Substack built a framework for how platforms can support creators

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Substack built a framework for how platforms can support creators

The paid newsletter startup Substack made a recent announcement that it’s launching a fellowship program for independent writers. Those who get chosen for the program will receive a monthly stipend, as well as “coaching and support in areas that will set them up for long-term success with the subscription publishing model.”

I actually think this has the potential to be an important move for Substack and could possibly be emulated by other platforms. One of the biggest challenges for aspiring professional newsletter writers is that they need, at the very least, several months of runway to build up a strong base of non-paying email subscribers before they can attempt to monetize their audience. This runway will differ depending on the individual writer and niche, but I would suggest that you shouldn’t even debut a paid subscription until you have at least 10,000 free newsletter signups.

But here’s the problem: the average middle class creative simply doesn’t have the capital to spend 40 hours a week for six months building up their audience. Instead, they’re forced to operate their newsletters on the side, hoping that they have enough energy left over after they come home from their day jobs to spend time on their writing.

So you can think of this fellowship program as a miniature form of venture capital investing. Substack sees lots of potential for writers on its platform, and by providing an initial revenue base to get them going, these writers have the runway to truly scale their operations. They benefit from the stipend and support, and Substack benefits because it’ll take its cut of all future subscription revenue the writer generates.

It’s a model that I wish more platforms would copy. Imagine if the folks at YouTube spotted a creator who makes really original content but has only grown their channel to 10,000 subscribers, and then consider how a monthly stipend could go a long way toward helping that filmmaker grow their audience into the millions. The same could be said for most platforms that support independent creators, from Medium to Patreon to even Facebook Watch. Given how much money and support the platforms throw at mainstream media companies, it’d be nice to see them support their own homegrown creators for once.

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I have a secret Facebook group that’s only promoted to subscribers of this newsletter. I try to post exclusive commentary to it sometimes and have regular discussions with its members about the tech/media space. Go here to join. [link]

What it takes to build a bootstrapped podcast network

If you listen to the podcast Startup, then you’ve heard host Alex Blumberg go into exquisite detail about the trials and tribulations of launching a VC-funded podcast network. In earlier seasons, we got a firsthand look at what it was like to pitch venture capitalists, hire talent, and grow the business. In the final season of Startup, Blumberg walked us through Spotify’s $230 million acquisition of Gimlet.

But what about bootstrapped podcast networks that don’t have access to millions of dollars of venture capital money? How do they get off the ground and scale? To answer these questions, I spoke to Jeff Umbro, the founder of the Podglomerate. We talked about his early mistakes in trying to partner with shows for his network and why it can be incredibly difficult to monetize a show with a small audience. Check it out

Another Twitter feature that its power users will hate

Twitter is rolling out a feature called Topics. Instead of just following individual users, people will now have the ability to follow, well, topics like Entertainment, Sports, and Fashion.

Why is it doing this? One of the constant struggles Twitter’s faced in growing its user base is developing features that will attract non-power users. As a self-described power user myself, I’ve spent years tweaking my Twitter timeline just so. For instance, when a user I’m following is too trigger happy about retweeting praise of their own work, I’ll go to their profile and switch off my ability to see their retweets. I’ve followed all my favorite journalists, podcasters, and YouTubers. I’ve followed the elements of Weird Twitter that make me laugh and a fair number of meme accounts. I have my Twitter timeline just the way I like it.

But casual users don’t have the time or inclination to hunt down all the best accounts that fit within their interests. They come to the platform, test it out, and are chased away by the cacophony of mediocre content you see if you just follow well known celebrities and brand accounts. Twitter’s new Topics algorithm, supposedly, will cut through this cacophony, surfacing the very best tweets in a category from both mainstream and niche users. You only see a Lebron James tweet if it’s actually interesting, and you also get to see tweets from the funny NBA meme account that only has, like, 10,000 followers.

It's worth noting that Medium switched to a topics-based following system years ago and I didn't really like the results. The topics were too broad and filled my feed with a lot of bland content I had absolutely no interest in reading.

