Is Substack A Platform Or A Publisher?
Also: Clubhouse’s accelerator program, Twitter’s new monetization tools for Spaces, a platform that lets fans control creators’ lives, and more
This week: Special guest Turner Novak joined Li and Nathan to share his thoughts on the news! Turner is a former GP at Gelt VC and an omnipresent memelord on Twitter and TikTok. He is currently just vibing while he works on launching something new. He’s deeply insightful about the creator economy, and we're excited to have him on the show today at 5pm Pacific / 8pm Eastern, on Twitter Spaces!
And now, onto the news…
Top Stories in the Passion Economy, 03/18/21
Is Substack A Platform Or A Publisher?
- Substack cofounder Hamish McKenzie published an essay about Substack Pro—their initiative to offer famous writers upfront advances to move to Substack.
- The essay was written in response to backlash from writers and readers about the previously secretive program and the kinds of writers it helps fund; a list that reportedly includes well-known names like Matthew Yglesias, Casey Newton, Matt Taibbi, Anne Helen Peterson, and others.
What this means:
Substack is wading into the territory of publishers, rather than strictly being a platform. By funding certain writers, they are picking and choosing what gets published. At bottom, those are editorial decisions.
I don’t think so. They're not accepting or rejecting posts from individual writers—they are merely choosing which writers to invest in.
These programs could be seen as a growth marketing strategy, and not editorial control. Substack is just paying writers to attract more readers and more writers. They're incentivising high profile creators to kickstart the flywheel of network effects.
Writers ultimately control what gets written.
That’s a good point, but funding writers supports their success in a much more direct way than just allowing them to use the platform. It makes sense that Substack be held more responsible for the kind of content that gets published by Substack Pro writers compared to normal writers. It speaks to Substack’s values. And it also has legal implications.
Section 230 says that internet platforms are not liable for what their users post. But publishers are liable for what their writers write. Does Substack Pro jeopardise their Section 230 status?
It might! With Substack Pro they’re still a platform, but they’re also sort of a publisher on their own platform now. I don’t see why it would affect their section 230 status for normal platform users, but I can imagine it getting tricky for writers who are a part of Substack Pro.
The bigger issue to me isn’t legal status, but cultural mores. We used to have a stable set of mores clearly labeling the difference between things like platforms and publishers. But the Platform/Publisher binary is more like a spectrum now—and we will eventually update our ethical standards to reflect that fact. Between now and then, it will be an active conversation.
Clubhouse Opened Applications for a Creator Accelerator
- Clubhouse Creator First is an accelerator program which will help 20 creators build audiences, partner with brands, and monetize their shows.
Today’s Town Hall Updates:
We are launching our first creator accelerator program, Clubhouse Creator First. We are looking to support and equip 20 creators w/ resources they need to bring their ideas and creativity to life. Details and application here:
What this means:
When it comes to platforms trying to formulate creator-oriented strategies, I’ve seen two broad approaches so far: The first approach is open and application-based, like Clubhouse’s program here, TikTok’s Creator Fund, or Substack Bridge. The second approach is closed and invite-only, like Triller, Substack Pro, or Clubhouse’s previously announced Creator Pilot Program.
The first approach is more egalitarian and better at attracting talented emerging creators. The second is better at attracting celebrity creators because platforms typically pay big upfront-advances.
I think the second approach is really effective! It’s particularly good for Clubhouse. Whenever a famous person drops into Clubhouse, it goes wild.
But attracting big names only works if platforms have a strong user retention strategy. Which is not the case with Triller, for example.
Also, this Clubhouse accelerator program seems so selective! I wonder if this makes creators feel left out if they're not chosen.
I remember when they first announced the Creator Pilot Program, some creators definitely felt that way.
It's not about whether or not certain creators get chosen, but about whether the process seems fair. I think if there's a transparent application process, creators don’t mind. That’s what the open applications for this accelerator program are meant to do.
Twitter Moves to Capture Clubhouse’s Opportunity
- Twitter is adding a tip jar that will let hosts monetize through its audio-based social feature, Spaces.
- Twitter’s Head of Consumer Product also hinted that they will eventually let hosts natively record conversations and release them as edited podcasts.
- Currently, the ability to host Spaces is only available to invited users, but Twitter announced that it will be open to everyone in April.
What this means:
This is obviously a move to head off and capture some of Clubhouse’s success. Twitter is already the top of funnel for Clubhouse: people tweet about Clubhouse rooms before they go live and write tweetstorms about those rooms after they’re over. So it makes sense for Twitter to want to control the entire stack versus just being an informational layer for Clubhouse.
Totally. Twitter has this opportunity because it is already the primary place of discovery for interesting articles, podcasts, threads, and people. Better creator monetization not only heads off Clubhouse’s success, it also allows them to more effectively capture a lot of value that they've left on the table for the last 10 years.
Besides, relying on advertising is not going to work for Twitter. Other platforms have much more compelling content formats better suited for the attention economy.
Yeah, I agree! They're also in a position to undercut everyone by having a 0% take rate on most creator tools because they have a steady stream of ad revenue.
As an aside, focussing on creators has now become the primary way to build a social network. (Shoutout to Li!) Early-stage networks need content and community. Creators make content and bring communities of their fans to the platform. Helping creators monetize has a strong network effect.
