Are Newsletters the Future of Free Speech?

"Society has a trust problem," Substack co-founders Hamish McKenzie, Chris Best, and Jairaj Sethi declared in a joint statement late January. "More censorship will only make it worse."

Substack, a leading online newsletter company that publishes the likes of polarizing journalist Bari Weiss, Brown University economist Emily Oster, COVID-19 contrarian Alex Berenson, and lefty iconoclast Glenn Greenwald, was reaffirming its hands-off approach to content moderation at a moment of intense pressure to "deplatform" controversial voices. That same week, rocker Neil Young accused Spotify podcaster Joe Rogan of spreading pandemic misinformation and demanded that the platform remove his songs if it continued to offer Rogan's show; days later, the White House urged Spotify and all other media companies to be more "vigilant" in policing public health news and commentary.

"As we face growing pressure to censor content published on Substack that to some seems dubious or objectionable," McKenzie and his partners wrote, "our answer remains the same: we make decisions based on principles not PR, we will defend free expression."

Those principles have been good for business thus far. Since launching in 2017, Substack has grown to more than a million paying subscribers, boasts a valuation of $650 million, and has drawn venture capital funding from the likes of Andreessen Horowitz. The company's pitch to writers is seductive: You set a couple of subscription tiers (the most common price points are $5 a month and free), you let Substack facilitate the payment processing in return for a 10 percent cut, and then all the customer information and content is owned not by the platform but by the creators, who can leave at any time. In 2021, flush with investment money, Substack began a "Substack Pro" program of cash enticements to lure name writers away from imploding media organizations or their own unpaid blogs, including Matt Taibbi from Rolling Stone and Matthew Yglesias from Vox. Of late, the company has taken an interest in breaking into the lucrative podcasting biz, poaching Jesse Singal and Katie Herzog's Blocked and Reported from the market-leading Patreon payments service. (It may soon also sign a deal with The Fifth Column, which Reason's Matt Welch co-hosts with Kmele Foster and Michael Moynihan.)

McKenzie, Substack's chief operating officer, is a technology journalist by training, having worked for PandoDaily and written the 2018 book Insane Mode: How Elon Musk's Tesla Sparked an Electric Revolution To End the Age of Oil. Like his co-founders, McKenzie believes fervently that the independent-operator newsletter and podcasting model, as opposed to the cheap conflicts of social media and industrial neuroses of legacy journalism outlets, is the way out of a news and political conversation that has become distrustful and coarse. "We started Substack to improve discourse and help restore financial dignity to writers and help readers take back their minds," he says.

Welch spoke with McKenzie in San Francisco this February.

Reason: When journalists dream of making a new startup—newspaper, website, whatever—there's always this special idea that this will be the one where all our favorite writers will actually all get rich, too. Did you find the secret code of being a journalist who started a company that actually makes journalists money?

McKenzie: I'm relieved that there is something that can work. I feel like writers in the last couple of decades especially, but maybe forever, have been undervalued by the economy, considering how much value they give to the world. So it's nice to see some momentum on that front.

Substack is very open about being anti-algorithm. Is there something fundamental to the advertising model that impels the algorithm?

We're not strictly anti-algorithm. Algorithms are like equations, right? They appear all over the place and do different things. But we're very skeptical about the consequences of organizing the media ecosystem around engagement.

You guys have said that algorithms as used by Facebook, YouTube, or Twitter produce and incentivize cheap conflicts.

I don't think it's the algorithms that do that; it's their business models. These artificial intelligences arise to maximally serve the business model. The thing that the business model needs is total monopolization of your attention. Then the way that they do that is by creating these addictive experiences that amplify the most engaging stuff.

Often the most engaging stuff is not the stuff that's necessarily conducive to sharing a common understanding of the world or encouraging good faith discussion or sharing factual material. It's what's provocative, what's contentious, what divides us. That is a thing that's broken in the world.  We want to provide an alternative.

But most of your largest and certainly most controversial signups are people who came from conflict-world on Twitter and other places. And they're still there, as a matter of fact: Glenn Greenwald, Bari Weiss.

There's an overlap between the people who are doing well on Substack and those who know how to play the game on Twitter and Facebook. If that becomes a long-term thing where the only people who can succeed on Substack are the people who are good at playing that game, we would not feel like we've done our job.

But even for those who are the good brawlers in the social media world, the quality of discussion and argument that you see on Substack is very different to what you see on Twitter. There's reward on Twitter for these performative arguments and outrage—instant reactions, pithy retorts, one-liners, takedowns. Whereas in Substack, you are forced to defend your positions more. You're held to account by readers who are willing to argue with you at length in comment sections or writers who are willing to take you on, but not in a tweet in front of the whole world, in a different post, where the heat was taken out of the conversation a little bit.

Substacks are in these quieter spaces. You are reading in an environment where there's not a whole lot of gunfire going on around your ears, and in the background you as the reader are having this more focused reading experience where you have more time to stop and think. I'm not pretending that Substack is completely insulated from the drama of social media. But I do think that the discourse that is happening on Substack is a massive improvement from the discourse that's happening on social media.

