Paid Newsletters: Viable Journalism Alternative or Platform Risk? - Episode Hero Image

Paid Newsletters: Viable Journalism Alternative or Platform Risk?

Deep Questions with Cal Newport · · Listen to Original Episode →
Original Title:

TL;DR

  • Paid newsletters can financially outperform traditional print media, with top creators earning seven figures annually, demonstrating a viable alternative business model for journalism.
  • Producing high-quality, high-frequency newsletter content comparable to Paul Krugman's requires a dedicated effort equivalent to a full-time journalism job, involving 40-50 hours per week.
  • The paid newsletter market currently supports an estimated 500-1,000 individuals making a "good living" (>$150,000/year), with potential for significant growth to rival newspaper industry scale.
  • While newsletters offer a potential replacement for declining print media, they may lack the rigorous fact-checking and broad appeal of newspapers, potentially leading to increased partisanship and reduced exposure to diverse ideas.
  • The long-term viability of the paid newsletter model hinges on avoiding platform consolidation, as a single dominant company like Substack risks prioritizing user growth and engagement over sustainable creator livelihoods.
  • Reducing phone usage is less about digital hygiene and more about cultivating a fulfilling life with meaningful activities, connections, and personal growth, which naturally diminishes the appeal of digital distractions.

Deep Dive

The rise of paid newsletters, exemplified by Paul Krugman's success on Substack, presents a viable alternative to the declining traditional media landscape, offering expert voices a direct path to substantial revenue. However, this model's long-term viability and potential for broad industry replacement hinge on Substack's strategic direction and the emergence of a more decentralized, open ecosystem.

The financial success of individuals like Paul Krugman on platforms like Substack is significant. Krugman, generating an estimated $1.26 million to over $4 million annually, demonstrates that a direct-to-consumer model can yield higher earnings than traditional journalism salaries. This success is underpinned by a subscription model that, at $7 a month or $70 a year, offers readers exclusive content and access to archives. Maintaining such a platform requires consistent effort, comparable to a full-time journalism job, with writers like Nate Silver dedicating 40-50 hours weekly to content creation, idea refinement, and timely delivery. While the number of "Substack millionaires" is relatively small, estimated at around 34 individuals with over 500,000 subscribers, a broader segment of approximately 500 to 1,000 individuals are likely earning a "good living" (over $150,000 annually) across various popular categories.

The potential for this newsletter market to rival the scale of print newspapers is considerable, though not yet realized. At its peak, the newspaper industry boasted 60 million in circulation and generated around $50 billion in revenue, employing approximately 56,000 editors and reporters. Currently, the newsletter economy, with an estimated 5 million paid subscribers and $450 million in revenue, is significantly smaller. However, Substack's co-founder projects a future with 50 million paid subscribers, which would generate an estimated $4.5 billion in revenue and support around 5,000 full-time writers. This best-case scenario places the newsletter economy in a comparable, though not identical, position to the current state of the newspaper industry, particularly in terms of revenue and subscriber numbers, albeit with fewer employed professionals.

The comparison between newsletter media and its newspaper predecessors reveals both advantages and disadvantages. Newsletters offer a more direct and transparent authorial voice, allowing readers to better understand and filter perspectives based on known individual biases, leading to potentially higher trust than with institutions claiming neutrality while exhibiting partisanship. This model also fosters a "star-making system" where successful writers have demonstrably earned their audience through compelling content, suggesting higher overall quality. However, newsletters lack the robust fact-checking, copy-editing, and legal liability infrastructure of traditional newspapers, which historically provided a safeguard against misinformation and defamation. Furthermore, the distributed nature of newsletters means a loss of "boots-on-the-ground" reporting and the serendipitous exposure to diverse information that print newspapers offered through their fixed format.

The primary risk to this optimistic vision of a thriving newsletter ecosystem lies in the potential for platforms like Substack to prioritize growth and valuation over writer support and journalistic integrity. Critics worry that Substack might evolve into a content aggregator focused on maximizing user engagement through algorithmic curation and distraction, rather than fostering a diverse network of independent voices. This "inshittification" process, where a platform degrades user experience to extract more value, could undermine the very principles that make newsletters appealing. The ideal future, therefore, depends not on the success of a single platform, but on the emergence of a decentralized, open-source alternative that offers low-friction tools for writers to publish and monetize their work without the pressure of hyper-growth valuations. Such an ecosystem would ensure that the internet, which has contributed to the decline of traditional media, can also provide a sustainable alternative for serious journalism and expert discourse.

