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When I was building my first Substack newsletter, there were no third party resources available for newsletter creators. Getting my first 250 paid subscribers was hard! That's why I created the first Substack Course.
CASEY BOTTICELLO
Founder, Blogging Guide
Substack is a newsletter publishing platform, designed to be a turnkey service for writers. Not only does it provide easy, point and click tools for writing and publishing a newsletter, Substack also makes it easy for writers to get paid for their content, too.
Substack has quickly emerged as one of the most popular passion economy platforms.
The service is becoming popular because of the ease of use, and because it puts control back into the hands of writers. Those who choose to write and publish newsletters are not subject to the restrictions and limitations of social media outlets or political leanings of traditional media publishing platforms.
This article provides a comprehensive overview of Substack’s history as a company and a digital publishing platform.
Substack History and Mission
Substack was launched in 2017 by Chris Best, Jairaj Sethi, and Hamish McKenzie. Best was a Kik messenger co-founder, Sethi a developer, and McKenzie a former tech reporter.
These founders wanted to “build a better future for writers” by giving them a way to earn money directly and on their own terms. The primary goal, Best said, is “to allow writers and creators to run their own personal media empire.”
Writers, bloggers, podcasters, and creators of all types are often limited by modern publishing platforms in multiple ways. Because of the need to adhere to restrictions, tiptoe around political leanings, and carefully attempt to not become targeted by cancel culture, creativity is too often hindered.
Additionally, most traditional online media outlets rely on advertising to generate revenue. The problem with this is that ad revenue is usually dependent on page views. To generate page views, writers often have to resort to click-bait strategies, like salacious headlines.
On top of this, so much of news today is controlled by social media algorithms, with only the most click-bait heavy articles getting significant exposure.
This reality doesn’t lend to thoughtful writing or in-depth analysis. Substack allows writers to be supported by those who love their work, somewhat similar to Patreon. They don’t have to pursue the most page views, and can instead focus on doing quality writing.
As they wrote in their manifesto:
News organizations—and other entities that masquerade as them—are turning to increasingly desperate measures for survival. And so we have content farms, clickbait, listicles, inane but viral debates over optical illusions, and a “fake news” epidemic. Just as damaging is that, in the eyes of consumers, journalistic content has lost much of its perceived value—especially as measured in dollars.
Substack wants to be the place writers are free to pursue their own beliefs, ideas, and commentary directly with their audience, and support themselves in the process. New or casual creators might earn a nice side income and others may choose to create a lucrative income stream.
As Falon Fatemi notes in Forbes:
Beholden to editors, advertisers, and page-view metrics, the freedom of journalists has long been constrained. Journalists are flocking to Substack in hopes of gaining back this freedom—creative, editorial, as well as financial freedom. Substack offers journalists a platform to say whatever they want, unencumbered by editors.
Most modern media platforms filter and censor content regardless of what the reader is interested in. With Substack, readers also benefit because they’re able to connect with thought leaders and creators that they want to hear from.
Substack is also trying to rebuild trust between journalists and readers. Journalism, as an industry, has long been the focal point of critical examination. In 2019, however, a Gallup/Knight Foundation survey on public trust and confidence in American institutions estimated that only 6% of Americans had “a great deal” or “quite a lot” of confidence in the press.
Substack hopes to repair the falling trust of readers. Authors are free to write what they want without worrying about how many page views they’ll generate, as they’re not being incentivized by anything other than an engaged audience.
How Does Substack Benefit Content Creators?
According to Forbes, the United States media industry suffered more than 30,000 job cuts in 2020. The reputation of many publications, and particularly social media outlets, has fallen off a cliff in the same time period, leaving freelance and staff writers struggling to support themselves. So even when content creators have not had to struggle with filtering and censoring, they still lost income.
Substack gives writers, podcasters, and other creators their own voice. Content creators can launch Substack a newsletter at no cost and have a ready-made website available to help promote the newsletter.
They can then choose how to charge subscribers, and what content can be free vs what will be paid for. Substack retains 10% of the subscription income for themselves, and publishers also pay payment transaction fees to Stripe.
Another benefit of Substack is how easy it is to use. Rather than having to use complicated landing page software and integrate that software with an email provider, Substack users can get up and running in a matter of minutes.
Not only is it easy to create a Substack newsletter, but it is very easy for writers to format their Substack newsletter to make it look professional.
For journalists, Substack offers significant resources to pursue challenging stories. Its legal program, Substack Defender, provides writers access to top-notch lawyers who provide advice in the event of uncertain or complex legal issues related to their work.
Substack Defender offers pre-publication legal review of stories and responds to cease-and-desist letters on behalf of authors. What’s more, Substack commits to covering up to a million dollars (sometimes more) once the case has been taken on by Defender lawyers.
Possibly the biggest benefit is that control is put back into the content creator’s hands. Creators get the benefit of having a direct line of communication with their readers while not having to be constrained by advertisers, editors, and management.
This allows authors and journalists to build their own unique personal brands, which isn’t something most have been able to do working at traditional media outlets.
Historically, readers would follow a publication as a whole, but not an individual journalist. Now with journalists taking charge of distribution on Substack, things are starting to change.
