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By Thomas Baekdal - September 2020

All about new publishers building new things

This is an archived version of a Baekdal Plus newsletter (it's free). It is sent out about once per week and features the latest articles as well as unique insights written specifically for the newsletter. If you want to get the next one, don't hesitate to add your email to the list.

In this newsletter, we are going to talk about building new things, specially focusing on the fascinating trend of independent journalists starting their own newsletters, podcasts, or other forms of independent media. Coming up...


What business model should independent journalists and creators use?

My latest Plus article is the first part of a two (maybe three) part series aimed at helping individual journalists who are thinking about starting their own thing (like a newsletter).

In this article, we are going to talk about the strategy and the things you need to think about before you start. What business models should you choose, how should you approach this, what kind of obstacles are there, and what things do people often forget to consider?

So take a look at: What business model should independent journalists and creators use?

The second part (coming in about 1-2 weeks) will look at the more specific tactics that are known to work. Things that help you grow and that help you push your readers to pay (or to support you in other ways).


Speaking of this, there is a lot of good advice out there at the moment, for all kinds of publishers.

I will mention two examples here.

The first one is a new report by The Membership Puzzle called: "Introducing the Membership Guide". It's a very interesting report based on a three-year study looking into newsrooms and what they learned. As they write:

The Guide is like a little course in membership. It takes you through the steps. It tells you how to do each one. It identifies best practices. It warns about common mistakes. And it gathers into one place the lessons people have learned as they built their membership programs- including, of course, the errors and wrong turns.
We spent six months pulling it all together, we consulted a lot of knowledgeable people to make sure we had it right, we talked to 50+ newsrooms - or individuals and organizations supporting newsrooms - on five continents, and we're excited to share the results with you now.

The second report is from DW Akademie called: 'From start to success' - New handbook to support startups striving for media viability.

This is another very comprehensive report that looks at the lessons of 21 startups across the globe.

As they write:

'From start to success' is a practical guide for digital media entrepreneurs, who have founded a media outlet and are seeking sustainability whilst staying true to quality journalism. This media viability handbook is unique in that it has been written by media startups themselves and presents the learnings of 21 digital pioneers including the Philippines' Rappler, Egypt's Mada Masr and Animal Politico in Mexico. The pages are filled with tips and information these media startups from 18 different countries wished they had when they first started out. It includes lessons learned, advice for successful growth and perhaps most importantly, how to sustain a startup's success.

Each one of these reports (including mine) takes a slightly different look at this, and defines media in different ways too. But if you are thinking of starting something new or just want to learn from others, these three reports are a very good place to start.


The Substack crowd

Of course, when talking about starting new things, we also have to talk Substack.

Substack is this new platform that everyone is using that allows you to very easily start your own newsletter. It's an amazing platform, but I do have concerns about it.

First of all, for those of you who haven't heard about this, Substack is a new platform for premium newsletters that allows anyone to very quickly and effortlessly start their own paid-for newsletter, without all the hassles of trying to manage this yourself.

Overall, this is great. Back in 2010 when I started this site, we had nothing like this. All the platforms were focusing on advertising and scale, and there simply wasn't any good choice for someone wanting to create a premium publication. There were a few Wordpress plugins, but they were not really designed for publishers, the user-experience was often horrible, and you had to do a number of workarounds.

And so, back when I started this site, I gave up trying to find a platform to use, and instead I built this entire site from scratch. I could do this because I happen to know how to code, but it meant I had to build everything that Substack is now doing. I had to build the publishing system, the member database, the email newsletter sending system, the payment interface ... everything.

But today we have a very different world. Today, you can do all of this without knowing any code at all with Substack, you can use Memberful, Ghost, or even (to a lesser degree) Squarespace. And there are also other platforms, like Medium (which I don't recommend, but it's there), and even new premium podcasting platforms designed specifically to help you create paid-for podcasts.

On top of all this, we have monetization platforms like Patreon. So, you could just ask people to pay you there, and then take those emails and create a paid-for email list from that. Now you don't need anything.

It is so much easier to build a premium platform today.

And Substack is particularly interesting because it has made this really easy (easier than any other platform).

The effect of this has been amazing. Sara Fischer over at Axios wrote a great summary. And the New York Times wrote an interesting article about Casey Newton who is now using it too (previously working for The Verge), and there is another one about his move to Substack over at One Zero by Sarah Jeong.

And, Brian Morrissey, the Editor in Chief and President of Digiday recently announced that he is quitting his job to start his newsletter on Substack.

So, this is amazing. We are truly living in the golden age of new independent media.

But, wait a minute, if this is so exciting, what are the concerns I mentioned earlier? Well, my concerns are three things: Change, control over your destiny, and price.

Let me explain.

One of the key mistakes I have seen people make over the years is to choose a platform that doesn't provide you with the flexibility that you need. I have seen so many people who have tried to do something, but have limited themselves in ways that have made them fail.

One example of this is Medium. Medium is an interesting publishing platform, but it's also a platform that has proven itself not to provide publishers with the control they need to adapt their focus to a changing world.

As such, I don't recommend anyone to use Medium.

But it's not just the platform's problems that is the concern here, it's also the choice you make as a publisher. Specifically I'm thinking about newsletters. Yes, right now, newsletters are the hot new trend, but you should never make the mistake of defining your business model around a format.

This is a huge mistake to make. What you need to do instead is to focus your model around the value you create for your audience, and then you should use whatever format best provides that ... and you should also have the flexibility to change that.

This is where Substack is a problem. It is very heavily designed around premium newsletters, and while you also get a website and have the ability to publish podcasts, those two things are clearly 'extras'. Their platform is newsletter-based.