For instance, I'm interested in tech news, but only a narrow sliver of tech news, but that didn’t stop Medium from bombarding me with stories about the iPhone and every flavor of tech startup I cared absolutely nothing about. Or when I chose to follow "social media," it started surfacing social media marketing 101 stuff that had no bearing on my life. There’s not a day that goes by when I don’t miss the old Medium, the one that actually surfaced content from the people I followed.

The good news is that, unlike Medium’s foray into topics, Twitter’s version will be completely opt in. The power users get to keep what they hold dear, and maybe, just maybe, Twitter can finally start growing its user base again.

Slate’s podcasts now generate over 50% of its revenue

Slate is doing a lot of interesting experimentation with trying to create synergies between its podcast operations and its text-based reporting. [link]

A new traffic firehose for publishers

It's amazing how easy it is for large platforms like Google to casually toss publishers gargantuan loads of free web traffic. [link]

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Simon Owens is a tech and media journalist living in Washington, DC. Follow him on TwitterFacebook, or LinkedIn. Email him at simonowens@gmail.com. For a full bio, go here.

Why the tech platforms lost interest in streaming live sports

Welcome! I'm Simon Owens and this is my tech and media newsletter. You can subscribe over here or just click on this handy little button:

For a brief moment in time, it seemed that the tech platforms were set to become major players in sports broadcasting. In 2016, Twitter won the rights to stream Thursday Night Football. A year later, Facebook bid $600 million for the online streaming rights for Indian Premier League. Not to be outdone, Amazon later bought the rights to stream both Thursday Night Football and the U.S. Open tennis tournament in the UK. Even Twitch got in on the action, securing the rights to the NBA’s minor league in 2017.

At the time, some wondered if the tech behemoths would eventually leverage their large audiences and even larger checkbooks to elbow their way into an industry dominated by traditional TV networks like ESPN, and in the process deal a final death blow to a cable industry that was already staring down the barrel of a cord-cutting apocalypse. 

Flash forward a few years, and it now seems that tech’s move into sports broadcasting was little more than hype. A recent article from Digiday reported that, over the past several months, the platforms have taken a step back from the broadcast bidding wars, and instead are focusing on much smaller deals that don’t involve the actual live-streaming of games. 

In fact, tech companies are now much more likely to launch shows in partnership with current broadcast rights holders. Facebook is paying Fox Sports to post to Facebook Watch, while Twitter has signed “deals to show sports footage from Univision, ESPN, CBC Sports, and Eurosport.” It’d be hard to argue at this point that Big Tech is playing a disruptive role in the broadcasting of live sports.

So why did the tech companies blink? A few reasons, the first being the inflated prices they were expected to pay. ESPN has spent years bidding up the cost of broadcasting rights, raising them to what many would consider unsustainable levels. It was able to do this because of a quirk in how it derives revenue from cable subscribers. When you pay your Comcast bill every month, up to $9 of it goes directly into ESPN’s coffers regardless of whether you watch ESPN. The same goes for virtually every other sports network. 

What this means is that people who don’t watch sports, a demographic that makes up a larger portion of the population than sports watchers, have been subsidizing sports broadcasting to the tune of billions of dollars every year. This dynamic has propped up ESPN’s bottom line and allowed it to place ever more elastic bets on sports rights, doling out $6 billion a year to the NFL, NBA, and other leagues. So it shouldn’t be surprising that tech platforms aren’t excited about shelling out billions of dollars at price points that the market can’t sustain.

What’s more, the tech platforms are much more limited in how they can monetize sports broadcasts. Only 25% of ESPN’s revenue comes from advertising, yet most of the platforms would need to rely entirely on ads for their monetization. To which you might say, “But these platforms are amazing at generating ad revenue. That’s why they’re among the most profitable companies on the planet!”