In terms of personal practices, advice for reducing phone usage emphasizes filling life's voids with meaningful activities rather than focusing solely on phone-related habits. The viral success of advice centered on aggressively pursuing alternatives, hobbies, and self-reflection, rather than "white-knuckling" phone abstinence, suggests that a fulfilling life naturally diminishes the allure of digital distraction. This approach shifts the focus from managing phone use to cultivating a life so rich and engaging that the phone becomes a less appealing option.

Action Items

  • Audit Substack's platform for potential "inshittification" risks by analyzing its business model and user experience for signs of prioritizing ad revenue or algorithmic engagement over user value.
  • Create a framework for evaluating alternative, open-source newsletter platforms to identify low-friction options for content creators seeking to monetize their work independently of large, venture-backed companies.
  • Develop a personal strategy for filling life voids with meaningful activities, focusing on hobbies, connections, and self-reflection, to reduce reliance on phone-based distractions.
  • Measure the impact of reading classics with AI assistance by comparing comprehension and retention rates between sessions using ChatGPT for summaries versus those without.

Related Episodes

Key Quotes

"The paper wanted to take away his newsletter or make him write less frequently. It goes on to summarize that Krugman was fed up with that, he felt like he was being pushed out, and he left."

This quote highlights the catalyst for Paul Krugman's departure from The New York Times, indicating a conflict over his newsletter and writing frequency. The author uses this event to frame the subsequent discussion about the viability of paid newsletters as a journalistic model.

"In an age of digital distraction, the business model for traditional media is really struggling to compete, because on your phone, information is free and distraction is powerful."

The author posits that the current digital landscape, characterized by constant distraction and the perception of free information, poses a significant challenge to the established business models of traditional media outlets. This sets up the exploration of alternative models like paid newsletters.

"No, no, you don't understand. Paul is killing it. His subscriber count rivals the Times' Sunday print circulation. He's really impacting the conversation, and according to my source, his earnings have leaped comfortably into the seven-figure range."

This quote presents a counter-narrative to the initial impression of traditional media's decline, revealing Paul Krugman's unexpected success on Substack. The author emphasizes the scale of his readership and financial earnings, suggesting a potentially more optimistic future for journalism.

"Is it possible that paid email newsletter subscriptions might be the foundation on which we can build a new type of professional journalism? Can a distributed network of respected and expert thinkers delivering thoughts in long-form essays offer competition to the nonsense and slop being delivered through attention economy apps?"

The author poses these questions to explore the potential of paid newsletters as a viable alternative to traditional journalism in the digital age. This frames the core inquiry into whether this model can support professional journalism and compete with content optimized for attention.

"So what I want to do here is load up on the screen for people who are watching. This is Paul Krugman's Substack. I've loaded it up in the Substack app where we can see what he's up to. There's a couple of key numbers in here that I want to point out. One, the subscriber count: 505,000. Two, his ranking on here is number six in US politics."

The author uses specific data points from Paul Krugman's Substack to illustrate the tangible success of his paid newsletter. This provides concrete evidence of his significant reach and influence within his niche.

"Substack says for a standard newsletter with a free tier and a paid tier, you can expect somewhere between 5% to 10% of your subscribers to pay for the paid tier. The low end of that would be more like 3%."

This quote provides a key metric from Substack itself regarding conversion rates for paid subscriptions. The author uses this industry standard to calculate potential earnings for newsletters like Krugman's, grounding the financial discussion in data.

"So he has seven pieces of advice. Number one, we'll go through them real quick: 'Always Be Blogging.' He says, 'I have to tell you that producing Silver Bulletin is really hard work. It's often creatively fulfilling and enjoyable, and this year it was financially rewarding. But professionally, I'm the happiest I've been in years. But it's a lot of work.'"

