Passion Economy News: Casey Newton goes Indie, SignalFire’s Creator Economy Market Map, Newsletter Curation, and More

Plus, using Twitch for journalism, Bella Poarch, and the implications of Penske’s control over Hollywood publications

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Welcome to Issue #2 of the Means of Creation weekly news roundup where we break down the latest news on the passion economy, including the happenings related to platforms, creators, startups, and trends.

Our first month of the Weekly News Roundup will be a free beta. The goal is to make this the most helpful resource for founders, investors and creators in the passion economy. We’re looking for your feedback to make this happen! (form also linked at the bottom). 

NEW FEATURE: Be sure to read to the bottom of this issue for a new section in the News Roundup: Passion Economy Financings!

Stuff We Published

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Additionally, we uploaded the interview with Joseph Cohen to our YouTube channel. Check it out here. As always, you can view more episodes and subscribe to the Means of Creation YouTube Channel.

Top of Mind

CASEY NEWTON GOES INDEPENDENT

Journalists Are Leaving the Noisy Internet for Your Email Inbox // New York Times

Casey Newton’s highly publicized move to independence on Substack after seven years at The Verge has sparked a mainstream discussion around the growing trend of journalists migrating to a direct-to-reader model and how this trend might shape the future of journalism. 

https://twitter.com/benthompson/status/1308995514344538113

Interestingly, Casey predicts that the creation process itself could change to be more community-led rather than top-down. In an interview with Sarah Jeong at OneZero, Casey Newton says, “Substack just did some interesting things. They’re really helping writers build communities [...] I definitely include reader feedback in a lot of my newsletters, but I’ve never tried to cultivate it as a community where I’m, like, starting a Friday thread where people can jump on and debate the issues of the day. And I really want to see what is in that community, what they want me to report on. That feels really interesting to me and kind of different from what has come before.”

The Verge let Casey take his mailing list of 20,000 subscribers with him, but what remains to be seen is how he monetizes these readers through his publication Platformer. Different conversion rates are being thrown around; mostly anecdotal. The high-friction nature of subscriber migration should also be highlighted. It is unlikely that all his 20,000 subscribers will all follow him across platforms. 

(Interesting side note — while at The Verge, he was publishing his newsletter on Revue, a different newsletter platform, but opted to switch to Substack for his new newsletter.)

Just about 24 hours into the launch, Platformer hit the 500 subscriber mark—at $100 per year, that’s already $50,000 in annual subscription revenue, all pre-launch. This is partly fueled by the highly publicized nature of his departure, but it’s also indicative of a growing appetite for content from creators who have built up affinity and trust among their audience.

https://twitter.com/caseynewton/status/1309308668484091905?s=21

The move has prompted a broader discussion around journalistic independence and creative autonomy enabled by the passion economy. But we do not wish to paint an overly romanticized picture. Casey Newton’s move also raised questions around the business realities of the newsletter ecosystem, and the challenging task of building an audience given the disparate power law. Do you need an already established audience to successfully migrate to Substack? (short answer: Yes it can work without an established audience). 

Others have adopted a more positive sum paradigm stating that the Substack brain drain might be just what the industry needs because the migration of established incumbent writers to platforms such as Substack is creating space for emerging writers to make their mark by leveraging the undeniable publishing firepower big publications still have. 

As independent writers evaluate their options whilst deciding to go DIY, platforms such as Substack seem to have taken on a role more akin to that of a publisher where they concentrate on writer acquisition. Deemed Substack’s ‘rival’, Lede has been doing the same.  

Related Reads: 

What I Hope Substack Changes About Journalism // Jessica E. Lessin, The Independent 

Casey Newton on Leaving ‘The Verge’ for Substack and the Future of Tech Journalism // Sarah Jeong, OneZero

PASSION MACROECONOMICS

SignalFire’s Creator Economy Market Map // Yuanling Yuan, Josh Constine, SignalFire

This week SignalFire published a Creator Economy market map that includes the different revenue streams content creators use to monetize their offerings. With ~2 million people considering themselves as professional creators and another ~47.6 million as amateur creators, the marketplace for DIY tools has exploded. But how does one navigate a business environment that’s in constant cultural flux? 

“Essentially, creators have to balance the distribution potential of certain platforms with the risk of becoming dependent on them, and monetize by either earning a little off of each fan from mainstream content for a big audience or earning a lot off of deeper connections to a smaller set of fans through niche content.” 
The map defines three ‘layers’ that have led to this transition. First: the rise of foundational media platforms since the 2000s which have significantly lowered the barriers for content creation and distribution. Second: how they enabled these content creators to build a fanbase and subsequently monetize this influencer reach. And third: the eventual formation of creator businesses having a diversified presence across platforms and revenue streams. 
“The big trend we see here is that over time, creators are becoming more diversified in their revenue streams and are being funded directly by their fans.”

Note that Li defines the passion economy more broadly than the scope of this market map. Rather than just focusing on people who are creating or curating digital content for a living, the passion economy includes individuals who are making an income through non-commoditized work of any kind, including providing real-life services (e.g. Dumpling) and teaching on marketplaces (e.g. Outschool). In this way, the creator economy is a subset of the passion economy—creators are creating non-commoditized content that emphasizes their individuality and isn’t fungible—but the passion economy is broader than online media creators.

