How Substack fits into the future of publishing

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This article is about the future of publishing and how Substack fits into the paradigm shifts coming in the next few years. If you are a paid subscriber, I would suggest reading my articles on how to find more readers for your books and get stacked with subs on Substack, how to use technology and productivity hacks to reclaim your time for things that matter, and how to use Substack sections to strengthen your backlist and give subscribers even more value to help support on the ideas in this article.

If you are not a paid member, you can read everything with a 7-day free trial, or give us a one-time tip.

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I’ve been writing on

Substack

for a while now, and I’ve yet to talk about one of the biggest projects of my career, except in passing. Earlier this year my business partner

Monica Leonelle

and I founded a conference called the Future of Publishing Mastermind.

We’ve hired the team responsible for coordinating NINC, Mel Jolly and Tawdra Kandle, and attendees are meeting on February 26th-29th at the Hilton New Orleans Riverside for a truly epic three day event to celebrate all the amazing opportunities available to writers in the next few years.

There are some legendary indie writers attending, vendors pushing the boundaries of the indie publishing space, and we’ve come up with a really cool format that relies mostly on small group connections and roundtables instead of lectures to help you break through your biggest roadblocks.

Monica and I are also guest editors on the October issues of Indie Author Magazine which is focused on discussing the future of publishing across several different dimensions.

We believe the future of publishing is: selling direct to readers, technology assisted, community driven, distributing your work widely across many platforms, immersive, and decentralized.

As you might expect from all this, I spend a lot of time discussing the future of publishing. Additionally, I ruminate about Substack a lot trying to find ways to help authors build their platform. Recently, I’ve been thinking about how these two things fit together. So, today I am going to set down my thoughts about how Substack fits into the current publishing landscape across these six areas and how prepared it is to be an asset in the future of publishing that is barreling straight for us.

***This is a long post that will be truncated in emails. I highly recommend you go to this page to read the whole 5,500-word post without interruption.***

Photo by Edson Rosas on Unsplash

Does Substack help you sell direct to readers?

The short answer to this question is yes, but it’s worth spending a second talking about what direct to readers means inside the publishing landscape. Direct sales works on a spectrum between a platform like Patreon that lets you interact with your readers and collect their email addresses but handles the payment processing themselves all the way to setting up a booth at a trade show where you collect the money directly from the person buying from you and get to shake their hand.

For me, there are three areas by which I think about selling directly to readers.

1. Does this platform allow me to interact directly with readers without a middleman?

2. Does this platform allow me to collect customer data and offer interportability so I can take them to another platform without much hassle if I ever choose, or am forced, to leave?

3. Does this platform allow me to process payments through my own processor like Stripe, Thrivecart, or Square, or do they process payments themselves?

Does Substack allow me to interact directly with readers without a middleman?

When I first started thinking about direct sales, I only used the second and third questions to define direct sales. However, when I talked to writers over the last several months, they often incorrectly conflated platforms like Facebook or Reddit with direct sales.

I’ve heard many cases for why Facebook is a great direct sales marketplace, but after my Facebook account was locked and access to my 15,000+ Facebook fans and 1,800 friends was revoked in an instant, I became living proof that you only have direct access to your readers on most platforms until they decide to rip them away from you. Social media platforms will always act as an intermediary between you and your fans.

Yes, I had access directly to them through comments and messages, but only through the app and website. I couldn’t access their buyer data or even their customer data. I didn’t even have access to their emails unless they chose to share it. In every case, they act as a middleman.

Middleman

An intermediary in a distribution or transaction chain who facilitates interaction between the involved parties -Corporate Finance Institute

By that definition, Facebook acts as an intermediary in the distribution chain between the customer and me, and since they don’t give me access to my customer’s data or offer interportability between myself and my subscribers, or even my friends, I have decided that social media networks, by and large, are not good channels for direct sales.

Substack, on the other hand, doesn’t have that restraint. While I don’t have access to somebody’s email until they subscribe, once they do I have customer data associated with their account. The ability to follow an account with subscribing muddies this, and I might change my opinion in the future, but right now I believe Substack Notes is a great avenue for cultivating direct sales.

Does Substack allow me to collect customer data and offer interportability so I can take them to another platform without much hassle?

The next question I ask is not only whether I can collect customer or subscriber data on the platform, but does it allow me to download that data quickly if I choose to move off the platform.

