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How TikTok's For You feed made audience monetization harder

Patreon CEO Jack Conte does a good job here of discussing the pros and cons of the internet shifting from a "follower" dynamic — where we intentionally subscribe to the creators whose work we want to see more of — to a "For You feed" dynamic, where a platform just tries to predict your interests and serves you content from creators you don't follow.

On the one hand, the "For You" feed is great at elevating the work of smaller creators. That's why so many of them flocked to TikTok, where it was much easier to achieve breakout success compared to what they experienced on platforms like YouTube. Without that overnight success, a lot of those creators would have given up before they found an audience.

At the same time, creators are finding it increasingly difficult to forge a direct connection with their audiences. The For You feed giveth and it taketh away — hence why so many creators are launching podcasts and newsletters; these serve as vehicles for migrating audiences off of platforms with capricious algorithms and onto decentralized networks where the word "subscribe" still actually means something. As Conte argues, the most successful creators will be those who are able to consistently funnel new fans from their “For You” feeds (TikTok, Instagram Reels, Threads) to their “follower” feeds (Substack, Patreon, YouTube).

Beehiiv wants to steal Substack’s thunder

Beehiiv, the publishing platform that’s sometimes cited as a Substack competitor, is rolling out a “Media Collective” that provides special benefits to a small cohort of prominent creators:

Beehiiv’s Media Collective — which Beehiiv says will support somewhere between 20 and 40 journalists for up to two years each — provides monthly health insurance stipends; some legal support; access to Perplexity Pro, Getty Images, and accounting software Doola; and additional technical and business support. Beehiiv’s monthly hosting charges (starting at $39/month for a publication with 1,000 subscribers) are also waived for collective members.

This definitely reminds me of Substack Pro.

For those who don't remember, Substack Pro was a special program where Substack would extend a cash advance to prominent writers to get them to join the platform. The deal was usually structured so that Substack would receive 90% of all subscription revenue for the first year, and then it would revert back to the typical 90/10 revenue split once the contract ended. The whole idea was that Substack would absorb all the risk for the writer, which would theoretically make it easier for them to quit their job and throw themselves into Substack full-time.

Substack eventually ended the program, but I think it was a net positive for the company because it generated a lot of earned media that branded Substack as the place to go if you want to launch an independent media outlet.

So why did Subtack put an end Substack Pro? Well, it just didn't make good long-term economic sense. Many of the writers just took the free paycheck and then phoned it in for the entire length of their contract. Of those who did succeed, many of them ended up leaving Substack after the contract ended so they wouldn't have to continue sharing 10% of their revenue.

That's why Substack eventually pivoted its focus to building out social network features that would help creators grow their audiences. It's a lot easier to justify Substack's 10% cut when you look at your dashboard and see a significant portion of your subscribers are coming in via its network.

So why is Beehiiv also offering perks to a small cohort of journalists? My guess is it also wants the imprimatur of having prominent creators on its platform. That helps signal to outside creators that Beehiiv is great place to set up shop and build a business.

Why WashPo’s traffic plummeted

It’s probably not a good sign when a company that specializes in political news sees a decline in both traffic AND revenue during a presidential election year:

Subscription and ad-revenue shortfalls are taking a toll on the [Washington Post’s] business, which lost around $100 million last year, and leaders are struggling to convince staff that they have a clear editorial vision and continuing commitment to hard-hitting journalism … The Post had 54 million digital visitors in November 2024, according to media-measurement firm Comscore, down from 114 million in November 2020.

That’s an incredibly steep drop in traffic, but my bet is it had more to do with the macro media environment than the company's own actions.

In the last four years, the largest tech platforms have drastically reined in outbound traffic, especially to political content. My guess is that Twitter was a huge traffic driver to WashPo back in 2020, and not only has that platform lost tens of millions of users since Musk's takeover, but Musk openly admitted that he’d tweaked the algorithm to discourage outbound linking. On top of that, Meta announced it was throttling political content in the runup to the 2024 election.

What's more, I just think Americans are burnt out on political news. After Trump's win in 2016, liberals were fired up and became highly engaged news consumers, even during non-election years. The 2020 lockdown also increased everyone's media consumption time, since there was very little to do outside the house. All those advantages are now gone.

And this all brings me back to the point I made last week: if the Washington Post wants to return to growth mode, it needs to diversify beyond political content. The Trump Bump isn't going to rematerialize, and meanwhile the political news and commentary space is more crowded than ever.

Publishers can’t catch a break

It’s been a shocking few weeks for publishers that monetize with affiliate revenue. First we learned that a PayPal-owned browser extension called Honey was swapping out their affiliate links with its own. Then it turned out that a Capital One-owned browser extension was doing pretty much the exact same thing:

In a class-action lawsuit filed on Monday in a Virginia court, two creators who promote products on social media allege the browser extension is designed to "systematically appropriate commissions that belong to influencers." The lawsuit alleges Capital One Shopping "stole credit" by swapping out influencers' affiliate-marketing browser cookies with its own.

It’s pretty incredible that the publishing industry has spent the last decade limping from one financial crisis to the next and it turns out that PayPal and Capital One were just fucking stealing those publishers’ affiliate revenue FOR YEARS without their knowledge.

If I were running an affiliate-dependent media business, I would be absolutely furious. For the better part of 25 years, publishers have been judged — perhaps unfairly — by how much direct revenue they can generate for advertisers, which put them at a huge disadvantage given how terrible display ads are at driving real clicks. But then they adopted an affiliate model that actually does drive direct revenue, and here it turns out that some slimy banks were simply sliding in at the last possible moment to remove the crucial last-click attribution that would allow publishers to financially benefit from their content.