Your profile, whether it's intentional or not, is that you're champions of free speech within the world of online media. You state a lot of foundational liberal values, including in that statement about censorship you made in January. How did those shared values shape the way the company was formed?

We started Substack to improve discourse and help restore financial dignity to writers and help readers take back their minds—an alternative to the attention economy. For those things to all be true, you need to create a space that is accommodating for a broad range of views and for genuine discussion, and to not have a company sitting at the top that appoints itself as the referee of what's acceptable.

So we do hold those values. They're reflected in the design of the system, which is that writers are in charge. They make money through subscriptions, which are trust relationships. They have to live up to the contracts they have with their readers. They have to respect and reward the attention and trust of their readers.

Substack in turn has to respect and reward the attention and trust of the writers. Writers own everything on Substack. They own their mailing lists. They own their content. They own their [intellectual property]. They could take all of that with them at any time. It's not like Twitter, where you can't leave Twitter and take all your Twitter followers with you.

That puts us in a good position. It's a difficult position, because we can't just lock the doors and keep everyone locked inside the house—we have to keep people by proving that we are worthy of their trust, that we add a lot of value.

There's tons of internal pressure at Spotify, at least among the lower-ranking employees, to do something about Joe Rogan. How do you design a corporate culture so that you're not faced with revolts from 25-year-olds who have different points of view about this than some of us old fogies?

Yeah, that's…a unique challenge of this time.

Very delicately said.

Well, we're very careful with hiring. We want to make clear what our values are, which is why we write things and publish them, explaining our stances and positions, and then hire people who are on board with that philosophy. So being careful of the hiring on that front to make sure that people know what they're joining here, what they're signing up for, and what they're speaking for as well—that's the place to do it.

We take a hands-off stance on content moderation, not because we are free speech absolutists to the death but because we genuinely think that is the best way to foster a healthy discourse.

The alternatives—the positions that are being argued by people who advocate for a more interventionist approach—in our view seem to be making the problem worse. If your only focus is misinformation, we don't think it should be. We think your focus should be actually more about trust in society and what can be done to restore and bolster trust.

But even if your only position was that misinformation is the problem, then the things that you are currently doing to fix misinformation are having the opposite effect. Because you're eroding trust, you're creating more of a misinformation problem.

Speaking of the erosion of trust, COVID-19 has been a big inflection point for the media. How has that affected what you've done?

COVID has brought a lot of madness into the world, which has meant that some of the pressures from online chatter are more intense and difficult to deal with. But it is also like a steel rod in your back, when you can see that there is madness. It's only more important, then, to stay as levelheaded as you can, and as cleareyed as you can, and stick to your principles.

COVID also introduced a lot more financial precarity into the world, especially in media. People who might have previously felt secure in their media jobs are more interested in looking at the alternatives, other ways of making money, other ways of connecting with their audiences, more aware that their newspaper or magazine might close at any moment.

We've certainly seen a ton of demand for COVID-related content. Your Local Epidemiologist, by Katelyn Jetelina, has been one of the rocketship success stories of Substack. Eric Topol has been doing his work on Ground Truths on Substack. All these voices who are being thoughtful and smart about COVID writing—they're getting a ton of attention and a ton of play.

It felt like the media business was suffering a self-inflicted nervous breakdown after the George Floyd protests came up in 2020. A whole bunch of people, including people who are now on Substack, lost their jobs or felt pressured out by the conformity at big preexisting media institutions. Those moments seem to be made for you.

It's not just COVID. It's not just the Floyd protests. It's this moment in the culture—and the moment has now been quite extended—where in certain institutions there's more conformity of viewpoint. Whenever there's that kind of culture, there's an opportunity for the counterculture. Substack is where the counterculture is happening right now.

How do you then prevent yourself from being reactionary or anti-conformist?

We've been lucky. Since the early days of Substack, people from all walks of the political spectrum have seen value in the Substack model. It's not a model that says you can only succeed if you're from the left wing or the right wing. It's agnostic in that sense.

You're not agnostic in picking people. Surely you're picking people, especially in the Pro program, who can be worth the investment. You're putting a bit of a gamble on them, and not just a gamble of "Will they earn it back?" but "Will they stay?" after you've given them a nice year. That's a conscious decision; you're choosing that person. To what extent are you thinking in terms of balancing a diverse array of voices?

It's much more a question of what is smart business-wise. Does this person have a devoted audience? Are they writing about something that people want? Are they writing about issues that are not well-covered elsewhere? Do they have a certain voice?

In the early days—this was true as well before Pro came into it, before we had any money to spend to help writers make the leap—I was on the phone and emailing people every day from all walks of life to just encourage them to think about Substack. We consider that seeding the ecosystem and getting people to learn about and fall in love with Substack, and we want that to not just be a group that represents one ideology or represents one particular position in the world. It's not totally purist agnostic, but I would argue it's not an editorial effort.

I was involved in the second wave of blogging. After 9/11, Henry Copeland started the Blogads company and said, "Can we try to monetize this?" People were always talking about micropayments, but it wasn't quite congealing. In fact, a lot of people that you have got their starts in that era. Greenwald was a semi-early blogger. Andrew Sullivan too.

