Incumbents & Paid Newsletters
5 featured resources + deep dive: implications of large companies entering the paid newsletter market
First off, thank you for the immense support on our launch! The Passion Economy Stack garnered 389 upvotes, 47 comments, 8 5-star reviews, #2 on Product Hunt. Our launch tweet got 263 likes & 48 retweets + many great testimonials! Read more about our lessons here.
In service to the community, we'll continue updating the stack, featuring top resources, and sharing deep dives on topics.
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Timely Announcement: Creator Economy Courses!
Our friends are creating courses on the Creator Economy. Registration deadlines are fast approaching and we wanted to make sure you had a chance to catch them!
Li Jin’s Creator Economy Course - A 3-week-long intimate workshop-style course with the person who coined the term “Passion Economy”! Perfect for investors, founders or builders. Hurry! Deadline: 2/15.
Ryan Gum & Peter Yang’s Course on how top creator companies scale - perfect for operators in fast-growing creator-focused companies
Featured
A few top picks on new resources added to the Passion Economy Stack
Substack's Catch-22 - Angie Wang poses existential questions on which audience Substack should go after.
Twitter Will Take Flight in the Creator Economy - Peter talks about how Twitter will be a full-stack platform that can win in the creator economy.
App rush: Talent over Trash - Axios scores popularity among social media platform and talks about how social media giants lean into the creator economy
Facebook is Planning Newsletter Tools - Facebook is working on newsletter tools for journalists and writers, according to three people familiar with the company’s plans
Creators Are Hiring - Ben shares that as creators grow, they need to find, hire and manage workers to scale themselves.
... and more! Check out the stack.
Deep Dive: Facebook and Twitter Launching Paid Newsletters Products
This past month, Twitter (publicly) and Facebook (privately) announced moves into the paid newsletter space, a detour from their lucrative advertising business models.
It's not like the advertising model is losing steam: after all, Q4 2020 was the best quarter for advertising yet, with Pinterest revenue up 76%, YouTube revenue up 46% and Snap revenue up 62% YoY.
Is this a key moment where incumbents address the increased consumer appetite for authentic, quality content that accelerated the rise of Substack? Is this a hedge to avoid the Innovator's Dilemma by disrupting themselves? Is this a way to reduce political scrutiny by spotlighting how they help creators?
It's hard to say exactly why they are doing this and whether it will work. After all, Youtube has been trying to push paid subscriptions for over two years and they haven't been very successful outside of music.
So what
We'll see more large social media platforms offer paid subscription options for their top creators, in a move towards creators owning their audience.
For creators
More creators can rely on sustainable income, whatever platform they’re in. The change will make it easier to keep their audience in a single place, as paid subscriptions can happen directly on the platforms where they make their most engaging content.
For builders in the Passion Economy
Bad news is it's more difficult to launch a new platform. But, this is potentially good news for products that don't compete directly, and instead help creators grow on existing platforms.
For example, both StreamLabs (acquired by Logitech for $89 million in 2019) and StreamElements (with estimated creator revenue exceeding $40M in 2019) have built successful businesses on top of Twitch, which already has paid subscriptions built in.
Twitch openly encourages tool creation through their APIs as they benefit from this open marketplace that supports their creators.
While this method involves platform risk, it has upsides as these platforms aggregate existing demand and could be an exit strategy through acquisition.
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