I'd like to apologize in advance for the topic of this week's newsletter, which I fear may not interest all (or perhaps even most) of you. It would be nice to think that lots of people care about the nuances of how news and information gets published, and the challenges that the modern web and social media and tech monopolies (among other things) pose to our information ecosystem, but a long career as a journalist writing about tech — including publishing technology like Substack — has convinced me that this is very much not the case! So if you are one of those people for whom this topic induces snoring, please feel free to ignore this week's newsletter and then come back later 😄

If you are reading this newsletter via Substack, the headline might seem a little confusing. Don't I use Substack to publish The Torment Nexus? I sure do, because I want to reach potential readers in as many ways as possible, and lots of people use Substack. However, I also publish this newsletter using Ghost — an open-source platform — and I simultaneously post all of the newsletters to my personal website, which runs on WordPress (a platform that I confess also has some problematic aspects). Unlike many of the people who publish on Substack, I don't have a paywall that kicks in at a certain point, or hides posts or premium options behind a subscription. I rely on donations through both Substack and Ghost to support my newsletters (including my daily newsletter When The Going Gets Weird), and I also have a Patreon portal where you can send money if you want to support my work with a specific amount of your choosing.

As you can probably gather from the above description, I am not backing one specific horse in the web publishing race. If you want to read my writing via Substack that's great, and if you want to read it via Ghost that's also great, but if you'd rather use the old-fashioned open web that's fine too. This makes monetization somewhat more difficult, since people can easily get my newsletter without paying and therefore there isn't a compelling reason for subscribing or donating (apart from just the fact that you like me or my writing). But I am willing to live with that because I think the free and open exchange of information is a crucial aspect of the web — although it is becoming less and less common all the time. And that's part of why I don't think that Substack isn't the real future of web publishing, or at least shouldn't be the future.

There's no question that Substack has built a company and a service that meets the needs of many independent publishers and many users, and for that I congratulate them. I remember getting a phone call from Substack founder Hamish McKenzie many years ago when they were launching, but I confess that I was less than excited by the idea when he finished describing it. Is that because the mechanics of web publishing are less than sexy? Heavens no! 😄 One problem was that it seemed like a difficult business to make money at — even if you did a good job for a specific publisher, and took a cut of the revenue, why wouldn't they just leave as soon as they got successful and take all their subscribers with them? And even with the democratization of publishing, how many high-profile writers could there possibly be who could pull in the numbers of subscribers that would make it financially worthwhile to run a company on them?

Tools versus platforms

As Substack's founders have acknowledged, the service was inspired by the success of Stratechery, a newsletter that technology analyst Ben Thompson launched in 2014 (inspired in turn by long-time Apple blogger John Gruber's website Daring Fireball). Like many others, I have been a fan of Ben's for some time, and I think I was the first to write about his newsletter venture in April of 2014, when I was at Gigaom (RIP). The idea of a writer "going direct" — as blogging pioneer Dave Winer used to call it — and connecting with readers without the need for intermediaries seemed like a promising opportunity to me, as a long-time blogger myself. It was like a manifestation of Kevin Kelly's principle of making a living by connecting with "ten thousand true fans," which he wrote in 2008. However, there is a key difference between what Thompson does with Stratechery and what thousands of writers do with the newsletters they publish on Substack, and it is this: Thompson doesn't use a platform like Substack.

This is where it's useful to distinguish between tools and platforms. Stratechery uses publishing tools to send out emails and handle subscriptions and so on, many of which Ben developed either solely or partly on his own. These tools would be equivalent to Ghost or to Buttondown, two of the other publishing tools that some newsletter writers use. You can even use WordPress to do your own newsletter publishing directly from your blog, by adding a couple of plugins that handle sending out the newsletter via SMTP and keep track of subscriptions, clicks, and so on (I experimented with doing this before I ultimately decided to opt for publishing via Ghost). Substack also handles subscriptions and email publishing, but it is much more of a platform than a simple tool: not only does it take a cut of a publisher's revenue — as opposed to a flat fee — but it also plays an active role in curating content. In other words, it plays favourites.

This has gotten Substack into quite a bit of trouble with both authors and readers, as some of you are probably aware. In 2023 the company was accused of "platforming Nazis" and other reprehensible viewpoints, because it included writers with transphobic and white supremacist views. McKenzie responded by saying the company allowed these accounts to remain because Substack was committed to free speech. As a number of people noted, however, it is one thing to allow speech to occur using your tool, and another to actively recruit, promote, and monetize arguably harmful or hateful speech. To use a popular analogy, if you run a bar and a few neo-Nazis come in for drinks and you don't eject them, you are running a neo-Nazi-friendly bar; if you tell them that Thursdays are neo-Nazi Night, then you are running a full-on neo-Nazi bar.