In this scenario, Substack also shines. I download my entire email list from Substack every month, and it’s as simple as going to DASHBOARD>SUBSCRIBERS>EXPORT.

While it takes a few minutes to come through since I have quite a few subscribers at this point, I can get them with near immediacy.

Does Substack allow me to process payments through my own processor like Stripe, Thrivecart, or Square, or do they process payments themselves?

The one advantage of having a platform like Patreon handle payments for you is that they handle the sales tax for your publication as well, while using your own payment processor makes you liable for sales tax in states where you have a sales nexus.

Sales tax nexus is defined as a connection a person or business has with a taxing jurisdiction. The concept of economic nexus came into existence in 2018 after the Supreme Court Case South Dakota v. Wayfair. It defined the thresholds by which a remote business establishes sales tax nexus with no physical presence in the state simply by selling into a state. These economic nexus thresholds are based on the total number of transactions within a state and/or the total amount of sales revenue within a state. Many states have followed the example of South Dakota and put economic nexus laws into place. However, the thresholds in the number of transactions or revenue are not always consistent among each state. Most states, but not all, use $100,000 in revenue or 200 individual transactions to measure whether economic nexus has been established. -Taxconnex

This is even more complicated by the fact that every state, and country for that matter, defines a sales nexus differently. Luckily, because Substack integrates with Stripe there is a solution for this headache, because Stripe has a service called StripeTax that will do much of this for you.

I vastly prefer working with a platform that allows me to collect payments through my own processor because when you want to change platforms it is very easy to connect those buyers with another service. Assuming any new platform also integrates with Stripe, I can connect my buyers and their existing payment information to my new platform with very little effort.

When you use a platform like Patreon, it’s very hard to move off the platform without completely breaking your payment system and losing paying members in the process. I have friends who have a Patreon and another service, like Ream, because they simply can’t cut off their payments on Patreon without destroying their entire business.

In this way, Substack shines for a third time. They are not a perfect direct sales platform, especially since they don’t offer the ability to sell other products or have a storefront, but as a direct sales platform, Substack is very well positioned to become a major player in the future of publishing.

That said, Substack is probably not able to be your only direct sales platform. While they are great for building a paid newsletter, that is only one part of direct sales. When Monica and I talk about direct sales we speak across several different aspects.

• Crowdfunding

• Memberships ←this is where Substack fits in.

• Web store

• Special offers

• Sales Funnels

• Conventions

While Substack is great for a paid newsletter, the fact they only allow for one or two tiers limits them in ways even a simple platform like Kofi doesn’t. Their laser focus on one type of customer has given them incredible clarity of vision, but it’s unlikely you’ll be able to grow a sustainable business without integrating other platforms and services into your ecosystem.

That’s not necessarily a bad thing. I’ve been a huge advocate for Kickstarter for almost a decade and they don’t integrate easily with any other major direct sales platform, either. Still, I’ve raised close to $500,000 on Kickstarter and we’ve helped authors raise $1.2 million through crowdfunding since launching the Kickstarter Accelerator in January 2022.

(One side note about Kickstarter. Even though their system integrates with Stripe, they collect all the pledges for you inside their account and send them in one bulk payment. Just one of the little quirks of direct sales proving every system works a bit differently.)

Being hyperfocused is how businesses scale, but as you think about growing your ecosystem, Substack will likely need to be augmented with something else, or many other things.

For instance, I launch several Kickstarters a year, have a web store, a Teachable site, table at conventions, run special offers to my newsletters, teach courses, and write this Substack, among other things. Meanwhile, on top of Stripe, I also have payment processing through Thrivecart, Square, and Paypal, along with Venmo and the Cash app.

All that together gives me a stable income, but more proof that no one solution is a magic bullet.

Photo by Alexandre Debiève on Unsplash

Does Substack embrace technology to help their users thrive?

Putting aside for a minute the fact that Substack allows you to generate AI imagery (even though it’s slow and cumbersome) what I’m trying to get at with this question is whether a platform takes advantage of technological advancements in a way that helps their users build more sustainable businesses.

Yes, it could include AI imagery if that improves your flow, but what I’m really after is whether you can rely on the platform to integrate with new technologies in a smart, intuitive way. Lots of platforms will add new technology without forethought that makes the overall user experience significantly worse for writers.

