Imagine you are a Spanish journalist earning 1,500 euros a month, the average salary of the profession, and you are told that there is a platform called Substack, recently valued at $1.1 billion, where some of your colleagues pocket more than a million dollars a year for writing. newsletter. Wouldn’t you like to write an article about it?
Substack was born in San Francisco in 2017. It was founded by Chris Best, Hamish McKenzie and Jairaj Sethi, two of them engineers and a journalist (Mckenzie) expert in the technology sector. The platform acts as an intermediary between authors and readers through newsletters sent via email. There are some newsletter paid and others free, depends on the author. Substack takes a 10% commission. The platform also has modes of operation and functions that, in a less aggressive version, are reminiscent of X. It currently has more than five million paying subscribers and is estimated to generate around 45 million dollars a year. In July it closed a $100 million funding round in which it achieved unicorn status.
Enrique Dans, professor of Innovation at IE Business School, warns that Substack’s valuation responds much more to expectations than reality. “You lose money,” he says. «It is an evaluation based on the assumption that the future of digital publishing will increasingly tend towards a direct relationship between author and reader». Dans credits Substack with revamping the classic newsletter format, but doubts its long-term viability with such a low commission. “Can it become a business? For the authors, without a doubt. For the publisher (publisher), I don’t know.”
The entrepreneurs who created Substack initially used the tactic of recruiting famous journalists from large newspapers, offering them a fixed annual salary. They boast that they have 50 authors making more than a million dollars a year from subscriptions alone. Matthew Yglesias, with his Slow Boring newsletter, has around 18,000 paying subscribers and a turnover of 1.4 million a year. However, it is an exception. Most Substack authors make little to no money. The best reward you can get from the platform is to create a personal brand. Thus speaks Mar Manrique, journalist with a news free of 24,000 subscribers. “For me it was the way to enter the journalism market. I see it more as a cover letter to get known than as a main source of income.”
The written press has been trying to reinvent itself for years. For decades they have lived largely on advertising in the print edition. Many didn’t know how to adapt to the Internet. Others tried to compensate for the drop in income and embraced the solution clickbait (the hunt for the reader with sensational titles).
Substack was born with the promise of freeing journalists from the pressure of opinion. But the truth is that after the click-hunting phase, most of the large reference newspapers understood that they could not support themselves with digital advertising alone and adopted the subscription model. The New York Timesas the most successful example, it has more than 10 million subscribers and achieved an operating profit of approximately $350 million in 2024.
In this context, the Substack journalist who asks his readers for a monthly subscription competes with the infrastructure of an entire medium. The fight is, to put it mildly, unbalanced. Therefore, for Aurelio Medel, professor of Direction and Management of Journalism Businesses at the Complutense University of Madrid, it makes no sense to compare Substack to a traditional medium. “A single journalist on a blog seems anecdotal to me compared to the capabilities that a medium can have,” he underlines. In his opinion, it is difficult for an isolated author to compete in subscriptions with a large newspaper, and he doubts that in the long term readers will prefer to pay five euros to follow a single person instead of accessing an entire newspaper.
Yet some do. Substack exploits several demand gaps that neither newspapers nor social networks like X or Instagram can cover. After identifying this crack, Fernando López-Pita, an engineer with work experience in start-upsdecided to create Subtrato, a digital magazine that brings together dozens of young authors. López-Pita realized that many readers, especially young people, were fed up with the “rubbish” of social networks and, at the same time, were not attracted to or did not reach the articles of the big newspapers. “I thought that if instead of paying 5 euros to read an author (like on Substack) I could pay 5 euros to read 40, I would pay them.” This is how Substratum was born.
Harness nostalgia
This digital magazine, like Substack, is fueled by nostalgia for the so-called slow Internet: the stage before social networks, when blogs proliferated. Many of the texts published on Substack, and almost all of those on Substratum, are written in the first person. “Younger generations are attracted to this accessible style, it’s something well known in the publishing world,” says López-Pita. Despite this, the style books of the main newspapers continue to focus on the third person and the impersonal tone. “Why do people connect with influencers? Because they constantly talk to you in the first person,” summarizes Manrique. “The reader sometimes perceives that the journalist is speaking to him from an advantageous point of view.”
López-Pita maintains that the world of the written press continues to function in a “very artisanal” way. “How is it possible that, unlike any other platform such as Instagram or YouTube, in a newspaper all readers see exactly the same site, without any degree of personalisation?” he asks. “I understand that journalism is conceived as a public service, or even as a democratic tool; but even worse than breaking the hierarchy in the news order is failing to reach the people.” He urges newspapers to find a way to connect with young readers, otherwise, he warns: “we’ll end up eating our own toast.”