A number of prominent authors and publishers left Substack as a result of this furore, including Casey Newton's Platformer, Ryan Broderick's Garbage Day, and Rusty Foster's Today In Tabs. Many others remained, however, and some have become significant publications in their own right: The Free Press, which was founded by former New York Times writer Bari Weiss, now has over 500,000 subscribers and brings in an estimated $10 million a year in revenue. Some high-profile journalists have recently moved to the platform as well, including Terry Moran, the former ABC reporter who was fired by the network after calling Donald Trump and his advisor Stephen Miller "world-class haters." Substack also recently created what it calls a $20-million Creator Accelerator Fund, which it says it will use to bring on and support new publications.

On paying the piper

So that's the good news: Substack has some high-profile authors and is bringing in more of them, and that's presumably good for revenue. But how good — enough to make a living on, or enough to satisfy the company's investors? Those are two very different things. When I wrote about Substack raising funding from venture capital in 2021, I pointed out the difficulties of this business model, one that has torpedoed many promising publishing businesses in the past (including BuzzFeed, Gigaom, Mic, and many others), and I continue to believe that Substack is riding a fine line. The best thing about venture funding is it gives you money to grow your business, and the worst thing about taking venture financing is that you absolutely have to continue to grow at predictable — and in many cases unrealistic — rates forever, or you will be tossed onto the scrap heap.

As former Mother Jones editor Ana Marie Cox pointed out recently, the company is said to be working on a new round of between $50 million and $100 million, at a "post-money" valuation around the $700 million mark — barely any higher than the $650 million valuation it had when it completed its last major financing round in 2021. That is not what you would call impressive growth! And even that valuation implies a multiple of about 16 times revenue, which is arguably up in the stratosphere for an online publishing platform. The only way to satisfy the hopes of those investors is to grow revenues (forget about income) at a ridiculously quick pace, which for a publishing platform requires adding more and more features, regardless of whether users want them. As Cox describes it:

Everything suspect about Substack stems from a desire to be more like a sticky destination and less like a publisher. You can ignore their posturing about free speech and just look at how they’re leaning harder and harder into audience capture and engagement. They’re offering audio, video, short-form posts, “discoverability.” They want to keep readers in their app listening, watching, interacting—anything but reading newsletters in their inbox as God intended. Indeed, Substack is now hunting bigger game than any legacy media creature. In January, they announced a $20M “creator accelerator fund” to lure Tiktokers (or anyone else with at least $2000/mo in existing subscribers). That’s almost half their revenue on a bet that gets them further and further away from a sanctuary for outcycled journalists and closer and closer to the chaos chum bucket that newsletters were supposed to stand out from.

Substack, Cox notes, is "utterly dependent on the whims of its investors." Every round of capital it raises deepens the expectation of a big payoff — a public offering, an acquisition, etc. The nightmare scenario, she says, is that Substack limps along long enough for its founders to get desperate for a quick exit, and so they sell the service to someone who sees it as their "personal ideological playpen," much like Elon Musk did with Twitter (Musk has mused in the past about wanting to buy Substack). "Imagine the enshittification of Twitter, but with thousands of journalists locked in because that’s how they hoped to make a living, not just fuck around micro-blogging on company time," Cox writes.

Will Substack continue to be the platform of choice for many authors and journalists who want a platform to handle all of the intricacies and plumbing of web publishing? Perhaps. But I agree with Cox that the future is clear. So what is the alternative? Thankfully, services like Ghost exist (it powers publishers such as the Kyiv Independent, 404Media and Hell Gate) along with other alternatives such as Beehiiv, which recently launched its own multimillion-dollar initiative to attract journalists, known as the Beehiiv Media Collective, which offers health insurance, legal support, and free hosting to a select number of applicants. In March, it rolled out a feature that allows creators themselves to manage ads and invoice advertisers. Ghost, for its part, is close to rolling out full integration with the fediverse, which will allow publishers to make their publications a standalone portal to federated applications and networks such as Mastodon. The open web can be the future of publishing if we put our minds to it!

Got any thoughts or comments? Feel free to either leave them here, or post them on Substack or on my website, or you can also reach me on Twitter, Threads, BlueSky or Mastodon. And thanks for being a reader.