Why Substack Isn't Going the Way of Facebook, Instagram, TikTok, and YouTube

A rebuttal to 'Who Owns Substack?' post by William Finnegan

I mainly write about my new company, Vusub - a time-shifted ad experience and a new way to monetize online content. Now and then what I write about intersects with other commentary, this is one of those!

William Finnegan

of The Long Memo recently wrote a post titled ‘Who Owns Substack’. It largely took umbrage at the common refrain you hear around Notes that ‘Substack isn’t owned by billionaires! Yay!’. He points out that most platforms owned by billionaires weren’t started by billionaires, so being ‘not owned by a billionaire’ is not something to necessarily cheer about.

The post then goes on to explain how, in his opinion, Substack will essentially end up being ‘owned by billionaires’ - or at least, it will undoubtedly succumb to all of the similar pressures and incentives that turned places like Instagram into ‘doom scrolling attention farms’ that make massive amounts of money for their billionaire owners.

I was really surprised to see so many comments on his original post wholeheartedly agree with him because I think there is a really strong argument against this happening on Substack.

He writes…

(Substack)… promises independence, a direct connection between writers and readers, and a refuge from the algorithm-driven chaos of social media. It has positioned itself as the anti-corporate alternative to traditional publishing, a place where writers own their audience, control their revenue, and escape the editorial interference of big media. And for now, that’s true.

But if history has taught us anything, no platform stays pure forever.

What history has actually taught us is that platforms that pursue aggressive user growth to reach audience levels that give them near monopolistic power in their space, and then monetize that audience using advertising… don’t stay pure forever.

This is not surprising. The strategy from early Facebook was to simply ‘grow at all costs’. The growth is the point. They grow first, monetize later. It’s a long-form of bait-and-switch. Most people thought Facebook was about ‘connecting with their friends’, but the long play was really about ‘monetizing your attention’.

Every other platform he talks about in the article (TikTok, Instagram, YouTube', etc.) has the exact same playbook as early Facebook - build a large audience, monetize the attention.

Substack on the other hand has purposefully built itself in a very different way. Substack isn’t pursuing large user growth at huge cost. It’s actually building a sustainable business pretty much right out of the blocks, with the aim to add revenue only when users decide they are consuming something worth paying for.

That’s not what Facebook, YouTube, or TikTok did, not even close.

He went on to list five main reason Substack will fall. Each has substantial issues…

1. The Revenue Squeeze Begins – Substack’s 10% cut might start creeping up. Maybe it’s an extra fee for premium placement in discovery. Maybe they introduce platform-wide ads, cutting writers in just enough to keep them from leaving. Slowly but surely, monetization shifts from empowering writers to extracting more value from them.

Every company at some point faces revenue pressure. No doubt Substack will as well. But the pressures that the TikToks and YouTubes face here are very different to Substack. Revenue growth on the large platforms is about squeezing ads into every place they can reasonably assume users will tolerate. If someone becomes annoyed enough to leave because of excessive ad load, that’s not a huge loss.

Substack isn’t built from a uniform user base, it has an aggregation layer - writers aggregate audiences. If a writer leaves the platform and they have a large audience, it’s a big deal. That’s a lot of lost subscription revenue for Substack. Hence, there is a strong built in incentive to ensure writers are happy. Substack can’t ‘squeeze’ revenue from its writers the way TikTok can from users.

2. The Algorithm Arrives—Right now, Substack’s power lies in its simplicity: Writers succeed based on their ability to attract and retain subscribers. But that’s not how big platforms make real money. The next phase will introduce subtle algorithmic “optimizations”—perhaps to help readers discover new writers, but really to prioritize content that drives engagement, clicks, and growth.

So this second one just makes no sense to me. It’s sort of a collection of ‘bad things’ with no real logic. First, Substack already as an algorithm that fuels recommendations on the platform. Notes is also algorithmically based. These algorithms are there for discovery and they work well (many new writers to Substack talk about how these discovery algorithms help drive audience growth).

Second, the nefarious sounding phrase ‘…prioritize content that drives engagement, clicks, and growth’ is nonsensical. Substack doesn’t have ads in any of its feeds so the concept of a ‘click’ is worthless. Substack makes zero revenue from people discovering things unless that person subscribes to something they find. Driving a whole lot of views/clicks/reads without focusing on what’s going to convert subscriptions is just wasted effort. Substack’s founders have literally said this.

At a high level, Substack is a response to the ‘attention economy’… click-bait and online advertising gives rise to behaviors and content that drive people apart… (Substack) creates a trust relationship between the reader and writer that’s not mediated by any other party.

The additional salient point here is that Substack was literally built as an answer to the misaligned incentives in these other platforms.

3. Content Moderation Wars Begin – As Substack grows, so will the controversies. Which writers are allowed on the platform? Which ones are considered too dangerous, too controversial, too problematic? Right now, Substack prides itself on free expression, but that won’t last forever. Governments will pressure it. Advocacy groups will demand action. Payment processors may threaten to cut ties. At some point, Substack will have to choose between being a neutral platform and maintaining its business. It will pick business.

To a large extent this has already happened and Substack has had to navigate the tight-rope of content moderation and allowing open expression. This is a thorny issue, but all platforms have to navigate it. I don’t see how Substack is any different to any other platforms here and its solutions/answers won’t be either.

4. Big Media Moves In – The biggest threat to Substack’s indie ethos isn’t government regulation—it’s traditional media. Right now, it’s a refuge for independent writers, but as the platform grows, corporate media will take notice. Some will try to replicate it. Others will push for deeper integration. A few will demand that Substack prioritize their brands over solo writers. Over time, what was once a writer-first ecosystem will start looking a lot like the media landscape it was supposed to disrupt.

I work a lot with ‘corporate media/brands/Marketers’ and I have never once heard someone ask ‘What’s our Substack strategy?’. As a corporate brand you can’t advertise on Substack. You can’t access the Substack audience’s personal data. You can’t create any type of ‘brand presence’ with the exception of starting your own Substack! Even in the bizarro world where Substack allows brands to have Substacks, who’s going to read long-form content about Tide?

As Substack grows it will receive zero pressure from brands for integration or improved presence. There will always be larger platforms with much wider reach that will attract corporate attention.

5. The Next Big Competitor Emerges – Every dominant platform creates the conditions for its own downfall. When Substack inevitably drifts toward a more centralized, monetized, and controlled version of itself, a new competitor will rise—perhaps a decentralized publishing network, perhaps an alternative built on blockchain technology, perhaps something we haven’t imagined yet. It will market itself exactly as Substack once did: as the indie alternative to the now-bloated media empire. And the cycle will begin again.

Substack was literally built in the wake of large, centralized, ad-based systems with misaligned incentives. It’s not some continuation of this theme, it’s a fork to create a new system that avoids these pitfalls.

We actually need more ‘Substacks’ - companies that seek to serve an audience and align their growth and wellbeing with that audience.

As writers on Substack we have a lot of power. We need to use that power to ensure it continues to grow in a direction that benefits us, our readers, and Substack. We need to try and recapture that original promise of the Internet - a distributed network of content where the spoils accrue to everyone, not just a few.

P.S.:

I would actually recommend The Long Memo. Despite me not agreeing with this post, there is some really good writing there!