The End of the Subscription Era is Coming

Love it or hate it, we’re living in the subscription era.

I’m not just talking about streaming platforms, which have been biting the wallet for years, or newspapers and magazines, which have simply migrated their long-term models to a new digital era. No, I’m talking about everything. Beer, insurance, cinema: just three of the crazy subscriptions that I’ve currently taken out.

This move stems, obviously, from the collapse of digital advertising and the decline of the high-street. These are two related trends, which have had an enormous impact on the way that product purchasing works. Media enterprises — whether that’s Netflix or the New York Times — cannot rely on advertising revenue to underwrite their costs, and, similarly, the rise of online retail has made the expense of doing IRL business prohibitive. And so, rather than going to a local bottle shop for my craft beers, I have them sent to me once a month. And where product is not available on subscription, those businesses use subscriptions to incentivise loyalty: just look at ASOS Premier, which puts the fast in fast fashion.

Anyway, we all already know this because we all experience human life in 2023. But the impact of the rise of the subscription model on the media has been staggering. It has changed the way that people do business — not just the businesses themselves, but the would-be employees and contractors. Just look at this quote from British journalist Emma Gannon, given to Press Gazette, who has 26,000 subscribers to her lucrative Substack: “One of my passions really is talking about writers being paid fairly — and not just that, but even thriving and making a really good living from writing and creativity — because I think in the past people have often viewed it as a hobby or just a nice to have”.

She credits Substack with offering that — a nice idea, and one, perhaps, that’s easy to imagine at 26,000 subscribers. Certainly, Gannon is not alone in having this experience with Substack, and I imagine it feels liberating for journalists who have previously been constrained by things like “contracts” and “editors”. In its early days, Substack was aggressive in providing its top — partner — writers with economic security: anecdotally I heard that they were offering 1.5x the salary of the magazines/newspapers that they were poaching columnists from.

The question is not “can you make money with Substack?” or “can you find an audience with Substack?” but what the averages are. Substack’s CEO, Hamish McKenzie, has been quoted as putting the number of Substack subscribers at “millions”, which is not hugely helpful. Globally, the figure was pitched at about 500,000 paying subscribers in 2021, according to Nieman Lab. According to Axios there are more than 17,0000 writers running paying Substacks (including mine) and the Top 10 publishers earned more than $25m last year.

Very good, I’m sure. Substack’s own figures also refer to $300m paid out to writers, though that doesn’t claim to be an “annual” figure (as the $25m is). But let’s assume it is, for simplicity’s sake. That leaves $275m to be disbursed between 16,975 writers, which, if shared equally, would be $16,200 a piece. A nice side hustle, if not a living.

But if the Top 10 publishers are making roughly $2.5m a piece, let’s also assume that the rest of the Top 100 (the top 0.59% of Substack paid writers) are making $500,000 on average. Then we lose another $45m and $230m is left to be shared between 16,000 (suddenly the average earning, if distributed equitably, is down to $13,609). You can repeat this exercise as many times as it takes you to realise that the average writer of a paid Substack is earning next to nothing. And probably that means that they’re broadcasting to next to nobody.

While these thoughts were floating around about Substack — which is currently running a fundraising round encouraging writers to invest in the platform — OnlyFans, the UK based membership service for cough fans, released its 2022 financials. The headlines were a $5.6bn spend on-site last year, of which the site takes a 20% cut before distributing to creators. Which means roughly $4.5bn was disbursed by OnlyFans to its 3.2m creators (a figure that’s up a staggering 47% from 2021).

Distributed equally across all creators, this would be a mere $1,406 per person. But, like Substack, OnlyFans is, of course, not divided equally. In fact, the inequalities are even more stark. Top earners on OnlyFans can make almost as much as the Top 10 earners on Substack combined. Blac Chyna, rumoured to be the top earner, was said to have made $20m, annually, from the platform. (Other publications claim she makes $20m a month which seems like crazy money, even for softcore pornography).

Again, the point here is that the subscriber side of the creator economy can be hugely lucrative, but the average earnings are almost certainly prohibitively minute. And unlike Substack, unsuccessful creators on OnlyFans don’t just have an archive of inane ramblings to show as evidence of their failed project. Likely, they have, instead, an archive of material which may create personal or professional issues in the future. All for gas money.

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The End of the Subscription Era is Coming

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