This article exists because of the generosity of paid newspaper subscribers. If you value my writing on Medium, joining them is a great way to help.
Love it or hate it, we live in a subscription period.
I’m not talking about the streaming platforms that have touched the wallet for years or the newspapers and magazines that just ushered their longtime ally into the new digital age. No, I’ll tell you everything. Beer, insurance, and movies: are just three crazy cards I currently accept.
This trend is the result of the demise of digital advertising and the decline of the high street. These are two related trends that have had a significant impact on the way procurement works. Media companies — whether it’s Netflix or the New York Times — can’t rely on ad revenue to offset their spending. Likewise, the rise of online sales has prohibited costs charged for doing IRL work and, instead of going to the local bottle shop for my craft beer, once a month They ship it to me. And where the product isn’t available on a subscription basis, those businesses are using subscriptions to drive loyalty: just look at ASOS Premier, which is fixing faster and faster.
However, we all already know this because we are all witnessing human life in 2023. However, the impact of the increased subscription program has been spectacular in the media. It changed the way people worked — not just jobs themselves, but future employees and prospective employees. Just look at this quote from British journalist Emma Gannon, courtesy of the Press Gazette, whose lucrative Substack has 26,000 subscribers: “One of my passions is talking about fair compensation for writers about really — not only that but also writing and creating a really good consequence of developing — because I think in the past people tended to see it as a hobby or just a hobby.”
He credits Substack with that offering — a beautiful concept, and one, perhaps, not hard to imagine among 26,000 customers. Of course, Gannon is not alone in having this experience with Substack, I think journalists previously constrained by things like “contract” and “editorial” find it liberating In the early days Substack is aggressive in providing financial security to his top — partners — writers: anecdotally I I heard they were offering 1.5x the salaries of the magazines/newspapers they used to poach columnists from.
The question is not “Can you make money with Substack?”. or “Can you find an audience with Substack?”. But what about the average? Substack CEO Hamish McKenzie was quoted as putting Substack’s customer base at “millions,” which isn’t very helpful. Globally, there will be an estimated 500,000 paying customers by 2021, according to Nieman Lab. According to Axios, more than 17,000 authors run paid Substacks (including myself) and the Top 10 publishers made more than $25m last year.
Very good, I’m happy. Substack’s figures also show $300m from writers, though they don’t necessarily constitute an “annualized” figure (as it’s $25m). But let’s assume it’s for convenience’s sake. That leaves $275 million to be distributed to 16,975 authors, an even average of $16,200 per book. A nice side hustle, if not a living.
But if the Top 10 publishers make about $2.5m a piece, let’s still assume that the rest of the Top 100 (the top 0.59% of paid Substack authors) make $500,000 and then lose another $45m and have $230m left we will share in the 16,000 (suddenly average income). , down to $13,609 if evenly distributed). You can run this exercise as many times as you need to know that the average paid Substack author makes no money. And maybe that means they don’t broadcast to anyone.
While these speculations were floating around Substack — which is currently running a fundraiser that encourages authors to invest in the platform — OnlyFans, the UK-based subscription service for *cough* fans, released its 2022 finance subject 5.6 billion on the site last year It was the cost of dollars, which the site takes a 20% discount before delivering to developers. That translates to about $4.5bn distributed by OnlyFans to its 3.2m users (with a staggering 47% increase from 2021).
Equally distributed among all producers, this would be only $1,406 per person. However, like Substack, OnlyFans, of course, is not perfect. The inequality is even worse. The highest earners on OnlyFans can earn about as much as the highest earners on Substack combined. In the conversation about being the top earner, Blac Chyna was said to make $20 million, a year, from the stage. (Other sources suggest he makes $20 million a month which sounds like crazy money, even for softcore porn).
Again the point here is that the client side of creator finance can be very lucrative, but the revenue is almost prohibitive at the minute and unlike Substack, OnlyFans does not have a collection of inane ramblings from failed creators there simply to show that their impossible task. Perhaps, they have, instead, collections that will generate personal or business issues in the future. It’s all gas money.
But let’s consider the other side of the equation. How do consumers feel about the growing confidence in this constellation of atomic ordering platforms?
The New York Times costs $7 a paperback. Ordering 7 days a week for home delivery in the New York metro area will set you back $845 per year. This is the rise in prices at the expense of publishing that fueled the dot.com bubble and digital boom and convinced readers that, apparently for free, they were making a profit on the web. But seriously, who can afford to pay thousands of dollars a year for newspapers?
The problem is, that’s about 100 pages a day of stories from hundreds of writers and dozens of top journalists. The Times has something like 2,000 writers on staff so (you can see my calculator came up today) that's about $0.40 a year, per writer, if you're a Times subscriber.
To take a non-random example, Vox founder Matthew Yglesias has a Subsack called Slow Boring (kid yourself, I’m sure he’s heard it all). Membership costs $8 per month or $80 per year. That's the same price as former Times columnist Bari Weiss's (ironically, in this sense pronounced) Free Press, which sells for $8 a month (while Weiss originally packaged the Times for more than $5 a month ordered when he quit).
I won’t debate the merits of Yglesias and Weiss as writers and columnists, but for $80 a year, there can be 10 substacks of Slow Boring to cover the cost of delivering the Times to your doorstep every morning, commentators, analysts, contrasts. etc costs are going up in journalism, not down. Just as OnlyFans is, of course, a very expensive way to consume porn (I don’t want to give away internet secrets, but you can, of course, get free porn), so is the current trend toward information reports using sub-stacking similar.
