The Flaw in Substack’s Model

I was once a big fan of Substack and its leadership. When Hamish McKenzie told me that Substack was intended to be the antidote to the attention and surveillance economy, and would hold fealty to truth, I believed him.

I ended up leaving after Substack used a bogus “free speech” justification to rationalize platforming misinformation peddlers and Covid fraudsters.

Why would they do this?

Because their subscription model has one major flaw in it — commissions.

When an information business is paid on commission, and the moderators have no barriers to benefiting from these commissions, it becomes much more like an advertising-driven business.

That’s the flaw.

Ghost — the current platform — uses a more traditional services model, where writers like myself pay a flat annual fee based on various levels of support, features, and members/subscribers. There is no incentive for them to generate more revenue from each writer, and they don’t make more money each day or week based on subscription activity.

They don’t work on commission.

Commission models on selling content aren’t new — but when associated with a platform that is also a content moderator, it becomes stickier than commissions based on gross sales by someone without control over content decisions.

Firewalls are usually constructed between sales and editorial to prevent sales incentives from influencing editorial decisions. In Substack’s case, no such firewall exists.

This is the flaw with Substack’s model of subscriptions, and what I believe drove them to abandon their stated purposes and goals — greed, driven by a model that rewards any type of content sale, and does nothing to prevent incentives from sales leaking across to content moderation decisions.

In fact, for Substack to work, content quality has to become secondary. And it has.

They are truly sell-outs.