‘They Gave Us Basically Everything We Need to Be Writers, But Didn’t Give Us Any Kind of Business Help at All’
Last April, Substack committed $1 million to a program to give grants for local journalists to launch publications, but now that the funding has run out, most of the newsletters are no closer to being sustainable businesses, and some are shutting down
When Substack co-founder and chief operating officer Hamish McKenzie met with members of the Substack Local fellowship program on June 6, it was clear that not all of the grantees were going to make it. The writers of the 12 publications had known it would be a gamble to sign on with the initiative, which promised to fund them for a year, and to some, the optimism at the heart of Substack’s pitch had begun to ring hollow. As they closed in on the end of their grant year, anxieties were mounting that the program’s short span would leave some writers hanging.
“We all sort of felt like, ‘Gosh, if we had one more year, maybe we could make these publications fly.’ But to go from nothing to sustainable in the span of 12 months looked impossible for all of us,” said Hanna Raskin, a James Beard Award-winning writer who publishes the southern food reporting newsletter The Food Section and was previously the chief food critic at The Post and Courier in Charleston, South Carolina. “This grant was contingent upon us quitting our jobs. So this was not like, ‘We’re gonna give you a little money, see if it works.’ It’s: ‘You have to give up your job and your health insurance and all of that.’” That day in June, the writers were told that their grants would not be extended past the initial year, though they would be able to continue using the Getty photos account.
“From the moment we started Substack, we’ve been alarmed by the breakdown of the business models that once supported local news,” McKenzie told The Fine Print. “By April last year, when we announced Substack Local, we had seen several local news success stories on the platform and we wanted to help others follow the same path. The support we offered as part of the program included grants of tens of thousands of dollars to each participant, access to services such as subsidized health insurance, editors, design support, and Getty Images, and coaching and mentoring sessions throughout the course of the year.”
After the program was first announced in April last year with a $1 million commitment from Substack, writers from around the world applied for grants with ideas for local publications. Submissions were judged by a panel of Substack writers, including New York Timescolumnist Zeynep Tufekci, Anne Helen Peterson, Dick Tofel, and The Dispatch’s managing editor Rachael Larimore. Substack announced the winners, including writers in Romania, Brazil, Nigeria, Taiwan, Australia, as well as several Americans, on June 1, 2021.
“I don’t expect them to be able to or to be interested in subsidizing publications that are never going to work, but they did pump a million dollars into all this,” said Hank Stephenson, a Substack Local grantee who, alongside Rachel Leingang, writes The Arizona Agenda focusing on politics in the state. “For them, it’s a project — move fast, break things — but for the people in this, it’s their livelihood.” McKenzie gave the writers some suggestions for putting their businesses on a sustainable footing. “It was a long list of very obvious things,” Stephenson recalled. “I don’t think there were any fuckin’ revolutionary lightbulb-turns-on ideas there.”
The recommendation that struck Raskin and Stephenson as the most ridiculous was the idea that a good way to promote their titles would be to land profiles in The New York Times. In subsequent one-on-one consultations, McKenzie workshopped strategies with writers to attract the interest of The Times. By the end of the month, one of the grantees shut down her publication, and others were left wondering how much longer they could sustain their own. A Times profile still seemed out of reach. “Maybe we’ll get an obit from The New York Times,” Stephenson said. “That’d be fun.”
There are things some writers wish had been done differently. “They gave us monetary support for a year, which is awesome, and they gave us editing services and access to Lexis, basically everything we’d need to be writers,” Raskin said. “But they didn’t give us any kind of business help at all. And so here we are, all with experience in local news, being asked to run a business.” When she took a train trip around the Southeast in the leadup to her newsletter’s launch, Raskin tried to figure some of that out on her own. “That was really market research: To see the places I’d be covering, to meet with lots of people in lots of places, to ask them what they wanted,” she said. “But there were certain things that no one on the ground could tell me like, ‘How much am I supposed to charge for this thing?’ That’s the kind of thing that I wish Substack had provided, to say, like, 32 percent of our most successful substack publishers charge $8 a month. That kind of information would have just been gold.”