Nate Silver's perspective, as relayed by the author, emphasizes the significant effort required to maintain a successful newsletter. This quote highlights that while rewarding, the work is substantial, countering any notion that this model is effortless.

"So what we need is not like the old indie web stuff to be successful. Like, won't people just pay for my microblog or my, you know, WordPress? We need more indie web copies of Substack. We need more independent Substacks. We need more platforms run by more people where the friction is low for me to put out content and to make money from it."

The author argues that the future of independent media requires more than just personal blogs; it necessitates platforms that facilitate content creation and monetization, similar to Substack but with greater diversity. This points to a need for a competitive landscape rather than a single dominant player.

"The best advice about using your phone less, as we see here in this viral clip, really has nothing to do with your phone or your habits around your phone or how you use your phone. It's about everything else in your life."

This quote encapsulates a central theme from the "Practices" segment, suggesting that reducing phone usage is less about direct phone-related strategies and more about cultivating a fulfilling life. The author emphasizes that a rich life naturally diminishes the appeal of excessive phone use.

"I think if I had to rank them, I'm going to put Airframe number one. It had the, the, the least high-concept plot, but it was just perfectly executed. It is a really well-executed thriller at someone at the height of his powers."

The author ranks Michael Crichton's "Airframe" as the best thriller read in December, highlighting its masterful execution despite a less fantastical plot. This demonstrates Crichton's skill in crafting compelling narratives through detailed and well-paced storytelling.

Resources

External Resources

Books

  • "Airframe" by Michael Crichton - Mentioned as a well-executed techno-thriller with a focus on airplane safety and a ticking clock element.
  • "The Great Train Robbery" by Michael Crichton - Mentioned as a dramatization of a historical Victorian England train robbery, noted for its research and sting-style plot.
  • "Fantastic Voyage" by Isaac Asimov - Mentioned as an adventure thriller about a miniaturized submarine journey inside the human body, featuring a ticking clock and a double agent plot.
  • "Slow Productivity" by Cal Newport - Mentioned in relation to a viral clip about successfully deleting social media.
  • "Dopamine Nation" by Annie Lembke - Mentioned as a comparison point for a clip on phone usage, focusing on addiction science.
  • "The Deep Life" by Cal Newport - Mentioned as containing an example of writing down lifestyle observations in a notebook.

Articles & Papers

  • "Paul Krugman on leaving The New York Times" (Source not explicitly stated, but implied to be an article from the period of his departure) - Mentioned as an article discussing Krugman's departure from The New York Times due to disagreements over his newsletter and writing frequency.
  • "Always Be Blogging: My Seven Tips for a Successful Substack" by Nate Silver (Source not explicitly stated, but implied to be a Substack article) - Discussed as a source for understanding the work involved in running a successful Substack newsletter, offering insights into time commitment and content strategy.
  • "Regarding and Well Against Substack" by John Gruber (Daring Fireball) - Mentioned as a critique of Substack, arguing it is a delivery mechanism rather than a publication and expressing concern about its potential to become an "insification" machine.

Websites & Online Resources

  • Substack - Mentioned as a platform for paid email newsletters, analyzed for its potential to replace traditional media and its business model.
  • Really Good Business Ideas (Source not explicitly stated) - Mentioned as a source for data on the number of newsletters with over 500,000 subscribers, used to estimate the number of high-earning Substack writers.
  • Pew Research Center (Fact Sheet) - Mentioned as a source for data on US daily newspaper circulation and revenue.
  • YouTube - Mentioned as the platform where a viral clip about deleting social media was posted.
  • WordPress - Mentioned as an example of an open-source project that serves as a delivery mechanism for content, contrasting with Substack.
  • Simplecast - Mentioned as a podcast hosting company.
  • MeetFabric.com - Mentioned as a website for term life insurance.
  • PipeDrive.com - Mentioned as a website for a sales CRM tool.
  • FactorMeals.com - Mentioned as a website for a meal delivery service.
  • MonarchMoney.com - Mentioned as a website for a personal finance tool.