Substack, by contrast, seems to spend an inordinate amount of time thinking about what users really need before they integrate something into their service. For instance, while I don’t agree with their stance on offering an advertising platform like Beehiiv or Sparkloop, I do appreciate that they have thought extensively about these solutions and have an ethos about why they haven’t gone that way…yet.

It helps me trust that the things they do integrate will be worthwhile. This year saw the introduction of Notes, which has helped me grow exponentially in just the last couple of months since it launched. It’s also vastly improved the on-site experience for me in the long run because it helps me both find new creators to read and add them to my network.

They also introduced an entirely new dashboard in May, which has helped me understand my audiences better. You might think that these things don’t count as technology because they don’t use the words AI in them, but since different types of AI power every platform and algorithm, I would disagree with you on that. Notes, even though it is basic, still uses an algorithm to determine what you see and what you don’t.

I’ve worked with companies that don’t take a measured approach with their integrations and my confidence quickly eroded in them until the relationship deteriorated. They moved quickly, broke things, and destroyed my experience on the platform. It’s nice to be on a platform that, while I don’t always agree with them, has a consistent stance on technological integrations into their user experience.

I should mention that while I tend to agree with Substack on how they integrate technology into their platform, that agreement does not extend to their moderation policy or the types of people they sometimes promote on their platform.

Photo by 🇸🇮 Janko Ferlič on Unsplash

Does Substack facilitate community on their platform?

Just like with direct sales, there are a couple of metrics I use to judge community on a platform.

• Does the platform allow interaction between readers and writers?

• Does the platform help discoverability across their platform for new users to find publications?

• Does the platform allow for users to interact with the corporate entity to give feedback to better improve the experience?

• Does the platform allow for creators to form strong bonds to work together on common projects for their users?

• Does the platform protect its users through best practices on content moderation?

Does Substack allow interaction between readers and writers?

Between comments on articles, chats, and notes, Substack allows no less than three different ways to facilitate interaction between writers and their readers, allowing for even more interaction through restacking, mentions, and crossposting. While none of these are spectacularly novel innovations, Substack makes it as easy as any platform I’ve ever seen to foster interaction between readers and writers. It also allows writers control of whether to open comments to all readers or paid subscribers, and the ability to block trolls to your publication. I wish that they had a more active moderation policy, though.

Does Substack help discoverability across their platform for new users to find publications?

With their explore tab, notes functionality, and Substack Reads newsletter, Substack has a top down approach to helping writers find more readers to their publication. While they have a lot of avenues for discoverability, they seem mostly focused on promoting successful publications and influencers, which makes sense because those are the ones that make money for them.

Still, they do give smaller publications some tools to help discoverability as well. All publications have access to notes and chat, along with the ability to join weekly office hours to ask questions and meet other writers. These outlets offer ways for publications of any size to find new publications and create networking opportunities. Additionally, authors can band together to create a group project or a group publication like Fictionistas.

Does Substack allow for users to interact with the corporate entity to give feedback to better improve the experience?

While Substack does offer weekly office hours and their staff is often seen around the “Stackiverse”, one of the major issues I have with Substack is the lack of customer support. Several times I’ve had issues that needed an administrator to resolve and there is literally no way to contact support that I can find. You can try to get an answer during office hours, but the staff is not guaranteed to answer your question. I’ve had my valid, neccessary, and important requests left unanswered after asking it there. Aside from their moderation policy, better customer support, especially for publications that need more support, would be very helpful.

Does Substack allow for creators to form strong bonds to work together on common projects for their users?

While customer support is a failing of Substack, where they shine is facilitating strong bonds between writers. On top of simply fostering interaction between publications, you can very easily add guest writers to your publication, or even create a new publication with multiple authors. I would love to be able to combine multiple disparate publications into one subscription, like Bundlerabbit allows with anthologies, and have the money distributed to each other in the backend, but Substack is a relatively small team and I know they only have so much bandwidth.

Does the platform protect its users through best practices on content moderation?

I can’t in good conscience conclude this section without mentioning that Substack’s moderation policies are onerous to publications and the people they choose to promote sometimes show a complete lack of compassion for underrecognized groups. I have watched marginalized writers get harrassed incessently on Substack for posting well-researched articles. I have watched the same trolls pop up again and again on different writer publications even though they should have been banned long ago. The brunt of the moderation burden should be borne by the platform, not the users.

