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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 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

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