Related Read: 

The Creator Economy: Tiktok, Patreon and Others Revolutionizing the Space // Julia Maltby, Medium 

Julia Maltby details how traditional content consumers used new media platforms to become content creators and how these content creators have used tools to monetize their content-based value propositions. The article enumerates five revenue streams (advertisements, subscriptions, one-off sales/donations, brand sponsorships, affiliate marketing) with pros and cons for each. 

DISCOVERY IN A PEAK NEWSLETTER WORLD

Pandemic spurs journalists to go it alone via email // Sarah Fischer, Axios

According to the above Axios article, Substack now has more than 250,000 paying subscribers across its network, and its top 10 publishers bring in $7 million collectively in annualized revenue (rough back of the envelope calculations: $80 annual revenue per subscriber translates into $20 million gross subscription revenue). The importance of discovery needs to be underscored as the number of independent writers leveraging creator infrastructure and D2C tools (such as Substack) rise in popularity. 

https://twitter.com/tzm_tmt/status/1309142755524964354?s=21

Newsletter Stack, a platform launched in June 2020 by Patricia Mou and Phil Hedayatnia, offers a curated collection of newsletters to combat peak newsletter. As newsletter fatigue kicks in, the role of discovery platforms such as Newsletter Stack (where potential knowledge influencers may thrive) has become increasingly relevant. 

But we don’t expect Substack to easily cede the opportunity to be the destination for discovering newsletters; Substack recently launched the ability to find newsletters written by people you follow on Twitter, a hint at their aspirations to own newsletter discovery.

ICYMI:

Who Is The Real Bella Poarch? // Def Noodles

  • Bella Poarch is a top 20 creator on TikTok made famous by her viral head-bobbing “M to the B” video that uses the face-zoom feature, which now has over 400 million views. Upon first glance, her content seems to be perfectly created for the TikTok algorithm: pretty face, catchy song, and seemingly raw and authentic. However, the actual situation turns out to be a bit more complicated: her real life identity is unclear. Her TikTok, Instagram and Twitch accounts were created just this spring and her Facebook URL lists a different name: Taylor Nariee. 
  • Turns out that “Bella Poarch” works for BAS Media, a viral-content marketing firm that has an exclusive deal with Columbia Records to promote artists and tracks on TikTok. It seems that Bella was created largely to promote certain tracks that Columbia Records owns, which is particularly interesting given that the most popular songs on Spotify often originate on TikTok. The question of whether Bella is a real person or the elaborate creation by a record company reminds us of Lil Miquela, a CGI influencer created by the venture-backed Brud that now has 2.7 million followers on Instagram. Given TikTok’s 150 million monthly active users spending 80 minutes per day on the app, perhaps we should expect more undercover marketing creations on the platform in the future. 

InfiniteScroll’s Episode I — Hello World // Twitch 

  • Charlie Wazel and Kevin Rose had Casey Newton as a guest on their channel InfiniteScroll on Twitch, showcasing a different way for journalists to use the platform for unstructured, conversational audio content. 
  • “Like and subscribe. Our careers depend on it.” It’s a chuckle worthy but also revealing statement that highlights the precariousness of the creator economy; where indie journalists go head to head with big media in the attention economy. 

Hollywood’s Venerable Trade Publications Unite in Joint Venture // John J Edwards III, Bloomberg 

  • As major writers are going independent, large publications are consolidating into media powerhouses. What are the implications of one corporation exclusively controlling the discourse around an entire industry? Penske Media might serve as the perfect example.

OnlyTweets, a tool that lets you monetize on Twitter

  • A common refrain we see on Twitter is “I can’t believe this site is free” (usually in the context of some public drama). Well, OnlyTweets is here to change that. It’s the latest experiment from startup Stir, aiming to help creators monetize natively on Twitter through private, paid subscriber-only feeds. For all of the value that creators contribute to Twitter today, it’s impossible to monetize natively, leading many to seek out other monetization paths like paid newsletters, courses, or consulting, and leveraging Twitter for top-level audience growth. The value prop for creators is clear; the more interesting question is whether a large portion of creators’ audiences would be willing to pay for a content format that has historically always been free.

Passion Economy Financings:

  • Streamloots, a platform for gaming livestreamers to monetize through interactions with their fans, raised a $5.6M Series A led by Jeremy Levine at Bessemer, with participation from angels including Tobi Lutke (CEO of Shopify), Jeremy Stoppelman (CEO of Yelp) and our very own Li Jin. 
  • Outschool, a marketplace for live online education for kids via small group instruction, raised a $45M Series B, led by Lightspeed, with participation from Reach Capital, Union Square Ventures, SV Angel, FundersClub, Y Combinator and others.
  • IRL, a social event discovery app, raised a $16M Series B led by Goodwater Capital, with participation from Founders Fund, Floodgate and Raine.
  • Trint, a leading transcription service, received a Series A Acceleration investment led by the New York Times. The NYT clearly sees the value of crossing text and audio as they acquired Audm (a startup that turns text into audio) in March of this year.
  • ReKTGlobal receives investment from Top Dawg Entertainment founder Anthony Tiffith. ReKTGlobal provides event management, agency solutions, and media support to the eSports ecosystem and previously raised a $10.8 million Series A which included artists such as Steve Aoki, Imagine Dragons, Nick Gross, Nicky Romero, and Rudy Gobert.

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