The Dispatch is Leaving Substack
Substack has an Exodus problem
From Every.to to any number of other big Substack players who have left, it’s clear in 2022 Substack is having trouble retaining its most popular Newsletter publications.
The “reasons why” are very interesting. While Every.to spawned into its own platform of writers, from the very core of Substack’s own product team, even some of the biggest political Newsletters are leaving.
It seems when Newsletters get really successful, they figure out that the 10% that Substack takes isn’t really worth it.
At the time of writing on May 11th, 2022 - the Dispatch is Substack’s #2 top paid Newsletter in Politics.
When Substack Newsletters group-up into a co-op of writers, the chances of them leaving Substack greatly increases!
The Dispatch has “10,000s of paid Subscribers”. (It turns out this is over 30k)
I heard this news from “The Rebooting” you can read it here.
The Dispatch has evolved in three years to have over 30,000 paying subscribers.
The Dispatch on Substack, 2019-2022, RIP though moving elsewhere TBA.
Around 200,000 free subscribers (after 2.5 years on Substack), which amounts to in the area of a 12-15% conversation rate to paid subscribers, albeit most of their content is behind paywalls.
Brian really nailed it to some degree and I’m going to quote word for word the important parts of what he said.
Why The Dispatch outgrew Substack - Quote from Rebooting
Many would assume the most popular political publications on Substack are culture war agitators like Matt Taibbi and Glenn Greenwald. In fact, the top two slots are much milder publications: Letters from an American and The Dispatch. Taibbi and Greenwald will be moving up a slot soon, since The Dispatch is leaving Substack.
Steve Hayes, one of the founders of The Dispatch in 2019, said the conservative news and commentary publication has outgrown the tools that Substack provides. Part of this is ideological – not in the political sense – in that Substack has squarely cast its lot with individual creators, doesn’t believe in advertising, and wants to be a platform rather than a backend tool.
“There was a certain point when they were seeing the success that they were having by focusing on individual content creators, and said, we need to do more of this. And there came a point, when their growth, which was just monumental and what they were doing to get that growth, didn't work for us as much as it had in the past.”
Businesses are all about making choices. And ultimately you can’t please everyone all the time. That said, I think Substack is at risk of losing many of its initial wave of successful publishers, particularly as upfront deals end and the pinch of paying 10% of revenue. (The Dispatch had a “handshake agreement” with Substack and didn’t get a special deal, according to Steve.)
The shift to individuals from institutions has been a major catalyst of publishing’s unbundling, but I believe we’ll see more confederations between individuals, sometimes just a gussied-up regular company and other times in new collectives. That’s because working with others tends to be more enjoyable for most people. What’s more, being part of a group means you can have someone to cover up for your inefficiencies or allow you to take a vacation. There’s still strength in numbers. What’s more, bundles are often better for customers.
Steve and I discussed how The Dispatch plans to expand beyond its 30,000 paying subscribers by adding in advertising and events. We also discussed building a center-right political publication at a time of extremes, and I tried but mostly failed to get him to give an optimistic view of what’s to come in U.S. politics.
TL;DR
The Dispatch has outgrown Substack.
The Dispatch wants more control over Advertising, and back-end flexibility
The Founders believe Substack will lose more successful Newsletter due to the 10% cut they take.
The Dispatch believes publications that bundle their value are ultimately more audience and reader-centric.
They see publication teams as usually able to offer a better product.
They care a lot about the user experience and want to monetize further Ads, sponsors and in-person events. When they agreed to work with Substack, Substack convinced them not to do sponsors and Ads.
I think they make an awful lot of good points are not the first nor the last big publications to decide to leave Substack.
With 30,000 paying customers, a store and many contributors and magazines in the Newsletter, I can see how they feel they have “outgrown” Substack has a platform.
The Dispatch has 45k Twitter followers, and is a Conservative center right digital media company. I don’t myself follow American politics closely so I’ve never heard of it outside of Substack. You can read their Wiki page here.
