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> First, Substack is going to have a serious problem retaining its most profitable writers unless it substantially reduces its 10% take. This is the part I'm h
by karaterobot 6y ago
> First, Substack is going to have a serious problem retaining its most profitable writers unless it substantially reduces its 10% take.
This is the part I'm having trouble understanding. 10% doesn't seem like a high percentage for a distributor, even if they're just hosting text and images. Of course Substack also provides comments, notifications, admin/moderation, and some degree of marketing and aggregation effects (not Aggregation in the strict Ben Thompson sense, just people going to a well-known website because they know there are things to read there).
None of that is super hard to set up, but If I was Matthew Yglesias, and I was making $775k next year on Substack, how much incentive would I have to leave and pay someone to create and/or manage a new site for me? Even assuming there's no lock-in whatsoever from Substack, or that Substack does not increase its value proposition for content creators by then, it seems like I'd probably just stay where I was and collect my $700k, and be pretty thrilled about it.
It's possible I'm wrong about that in some cases, but would it happen in so many cases that it poses an existential risk to Substack? Seems like a stretch!
- Eridrus 6y agoEveryone likes easy cash. Adding 50k/yr at the click of a button seems pretty compelling, and consider that the mere existence of alternatives may force Substack to renegotiate contracts woth high profile writers. But even if you ignore this, it's still a nascent space, Substack has not captured all the writers out there, and I think the fee will definitely be part of the package that writers care about. Substack should try to provide more value, but if it can't, this seems like it will be a problem for them since there is little competitive moat here.
- mbgerring 6y agoSuccessful writers stand to increase their revenue by the tens to hundreds of thousands of dollars by ditching Substack for any number of easy-to-administer self-hosted solutions. Writers like Yglesias gain absolutely nothing from staying on Substack. The CMS interface can't possibly be worth the pay cut they're taking by staying there.
- sfRattan 6y agoThe CMS interface is only a small part of the value. If you cut loose and try to run a high profile blog/newsletter on your own, suddenly you're paying for IT professionals to do security because you are a high profile target and what you want to do is write, not stay constantly up-to-date on hardening your CMS, database, and sensitive information. Good operational security for a website with the threat model of a high profile, heterodox journalist probably costs tens or hundreds of thousands of dollars annually. If Substack can effectively economize the provision of security for the blogs/newsletters of high profile writers, they might actually reach a scenario that inverts the dynamic of others like YouTube or Patreon: the higher your profile, the more attractive something like Substack becomes; the lower your profile, the easier it is to handle your own website administration and not worry about security.
- qPM9l3XJrF 6y agoJust asking readers/customers to re-enter their payment details on a new platform could easily trigger 10% churn in subscribers no?