The Future, Now and Then

(1) Congratulations to Substack on their Series C funding round. The company now has over a $1 billion valuation. Casey Newton has the details on what this likely means for the company and its product line. Tl;DR, for unmonetized newsletter writers like myself:

The underly finances of Substack’s core product do not scale well at all. As Casey puts it:

That business has never entirely made sense to me. The company takes a 10 percent cut of subscription revenue, meaning that the more your business grows, the worse a bargain it is for you. (The level of service you get paying the company $1,000 a year is more or less the same as it is if you pay it $50,000 a year.)

The higher the valuation, the greater the investor pressure to juice those numbers somehow. Substack is already warming up to adding programmatic advertising to newsletters. We’ll see how it goes, but I suspect newsletters like this one are going to face serious headwinds. I’m a Substack free-rider. One way or another, they’re probably going to try to make money off of my writing. And once they start trying to squeeze it for revenues, they’ll probably just keep squeezing.