Unbundling of Digital Journalism
|Sachin Kesiraju||Feb 24|
In honor of the tenth week writing this newsletter, a recurring theme I’ve been thinking about is how creative platforms like Substack create new provisions for entrepreneurial success. It’s always interesting to observe the power law dynamics on the creator side of these platforms — what is unique about the top 10% of creators compared to the long tail? Browse through the top paid publications on Substack and you'll notice that the majority of writers are actually independent journalists or book authors who are carving a direct niche audience for their work. Substack's business value is less in personal blogging but actually in unbundling traditional media companies by creating trusted 1:1 relationships with quality writers. Instead of paying for a NYT subscription people are directly paying the journalists writing the content they care about. As this dynamic continues to erode traditional media companies question is what does the future of journalism look like?
Unbundling of traditional incumbents typically occurs when new technology enables or changes some underlying behavior. In this case, the traditional media companies have struggled to adapt from the days of paid paper news to free distribution via the internet. Consumers directly subscribing to individual writers is an important emergent trend since it reveals — it's not that people don't want to pay for journalism, it's that people don't want to pay for bad journalism. Independent writers no longer need to resort to legacy media company business models of baiting millions of passive readers for ad impressions. To achieve a sustainable living, creators can now focus on creating quality content and maintaining a strong personal brand to attract and monetize ~1000 passionate fans ($100/yr * 1000 fans = ~$100,000/yr). Ben Thompson’s Stratechery is a prime example of this dynamic (subscribers to his tech analysis blog net him over $200k/yr). Writers like Ben are representative of a general paradigm shift in creator career progression (that I previously detailed here) — creators are using direct online distribution to become their own media companies.
A changing landscape for the writing business still implies changing expectations from the writing profession. Establishing an independent brand and maintaining subscribers does come along with the tedious overhead of managing customer support, branding/marketing and an online persona. There’s also a greater pressure for consistent quality with less financial stability (subscriber churn) that would make writing under a “diversified” collective outlet seem more appealing. As these problems become more evident there’s an interesting question of what a “rebundling” or new-era media company would look like. The Athletic is pioneering one such model by cherry-picking talented local sports journalists and relentlessly focusing on quality to reach a greater audience and increase subscriber revenue. Another potential model attempted by the Correspondent and Popular Front is the concept of micro-patronage where writers crowdfund support for specific journalistic projects. The ideal platform will likely be one that aggregates new audiences, facilitates discovery and creates more opportunities for writers to monetize their fanbases.
What I’ve been consuming recently
Popular Front (h/t Alex)
exploring the modern creative renaissance. i’ll also be in LA this week — let me know if you or anyone I should meet is around!