McKenzie pointed out that business management was never part of the Substack Local deal. “The intent of Substack Local was not to help run local news businesses, but to give those who wanted to run their own local news businesses the best possible ‘leg up’ for success on the Substack platform,” he said. “We knew we could not guarantee their success, and we knew that building a local news business is extremely challenging — but we also knew that success with the Substack model was possible. We’re proud of the quality of writers and publications that participated in Substack Local and of the work they’ve done to serve their communities.”
And the writers who joined the program acknowledge that, on some level, they knew they’d have to figure out how to make their business work. “It’s our responsibility to do this. I feel weird about being bitter about this whole thing, but there was this sense that they were going to show us the ropes of how to do the side of this that we didn’t know,” Stephenson said. “We know journalism, we don’t need help on that from them. What we need is how do you sell a fucking subscription? How do you market yourself? How do you grow this thing? What are the things that work here, and there was very little of that.”
McKenzie said the resources Substack poured into the program have not gone to waste. “Even in the cases where the participating publishers didn’t meet their targets, we hope that the program has at the very least helped them build a strong base for future growth,” he said. “At the same time, we are proud to see the success of those who have reached, or are on a clear path to, sustainability. That is not a small achievement, particularly at a time when local news businesses worldwide are in such a state of distress.”
In some instances, Substack did step in to offer business support. “Substack put up a round of Facebook ads for us, but that was an absolute failure,” Stephenson said. “It netted us a bunch of angry grandparents who didn’t know what they had subscribed to or why, and they just sent us angry emails about it.” In other instances, the company’s offices proved more successful. By the June 6 meeting, David Hundeyin had grown the free subscriber list for his investigative reporting newsletter West Africa Weekly to over 20,000, a significantly larger readership than most other publications in the program. Still, he only managed to gain about 100 paying subscribers. This was partly due to registering his location with Stripe, Substack’s payment processor, as being in West Africa. “Because of my address, basically, Stripe put a pause on my account. So Substack’s support helped me jump through the regulatory loopholes,” Hundeyin said. “There was a good three-month period in the middle of the thing where I couldn’t charge for subscriptions.”
While he waited for the payment kink to be ironed out, Hundeyin kept his work unlocked, which he thinks got his readers used to the idea of not paying for it even after Stripe unpaused his account in February. He is still unsure if he can overcome the difficulties of his market. “Nigeria has a per capita income of like $2,300 annually. So how much of that, realistically, is going to be spent on a Substack subscription? Even if you are recognized as this or that, you’re competing with food, literally,” he said. “I’ve given myself until March next year, and if I haven’t found a stream of income that can make it self-sustaining, then I have to revisit the entire thing,” he said.
To make ends meet throughout the grant period, Hundeyin had been taking on copywriting work. “Sometimes I wake up in the morning and think, what the hell am I doing with my life? Technically, on paper, you’re a successful person. You’ve won all these awards, and you’re so highly skilled at what you do, on paper, but in practice, that’s not what pays your bills,” he said. “And, I’m no spring chicken, either. I’m 32. So, at this point, you start asking yourself some really, really hard, difficult questions in life. If it becomes clear that this thing isn’t going to do what I want it to, then I’ll leave the platform as it is, and I’ll walk away.”
Some Substack Local participants don’t consider the company’s grants entirely altruistic. “I had never heard of Substack. I don’t follow the journalism industry stuff. It’s just too depressing, takes up too much mental space for me,” Stephenson said. His co-writer Leingang first came across the platform and the program. “When I’m talking to journalists, I’ll say, ’a newsletter on Substack.’ But when I talk to random people, I just say, ‘I write an email every day about Arizona politics, and people pay me for that,’ because it sounds more impressive,” Stephenson said. “The benefit we have provided to Substack is we’ve opened up a whole market of people who now understand what Substack is here. So I think there’s a kind of regional, getting out of the coasts thing for them. Basically, outside of LA, New York, DC, San Francisco, Substack barely exists.”