Large media companies are no longer the only powerhouses in the journalism world. This has started to change as many readers have begun following specific journalists instead of publications. This allows them to build personal brands that aren’t dependent on working for a specific publication.
Content creators are not obligated to stay with Substack either. They own their email list and can move to another service at any time. Having true email list portability gives content creators more options and flexibility.
Who Writes on Substack?
Substack boasts popular journalists and beginners alike. Topics can be whatever the writer wants to write about, and range from business and technology, to faith, literature, news, health, politics, recipes, and even witchcraft. Some of the featured newsletters include Time Travel Kitchen by Jolene, Adventure Snack by Geoffrey Golden, and Counterpoint by various political cartoonists.
Substack has a leaderboard of sorts, that spotlights the top newsletters in general and in each category. When you drill down by category, you’ll see how much each newsletter charges and get a general idea of how many subscribers it has. Click on each one to get a preview of the content they offer.
The 2020 coronavirus epidemic led Substack to extend grants as a way to entice writers onto the platform, and provide them with funding when other publications were closing their doors.
Since there were little to no sports events to report on, for instance, many sport’s writers and reporters were left scrambling to cover their income. Some joined the Substack platform and began publishing their own independent sports-oriented newsletters, while others went to competing outlets.
Some writers have been paid advances to write on the platform, similar to the way traditional publishing houses pay advances to authors when signing them on for book deals. In early 2021, those offers were known as Substack Pro. Critics complain that there is not enough transparency about who Substack offers advances to.
How Much Money do Substack Writers Make?
Substack doesn’t provide data on exactly how much specific authors make, but it has revealed that it’s top 10 authors collectively make more than $20 million per year.
And it’s not hard to estimate what individuals make when you look at how many subscribers they have and how much they charge per subscription.
This is demonstrated through various earnings reports shared with me, but also reflected in my own newsletter’s success on the platform. Blogging Guide earns close to $1,000 per month in Monthly Recurring Revenue (MRR) in June 2021. Below is a screenshot of my Substack newsletter earnings through early May 2021:
Suffice to say, many authors earn thousands of dollars every month through their newsletters.
How Does Substack Operate?
When Substack first launched, they contacted popular writers and asked them to become creators on their platform. One of the first to sign up with Bill Bishop, with his popular newsletter, Sinocism. Initially he offered his content for $11 per month and published content daily. As of 2020, many large, popular newsletters are published through the platform, some with over 100,000 subscribers.
Substack offers its platform to writers for free (or until a writer enables monetization and successfully gains paid subscribers). When writers and creators decide to start charging for their content, they simply pay a small percentage in commission to Substack.
Substack’s commission is 10%. Payments are processed through Stripe, which has standard payment processing fees separate from the Substack commissions.
Substack collects 10% of all revenue generated by your newsletter. Additionally, Stripe, the payment processor Substack uses, charges 2.9% + $.30 per transaction fee.
So what does this actually look like, in practice?
Using my own newsletter as an example, a $50 payment, from a reader, for an annual subscription to Blogging Guide, nets me $42.75 (14.5% taken in total fees).
This might not seem like a lot, but if you are going to try to grow a large Substack audience, this amount can become a meaningful difference.
So it is important that you pick a newsletter subscription price, that will meet your needs net of the fees from Substack and Stripe.
Writers can set their own subscription newsletter pricing at rates of $5 per month or higher.
Substack provides the tools for writers to get set up and publishing quickly. In addition to the newsletter, each creator gets a custom sub domain on the Substack website, and their free content is posted there to act as a free preview of the email content. Content creators can choose to have all of their content free, all of it behind the paywall, or some free and some premium. Substack leaves those decisions up to each individual.
In May 2021, Substack acquired People & Company to help build out their community by supporting and mentoring writers. The acquisition announcement on their blog states, “we intend to do a lot more to help the undiscovered, under-appreciated, and under-resourced writers of the world succeed with this model.”
Substack used some of the Series A funding to attract writers through fellowships, stipends, and grants. They intend to rapidly expand that approach with the second funding round. Initiatives include:
- Expanding financing that helps writers start publications
- Expanding grants, fellowships, and training (Note: Blogging Guide was a recipient of the Substack Independent Writer Grant Program).
- Supporting local news and reporting
- Expanding the legal support program for writers
- Building more powerful tools
- Adding to their team
The Future of Journalism?
The free speech approach Substack has taken is both refreshing and controversial. In the United States, free speech is supposed to be the norm, but it has unfortunately been targeted heavily through online outlets and social media.
Substack’s founders were “fed up” with the social media diet, and the online media’s tendency towards focusing more on clickbait and sensationalism rather than news and thoughtful commentary.
Substack has already been targeted by online activists. Activists claim that Substack is encouraging racism and transphobia because they allow certain political writers to maintain newsletters on the service. The “cancel culture” trend online is to delete, block, restrict, and remove things that people don’t like, and activists often bully companies into complying with their specific desires and beliefs.
And while there’s certainly room for debate regarding whether Substack should restrict certain topics, their desire to give authors editorial freedom is certainly commendable.
If you want to learn more about Substack, check out our Substack guide, or enroll in our Substack course!
