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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

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

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