Substack hits 1M paid subs, launches health care plan

Substack now has more than 1 million paid subscriptions on its platform, representing a 300 percent increase since December’s 250,000 paying readers.

The news: Substack cofounder Hamish McKenzie wrote on Monday that in addition to surpassing the 1 million subscriber mark, Substack’s top 10 publications collectively bring in more than $20 million a year — up from $7 million last year. Bloggers, journalists, academics, podcasters, comics creators, and many more are now earning cash for publishing on Substack.

“These are subscriptions that didn’t exist before – they’re not being siphoned off from traditional media outlets or redistributed from other platforms. They represent a rush of new money into the media ecosystem, the vast majority of it going directly to writers.” —Substack cofounder Hamish McKenzie

Why it matters: The media ecosystem is rapidly changing and people are keener than ever to directly pay creators for content. Since the pandemic began, 53% of US consumers have said they would be willing to pay for their news in the future, up from 16% who pay today. That’s spurring more writers to go indie and more publications to invest in newsletters.

Health care: Substack announced on Thursday that it plans to expand its health insurance pilot program to more publishers on the platform. To kick start the program, the company will offer a one-time $500 health stipend to any U.S. writer who pays out of pocket for health insurance and has more than $5,000 in gross annualized revenue on Substack. Substack partnered with HealthSherpa, a California-based technology company focused on connecting individuals with health coverage, for the program.

Supporting creators: Substack continues to invest in supporting its creators. It offers a mentorship program, legal support an Independent Writer Grant, and a $1 million Substack Local News fund. The company also offers Substack Pro, which pays a writer an upfront sum to cover their first year on the platform. In return, a Pro writer lets Substack keep 85% of the subscription revenue in their first year.

Journalism’s challenge: The internet realized the free flow of information and transformed what readers were willing to pay for. If it’s free, why pay for it? As a result, ad dollars plunged, shuttering hundreds of publications, decimating news staffs, and accelerating media consolidation. U.S. newsroom employment has fallen 26% since 2008, according to Pew Research. Substack co-founder Hamish McKenzie reflected on this here.

Shifting expectations: Publications became leaner, savvier with digital ads, and started re-couping subscribers. Simultaneously, indie publishing platforms like Substack, Lede, Medium, and Ghost began to help shift consumers’ expectations. And now, once again, paying for content doesn’t seem such a ridiculous idea, which has excited publications even if they’re facing competition in the form of Substack authors.

"I would regard anything that is about helping make the market for paid digital journalism is good. … This is still a forming market. And I would regard all efforts to get more people to think about paying for high-quality journalism is a positive thing." —New York Times CEO Meredith Kopit Levien

Substack vs. Journalism? A few months back we spoke with an expert in commercial content moderation about the potential harms of Substack. Dr. Roberts, Associate Professor in the Department of Information Studies at UCLA, shared how former journalists' use of Substack sidesteps important principles guiding news media and, as a result, threatens journalism. Read more about her argument here.