Platforms Are Letting Fans Control Their Favorite Creator’s Life
- NewNew, an LA based platform, lets fans pay to vote in polls that decide aspects of creators’ lives. Some of the things fans can vote for are: what outfit their favorite creator wears, or who they hang out with.
What this means:
NewNew is like playing a video game but with fans playing as their favourite creator.
To me, the concept seems dystopian. But what makes it slightly better is that creators get to frame the choices fans make for them in these paid polls. My hope is that they frame these choices responsibly.
NewNew would make more sense if it was an embedded feature in an existing social platform that creators were already using, rather than a standalone app.
For example, stories on Instagram already have a polling feature so it could be embedded as a format within them.
I agree! Latching onto an existing network is crucial for NewNew’s success.
Facebook Launches New Creator Monetization Features
- Facebook announced a slate of creator monetization features recently:
- Creators can embed sticker-ads in their Facebook stories.
- Qualified creators can insert in-stream ads for short-form video content. Previously, videos had to be 3 minutes long but the threshold is now 60 seconds.
- Facebook is expanding its paid live events and fan subscription features to additional countries, spending $7 million to promote ‘Stars’, its in-app tipping currency. (1 star = 1¢)
- “We want to enable more people to actually go and experience this delight of actually going and supporting a creator, and we think this is a relatively new behavior that we want to make more ubiquitous across the app, and we think this is a great way to do that”
NFT News Roundup
- Kings Of Leon generated $2 million through their NFT sale.
- Nyan Cat creator Chris Torres is organising NFT sales for memes like Bad Luck Brian, Keyboard Cat, and others.
- The highest bid for Twitter co-founder Jack Dorsey’s first tweet currently stands at $2.5 million. The auction ends on March 21st.
- Video game publisher Atari partnered with Bondly, an ecommerce company for digital assets, to create and sell gaming and music related NFTs.
TikTok Is Testing A ‘Music Hub’ Within The Discover Tab
- TikTok is testing a new ‘Music Hub’ feature in the UK. Music hub will let users discover trending sounds being used to create content on the platform, as well as the artists behind these sounds.
- The tab will also highlight music-based creators, challenges, and hashtags.
Facebook Gaming Reveals Requirements For Its Exclusive Partnership Program
- Facebook Gaming recently revealed the requirements to become a ‘Partner’ through its gaming creator program, Level Up.
- Creators can monetize their streams through Level Up, but becoming a partner entails additional benefits such as direct contact with Facebook's support team, exclusive access to a Facebook Gaming community, partner-only invites to Facebook Gaming events, a partner badge, etc.
- Level Up has standard account requirements similar to Twitch’s Affiliate Program, However, the Partnership Program has more stringent requirements—analysing criteria such as engaged followers (at least 3,000) and revenue. (at least $2,000).
Creators Can Now Start Selling Digital Products Through YouTube’s Merch Shelves
- YouTube’s ‘Merch Shelf’ was launched in 2018 in partnership with Teespring for the sale of physical merchandise. Creators can now start selling digital products through this integration.
- The feature has seen early signs of engagement: creator Sadie Aldis (1.01 million YouTube subscribers) sold 4,000 customised presets for Adobe Lightroom in less than 6 months.
Amazon Music Launches An In-App Merchandise Tab
- Amazon Music is adding an in-app tab that will let music creators sell merch to their fans. All orders will be fulfilled with Prime shipping.
- Amazon is also planning to use music streaming history to send push notifications and emails recommending new merch drops.
Public Markets Value Roblox At $38.3 Billion
- Roblox, a user generated gaming metaverse with 33 million DAUs, recently went public on the New York Stock Exchange (NYSE:RBLX). The company’s share price closed at $69.5 on the first day of trading.
- The public markets valued the company at $38.3 billion. Previously, Roblox had raised more than $500,00 in venture capital at a $29.5 billion valuation.
Means of Music Creation? Native Instruments & iZotope Partner Up
- Specific details about the partnership have not been revealed, but the press release hints at their plan to build better tools for user-generated music creation.
- "This investment is meant to continue Native Instruments’ strong thought leadership in digital music creation and expand the company’s product offering to create the end-to-end user centric platform for the music creation industry"
Triller Acquires ‘Verzuz’ A Web Series Produced by Timbaland and Swizz Beats
- Verzuz creators Timbaland and Swizz Beats shared part of the Triller equity they received from the deal to the 43 celebrity creators who have made appearances on the show.
- These include John Legend, Alicia Keys, Rick Ross, 2 Chainz, and other celebrities.
Passion Economy Financings:
- Section 4, an online school focussed on upskilling business managers, recently raised a $30 million Series A funding round led by General Catalyst. The company is founded by famous NYU professor Scott Galloway.
- Songclip, an intermediary that helps emerging social networks license music, raised $11 million led by Evolution VC Partners. Songclip’s API can be used by an early-stage network’s users to search for and share music.
- Epidemic Sounds, a marketplace of licensed music for content creators raised a $450 million funding round led by Blackstone Group and EQT Growth. The round values the Swedish company at $1.4 billion. Epidemic Sounds’ catalog has 32,000 songs and 60,000 sound effects.
- Stripe, the payment infrastructure company used by a wide range of platforms and creators, raised $600 million at a $90 billion valuation led by Allianz and Axa Insurance. Stripe plans to use this investment to expand its footprint in Europe.