The End of the Subscription Era is Coming | by Nick Hilton

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10 min read

Aug 30, 2023

The heyday of the New York Times

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Love it or hate it, we’re living in the subscription era.

I’m not just talking about streaming platforms, which have been biting the wallet for years, or newspapers and magazines, which have simply migrated their long-term models to a new digital era. No, I’m talking about everything. Beer, insurance, cinema: just three of the crazy subscriptions that I’ve currently taken out.

This move stems, obviously, from the collapse of digital advertising and the decline of the high-street. These are two related trends, which have had an enormous impact on the way that product purchasing works. Media enterprises — whether that’s Netflix or the New York Times — cannot rely on advertising revenue to underwrite their costs, and, similarly, the rise of online retail has made the expense of doing IRL business prohibitive. And so, rather than going to a local bottle shop for my craft beers, I have them sent to me once a month. And where product is not available on subscription, those businesses use subscriptions to incentivise loyalty: just look at ASOS Premier, which puts the fast in fast fashion.

Anyway, we all already know this because we all experience human life in 2023. But the impact of the rise of the subscription model on the media has been staggering. It has changed the way that people do business — not just the businesses themselves, but the would-be employees and contractors. Just look at this quote from British journalist Emma Gannon, given to Press Gazette, who has 26,000 subscribers to her lucrative Substack: “One of my passions really is talking about writers being paid fairly — and not just that, but even thriving and making a really good living from writing and creativity — because I think in the past people have often viewed it as a hobby or just a nice to have”.

She credits Substack with offering that — a nice idea, and one, perhaps, that’s easy to imagine at 26,000 subscribers. Certainly, Gannon is not alone in having this experience with Substack, and I imagine it feels liberating for journalists who have previously been constrained by things like “contracts” and “editors”. In its early days, Substack was aggressive in providing its top — partner — writers with economic security: anecdotally I heard that they were offering 1.5x the salary of the magazines/newspapers that they were poaching columnists from.

The question is not “can you make money with Substack?” or “can you find an audience with Substack?” but what the averages are. Substack’s CEO, Hamish McKenzie, has been quoted as putting the number of Substack subscribers at “millions”, which is not hugely helpful. Globally, the figure was pitched at about 500,000 paying subscribers in 2021, according to Nieman Lab. According to Axios there are more than 17,0000 writers running paying Substacks (including mine) and the Top 10 publishers earned more than $25m last year.

Very good, I’m sure. Substack’s own figures also refer to $300m paid out to writers, though that doesn’t claim to be an “annual” figure (as the $25m is). But let’s assume it is, for simplicity’s sake. That leaves $275m to be disbursed between 16,975 writers, which, if shared equally, would be $16,200 a piece. A nice side hustle, if not a living.

But if the Top 10 publishers are making roughly $2.5m a piece, let’s also assume that the rest of the Top 100 (the top 0.59% of Substack paid writers) are making $500,000 on average. Then we lose another $45m and $230m is left to be shared between 16,000 (suddenly the average earning, if distributed equitably, is down to $13,609). You can repeat this exercise as many times as it takes you to realise that the average writer of a paid Substack is earning next to nothing. And probably that means that they’re broadcasting to next to nobody.

While these thoughts were floating around about Substack — which is currently running a fundraising round encouraging writers to invest in the platform — OnlyFans, the UK based membership service for *cough* fans, released its 2022 financials. The headlines were a $5.6bn spend on-site last year, of which the site takes a 20% cut before distributing to creators. Which means roughly $4.5bn was disbursed by OnlyFans to its 3.2m creators (a figure that’s up a staggering 47% from 2021).

Distributed equally across all creators, this would be a mere $1,406 per person. But, like Substack, OnlyFans is, of course, not divided equally. In fact, the inequalities are even more stark. Top earners on OnlyFans can make almost as much as the Top 10 earners on Substack combined. Blac Chyna, rumoured to be the top earner, was said to have made $20m, annually, from the platform. (Other publications claim she makes $20m a month which seems like crazy money, even for softcore pornography).