Well sure, but the thing to remember is that most of the content that the platforms monetize is user generated and free. In cases in which they do pay content creators, it’s usually through a revenue share agreement, guaranteeing that their payouts never exceed their costs. Also, much of the content found on platforms like YouTube and Facebook Watch is evergreen in nature, meaning the platforms can run ads against it in perpetuity.

Live sports, on the other hand, are not only prohibitively expensive, with high fixed costs, but the vast majority of viewership will take place as the game is happening. So there’s a very small window of time in which the content can be monetized before it becomes virtually worthless. The hyper-targeted, niche ads that the tech platforms specialize in probably isn’t a good fit for this type of content delivery.

Hence why Big Tech has pared down its ambitions for live sports. By developing partnerships with TV broadcasters, tech companies don’t need to engage in expensive bidding wars, just pay a modest amount to get the TV networks to produce some tangential programming. This gives the networks additional marketing reach and some extra revenue for their troubles.

And while the tech platforms have backed away from traditional sports, they’re still all-in on esports, going to great lengths to secure broadcasting rights to esports competitions and sign exclusive streaming deals with gaming stars like Ninja and Shroud.

That’s because esports is a still-nascent market, one that hasn’t been distorted by ESPN’s unsustainable carriage fees. For instance, Twitch only had to pay $90 million to grab the rights of Season 1 and 2 of the Overwatch League, a far cry from the $2 billion that ESPN pays just to air Monday Night Football. And YouTube has shown by this point that gaming content is fairly evergreen, meaning it can be monetized long after the initial stream.

Does this mean that Big Tech will never play a role in broadcasting traditional live sports? My bet is that it’ll wade in eventually, but first it must wait for the current sports bubble to pop. For as long as non-sports fans are subsidizing Monday Night Football, its broadcasting rights will be overvalued. The tech platforms might have a lot of money to spend, but that doesn’t mean they’re willing to set it on fire.

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Simon Owens is a tech and media journalist living in Washington, DC. Follow him on TwitterFacebook, or LinkedIn. Email him at simonowens@gmail.com. For a full bio, go here.

How platforms abandon their homegrown creators

Welcome! I'm Simon Owens and this is my tech and media newsletter. You can subscribe over here or just click on this handy little button:

Facebook is currently rolling out what it’s calling a “News tab,” a dedicated section on its platform that aggregates news story links from about 200 publishers, and for reasons that I can’t fathom it’s actually paying some of these publishers upward of $3 million a year for the privilege of linking to them (most agree that this is a PR stunt that will help Facebook’s efforts to wave off antitrust probes).

As with most Facebook actions, this one has generated its fair share of controversies, especially in its decision to include racist hate site Breitbart among the publishers. But lost within this debate is the persistent throughline of how large platforms discriminate against independent publishers in their efforts to court mainstream media companies.

There are currently tens of thousands of publishers that try to leverage Facebook’s enormous reach to drive eyeballs to their content, and every time Facebook carves out prime real estate for select publishers it hand picks, it’s depriving these smaller publishers of attention, making it that much harder for them to surface their content in front of audiences.

It’s not just Facebook that engages in this type of behavior. In fact, it should be considered a law of the internet that any sufficiently large platform will eventually abandon its homegrown creators in order to court mainstream media and celebrities.

YouTube is a prime example of this law in action. Few platforms can lay claim to a more cohesive and vibrant community, one that has spawned some of the most creative filmmaking of the 21st century. Yet in YouTube’s quest to scale its advertising revenue to tens of billions of dollars a year, it’s slowly shifted its priorities away from this community in favor of promoting traditional media companies and celebrities.

I’ve written in the past about how YouTube’s done this with its trending video tab, lowering the bar for mainstream television networks while making it nearly impossible for organic YouTubers to be featured. But this week we’ve seen some new data on how YouTube is funneling advertising money away from independent creators and toward their mainstream counterparts.

