Content bundles like a "Substack Prime" face a fundamental economic flaw. The most popular writers, essential for the bundle's appeal, earn more by staying independent. This leaves the bundle filled with less popular creators, an example of adverse selection that prevents it from achieving critical mass.
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Despite private equity interest in 're-bundling' newsletters, top-tier A-list creators have no financial or operational incentive to join a collective because they can succeed independently. Therefore, any such bundle will likely be comprised of second-tier writers, limiting its market power.
A16Z invested in Substack believing that providing writers with a monetization tool would unlock a new supply of high-quality content. This new supply would, in turn, create its own demand, rather than competing in the existing market for free content.
Platforms like YouTube intentionally design their algorithms to foster a wide base of mid-tier creators rather than a few dominant mega-stars. This is a strategic defense mechanism to reduce the leverage of any single creator. By preventing individuals from overshadowing the platform, YouTube mitigates the risk of widespread advertiser boycotts stemming from a controversy with one top personality, as seen in past 'Adpocalypses'.
Substack's founder argues that online spaces become "heaven or hell" based on their core business model. Ad-based models optimize for attention (often leading to outrage), while Substack's revenue-share model forces its algorithm to optimize for the value creators provide to their audience.
The creator economy's foundation is unstable because platforms don't pay sustainable wages, forcing creators into brand-deal dependency. This system is vulnerable to advertisers adopting stricter metrics and the rise of cheap AI content, which will squeeze creator earnings and threaten the viability of the creator "middle class."
To attract top freelance talent, Escape Collective is testing a model that can pay more than Substack. They offer writers a base rate plus a share of the subscription revenue directly generated from their articles, aligning incentives and rewarding high-performing content.
People claimed they would never pay for online content in the abstract. But when founder Chris Best asked if they'd pay for their *single favorite* writer, the answer was yes. This specificity proved the model's viability, showing people pay for trusted relationships, not generic content.
While lucrative for top performers, being a content creator is fundamentally unscalable. The business is entirely dependent on the individual's daily effort and presence. If the creator stops producing content, the revenue stream disappears, creating a high-pressure 'prison' for the individual.
Substack writer Emily Sundberg argues that platforms like Patreon are mistaken to poach established creators from rivals. A better growth strategy is to find underpaid, high-value talent within legacy media and provide them the support to launch their own ventures.
In the creator economy, success isn't always defined by venture-backed growth. Many top creators intentionally cap their audience size and reject outside investment to maintain full control over their business and content, defining success as a sustainable, manageable enterprise rather than a unicorn.