For me, this makes it irrelevant. If I were to start Baekdal Plus today, Substack would not work for me. It's not flexible enough, and you are too limited by their model.

Substack also told Axios that it will focus exclusively on the subscription model. As they said:

McKenzie says Substack is "100% focused on subscriptions. We will never build advertising technology into Substack." The subscription approach "better aligns incentives for writers and the platform," he says.

For some publications, like hard news newsletters, this is fine. But for others, this means that your web host is suddenly defining what business model you can have.

This is not good. If there is one thing I have learned over the past 15 years it is that you must always own your primary business model. The very idea that the hosting company you choose can decide what business model you should have? That's bonkers.

The other concern is price. Substack charges 10% on top of the Stripe credit card fees. This is something that a lot of people have already spoken out about.

10% (+ credit card fees) doesn't sound like much, but it is. To put things into perspective, the cost of my newsletter is 0.26% (+ credit card fees).

And as Jason Calacanis tweeted:

The challenge @SubstackInc will have, is that anyone who hits $25-50k in membership will quickly realize that giving 10% of your revenue (i.e. $2,500 to $5,000), is totally unnecessary...

In fact, Substack is one of the most expensive hosting platforms you will ever use!

So, yes, they make it very easy for you to get started, but they limit and control your business model and they charge a very high fee for it.

There are also other concerns.

Like how you cannot use your own domains (including your domain email address). Although, some select celebrities apparently can... so maybe that's just a feature coming to everyone later. For me, this is already a deal-breaker. You need your own domain, period!

You have no control over the design and branding. Sure, you can add a few design elements, but again, it's Substack that defines this.

You have no dynamics or custom things you could do that would make sense to you. It's just a plain newsletter sent to a group.

And my final concern is the 'celebrity effect'.

Right now, all the examples you hear about are the 'top successful people'. And on any platform, there will always be some that do much better than everyone else.

This is certainly true on Substack. I see so many 'normal' people thinking about creating a newsletter with Substack that they don't realize that the people they look up to didn't start the way they did.

I wrote about this in my article above and on Twitter. I said:

One thing many independent journalists starting a newsletter don't realize is that, unless you are famous, have a big outside event to focus on, or have a huge supporting network ... it will take you five years to reach your revenue goal.

On top of this, Substack has been giving celebrities 'special treatment' to boost their numbers.

As Peter Kafka reported:

Substack pays you a grown-up salary for the first year, you get a small slice of revenue your newsletter makes. After that, your stipend goes away, you keep most of the revenue.
This model isn't available to most substackers, who will make content for the company for free, and share rev (ie, YouTube model). And per Substack co-founder @hamishmckenzie, not a "salary". But it certainly meant to replace the salary you already have at your current job.

They are often also featured in their search engine (increased exposure) and more. And we have heard other stories of Substack offering some form of legal protection to a few select people (which is bonkers, why should your web host ever do that? You are not working for Substack. You are working for your own business.)

The point being that it's easy to get distracted by this. We look at famous people, we see how successful they are, but we don't see how much 'help' they actually get because they are already famous.

And we see the effect of this all the time. For instance, Axios wrote:

It can take writers months to develop large and loyal enough audiences to make a decent living - but once they do, the payoff can be substantial.

This is generally not true. It doesn't take 'months' to develop a large and loyal audience. It takes years! ... and the payoff for 99% of the people who try this is not going to make you rich.

It may give you enough to make a decent living, and the freedom of doing your own thing might be the reward in itself. But, the idea that you can, in just a few months, grow a huge audience that will make you rich? No... that's just not happening unless you are already a celebrity or there is some other factor at play.

I'm not saying this to discourage you. This is truly the golden age of being an independent journalist. If you have a good idea, go for it!

But don't get fooled by the celebrities and their success. They are not like the rest of us. When I started Baekdal Plus, it took me three years to be cash flow positive because I had to build up a new audience basically from scratch. Back then, almost nobody knew me, so I had to grow my site little by little.

This is the reality for most people. It's incredibly rewarding to start your own thing. But don't think you can just do it in a few months.


Everyone can cook

I want to end this newsletter with a little voice of encouragement. I was recently reminded of Ratatouille (the Pixar movie), where the slogan is "everyone can cook"

In the movie there is a food critic who is so impressed by the food he is given that he writes:

In the past, I have made no secret of my disdain for Chef Gusteau's famous motto, "Anyone can cook."
But I realize only now do I truly understand what he meant.
Not everyone can become a great artist, but a great artist can come from anywhere.

It's the same thing with journalism. The trend we see right now around independent media is about much more than just traditional journalists starting their own newsletters. It's about all types of people discovering that people want news in a different way, and creating new publications to help them get that.

Case in point is this 9-year-old girl who noticed how everyone was feeling depressed by the recent lockdowns. So she wrote "The Cheer Up Weekly".

This is such a wonderful example, but it also illustrates something important. Don't just give people more articles. Listen to your community and come up with a solution to whatever they need.

This is an archived version of a Baekdal Plus newsletter (it's free). It is sent out about once per week and features the latest articles as well as unique insights written specifically for the newsletter. If you want to get the next one, don't hesitate to add your email to the list.

 
 
 

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Thomas Baekdal

Founder, media analyst, author, and publisher. Follow on Twitter

"Thomas Baekdal is one of Scandinavia's most sought-after experts in the digitization of media companies. He has made ​​himself known for his analysis of how digitization has changed the way we consume media."
Swedish business magazine, Resumé

 

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