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> Can anyone tell me what Substack is doing with all the millions of dollars of funding they've taken? Padding the paycheques of America's biggest contrarian w

by rchaud 4y ago

> Can anyone tell me what Substack is doing with all the millions of dollars of funding they've taken? Padding the paycheques of America's biggest contrarian writers apparently. Greenwald, Taibbi, Andrew Sullivan all have paid gigs there.

jdm2212 4y ago
They don't have "paid gigs" there. They bring in tons of subscription revenue, and Substack gave them advances against that subscription revenue. In each case, they quickly earned out the advance.
- bgentry 4y ago
  Are you sure that any of those three got an advance from Substack? They don’t appear in any of the articles listing authors with paid advances except in providing commentary about the existence of such a system. They might have all even joined before Substack had its advance program. You are otherwise correct about them not having a “paid gig”. They each built their own large paid subscriber base from which Substack takes a 10% cut. They pay Substack for the service, not the other way around.
- burkaman 4y ago
  In addition to advances they will sometimes just pay a writer to move to Substack. > But the advances also had limitations. On a per-deal basis, we could never really do better than break-even. A Substack advance was effectively an interest-free loan that would never be paid back if a publication failed. > With Substack Pro, we pay a writer an upfront sum to cover their first year on the platform. The idea is that the payment can be more attractive to a writer than a salary, so they don’t have to stay in a job (or take one) that’s less interesting to them than being independent. In return for that financial security, a Pro writer agrees to let Substack keep 85% of the subscription revenue in that first year. After that year, the deal flips, so that the writer no longer gets a minimum guarantee but from then on keeps 90% of the subscription revenue - https://on.substack.com/p/why-we-pay-writers https://on.substack.com/p/why-we-pay-writers Depending on the payment it's possible that a writer could lose money on this, because they would have made more from subscriptions than they did from Substack, but I'm guessing for very big names Substack is paying quite a bit more than they would have made from their first year of subscriptions. Also, this wasn't public for a while and there's probably more that is still not public. > We haven’t said anything about Substack Pro in public until now because we have been in a “figuring it out” phase, seeing what resonates with writers and how the deals perform over time.
  - bombcar 4y ago
    On the surface that’s a better deal than many publishing houses give actual book authors - some major percentage of books never “pay back” the advance and it rarely gets to be heavily author-favoring.
    - burkaman 4y ago
      Yeah I don't think there's anything wrong with this kind of arrangement, writers getting paid is good. I do think it's possible that Substack is spending more than a sustainable amount on acquiring big name writers because they want to show results and growth to their investors.
  - jdm2212 4y ago
    > On a per-deal basis, we could never really do better than break-even. A Substack advance was effectively an interest-free loan that would never be paid back if a publication failed. They made a ton of money on Matt Yglesias's advance. His advance was ~$250k, and he brought in two or three times that in revenue (the terms of his deal were: he gets 250k upfront, they get his first year's revenue). I'm not aware of any other writers who've published their numbers, but Greenwald, Sullivan and Taibbi all have a TON of subscribers.
    - lkbm 4y ago
      Scott Alexander didn't give a number, but reported the advance was less than he would have made if he just did the default system, as of March 2022[0]. He also points out that Taibbi says "Every one of the Substack Pro writers I know would have made more money not taking the advance", which obviously includes Taibbi himself. [0] https://astralcodexten.substack.com/p/adding-my-data-point-to-the-discussion https://astralcodexten.substack.com/p/adding-my-data-point-t... [1] https://twitter.com/mtaibbi/status/1372612686803042317 https://twitter.com/mtaibbi/status/1372612686803042317
AlbertCory 4y ago
> Padding the paycheques of America's biggest contrarian writers You say that like it's a bad thing. Being a contrarian means that the mainstream media doesn't like them, but apparently enough readers do that they can make bank.
- DoctorOW 4y ago
  "Mainstream Media" especially in contexts like these is meaningless. You seem to mean many PEOPLE don't like them. There's an argument to be made that for the average person, being attacked by a number of Substack's writers would make that average person less likely to explore their other writers offerings. Fewer readers means less revenue.
  - AlbertCory 4y ago
    What? "Mainstream media" is certainly not meaningless. A good proxy would be any organ considered an "authoritative source" by Facebook: NYT, WaPo, CNN, Politico, AP, etc. As for "fewer readers" I don't know what you mean. The "readers" are paying their money, aren't they?
    - DoctorOW 4y ago
      Meaningless in that the phrase is used almost exclusively in the way you use it, and yet you (and others) aren't able to construct a coherent definition. Regarding your examples, Facebook was a weird choice of authority when viewership/readership are easily researched numbers. I bring this up partially because the only thing that you believe is "media" is news sources but the most popular news sources aren't "mainstream media"? There is clearly something specific you're filtering for but are unwilling to say. Until you do the term means nothing.
      - AlbertCory 4y ago
        Wow, you're really going to elaborate lengths of pedantry here, aren't you? "Please define 'mainstream media' and no, I'm not satisfied with your definition." Why is this important? You could make a list of 100 news sources and ask a random sample of 1,000 people to check Yes/No on "is this mainstream media?" You would get a very high level of agreement. It's not my responsibility to give you a definition you're happy with. This isn't a scientific debate.
coldtea 4y ago
It would be sad if these, who are very tame, and not long ago would have been considered doing a mighty fine job to the side they're now rejected by, were the "biggest contrarians". Would imply a total lack of actual contrarians, and an overencompassing uniformity and party line-ism... Then again that's what you get when you build two bipartisan monocultures of echo chambers...