Again, the point here is that the subscriber side of the creator economy can be hugely lucrative, but the average earnings are almost certainly prohibitively minute. And unlike Substack, unsuccessful creators on OnlyFans don’t just have an archive of inane ramblings to show as evidence of their failed project. Likely, they have, instead, an archive of material which may create personal or professional issues in the future. All for gas money.

But let’s think about the other side of the equation. How do consumers feel about this increasing reliance on an atomised constellation of subscriptions?

The New York Times costs $7 for a hard copy. In the New York metro area, a full 7-day a week home delivery subscription will set you back $845 per year. This is the sort of inflation to print costs that drove the dot.com bubble and the digital boom, and made readers believe that they were getting value on the, apparently free, web. After all, who can afford to spend basically a thousand bucks a year on newspapers?

The problem is, that’s close to 100-pages a day of content from hundreds of writers and dozens of top columnists. The Times has something like 2,000 writers on staff so (you can see that I have my calculator out today) that’s about $0.40 a year, per writer, if you’re a Times subscriber.

To take a random example, Matthew Yglesias, the Vox founder, has a Subsack called Slow Boring (make your own joke, I’m sure he’s heard them all). Subscriptions cost $8 a month or $80 a year. That’s the same price as ex-Times columnist Bari Weiss’s (ironically, in this sense, named) Free Press, which retails at $8 a month (up from the $5 a month subscription Weiss initially offered when she left the Times for Substack).

I’m not going to debate the merits of Yglesias and Weiss as writers and columnists but at $80 a year, you could have 10 subscriptions to a Substack like Slow Boring for the cost of having the Times delivered to your front door every morning. At a basic level the cost per journalist, cost per editor, cost per photographer, cost per columnist, commentator, critic, contrarian…etc is going up in journalism, not down. Just as OnlyFans is, in fact, an extremely expensive way of consuming pornography (I don’t want to give away the secrets of the internet, but you can, in fact, acquire pornography for free), so too is the current trend of Substackification an extremely expensive way of consuming journalism.

The question is where the inflection point for our consumption of paid subscriptions lies. The OnlyFans data from 2022 (I really do wish that Substack would provide this sort of detail) suggests a 27% rise in total “fans” year-on-year. At a modest 25% year-on-year increase to total number of fans, it would take OnlyFans 6 years to reach 1.1bn fans and 13 years before there are more fans (8.4bn) than people on earth. Jokes aside, the growth is demonstrably unsustainable and the cooling will necessarily come.

I’ve got this far in the piece without even mentioning the cost-of-living crisis and the commensurate reduction in households’ discretionary spending. How much are you spending now on eating out, compared to pre-pandemic levels? How much are you spending on wine? How much are you spending on toilet roll? How much are you spending on perfume? How much are you spending on dog food? How much are you spending on newspapers? How much are you spending on porn? If the answers to any of those questions is anything other than “less”, well done you (and please take out a paid subscription to my newsletter).

The pressure on households to trim budgets is huge (see, for example, the impact that this has had on streaming platforms, which are a full half-decade cycle ahead of the rest of the media in this regard) and yet the number of available products continues to increase. Stop, for a second, and mull over the fact that OnlyFans experienced a 47% increase in the number of creators using its platform between 2021 and 2022. That’s almost a doubling; the sort of thing that scary amoebas would do in high school biology class.

