Substack Is Going Local

Substack, the newsletter platform, has become an object of obsession for journalists in recent months. The siren call of independence, minimal editing and, in some cases, bloated advance deals has lured name-brand journalists away from legacy publications including The New York Times. It’s also attracted a cohort of divisive writers: Recently, Substack saw an exodus of writers upset that the platform was funding transphobic voices through its Substack Pro program. Through it all, Substack has become synonymous with the latest wave in indie journalism: It’s both a comeback for the email newsletter and the form du jour for internet bloggers. But, for its next act, Substack is going local. The company announced Thursday that it will give $1 million in grants to local journalists. “We are strong believers in the importance of local news as a bedrock for healthy communities and societies and are deeply concerned by the industry’s ongoing collapse,” the company wrote in a blog post. The program, dubbed Substack Local, is open to local journalists in the United States and around the world, though non-U.S. participants would not have access to the legal protections Substack offers to U.S.-based writers. Substack is funding about 30 journalists with cash advances of up to $100,000 for their first year in the program. During that initial year, as with the Substack Pro grants that fund journalists like Matt Yglesias and Freddie deBoer, Substack will take 85% of the writers' subscription revenue and, after that, will revert to a 10% cut. Substack said it is “optimistic” about how the Substack model could apply to local news and pointed to a few examples of local journalism outfits already on the platform: The Mill in Manchester, England; The Rover in Montreal; The Charlotte Ledger in Charlotte, N.C.; and City Hall Watcher in Toronto. The recipients will also receive health benefits and advice from “mentors.” The Charlotte Ledger, which journalist Tony Mecia launched in March 2020, has seen modest success in its first year, accruing 7,900 total subscribers and 1,200 paying subscribers. Through its $9 subscriptions and a fledgling advertising program, the Ledger generates around $10,000 per month, enough to support Mecia and one other full-time employee. The Substack Local program offers a solution to one of the primary challenges facing local news entrepreneurs: seed money. “With local journalism and local journalists, you have to build something up from nothing with no revenue for a period of months,” Mecia told Adweek. “The Substack advances solve the runway problem.” The newsletter-centric local news model is growing While neighborhood blogging is no cutting-edge innovation, Substack’s entrée into the field comes as part of a larger trend. City Cast, launched by the Slate alumnus David Plotz at the beginning of the year, has brought newsletter-based local journalism to Chicago and Denver with plans for further expansion. Axios Local has distilled the Axios brand into city-sized outlets, using newsletters to cover local stories in five midsize U.S. metro areas. And 6AM City, whose recent expansion was first covered by Adweek, now brings soft news and cultural coverage to newsletter subscribers in nine markets. Other initiatives, such as the Tiny News Collective, resemble Substack Local in spirit, if not wholly in practice, as they use newsletters as part of a larger suite of tools for communicating local news to readers. These efforts all share a common business structure: a series of small, city-based teams whose primary means of reaching readers is through newsletters. The model allows for low overhead, both in terms of software costs and headcount, while taking full advantage of the desirability of newsletter readers as an audience. Dan Oshinsky, who runs the email consultancy Inbox Collective, said he’s thrilled that Substack is making a public commitment to local news. “Between this, Tiny News Collective and investments that Facebook and Google have made in local news in the past few years, there's some real momentum for new local news startups, especially those with newsletters at the center of their strategy,” Oshinsky said. “There's a lot more that needs to be done to support these local outlets—particularly giving them the right tools to drive long-term growth—but this is a great start. Joseph Lichterman, communication and editorial director at the nonprofit Lenfest Institute, said that Substack’s investment in local news is “unquestionably a good thing,” but he has some reservations. “I worry about whether the Substack Pro model—which has primarily focused on supporting writers with large national or international audiences and solely relies on subscriptions—will scale to the local level, which inherently has a smaller addressable market, and where we’ve seen publications succeed with diversified revenue streams based, yes, on reader revenue, but also through philanthropy, advertising, and more," Lichterman said. Kerel Cooper, CMO of the email marketing platform LiveIntent, said the email newsletter is the “perfect container” for local news. “It’s direct from a publisher so it’s trustworthy (as opposed to being buried in news feeds in walled gardens), it’s in a format that’s easy to use (as opposed to apps) and it works across devices," Cooper said. "Substack will find that hyperlocal news and email were built for each other.” Cooper, whose company serves ads in newsletters, thinks there’s room for ad-supported local newsletters, too and worries about “subscription fatigue.” “I pay for three newsletters specifically about my industry, a few newsletters to cheer me up about parenting and a few newsletters to depress me about my beloved Mets,” he said. “How many subscriptions can the average consumer really support?”

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Newsletter Platform Substack Goes Local

The company will give $1 million to local newsletter writers

Scott Nover

Mark Stenberg

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Scott Nover

Mark Stenberg