Substock is in conversations to lift between 50 and 100 million dollars in a new financing round, with an assessment greater than the 700 million it reached in its last round, according to Eric Newcomerwho quotes his own sources the silence of replacement in this regard.
Why is it important. The company has found the perfect moment:
- Trump’s return has triggered interest in Newsletters policies.
- Its mobile application is promoting payment subscriptions.
With 500,000 creators on the platform, some already generate more income than entire traditional media. Two years ago There were already two doctors generating at least half a million a year. “At least”. It is the symbol of a trend of this decade: the permanent crisis of the media against author’s journalism, focused on a name and not on the brand of a large group.
In figures.
- Substack stays with 10% of payments to writers.
- The total volume of subscriptions moves around 450 million dollars.
- 45 million, therefore, are the income of the platform.
The context. We are seeing the rise of a new wave of independent journalists who have found an escape route to traditional media.
In Spain the phenomenon is being several magnitudes lower than that of the United States, but there are prominent creators:
Most are authors who seek independence to tell their stories or parallel projects rather than a replacement for their job.
The panoramic. What started as a modern tool for Newsletters It has become a network of independent creators that competes with traditional media.
Substack does two things:
- It offers journalists (and not journalists) with their own audience the opportunity to directly monetize their work leaving their media.
- Then paquetizes all that network of creators as a network with shared infrastructure.
First fragment, then package.
Yes, but. The model has its risks. The Newsletter Subtack average loses 50% of payment subscribers each year. To earn 50,000 dollars annually-an American average-moderate salary-charging $ 8 per month, a writer needs 900 payment subscribers. And also, add 31 a month to compensate for those who will leave.
That constant pressure to create quality content (the one expected of someone in substitution who charges a subscription), often without more tools than the creator’s own mind, is also a risk to the Burnout.
The model. And associated with these risks, there is the long -tailed model that prevails in substack. As in Onlyfansbut for different reasons, the economy of attention is reproduced:
- A few creators accumulate most income.
- A few live reasonably well.
- A huge mass gains symbolic amounts that need to complement to reach the end of the month.
The Mehdi Hasan and Bari Weiss of the ecosystem generate hundreds of thousands of dollars a year. Or millions. Niche creators with very faithful audiences can get between $ 50,000 and $ 200,000 a year. The vast majority stay with residual income, insufficient to dedicate full time.
The backdrop. The migration to substock is no coincidence. Traditional media have cut templates for a decade while advertising income migrated to Google and Facebook.
Between 2008 and 2020, United States lost more than 1,800 local newspapers In addition to usual cuts, rounds of layoffs, frozen hiring, etc. At the same time, star journalists discovered that their names had more value than headers. Matt Taibbi left Rolling StoneGlenn Greenwald left The interceptCasey Newton left The Verge.
Everyone found in substitute not only more money, but total editorial independence.
At stake. Substack is not alone in this race. Beehiiv, Kit and Ghost They compete for the same market, but with SAAS models that charge fixed monthly payments instead of 10% of substitution commission.
Substack’s advantage is their discovery network: readers find new authors through recommendations. But if the big names migrate looking for better economic conditions, that network weakens.
It is the paradox of all platforms: you need stars to attract talent, but the stars are the first to leave when alternatives appear.
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