Substack wants to pay you to write about local news

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Children selling newspapers, 1910. | Sepia Times/Universal Images Group via Getty Images

Your local newspaper is dying. Can newsletters replace it?

Substack, the email newsletter startup, might be best known as the home of high-profile writers who leave big publications and set up their own businesses.

Now it wants to become known as a place where journalists you haven’t heard of make a living by covering news in their hometowns.

Substack plans to hand out a total of $1 million in the form of one-year stipends to up to 30 journalists who are interested in covering local news on the platform. A smattering of writers are already using Substack to sell paid subscriptions to newsletters dedicated to local news, and the company thinks, with the right incentive, many more might do it.

“We do see a lot of encouraging signs that the model also works for reporting and for local news,” Substack co-founder Hamish McKenzie told me. “And that’s why we’re putting in this sizable chunk of money to make a bigger bet on it.”

The terms of Substack’s local push roughly mirror the “Substack Pro” program it has been using to lure high-profile writers to the platform: Writers can get up to $100,000 in one-time payments, and can also keep 15 percent of any revenue their newsletters generate in the first year. After that, they’re on their own financially but will keep 90 percent of the fees subscribers pay them. Substack says it will also provide mentorship from other Substack journalists, as well as access to subsidized health care and other services.

Substack’s announcement comes as it is generating increasing coverage, controversy, and competition. The startup, which launched in 2017, has become an object of fascination for the chattering-class types, as high-profile writers leave big-time publications to set up shop there — former New York Times columnist Charlie Warzel is the most recent example, along with several of my former colleagues who used to work at Vox Media. In some cases, these journalists have been able to make hundreds of thousands of dollars a year by moving to Substack.

The company has also angered some of its users, who accuse it of providing a platform to writers they find odious. And now that it has proved out a model for paid newsletters, Substack is facing competition from a range of competitors, including Facebook, Twitter, and Ghost, a nonprofit open source platform.

McKenzie and co-founder Chris Best talked about all of those issues with me in this week’s episode of Recode Media. Tl;dr: They argue that they’re not, as some posit, an existential threat to the likes of the New York Times, but that instead they are a new option for some writers; they argue that they host writers with a wide range of opinions and interests and are loath to interfere with any Substack writers’ output; and they say that Substack writers are free to leave for other platforms. Their job is to convince them to stay.

But back to local news, which has been in a steadily worsening crisis for the last 20 years, via a vicious cycle: The internet has steadily stripped away local news outlets’ advertising revenue, which leads to newsroom cutbacks, which leads to weakened products, which leads to declining audiences, which leads to more revenue losses. Repeat.

We’ve also seen various attempts to fix the situation, ranging from Patch, a once-ambitious plan to build all-digital newsrooms in towns across the country that still exists in a scaled-down form, to the American Journalism Project, which wants to combine philanthropy, corporate donations, and subscriber money into a not-for-profit news model.

Substack, to its credit, doesn’t argue that it can single-handedly save local news, just that it thinks there is an audience that will pay to read it and journalists who can make a living selling it.

But that’s very much an untested thesis. Some of the journalists Substack points to as encouraging examples of local journalism say they’re not paying all their bills with Substack revenue. That means they’re not spending all of their time covering local news for Substack, which means Substack is at best an extra source of local news and not a replacement for a gutted newspaper.

Matt Elliott, who covers Toronto politics via his City Hall Watcher Substack, says he has 900 subscribers paying him $5 a month or $50 a year. But it’s one of several gigs, including a weekly column at the Toronto Star and teaching college journalism. Substack, he says, replaces money he used to make selling one-off stories to other outlets — money he is happy to have, since it’s more consistent. “It’s almost like freelance insurance,” he says. “And that’s a powerful thing to have, as somebody who’s been a freelancer.”

Adam Wren, who covers Indiana politics via his Importantville Substack, has 432 subscribers who pay him as much as $150 a year; he says his audience includes local lobbyists as well as national reporters who want to keep tabs on what’s happening in his home state. But he’s only spending five to six hours a week on his newsletter, generally “in the wee hours,” he says. Wren also has a full-time job writing about national politics for Insider. “I have this sense that [Substack] is always going to be supplementary” for his journalism career, he says.

If you want a more encouraging perspective on Substack’s ability to build a local outlet, talk to Joshi Herrmann, a former freelance writer who started The Mill in Manchester, UK, last fall; now he has 850 subscribers paying him about $10 a month and has the money to hire another reporter and to rent a small office space. He thinks he’ll eventually be able to hire five or six reporters, as well as freelancers, all of whom will be writing features and “doing really good in-depth stuff.”

Substack revenues aren’t “the most money I’ve ever made,” Herrmann says, but he says they offer him a chance to make something that doesn’t exist — essentially a local magazine with a business model somewhere between the high-end Financial Times and Patreon. “If it keeps on growing like it has been, this can work.”

Here’s my interview with McKenzie and Best:

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