Even though I didn’t agree with their policy in the pre-Notes days, maintaining it after launching a social media network to encourage interaction between users shows a lack of care for marginalized voices, and the tone-deaf public attitude from the corporate brass forces me to couch my glowing approval of the platform and the people who run it with a thick layer of trepidation.

There are a lot of incredible voices on Substack and in the pockets I live in I rarely see any of this bubble up, but then again I am a het, cis, white male who was rarely called-to-task by trolls even on other platforms. I have talked to publictions who deal with harrassment all the time and have personally watched it happen enough that it sours my otherwise great experience with the platform. I’m not talking about negative comments, either. I’m talking about truly vile things and threats that any platform should rush to ban.

Photo by Diana Polekhina on Unsplash

Does Substack help writers distribute their work more widely?

In 2014, Amazon introduced Kindle Unlimited, allowing authors to make money when somebody “borrowed” their book from their library, while requiring exclusivity to Amazon for ebooks.

In 2014, Amazon introduced the now-familiar program called Kindle Unlimited. For $10, Amazon customers could subscribe to this program and have the option of ‘borrowing’ an unlimited number of books every month, as long as the authors of those books had made their titles exclusive to Amazon through the KDP Select program.

There were restrictions, of course. Readers could borrow a maximum of ten books at any one time – although downloading a new one for free was as easy as ‘returning’ a previously-borrowed title.

Authors, on the other hand, would receive a percentage of that month’s KDP Select Global Fund (I imagine it like it was a big pit of money that Jeff Bezos threw everybody’s monthly subscription into) based on the number of times their books were borrowed. -Ginger

After this, the conversation became if you were going into KU (Kindle Unlimited) or going wide with your work. If you want to learn more, I wrote about this choice in my article Kindle Unlimited vs. Wide Book Launch Strategies.

Why do so many authors enroll in KDP Select

Authors enroll in KDP Select because it allows them to make money without the reader purchasing their book. Since the subscriber pays a single monthly fee, anything they read which is available in the program is absolutely free...and getting somebody to try a free thing is way easier than getting somebody to pay for something.

Since the entry cost for a Kindle Unlimited book is nothing for the subscriber, and since Kindle Unlimited readers are generally voracious readers, the odds that they will try any book offered to them in their genre is very high. As a quick note, longer books tend to do better in KDP Select because people have to read many more pages to complete them. If you write short novels, the benefits of KDP select will reduce considerably, but they may still make sense for you.

What does "going wide" with a book launch mean?

The other option for authors when planning their book launch is to "go wide". What does going wide mean? It means that instead of enrolling in KDP Select, an author chooses to place their book on all platforms, including but not limited to iBooks, Amazon, Nook, and Kobo, among many others. There are dozens, maybe hundreds, of places an author can choose to distribute their books.

Uploading your book to so many places might sound daunting, but there are services like Smashwords and Draft2Digital which can upload your books to most major platforms for you so that you only have to upload your book once. However, there are caveats to this which we will discuss below.

Notice that when you "go wide" you will also be uploading your book to Amazon. You will just not be enrolling it into the KDP Select program. It is a common misnomer that going wide precludes you from publishing your book on Amazon, but that is not the case. It means you are publishing on other platforms in addition to Amazon.

Why would anybody go wide with their book launch?

If Kindle Unlimited is so amazing and can pay you for letting people read your book for free, why would anybody do anything else? Well, the reasons are varied, but the main one deals with exclusivity. When you enroll in Kindle Unlimited, you agree that your book will not be available for purchase ANYWHERE else, including your own website. Enrollment periods last for 90 days, which means you are tied to the Amazon platform exclusively for three months.

That means your book will only be available on Amazon, and only available on Kindle Unlimited in the USA, UK, Germany, France, Italy, Spain, India, China, Japan, Brazil, Mexico, Canada, and Australia.

Since Amazon is over 80% of the ebook market, that doesn't sound so bad, right?

Maybe, except that Amazon is only 80% of the USA based market. In many other countries, it is not the most popular, and in some countries, it's not even second place. This is a problem if you want to have a global footprint with your books, since people in many other countries often don't even register Amazon as a viable option.

