One Distinctive Writer Can Live on Subscriptions Instead of Ads
Writer Ben Thompson points to blogger Andrew Sullivan, who raised nearly $1 million a year from readers, as an example that distinct voices thrive behind paywalls.
Stratechery · End of the Internet | Stratechery by Ben ThompsonWriter Ben Thompson spent years regretting that he missed the early blogging boom of the early 2000s. A decade later, he decided he had arrived at just the right moment, in time for a better and more durable way to get paid.
The trouble, as Thompson sees it, is openness itself. When anyone can publish to everyone, he argues, everyone gets a chance, competition becomes infinite, and infinite competition is terrible for business.
His rule, written in 2015, was this: "niches are best served by making more from customers who really care than from milking pennies from everyone." Chasing a huge crowd for tiny advertising payments, he argues, is a losing game once publishing is free.
His example was Andrew Sullivan, the political blogger with what Thompson called a singular voice. While many were skeptical when Sullivan started asking readers to pay, Thompson noted Sullivan was, "for the last 2 years, supported by reader subscriptions to the tune of nearly $1 million a year."
In economic terms, Thompson said, Sullivan's writing had low elasticity of substitution. In plain terms, readers could get general news anywhere, but they could not get Sullivan anywhere else, so they were glad to pay for the original.
Thompson is open about the cost of that loyalty. "By making something scarce and worth paying for," he writes, a writer by definition limits the number of readers.
"Blogging is alive and well," he concluded. "It's just constrained and thus worth paying for."
Questions people ask
What does low elasticity of substitution mean?
It means buyers do not see a close replacement. If one pizza shop raises prices, customers go next door, but if a writer has a distinctive voice, loyal readers cannot swap in another writer and feel the same. That lack of substitutes lets the writer charge.
How many paying readers does it take to support a writer?
It depends on price. At 5 dollars a month, about 16,700 paying readers produce about 1 million dollars a year. At 10 dollars a month, about 8,300 readers do the same. About eight thousand to seventeen thousand committed fans at those prices can support one writer, though not a large newsroom.
Why do ads pay so little when the audience is huge?
Ad rates fall when the supply of pages grows faster than advertiser demand, which is what happened when anyone could publish. A mass audience is also often casual and hard to target. A small paying audience signals strong interest, which can support subscriptions and other direct payments.