Back in 2017, YouTube came under fire for running advertisements next to what some considered extremist content. The outrage that emerged in the wake of these revelations resulted in what many have termed the “adpocalypse.” Essentially, creators saw their advertising revenue crater virtually overnight as an opaque algorithm determined whether their content was “brand unsafe.”

YouTube also launched a program called “Google Preferred,” a category that brands could opt into. In exchange for paying higher advertising rates, brands could ensure their ads would run against the most premium, brand-safe content the platform had to offer.

To calculate whether a video qualified for Google Preferred, YouTube assigned it a “P Score,” a number that, when it reached a certain threshold, allowed the video access to this more lucrative advertising inventory. The P Score was meant to be hidden from creators, but some enterprising coders discovered the P Score hidden in YouTube’s source code. They then examined the score across thousands of the most popular channels to see what kind of content qualified for Google Preferred.

And you won’t be shocked to learn that the channels that generated the highest P Scores all hailed from mainstream TV shows: The Late Show with Stephen Colbert; Late Night with Seth Meyers; The Daily Show with Trevor Noah. Virtually no homegrown channels made the top 10. Just as YouTube has been lowering the bar for its Trending tab, it’s also done the same for Google Preferred. “I think this confirms our long time suspicions that ‘homegrown talent’ is being pushed aside in favor of ‘advertiser friendly’ late night TV hosts,” YouTuber Nicholas DeOrio told FFWD. 

I wrote a recent column about how we often leave out the independent creator community when assessing the health of the media industry, and that this community now comprises hundreds of thousands of content producers who collectively generate somewhere north of $10 billion in revenue. But because they often operate on the edges of media, they’re the ones most likely to be negatively affected when a major platform shells out $3 million to a mainstream media company to aggregate its content. As an independent creator, you can spend years building up an audience and a solid revenue base, but it only requires a single tweak to a platform’s algorithm to take it all away. 

Want to interact with me directly?

I have a secret Facebook group that’s only promoted to subscribers of this newsletter. I try to post exclusive commentary to it sometimes and have regular discussions with its members about the tech/media space. Go here to join. [link]

Why an online polling platform hired a seasoned journalist to run it

Advance Publications is one of the largest media companies in the world. It owns dozens of newspapers, the Conde Nast magazine empire, and even Reddit.

A few years ago, it created the Alpha Group, a tech incubator that would launch small startups and try to grow them into thriving, standalone businesses. One of those startups was called The Tylt, and it’s a platform that allows its users to participate in online opinion polls on a wide range of issues. The Tylt was successful enough that Alpha Group spun it off as its own company.

Recently, The Tylt hired Selena Roberts, a seasoned journalist who’s written for The New York Times and Sports Illustrated, to serve as its executive editor. I recently sat down with Roberts to learn about the site’s editorial ambitions and whether online, unscientific polls have any journalistic value. [link]

A non-hyperbolic article about the video streaming wars

If you follow news around streaming video on demand services, then you’re likely aware that the “streaming wars” are heating up, with new services set to be launched from Disney, WarnerMedia, and Apple. Often these services are framed as potential Netflix killers, with the writer at some point citing surveys showing that most consumers will only subscribe to a maximum of four streaming products.

I’ve always found this framing to be kind of silly. Products like Disney+ and HBO Max pose a much bigger threat to the kind of expensive cable packages offered by companies like Comcast, as the average consumer will weigh whether to continue paying $100+ a month for cable when they can instead cut the cord and still have access to enormous libraries of content.

That’s why I was glad to come across an article appropriately titled “Everyone’s Wrong About the Streaming Wars.” It actually runs through the math of what it costs to subscribe to streaming services and places that price in historical terms. Its conclusion? There are going to be lots of successful streaming services, not just three or four.

The changing metrics for influencer marketing

From Digiday: “For [influencer marketing] clients, we’re now doing 90% Instagram Stories and 5%-10% Instagram feed. We’ve had entire buys move to Instagram Stories.”