And, in fact, these two trends are highly related. Go back to the part where I looked at the distribution of cash on Substack and OnlyFans. I mentioned that we were not really talking about salaries but about “side hustles”. Another string in the bow of the multi-hyphenate. Sure, there’s the ambitious lure of miraculous making Matt Taibbi or Blac Chyna money, but more pragmatically, there’s the possibility of being able to supplement your income with a few thousand bucks of beer money. In a cost-of-living crisis, that’s not to be sniffed at. And with the media a more depressing environment than ever for job seekers — whether they’re at entry level or experienced — the temptation to take control of your own destiny is strong. And in a depression era, the moonshot of celebrity is even more gravitational than before. Look at the 1930s, when the Western economic climate was miserable, but the screens were littered with stars. Clark Cable, Humphrey Bogart, Cary Grant, Bette Davis, Katherine Hepburn, Judy Garland. Economic instability does not engender realism — it adds value to dreams.

It all reminds me of a few years ago in the cycle of the Great Podcast Boom, when the fact that a handful of people had become stars, and made profitable careers, from podcasting, made the viewing public believe that podcasting was an expeditious route to success. In fact, podcasting is, in media terms, a low-yield product. Advertising is cheaper on podcasting than almost all equivalent products, and audiences are, on average, very small. Movies, TV, theatre, books, music, comedy, journalism, radio: all are media forms in which you are more likely to get famous and/or rich than podcasting.

What people were confusing was the ease of creation with the ease of success. It is, in essence, the two-sided nature of the term “distribution”. Podcasters for many years prided themselves on the stunning ease of distribution. You could record in your bedroom, with gear bought from RadioShack, and be listened to all around the world by the time that the sun set. That’s one meaning of the term “distribution”, which we’ll label “technical distribution”. But distribution also speaks to the way that we access markets and audiences, not to mention capital. We’ll call this “social distribution”. Podcasting was never able to solve that distributional question. And, in fact, the graph seems to suggest an inverse correlation: the easier it is to technically distribute the product, the harder it is to achieve social distribution.

For now, we’re in an upward trend. Creators want more autonomy and audiences want to achieve a tighter fit for their social/political persuasion. Creators want to decrease their losses to an (imagined, largely) middleman, while audiences want to avoid inadvertent exposure to products they wouldn’t intentionally pay for. It’s a fragile truce but there’s one certainty: in the end, money will talk.

Which brings me back to what I quote Emma Gannon as saying, at the start of the piece. She gave that quote to Press Gazette after announcing that she would be investing in Substack’s fundraising round. “I’m putting thousands of my own money back into Substack, because I believe in it,” she told her subscribers. “I believe in writers being paid. I believe more people should be able to make a good and profitable career out of writing.”

It is an idyllic, almost utopian, perspective. There is an imagined logic at play, entirely divorced from reality. In the world where Substack were an expeditious route to “more people” being able to “make a good and profitable career out of writing”, we would also live in a world where you bought your lamp chops from a butcher, your baguette from a bakery, your stilton from a cheesemonger and your wine from a vintner, rather than just everything from a supermarket. The fact that there was a period, in the 90s and 00s, when consumers seemed to repudiate newspapers — the supermarkets of journalism — did not mean that the idea was wrong, but that the sale mechanic was at fault. Just as supermarkets have iterated, in the same period, to introduce self-service and home delivery, so too should the more endangered business of journalism. To think that long term stability is in returning to individual shopkeepers, and raising prices for consumers, is regression masking as progress.

The inflection point is coming — sure as it has already with podcasts — for Substack, OnlyFans and any platform where creators are reliant on the largesse of their audiences. When creators realise the dream of financial success and celebrity is sputtering, so too will the impression that this is a radical new future for content creation fade.

The question is how best to ready oneself for this inevitability. Personally, I favour a like-minded bundling, trying to create a product that has more voices, viewpoints and expertise, and thus feels more acceptable at the sort of price point individual Substacks or OnlyFans accounts are retailing for. But of course, I’ve just re-invented the “website” there. So I suspect that producers will bend over backwards to find a solution that feels more radical and more innovative, even if its ultimately just as backwards looking as the dream of the subscription economy in the first place.

Give me a follow on Twitter, if you fancy, and let me know your thoughts!





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