Substack...what's the hype? (Ricky Weekly #33)
This is where I share 3 things every week with my friends and anyone else interested.
A picture from my life:
Did you know the “Tres Comas” tequila from HBO’s Silicon Valley is now a real thing? 😂
Thing on my mind:
There’s a lot of hype about Substack (the service that powers this email) and the creative economy in general. I think the idea is that if you can make things people want, you now have an easier time making a living just doing that. But a friend who interviewed at Substack told me that they were only doing $400k in revenue and most of that revenue comes from their top two paid newsletters. I suspect services like Patreon, OpenCollective, Gumroad, etc have similar top-heavy dynamics. Of course, anything that makes the long tail more viable makes a dramatic difference for the creative class, so I’m all for it. I’m wondering if anything else has really changed to unlock the creative economy.
Attention and $$
Our attention and wallets are still limited. Sure we’ve found a little more time to consume content from our devices and we have a little bit more money to pay for content from the money we used to spend on cable, but the found time and money are incremental. That’s not even considering the overhead of subscribing to all these different things. The cable bundle was easy. Now that Peacock, HBO Max, Quibi, and Discovery streaming services are all slated to launch later this year, people are wondering how many we can reasonably sustain even if the aggregate price is still lower the cable.
Even if you can charge for a newsletter easily, you still need to tell people about it. Social media is more mature and more people have followers they can monetize right away, so maybe that’s what’s new. Because otherwise in terms of discovery, there’s way more competition. It’s much harder to get found on Google or stand out on social media compared to the early days. Big brands and celebrities have more power and closed systems like Spotify and Medium are more attractive today because they have the power to help the little guys get discovered, but they’re very limited in what they can do (eg if Spotify puts too many new artists in a playlist and you don’t get your Justin Bieber fix, you’d stop using it).
Supply and demand of quality
It’s possible that after being spoon-fed junk by Facebook and having lived long enough in the age of information abundance, we started to crave more quality content, but that doesn’t seem like a strong effect.
Charging for content has the effect of signaling quality, but as more people start charging money for content, money becomes a less useful signal. Social signals like “likes” and “shares” used to signal quality, but once people started to game it or realize that it only captures the lowest common denominator / popular vote kind of quality, the social signal became less useful. So basically I’m not sure if we are really demanding more quality, but we definitely have more supply.
With money directly coming from subscribers we are getting better quality content in two ways. Platforms like Netflix can spread out the cost of developing shows over millions of subscribers, giving them way more leeway to experiment and go for more niche content as long as it appeals to a segment of their subscriber base. The other way is that if you can make videos for your 100 Patreon supporters, you can make the best videos for those niche 100 people without feeling like you need to appeal to more people.
Am I missing anything important?
Piece of content I recommend:
Is Joker Cinema? by Now You See It
The “video essay” is one of the best things to emerge from YouTube in my opinion. This one’s special because it’s a video essay without a narrator!
As always, you can find out what I’m thinking in more real-time on Twitter and my essays are on my website. My latest essay is called “From Socialcam to TikTok: How we figured out video social in a decade”