Additionally, some readers simply hate Amazon and won't deal with them, even in the USA, so you are alienating yourself from those readers by not giving them the option to purchase your books.

From 2014-2022, the industry overwhelmingly told authors to release their books in KU because they made more money, even if they had to lock their books away in the Amazon vault and play by their rules.

While 90%+ of authors still launch their books in KU, the industry is changing. Last year, I was at a conference where nearly every author was considering going wide, which is the first time I had seen that in all my year working with writers.

This is different for other types of writers, of course, and many don’t even release books, or don’t release them independently. Blog authors usually syndicate their work to multiple platforms to increase reach, and comics never had a gatekeeper like Amazon that forced exclusivity which allowed them to cross-post from the beginning.

(I should mention that while you can syndicate a blog, almost all platforms at this point preference native uploads over syndication as this is shown in their backend as unique content — even when it isn’t — and thus increases the platform’s value to users and investors.)

What excites me about Substack is the burgeoning fiction community that serializes their work on Substack. Between The Library, Talebones, Erica Drayton, Fictionistas, and dozens of other authors, along with comic book writers like Scott Snyder, Substack is helping create a new path for writers to monetize their work.

The serial fiction community has Royal Road, Wattpad, and Radish, among others, but with each of them you are relying on their platform, and their ever-changing compensation metrics, in order to grow. Meanwhile, Medium is geared more toward non-fiction, while Webtoon and Tapas for comics also don’t allow for direct sales. There are vanishingly few ways for somebody to serialize their work and grow their own direct sales audience with fiction outside of Substack.

Additionally, Substack has an RSS reader which allows you readers to pull other blogs into one world-class reading format, helping increase the ever-important time on site metric.

We believe the future of publishing is not just publishing wide on platforms outside of Amazon, but going wider-than-wide with platforms like Substack, Kickstarter, and others that allow you to control your buyer data and get paid for your work directly.

Even though I do believe that Substack is great for fiction authors who are wide with their work, this is not necessarily the same for non-fiction authors because you can’t easily syndicate a Substack article. With your own blog, you can syndicate your work to other platforms like Medium, but if you write an article for Substack you have to do the work to republishing it and reformat it for syndication on another platform, which is a pain.

Part of that is because Substack does not have an open API so nothing can connect to it. I get why they made that choice. APIs are expensive time-sucks, by and large, but I would be remiss if I didn’t mention that it was a concern.

Photo by Sebastian Pena Lambarri on Unsplash

Does Substack help provide an immersive experience to readers?

What does the word immersive even mean when it comes to the future of publishing? Virtual reality, and to a lesser extent augmented reality, are both clearly immersive, but so is a brand like Star Wars that covers a hundred different formats and even has it’s own theme park experience.

When I think of immersive in the context of a platform like Substack, what I look for is whether it encourage readers to happily spend hours on the platform and does it allow for writers to provide unique experiences to readers they can’t get anywhere else.

With Substack, I think of

Geoffrey Golden

and his Substack

Adventure Snack

where he provides readers with short choose your own adventure experiences every week. I think of the potential for writers to augment their universe with additional short stories. I think of people offering paid bonus content to their members and ways that allow readers to fall even further down the rabbit hole of a publication they love. I think of the ability to provide coaching calls so people can meet with authors in person, and other unique experience that people have only begun scratching the surface of up until now.

While most writers aren’t utilizing the immersive qualities of Substack, and even I have a hard time conceiving what they will be, the potential is there and I hope the platform continues to build out the possibility for immersive content in the future.

Photo by Crispin Jones on Unsplash

Does Substack provide a decentralized experience to users?

The short answer to this is yes…kinda. Before I go further, I should mention that in this case I’m not talking about blockchain specifically. I’m talking about the ability for a writer to build and control an experience for their readers outside of centralized control. The more control a writer has of the reader experience, the more decentralized the platform.

While this can happen with blockchain, the concept of decentralization has existed since the dawn of business. Barnes and Noble decentralized a lot of their decision making to local stores, for instance.

Decentralisation is referred to as a form of an organisational structure where there is the delegation of authority by the top management to the middle and lower levels of management in an organisation.

In this type of organisation structure, the duty of daily operations and minor decision-making capabilities are transferred to the middle and lower levels which allow top-level management to focus more on major decisions like business expansion, diversification etc.