The question is where is the flexibility of our paid members? OnlyFans estimates for 2022 (I wish Substack would provide details like this) show a 27% increase in total “fans” per year with a modest 25% increase in total fans that would take OnlyFans years 6 before reaching 1.1bn fans and expected humans on earth It will take 13 years to reach more fans (8.4bn) Jokes aside, growth is demonstrably unstainable and cooling is sure to come.
How much does it cost compared to the pre-pandemic levels I have seen so far in the article, not to mention the cost of living crisis and discretionary spending by households even a corresponding decrease? How much do you spend on wine? How much money do you spend on toilet roll? How much money do you spend on perfume? How much money do you spend on dog food? How much money do you spend on newspapers? How much money do you spend on porn? If the answer to any of those questions is anything other than “minor,” you’re fine (subscribe to my paid newsletter, please).
The pressure on households to cut spending is huge (for example, look at the impact this has on streaming platforms, which are a full half-decade cycle ahead of the rest of the media in this regard) however the number of resources continues to grow. Stop, for a second, and think about the fact that OnlyFans increased the number of creators using its platform by 47% from 2021 to 2022. That’s about as much work as the creepy amoeba would do in a high school ecosystem in the study twice as much.
And, of course, these two things are closely related. Back to the section where I found funding for Substack and OnlyFans. I said we weren’t talking about salaries but “side hustles”. Another string in the bow of the multicompound. Sure, miraculously cashing in on Matt Taibbi or Blac Chyna is an ambitious deal, but more practically, the possibility of being able to add a few thousand dollars in beer money to your cash shouldn’t be seen in a cost-of-living crisis. And with the media more depressing than ever for job seekers — whether entry-level or experienced — the temptation to control their destiny is strong and during the Depression, moon the glow of fame is more gravitational than ever. Look back to the 1930s when the Western economy was grim, but the movies were covered in stars. Clark Cable, Humphrey Bogart, Cary Grant, Bette Davis, Katharine Hepburn, Judy Garland. Economic instability doesn’t make it real — it adds value to dreams.
This all reminds me of the great podcast boom cycle a few years ago, when a handful of people became stars, and made profitable careers, out of podcasting, convinced the audience that podcasting was the path to success quickly. Indeed, podcasting is a product that doesn’t get much relevance from the media perspective. Advertising is cheaper on podcasting than almost all equivalents, and the average audience is much smaller. Movies, TV, theatre, books, music, comedy, documentaries, and radio: all are forms of media where you are more likely to become famous and/or make money than podcasting.
What people got confused about was how easy it was to create and how easy it was to win. That’s the two-dimensional nature of the word “distribution”. Podcasters bragged about its incredible ease of distribution for years. You can record music in your bedroom, with equipment purchased from Radio Shack, and be heard around the world when the sun goes down. That’s one meaning of the word “distribution”, which we’ll call “technical distribution”. But classification also speaks to the way we reach markets and audiences, not to mention capital. This is what we call “social segmentation”. Podcasting never solved that distribution question. The graph seems to show the opposite relationship: the easier it is to distribute a product technically, the harder it is to achieve social distribution.
Now we’re on an upward trend. Creators want more freedom and audiences want a tighter fit for their social/political pressures. Producers want to minimize their losses for a (psychologically, large) middle ground, while audiences want to avoid inadvertent exposure to unplanned payments Simple peace of mind but one certain thing is that money will eventually talk.
This brings me back to the Emma Gannon comment I made, earlier in the article. He made that statement to the Press-Gazette after announcing his intention to invest in Substack’s fundraising round. “I reinvested thousands of my own money into Substack because I trust it,” he told his clients. “I believe in writers getting paid. I think a lot of people can do a good, useful job with writing.”
It’s a lovely, almost utopian, idea. There is an imagined logic at play, completely disconnected from reality. In a world where Substack was the fastest way to allow “more people” to “make a better and more profitable career out of writing,” we’ll live in a world where you get your lampshades from the butcher, where you buy bread also in your baguette from, your Stilton from the cheesemonger and your wine from the vintner Just about anything from the supermarket. There was a time, in the '90s and 00s, when consumers seemed to reject newspapers — the media outlets — not because the idea was wrong, but because the sales engineers were to blame while the supermarkets reiterated, at the same time, They have to bring their take-home supplies, as well as the highly endangered media business. To think that long-term stability benefits individual store owners and maximizes customers is masking regression as progress.
The inflection point is coming — sure as it already is with podcasts — for Substack, OnlyFans and every platform where creators base their audience size as creators realize their dreams of financial success and explode into fame and ideas of a new future that is strictly this ho of content creation will disappear.
The question is how best to prepare for this inevitability. I love bringing like-minded people together, trying to create a product with more voice, opinion, and expertise, and I feel more acknowledged for the value of individual Substacks or OnlyFans accounts sold to him. But of course, I found the “website” there again. So I think farmers will fall back on a solution that feels more radical and innovative, even if it ultimately looks backward like a subscription economy dream in the first place.
Follow me, to get the latest article on Technology. Thank You for reading.
You must be logged in to post a comment.