The Dispatch at a Glance
They charge $100 a year or $8.33 a month which is for a politics Newsletter, a decent price. The Dispatch has nearly all of their content behind a paywall a trend I see most of the other successful Substack Newsletters have followed.
The Dispatch were always a collective, that is a conservative news startup that serves audience members primarily through newsletters and podcasts.
By 2020 they had already surpassed $1 Million in revenue on Substack. If they have let’s guess around 3.3k paying customers, they are making over well over $3 million by mid 2022. At this point they have large enough to truly be an indie media company, do advertising better and own all of their own revenue on their own paywall.
As this trend continues, what would prevent someone like the Pragmatic Engineer, who games data for Engineering managers and professionals for profit, not to build his own media company around offering exclusive content for professionals? For example. When you find a model that works and scale, what’s to prevent you from taking not just 87% of your profits, but all of them home?
Substack worse, puts so much of its effort to fast-track its top publications (because it’s more profitable), but what happens when many or (most) of them leave? That’s a lot of wasted effort to promote Newsletters that are statistically the most likely to leave as you boost them up. This appears to me a significant product short-sightedness. Medium tried to buy-out and rip off Hacker Noon, that’s why they split off. But splintering from Substack appears more like a pat on the back, like the kids from Every.to seemed to get.
Substack greatly favoring its top 2% Newsletters cuts both ways. Every.to in its 50/50 writer’s guild scheme, could become a competitor to Substack. When your top Newsletters leave, it’s a hit on your revenue. No matter how much you like to brag about how much your top 10 Newsletters are making.
As I cover the Creator Economy broadly speaking, I’m paying special attention on trends on Substack. Personally I recently had to literally ask their support to put my main Newsletter in the right category. The support person claimed my A.I. Newsletter was in the “politics” category, which of course has nothing to do with my tags, audience or topics. He then went on to ignore the rest of my support question.
What other big Newsletters are the most likely to leave Substack? I could easily do an analysis, but that is beyond the scope of the article.
In the indie Newsletter business part of it is also the cult of personality. Stephen Hayes has 288k Twitter followers. His LinkedIn appears entirely inactive. Political Newsletters seems to be basically all Twitter is good for in terms of Substack engagement. Yet Substack as a product and its employees absurdly favor Twitter, it makes little sense. The only other verticals I can see Twitter working well for Newsletters are crypto and investing/and again the cult of personality that Substack so far has been using to prop up its reputation.
It seems like there’s a politics internal to Substack that is not being very well covered by anyone that I follow. Nor is there much transparency of data which ethically on a “no censorship” platform I’d like or prefer to see. I predict the Pragmatic Engineer will leave Substack before 2024. He has hacked LinkedIn traffic to the point he doesn’t really need to be giving 10% of his earnings to Substack.
Just my honest opinions guys,
Hacker Noon somehow gets 2.5 million visits a Month, not bad for refusing to be bought out by the shady folk at Medium.
Every.to have hacked Hacker News traffic by going “viral”, still only get 600k monthly visits, not so great thus far but okay for the limited number of writers, though they are hiring.
The Dispatch, clearly with the elections coming up have time to grow their audience before the fun really gets started with the Conservative middle demographic.
The unbundling and collective media splintering seem to be synonymous with the era of paywalls and subscriptions. Many rebel against the idea of a platform-centric media, even when it is compromised by “indie” journalists. The lion’s share of the wealth on Substack still goes to people with a professional media and journalism background. A few crypto bros and Silicon Valley types who can hack lucrative topics. Not much for a meritocracy if you ask me.
As for the Dispatch it’s important to note that they raised $6 million in funding from individual investors (none of it comes from venture capital firms). So the $3 million they make via Substack must have turned out pretty well for some of those investors, or will soon. It might also say something about some of the limitations of Substack’s business model.
Thanks for reading!