Delegation refers to the assigning a portion of work and the associated responsibility by a superior to a subordinate. In simple words, when delegation is expanded on an organisational level, it is called decentralisation.

Good examples of decentralised business are Hotels, supermarket, Dress showrooms and etc. Because it is not possible for one person to focus on more than 100 branches which have branches throughout the world, take an example of a hotel. When a particular person holds a chain of hotels as his business, he particularly focuses on using decentralised structures so that local hotel managers and assistants are empowered to make on-the-spot decisions to handle customers – problems, complaints and requirements. -BYJU

Like most everything else we have talked about so far, decentralization lives on a vast spectrum. Barnes and Noble gives store managers some control, but they still have to answer to a centralized corporate entity. Owning a franchise like McDonald’s gives you more control than working at Barnes and Noble, and becoming an approved partner to sell something like Verizon phones in your own store gives you even more control than either of those. Meanwhile, joining your local chamber of commerce gives you even greater control of your own business while still allowing you to access some resources of a centralized collective.

The same is true online. While Substack does allow writers to create their own publication and even use their own domain to cater a unique experience, this is still nowhere near the boundary of where decentralization can take you.

I tend to agree with

Simon Owens

that Substack’s unfair advantage is how is combines the decentralization of having siloed newsletters that don’t talk to each other with a recommendation engine and social media experience that brings people together in one place. He also pinpoints the problem with true decentralization.

But the problem with decentralized delivery is that there’s no user lock-in. It’s incredibly easy to export your email list into an Excel spreadsheet and migrate it to a new platform. At first this didn’t matter, since Substack was really the only newsletter payment platform on the market, but as new competitors emerged — Revue, Ghost, Beehiiv — then suddenly writers started openly wondering why it deserved its 10% commission on all subscription payments. -Simon Owens

The advantage of something like Notes is that you can very easily go from the centralized social media platform to a more decentralized newsletter at the push of a single subscribe button.

Substack seems to have started out more decentralized, but unlike something like Ghost which each operates on their own servers like Mastodon or Bluesky, Substack has taken the best parts of decentralization (owning the customer data) and combined it with the best parts of social media (a hub by which to share ideas).

This is especially interesting because while many platforms tout true decentralization, the experience of being siloed away from everyone else kind of sucks. However, centralization is also problematic because then you are at the whim of the algorithm. I don’t know if Substack strikes the right balance, but it’s close.

Photo by Drew Dizzy Graham on Unsplash

If you can’t tell by the tenor of this post, I’m bullish on Substack now and in the future as an important cog in the publishing landscape. While it’s not perfect, I think the positives vastly outweigh the negatives, even though the negatives are certainly worth considering before you go all in on the platform.

It’s probably worth setting up a publication for the organic newsletter growth alone. In the past 30 days I’ve had 622 new subscribers to my publication without spending a dime. With paid newsletter growth strategies, you could be paying anywhere from $1-$10 to acquire a new email, so that is a ton of real world value Substack provides for writers.

At the end of the day, what can Substack tell us about the future of publishing? I think it can show other platforms how to create an ecosystem for writers to thrive. The next 3-5 years will be about taking control of your customer data and owning the experience you provide to your fans.

This might be scary to some people, but it also means that you can stop paying middlemen and keep more of the money you rightly earned from your work. The best platforms will combine the ability to own the customer data with an algorithm that encourages discoverability. Even when I don’t post a new article, I gain at least 5-10 new subscribers a day on my Substack, and that is growth that used to either go to a platform or I had to pay dearly for through advertising.

This is the kind of experience I hope to find throughout the future of publishing as people lose patience with centralized platforms but don’t have the infrastructure to build their own web store experiences. Kickstarter strikes a great balance between empowering discoverability across their platform while keeping each project siloed in their own bubble, and I think Substack might just do a better job than Kickstarter. As a devoted Kickstarter fanboy, even thinking such a thing is a big deal, let alone writing it down.

It’s still a nascent platform for fiction, but non-fiction and memoir show the possibilities that Substack can provide all writers when like-minded people with similar fandoms get together to create a world class experience for readers.

If you like thinking about this kind of thing, I hope you’ll consider joining us in New Orleans next February where we’ll be talking about how to take advantage of the future of publishing with the brightest thinkers in publishing.

We’re about eight months out from our in person event and can’t wait to see you there.

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