Part of the problem for Raskin was that it felt like Substack wasn’t built for local journalism. “They’re adding bells and whistles that are great for a social media site, but we’re doing local journalism, and we don’t know where our readers are coming from because all we get are their emails,” she said. “We have no access to physical addresses — not a big deal if you’re a typical Substack publisher. For those of us who are covering localized geographic communities, it’s a huge deal.” Even on a more basic level, the company seemed to misunderstand the needs of the writers in the program. When Substack connected Raskin with an Oregon-based editor, she quickly realized he wasn’t suited to her publication. “The website for the Oregon guy was like, ‘I’ll get you in touch with your heart.’ And I was like, ‘Oh no. No, no, no,’” she said. “My understanding is he mostly worked with poets in Portland, Oregon. And now I’m working with Steve Fennessy, who’s the former editor of Atlanta Magazine. He’s great. I needed someone who understood news. I needed someone who understood the South.”
One of the ways Raskin has found that works to reach her particular audience is to use a far older medium. “I now put out a print edition quarterly, where I print my stories. And that really speaks to my demographic,” she said. “For those of us coming out of local news, many of our most loyal readers are older people who don’t want to get on Substack. They’re afraid to give their credit card numbers.” She uses Amazon’s print-on-demand service and has found someone to help her with the layouts. “I have this lovely woman I found through Fiverr, who lives in the Midwest and mostly puts together Christian recipe collections. All I do is send her the greatest hits stories from the last couple months,” she said. “I’ve been trying to pitch subscriptions to that, but it’s weird, because right now my only outlet for pitching anything is Substack, so those are probably not the people who are going to buy print subscriptions. I’ve got some readers who are like, ‘I wanted my husband to read what you’re writing, and he refuses to read online.’ So I’ve sold to those people and I’m proud of it.”
Stephenson sees the problem as a lack of focus at Substack as a company. “Some people kind of got screwed on this deal, and part of that is Substack just not caring or having the attention span to follow through on it,” he said. “They just forgot about us.” He said the person at Substack overseeing the Substack Local program changed at least twice in its first year. When the writers in the program banded together to request a meeting to talk about their worries, Stephenson felt like their concerns were drowned out by Substack’s focus on its newly launched app. “It started with them talking about this app for about 20 minutes. It was as if we called this meeting to talk about their app,” he said. “That whole meeting, to me, just perfectly symbolized how outside of their realm of priority we had become because it was just like nobody on this call gives a shit about your app, but that is what is consuming their entire mind at this point, clearly.”
McKenzie took that criticism in stride. “We didn’t intend for anyone to feel like we lost focus on the program at any point, so that feedback is useful for us to consider as we design future programs,” he said. “The advent of the app had no bearing on our commitment to, or focus on, any of our fellowship programs.”
And yet, The Arizona Agenda is one of the publications that looks like it’s likely to survive. Stephenson estimated that they have about 4,000 total readers, of which about 1,200 pay for the subscription. “We’ll probably hit 100 grand just off of regular subscriptions by the end of our one year, which still is not enough to live off,” he said. “We’re not quite making as much as we did. Both of us had been doing this for 10 years, and we were making 50 something grand at our papers, so it wasn’t like we were surviving on that either. But I think we’ll make it to six figures minus all the charges.”
They’re making up the difference with side hustles. “I clean pools,” said Stephenson. “I used to do it when I was a kid and then I always used to joke that I was going to quit journalism and go back to cleaning pools, because the pay is better and the stress is less. And then, I started actually doing it just as a side gig and now I’ve got enough pools that it keeps me busy one day a week, and I’m trying to grow that and hire somebody out eventually.” He’s painfully aware, however, that his publication is an exception. “We’re right on the cusp of being successful, so I can’t really feel bitter about this, but I think we’re the only ones, or at least one of less than a handful of publications, from Substack Local that really feel like, ‘Okay, I can do this as a living,’” he said. But Stephenson isn’t sure that The Arizona Agenda will stick with Substack. “Why should we stay here? You’re charging us 10 percent. Ghost won’t. What’s the pitch?” he recalled asking McKenzie. “Thanks for the 100 grand bro, but why should I pay you 10 percent of all future profits?”