Rafael Henrique | SOPA Images | AP
After posting almost 200 videos, amassing a whole bunch of hundreds of followers and racking up thousands and thousands of views, Carla Lalli Music is quitting YouTube. Substack is her latest focus.
Music is a cookbook creator and food content creator, and she or he is shifting her focus to Substack, a subscription platform that lets creators charge users subscriptions for access to their content. Music told CNBC she got here to that call after earning more in a single yr of using Substack, nearly $200,000 in revenue, than she did by posting videos on YouTube since 2021.
Music is the precise type of content creator that Substack is attempting to lure to its platform as TikTok’s future within the U.S. stays in limbo.
San Francisco-based Substack launched in 2017 as a tool for newsletter writers to charge readers a monthly fee to read their content. The platform allows creators to hook up with their followers directly without having to navigate algorithmic models that control when their content is shown, as is the case on TikTok, Google’s YouTube and other social platforms. Substack has raised about $100 million, most recently at a post-money valuation of greater than $650 million, the corporate told CNBC.
This yr, Substack has broadened its focus beyond newsletters, and on Thursday, it announced that creators can now post video content directly through the Substack app and monetize these videos.
“There’s going to be a world of people who find themselves rather more focused on videos,” Substack Co-founder Hamish McKenzie told CNBC. “That may be a huge world that Substack is simply beginning to penetrate.”
Substack began this push after the social media landscape was thrown into flux consequently of the effective ban of TikTok in January that caused the favored Chinese-owned service to go offline for just a few hours. TikTok was also faraway from Apple and Google’s app stores for nearly a month.
The disruption to TikTok in January happened consequently of a law signed by former President Joe Biden to force a sale of the Chinese-owned app or have it effectively banned within the U.S. On his first day in office, President Donald Trump signed an executive order extending TikTok’s ability to operate within the U.S., but that order expires on April 5.
Days after TikTok went offline, Substack launched a $20 million fund to court creators to its platform.
“If TikTok gets banned for political reasons, there’s nothing to do with the work you’ve got done, but it surely really affects your life,” McKenzie said. “The one and surefire guard against that’s in the event you don’t place your audience within the hands of another volatile system who doesn’t care about what happens to your livelihood.”
Moving beyond newsletters
McKenzie says that they’re going after creators on competing social media platforms to start out sharing their video content on Substack.
“Video-first creators, people who find themselves mobile oriented, there’s a complete lot of latest possibility waiting to be unlocked once they meet this model in the best place,” McKenzie said.
Already, Substack has greater than 4 million paid subscriptions with over 50,000 creators who make cash on the platform, the corporate said. Substack says that 82% of its top 250 revenue-generating creators have already integrated audio or video into their content, reflecting a growing emphasis on multimedia content.
Prior to the video announcements, Substack allowed creators to post videos on the app to Notes, which is the platform’s front-facing feed format. However the feature didn’t allow creators to publish video content behind Substack’s paywalls.
The update enables creators to place video content behind a paywall and it provides data on estimated revenue impact. It also allows them to trace viewership and latest subscribers.
Carla Lalli Music is a cookbook author and food creator.
Carla Lalli Music
The push by Substack into video is a welcomed development for creators like Music, who was losing money from making videos for YouTube.
Music said each video costs her $3,500 to supply despite filming at home. If she published 4 videos a month on YouTube, she’d earn about $4,000 in revenue. Music was losing about $10,000 a month, she said.
“It’s really depressing to operate at a loss,” said Music.
Even with brand deals, which is an agreement where brands pay creators to post content that promotes their products, the earnings were barely enough to recoup the prices of posting on YouTube, Music said.
Greater than half of the $290 billion creator economy comes from direct-to-fan value. That features ticket sales, courses, livestreams and paid memberships, based on a survey conducted by Patreon, a Substack competitor.
Together with her shift to Substack, Music said she’s now focused on writing one other book, posting recipes behind the platform’s paywall and sprinkling in occasional videos.
“I even have rather a lot more to profit from focused attention on a smaller group of individuals than I ever did on throwing stuff and seeing what was going to stick to billions of potential audience members,” Music said. “It’s more sustainable.”
WATCH: Our base case for TikTok is that it gets banned within the U.S.: Lead Edge Capital’s Mitchell Green
