Substack launches initiatives to attract creators with financial security

Substack is positioning itself as a champion for creators, offering initiatives designed to empower them in a landscape increasingly dominated by major platforms. Hamish McKenzie, co-founder and chief writing officer of Substack, said the company’s ambition was to cultivate a new economic model for creators.

“We’re trying to build a new economic engine culture,” McKenzie stated in a conversation with Digiday. He emphasised that creators should be able to grow their audience while using the platform without risking their earnings or livelihoods to larger entities that have established a significant influence over cultural production.

Central to Substack’s strategy is the introduction of the Creator Accelerator Fund, announced in January. This fund is designed to ease the transition for creators who wish to migrate their paid subscription audiences from other platforms to Substack. McKenzie characterised the initiative as involving “$20 million in guarantees” that would ensure that creators do not suffer financial losses when they switch platforms.

The structure of the fund differs from earlier creator initiatives that typically awarded bonuses based on content performance. Instead, Substack’s fund operates as a form of income assurance. For example, if a creator moving over to Substack has earned $50,000 on another platform, the fund guarantees that they will not earn less than this amount during their transition, providing a financial safety net. However, specifics regarding how creators can validate their previous earnings before participating remain unclear.

The initial group of participants in the Creator Accelerator Fund includes notable figures such as podcasters Sean Ross and Evan Ross Katz, YouTuber Nathaniel Drew, illustrator Lisa Hanawalt, and content creator Sennett Devermont, also known as Mr. Checkpoint. While it has been confirmed that these creators have transitioned from Patreon to Substack, the exact allocations from the $20 million are not publicly delineated.

A key concern addressed by McKenzie is the inherent instability in subscription models, where even devoted fans may churn due to minor inconveniences, such as payment difficulties. “It doesn’t matter how devoted and intensely committed your audience is, there’s always going to be one or two people who drop off because they lost their credit card,” he said.

Adding to their support for creators, Substack recently initiated a TikTok Liberation Prize — a $25,000 award for creators producing content aimed at encouraging others to join the platform. This was strategically announced in anticipation of TikTok’s potential ban in the US, thus offering creators an alternative way to retain control over their monetisation.

Source: Noah Wire Services