How Substack has grown the market for subscriptions

• Questions remain about its long-term prospects, but there’s now little doubt that Substack and its writers have helped grow the market for subscription-funded content.

There’s been no shortage of questions raised about Substack and the impact it may (or may not) have on the dynamics of digital media since it launched four years ago. How many writers can realistically build sustainable independent businesses? Why won’t Substack entertain revenue streams outside of subscriptions? Is it specifically optimizing to controversial writing?

Hot takes on Substack’s agenda and the future of media aside, there’s now little doubt that Substack and its writers have helped grow the market for subscription-funded content. It’s done so in three key ways:

• Powered incremental subscriptions for independent publishers: The company announced last week that there are now 1 million paid subscriptions to publications on Substack from more than 500,000 individual readers. “These are subscriptions that didn’t exist before – they’re not being siphoned off from traditional media outlets or redistributed from other platforms,” the company said. While it’s impossible to know if that statement is true, it stands to reason that Substack has indeed helped drive incremental subscriptions and revenue simply owing to the nature of some of the writers on its platform.
• Socialized the idea of paying for more content: Major news publishers and high-profile media companies such as The New York Times, The Wall Street Journal, The Athletic and The Information have been instrumental in educating the market on the benefits of the subscription model over the past decade. Readers are now more aware than ever of the impact publisher’s revenue streams and business models have on the content they consume. But outside of news and politics, Substack (alongside other platforms and technology companies) has helped socialize the idea with readers that content of all types can be worth paying for and subsidizing directly. While plenty of attention is directed at the controversial opinion writers who now use Substack and other platforms to skirt any form of editorial oversight, it’s also true that a long tail of creators is beginning to monetize various types of content with subscriptions, including newsletters about Dracula, animation, cocktails, bread, insect cuisine, construction physics, and opera. Questions remain about how many creators can realistically make a living with those types of products, but audiences are increasingly receptive to the idea of paying creators directly to produce them.

• Pushed media companies to add value and breadth to their own subscription products: As we’ve noted previously, a period of unbundling in media inevitably gives way to a rebundling phase. Major media companies are now snapping up independent newsletters, journalists and creators in order to add greater value and breadth to their own subscription products and bundles. Media companies may or may not have felt threatened by Substack in recent years, but if nothing else the independent creator trend is pushing them to compensate employees more fairly for the value they create, come up with new and interesting ways to serve audiences and — most importantly — it appears to be resulting in better-quality and better-value content and products for consumers.

Substack is far from the only game in town, of course. A plethora of platforms and technology companies now offer similar tools designed to help independent publishers, writers and creators of all stripes to create, distribute and monetize their content, and some of those companies have been around far longer and arguably done more to help grow the subscription market.

Nonetheless, while it will continue to face challenges and criticism around its business model, product choices, strategic decisions and more, Substack’s contribution to growing the market for subscription-funded content is undeniable.