My intellectual upbringing is in that era. We are big fans of that era of blogging, which is why I love this. I think it's not much of a coincidence that a lot of the voices who were prominent in those days are now prominent on Substack.

So what is the thing that finally unlocked that model? What made it physically possible to suddenly get into almost an affinity economy, where readers and podcast listeners want to declare their affection for a voice and have a mechanism to do it?

We're a beneficiary of timing. When Greenwald was in his Salon and pre-Salon days and Yglesias was blogging in college, people weren't going to pay for content.

When Spotify came along, people were wondering, "Are people going to pay for music?" And Netflix before that. I think people getting comfortable paying for content online just became clear and obvious at a certain point, probably not long after Netflix switched from DVDs to streaming. And then people supporting creative people who they love became a proven thing largely, I think, because of Patreon. That was not something that was really happening before. You weren't paying individual writers you love and artists you love and podcasters you love. Patreon proved that people are willing to support creators they love or trust.

Then people started losing faith in media, and many smart people became turned off by the experience of social media—feeling bad after spending all their time reading a news feed or reading a stream of tweets, and longing for something better.

An old-media criticism of you is: "Is it really so great for the media industry to have a bunch of people in their silos doing their little thing here, and there's no common experience?" That this isn't good for journalism.

There are already newsrooms on Substack succeeding: The Dispatch, The Bulwark, and Persuasion. They use editors and have art departments and legal support and that kind of thing. There's no reason that newsrooms can't succeed on Substack. It's easier than ever to start a media company because of Substack. I encourage more people to think about trying it.

The other thing is: We recognize that once you're independent, you're a sole operator and you don't automatically get some of those benefits that you might have gotten before. Substack wants to provide some of the infrastructure and support structure and help make you less alone. So we've introduced programs like Substack Defender, which is a legal support program to help you get pre-publication review on touchy stories, or respond to a cease-and-desist letter from someone who's trying to intimidate you, or gain access to Getty Images or access to designers. We have a health insurance program. These are mostly in the pilot phase, but as we learn more, we scale them out to more writers. So we are getting better at making it work for more people.

I think we're going through a rebuilding phase here. Substack simplifies things. It breaks things down to the atomic relationship between reader and writer. You can call it "unbundling," and lots of people do. It doesn't mean that's its forever state. This ecosystem has been around only four years, barely that. I'm confident that there is going to be an economy that develops around platforms like Substack and that there will be rebundling that gives rise to new types of media organizations that are better than anything that came before. There's nothing in physics that says that's not possible, but there's limited imaginations that might stop people seeing that.

You've already been under some pressure about stuff that you run or people that you have. What is that pressure, where's it coming from, and what is a worry about that going forward?

The perpetrators of that pressure come from all aspects of society, all over the political spectrum. I think that's a sign of the time we live in. We're quite determined to not let that become a distraction.

We are seeing society coming apart at the seams a little bit. We are seeing tensions being high. We're seeing people cease to understand each other. I think a large part of this nervousness is because people look at Substack and think "Here's the next Facebook thing or the next Twitter thing. We know that those systems have all these problems and we're not going to let those mistakes happen again." But that take misses that Substack is actually not very much like Facebook or Twitter at all. We're the antithesis.

You still have guidelines that you presumably enforce. Have you ever taken a creator and said, "You've consistently violated our guidelines against promoting illegal activity"? What's the amount of hands-on moderation that you've done?

We do have content guidelines that protect us and protect the platform at the extremes. You can't threaten to kill people or encourage others to go out and kill people. You can't do porn either, actually. If you're looking for Substack to be the total hands-off purists, we're going to disappoint you on the porn question. We stick closely to those narrowly defined things in the content guidelines, and it's not a culture that we want to let seep beyond those.

Why no porn? Why do you hate freedom?

If Substack was a place for porn, then very quickly it could become known as just the place for porn. That's not the kind of ecosystem we're trying to build. We're trying to build something more focused on discourse than whatever porn achieves.

If you're successful enough, you're going to be hauled in front of Congress to explain why you have Alex Berenson or whomever on your site. It's going to be a constant pressure. Do you think you'll be immune to that? Do you think architecturally somehow you've protected yourself?

Those problems are going to increase and intensify as we get bigger, as more things of consequence happen on Substack. It's unavoidable. But I do think that the flavor of problems that we experience will be qualitatively different to the ones we've seen on the giant social media platforms. This is a system where the discourse and temperature are a lot calmer and lower heat. And it might take some time for people to come to that understanding. Once people get around to realizing that, it'll be clear that this is a much better architecture. It doesn't mean that we're not going to have any of those problems, but it's going to be different than social media because we consciously designed Substack to be an alternative to the attention economy.

We talked about Joe Rogan. What is the lesson of the Spotify kerfuffle? What is he teaching old-media people who are freaking out about him, new-media people who are creating their own things, Substack, etc.?

I think one really important lesson is that you should own your audience, have a direct relationship with your listeners or your readers, have them on a mailing list. That makes you indestructible.

This interview has been condensed and edited for style and clarity.