrupt you. There are some unconscious things that can slip in, like not writing critically about that (sponsor) company.
“You need to set high standards for yourself and your journalistic and editorial integrity.
“That’s something you need to be vigilant about, and keep in mind that what you’re trading on is your integrity.
“But then, I think you can make some careful judgments and calls that can actually improve the experience for the audience rather than diminish it.”
Next we talk about focus and deadlines. As CEOs and news editors, Chris and I have lived with these most of our careers, but Substack has changed the perspective.
Chris asks whether the platform is less about reacting fast to breaking events and more a place for considered reactions.
“People are increasingly going to Substack to get instant analysis and sometimes breaking news from people they most trust, like you guys”
Hamish: “Substack is where people go to make sense of something. That’s not necessarily about being the fastest to break the news or give the fastest take.
“It’s a place for thought and consideration and making sense of the world, and I think the writers who do best on Substack are those who carry that spirit.
“However the advent of Substack live does make new things possible. Two nights ago, Zohran Mamdani won the mayoralty of New York, and that was a big moment.
“Substack was alight with people live from the scene or doing live dissections of what this all means and talking about the election results.
“They were even live announcing their election results in a way that reminded me of how you would have turned on CNN or Fox or whatever for that instant coverage.
“People increasingly, are going to go to Substack to get their instant analysis and sometimes breaking news from the people who they most trust; people like you guys.”
Coming up
The start of a two-part series with the recently departed head of the Google News Initiative Richard Gingras which sheds light on the backroom thinking at the search giant about the value, potential - and capabilities - of the news industry.