Other Resources

  • Paul Krugman's Substack - Mentioned as an example of a highly successful paid newsletter, analyzed for its subscriber count, content frequency, and potential earnings.
  • Nate Silver's Substack (Silver Bulletin) - Mentioned as a comparable Substack to Paul Krugman's, used to analyze the work required for a successful newsletter.
  • Ann Seltzer's Iowa Poll - Mentioned as an example of a timely and differentiated news event that Nate Silver wrote about on his Substack.
  • Glengarry Glen Ross (Film) - Referenced through the phrase "Always Be Closing," adapted by Nate Silver to "Always Be Blogging."
  • The Economist - Mentioned as the publication Paul Krugman was associated with before leaving The New York Times.
  • The New York Times - Mentioned as the publication Paul Krugman left, and analyzed in comparison to Substack's potential revenue and reach.
  • Washington Post - Mentioned in the context of liability exposure for traditional media outlets.
  • Pro Football Focus (PFF) - Mentioned in the context of Kevin Cole's background.
  • NFL (National Football League) - Mentioned in the context of sports analytics.
  • New England Patriots - Mentioned as an example team for performance analysis.
  • Pro Football Focus (PFF) - Mentioned as a data source for player grading.
  • Substack Leaderboards - Mentioned as a tool used to rank newsletters and estimate subscriber counts.
  • US Politics Leaderboard (Substack) - Mentioned as a category where Paul Krugman and Andrew Sullivan rank highly.
  • Business Leaderboard (Substack) - Mentioned as a category analyzed for newsletter performance.
  • Technology Leaderboard (Substack) - Mentioned as a category analyzed for newsletter performance.
  • Food, Drink, and Finance Leaderboards (Substack) - Mentioned as categories analyzed for newsletter performance.
  • Andrew Sullivan's DC Native - Mentioned as the 20th biggest newsletter in the politics category on Substack.
  • Western Southern Life Assurance Company - Mentioned as the issuer of policies for Fabric by Gerber Life.
  • AI-enabled customized newsletter snippets - Mentioned as a potential future direction for Substack that is viewed negatively.
  • Open-source projects - Mentioned as a desirable alternative to a single company controlling the paid newsletter ecosystem.
  • Email newsletters - Discussed as a potential replacement for traditional print media.
  • Traditional media - Discussed in contrast to the emerging newsletter economy.
  • Attention economy apps - Mentioned as a source of distraction and "nonsense and slop."
  • The Washington Post Covington kids incident - Mentioned as an example of a news event where traditional media published potentially defamatory content.
  • Venezuelan politics - Mentioned as a topic of news reporting.
  • Department store ads - Mentioned as a historical revenue source for newspapers that influenced their neutrality.
  • Paywalls - Discussed as a factor influencing modern media bias.
  • Nobel Prize - Mentioned in relation to Paul Krugman's achievements.
  • Princeton University - Mentioned as a past affiliation of Paul Krugman.
  • The Iraq War - Mentioned in relation to Paul Krugman's writing for The New York Times.
  • Judith Miller - Mentioned in relation to Paul Krugman's writing for The New York Times.
  • The Simpsons - Mentioned as a topic of a book read by the host.
  • Corey Doctorow's concept of "insification" - Defined as the process by which digital tools become worse as they prioritize profit over user experience.
  • Facebook - Used as an example of a platform that has undergone "insification."
  • Prohibition Movement - Mentioned as a historical example of societal coping mechanisms during hard times.
  • Brazilian Jiu-Jitsu - Mentioned in the context of physical interactions during the podcast recording.
  • Chat GPT - Discussed as a tool for enhancing understanding of classic books, with caveats about its reliability.
  • Single-purpose notebooks - Mentioned as a recommended tool for capturing thoughts and ideas.
  • Lifestyle-centric planning notebooks - Mentioned as a type of notebook where ideas are captured and filtered.
  • Nascar/IndyCar races - Used as an example of an experience that might generate novel but not necessarily deep insights.
  • Factor meal delivery service - Mentioned as a sponsor.
  • Monarch personal finance tool - Mentioned as a sponsor.
  • Fabric by Gerber Life (term life insurance) - Mentioned as a sponsor.
  • PipeDrive (sales CRM) - Mentioned as a sponsor.

---
Handpicked links, AI-assisted summaries. Human judgment, machine efficiency.
This content is a personally curated review and synopsis derived from the original podcast episode.