by rchaud 4y ago

jdm2212 4y ago

They don't have "paid gigs" there. They bring in tons of subscription revenue, and Substack gave them advances against that subscription revenue. In each case, they quickly earned out the advance.

bgentry 4y ago
Are you sure that any of those three got an advance from Substack? They don’t appear in any of the articles listing authors with paid advances except in providing commentary about the existence of such a system. They might have all even joined before Substack had its advance program. You are otherwise correct about them not having a “paid gig”. They each built their own large paid subscriber base from which Substack takes a 10% cut. They pay Substack for the service, not the other way around.
burkaman 4y ago
In addition to advances they will sometimes just pay a writer to move to Substack. > But the advances also had limitations. On a per-deal basis, we could never really do better than break-even. A Substack advance was effectively an interest-free loan that would never be paid back if a publication failed. > With Substack Pro, we pay a writer an upfront sum to cover their first year on the platform. The idea is that the payment can be more attractive to a writer than a salary, so they don’t have to stay in a job (or take one) that’s less interesting to them than being independent. In return for that financial security, a Pro writer agrees to let Substack keep 85% of the subscription revenue in that first year. After that year, the deal flips, so that the writer no longer gets a minimum guarantee but from then on keeps 90% of the subscription revenue - https://on.substack.com/p/why-we-pay-writers https://on.substack.com/p/why-we-pay-writers Depending on the payment it's possible that a writer could lose money on this, because they would have made more from subscriptions than they did from Substack, but I'm guessing for very big names Substack is paying quite a bit more than they would have made from their first year of subscriptions. Also, this wasn't public for a while and there's probably more that is still not public. > We haven’t said anything about Substack Pro in public until now because we have been in a “figuring it out” phase, seeing what resonates with writers and how the deals perform over time.
- bombcar 4y ago
  On the surface that’s a better deal than many publishing houses give actual book authors - some major percentage of books never “pay back” the advance and it rarely gets to be heavily author-favoring.
  - burkaman 4y ago
    Yeah I don't think there's anything wrong with this kind of arrangement, writers getting paid is good. I do think it's possible that Substack is spending more than a sustainable amount on acquiring big name writers because they want to show results and growth to their investors.
- jdm2212 4y ago
  > On a per-deal basis, we could never really do better than break-even. A Substack advance was effectively an interest-free loan that would never be paid back if a publication failed. They made a ton of money on Matt Yglesias's advance. His advance was ~$250k, and he brought in two or three times that in revenue (the terms of his deal were: he gets 250k upfront, they get his first year's revenue). I'm not aware of any other writers who've published their numbers, but Greenwald, Sullivan and Taibbi all have a TON of subscribers.
  - lkbm 4y ago
    Scott Alexander didn't give a number, but reported the advance was less than he would have made if he just did the default system, as of March 2022[0]. He also points out that Taibbi says "Every one of the Substack Pro writers I know would have made more money not taking the advance", which obviously includes Taibbi himself. [0] https://astralcodexten.substack.com/p/adding-my-data-point-to-the-discussion https://astralcodexten.substack.com/p/adding-my-data-point-t... [1] https://twitter.com/mtaibbi/status/1372612686803042317 https://twitter.com/mtaibbi/status/1372612686803042317

AlbertCory 4y ago

> Padding the paycheques of America's biggest contrarian writers You say that like it's a bad thing. Being a contrarian means that the mainstream media doesn't like them, but apparently enough readers do that they can make bank.

DoctorOW 4y ago
"Mainstream Media" especially in contexts like these is meaningless. You seem to mean many PEOPLE don't like them. There's an argument to be made that for the average person, being attacked by a number of Substack's writers would make that average person less likely to explore their other writers offerings. Fewer readers means less revenue.
- AlbertCory 4y ago
  What? "Mainstream media" is certainly not meaningless. A good proxy would be any organ considered an "authoritative source" by Facebook: NYT, WaPo, CNN, Politico, AP, etc. As for "fewer readers" I don't know what you mean. The "readers" are paying their money, aren't they?
  - DoctorOW 4y ago
    Meaningless in that the phrase is used almost exclusively in the way you use it, and yet you (and others) aren't able to construct a coherent definition. Regarding your examples, Facebook was a weird choice of authority when viewership/readership are easily researched numbers. I bring this up partially because the only thing that you believe is "media" is news sources but the most popular news sources aren't "mainstream media"? There is clearly something specific you're filtering for but are unwilling to say. Until you do the term means nothing.
    - AlbertCory 4y ago
      Wow, you're really going to elaborate lengths of pedantry here, aren't you? "Please define 'mainstream media' and no, I'm not satisfied with your definition." Why is this important? You could make a list of 100 news sources and ask a random sample of 1,000 people to check Yes/No on "is this mainstream media?" You would get a very high level of agreement. It's not my responsibility to give you a definition you're happy with. This isn't a scientific debate.

coldtea 4y ago

It would be sad if these, who are very tame, and not long ago would have been considered doing a mighty fine job to the side they're now rejected by, were the "biggest contrarians". Would imply a total lack of actual contrarians, and an overencompassing uniformity and party line-ism... Then again that's what you get when you build two bipartisan monocultures of echo chambers...