How Deadspin could rise from the ashes

You’ve probably read about the collapse of Deadspin after many of its writers resigned in protest of regressive business practices. I published a mini tweet thread about how I think the cohort of former Deadspin writers could launch an independent publication and quickly generate a sustainable revenue base. The newsletter platform Substack published its own tweet thread about how it thinks the writers should go about this. 

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Simon Owens is a tech and media journalist living in Washington, DC. Follow him on TwitterFacebook, or LinkedIn. Email him at simonowens@gmail.com. For a full bio, go here.

The media industry might be healthier than you realize

Welcome! I'm Simon Owens and this is my tech and media newsletter. If you've received it then you either subscribed or someone forwarded it to you. If you fit into the latter camp, then you can subscribe over here. Or just click on this handy little button:

Let’s jump right into it…

The media industry might be healthier than you realize

When discussing the jobs lost in the major upheaval of online media, we should at least acknowledge that new jobs are being created as well. [link]

Want to interact with me directly?

I have a secret Facebook group that’s only promoted to subscribers of this newsletter. I try to post exclusive commentary to it sometimes and have regular discussions with its members about the tech/media space. Go here to join. [link]

Other news:

I think it's going to be incredibly difficult for a single publisher to scale podcast subscriptions. A publisher might be better off trying to sell a series to a subscription app like Spotify, Luminary, or Stitcher Premium. [link]

Can niche streaming services compete with the Netflixes and Disneys of the world? [link]

Tech blog Pando Daily sold to an advertising company. Here’s a small Twitter thread I wrote last night about how mediocre (and irresponsible) it was. [link]

A pretty good breakdown of the business economics of a YouTuber with a mid-sized audience. [link]

"The fact is that my show gets, double, triple, sometimes five or 10 times the viewership of a major cable show ... You can bet that I’m not getting paid anywhere near what those networks are getting paid for having advertising on their content.” [link]

***

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This startup wants to solve podcasting’s monetization problem

Welcome! I'm Simon Owens and this is my tech and media newsletter. If you've received it then you either subscribed or someone forwarded it to you. If you fit into the latter camp, then you can subscribe over here. Or just click on this handy little button:

Let’s jump right into it…

This startup wants to solve podcasting’s monetization problem

Agnes Kozera knows a thing or two about helping content creators monetize their content. In 2013, she and a co-founder launched Famebit, a platform that helped YouTubers match with brands that were willing to sponsor their videos. The company was so successful that it was eventually acquired by YouTube in 2016.

Now, she and that same co-founder have launched a similar startup, and this one’s aimed at the podcasting industry. [link]

How we gathered an army of scientists to battle health misinformation

So I don’t typically mention my consulting work in my newsletter, but I’ve been working with an awesome startup that really aligns with my tech/media interests. It’s called Metafact, and it’s this amazing platform that has recruited an army of 11,000 scientists from around the globe to do battle with the health misinformation that plagues the internet. Think of it as Quora that only scientists can contribute to. Here’s an article on the company’s origin: [link]

Want to interact with me directly?

I have a secret Facebook group that’s only promoted to subscribers of this newsletter. I try to post exclusive commentary to it sometimes and have regular discussions with its members about the tech/media space. Go here to join. [link]

Other news:

"Despite the fact that PewDiePie’s audience had grown larger than that of any late-night talk show, many mainstream outlets still treated him like an exotic animal." [link]

A podcast that HBO produced to be listened in tandem with its hit show Chernobyl has been downloaded 10 million times. [link]

The streaming behemoths are currently engaged in an arms race to build out their children's programming. [link]

Some really good palace intrigue on how Shari Redstone finally wrestled control of CBS/Viacom away from her father and her plans to merge the two companies so she can launch a super duper streaming service. [link]

If you’re not listening to the final season of the Startup podcast, you should be. It’s probably the most intimate look we’ll ever get at what it’s like for a media company to get acquired. [link]

***

Do you like this newsletter? Could you do me a favor and recommend it to your social media followers? Here, I've even created some sample language for you to use:

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