Was it illegal? Who knows! But anyone who understands how affiliate revenue works has to agree that what Capital One and PayPal were doing was incredibly unethical, especially since they were directly targeting an industry that’s been hemorrhaging jobs spanning back to the Great Recession.

Want to pick my brain on your content strategy?

At this point I’ve probably interviewed over 1,000 media entrepreneurs about how they built their businesses.

I also spent over a decade consulting with organizations ranging from small nonprofits to Fortune 100 companies on their content strategies.

For this reason I get a fair number of people who reach out to me to see if I offer consulting calls so they can ask me questions related to their own content strategies.

Currently, there are three options for booking consulting calls with me:

1. Become a paid subscriber to my newsletter: When you subscribe, you automatically receive an email with a Calendly link that allows you to book a half-hour introductory call with me. Many of my subscribers use these calls to ask me questions related to their own businesses. Use this link and get 20% off for your first year:

Get 20% off for 1 year

1. Book an hour-long consulting call: Substack has a cool tool that allows you to directly book a call with me. Paid subscribers automatically get a $50 discount for these calls: [Book a call here]

2. Book a series of calls: Sometimes people want to book multiple calls with me. I can offer a significant discount for three or more calls. I also sometimes take on more bespoke consulting engagements. Reach out to me for details.

When brand deals overtake YouTube Adsense revenue

This is a really cool breakdown of how a finance YouTuber with 500,000 subscribers makes money. It’s super transparent and includes several charts to make it easier to understand all the revenue streams.

One thing that always strikes me in these types of videos is the extent to which brand deals dwarf YouTube’s ad revenue share. YouTube recently revealed that it’s sharing upwards of $23 billion with creators each year, so that means the collective take home pay across all of YouTube must be massive — at least $50 billion per year once you incorporate in brand deals and other revenue streams.

Now, my guess is that you have to reach a certain subscriber threshold before your brand deal money overtakes your YouTube Adsense money, but once you do start attracting those custom sponsorships, then the CPMs must be much higher than what YouTube charges in programmatic. From what I’ve heard, the average RPM for Adsense is $4 — meaning YouTubers generate roughly $4,000 for every million views — and I wouldn’t be surprised if those same Youtubers are selling brand deals at a minimum $25 RPM, or $25,000 per million views.

After I posted about this on LinkedIn, Taylor Bell, the YouTuber featured in the video, piped in with this insight:

Thanks so much, Simon! Cool insights on brand deals vs. ad revenue, you nailed it. If I remember correctly, my brand deal rev overtook my adsense when I had about ~80,000 subscribers

The biggest threat facing legacy media companies

Jen Rubin, a star columnist who built a huge following at the Washington Post, recently left to launch her own independent publication on Substack:

The Contrarian joins a growing group of publications – like The Bulwark and Zeteo, to name two – that are built on the Substack newsletter platform. Starting Monday, it will publish some content for free but will charge $7 a month for complete access to columns, podcasts, and videos.

This continues to be the biggest threat facing legacy media outlets: that they spend years building up the personal brands of their star journalists, only for those journalists to break off and drive their audiences onto their own independent media platforms.

And it seems clear that Substack is the biggest beneficiary of this dynamic. The platform has created clear network effects that help creators grow their audiences. I'm sure it wasn't lost on Rubin that there are already huge publications on Substack that align with her own writing— The Bulwark, Zeteo, Meidas Touch — and it'll be much easier to cross-pollinate audiences with those publications if they share the same network.

Should media outlets help journalists grow their personal brands?

Speaking of the Washington Post, it announced last week that it’s launching a “Star Talent Unit” within its communications team that’s focused on building up the personal brands of the company’s star reporters.

This rubbed gaming journalist Riley MacLeod the wrong way. In a piece titled “The Myth Of The Star Reporter,” he argued that this type of strategy devalues the work of less prominent reporters who weren’t lucky enough to be assigned to the most popular beats:

Just as much as “star” reporters can elevate an outlet, they can wreak havoc inside it too. Resentments flourish; even in the most well-managed scenarios, it’s natural to be jealous of someone who you think gets more freedom and attention than you do. People can behave badly, leading to mercurial “stars” and mistreated or bitter colleagues. A “star” can, intentionally or not, claim a beat or style of work and crowd others out of it. Colleagues can feel like they have to, or be made to, pick up the slack while someone does long-term work without ever getting their own shot at it. A site can go from being a team of journalists to feeling like a “star” or two and their support staff.

I have a slightly less cynical take on this. My guess is that the Washington Post is simply recognizing that personal brands are more powerful than journalistic brands, especially in an era when audiences are increasingly coming in through side doors and then bouncing off the website immediately after consuming its content. By promoting individual personalities, WashPo is helping consumers differentiate its work from all its competitors, which theoretically makes it easier to monetize those consumers.

Of course there's always the inherent risk in this strategy that you can put all this time and effort into building a journalist's brand only for them to leave once they've reached their maximum potential (see the Jen Rubin news above). That's why it's not enough to simply promote the personal brands of your reporters; you have to create incentives for them to stay. Imagine a scenario where WashPo carved out a specific portion of its annual revenue and then redistributed it at the end of each year with the entire newsroom. Suddenly, your journalists would become a lot more motivated to see the outlet succeed, and they'd be much less likely to decamp to competing outlets.

ICYMI: How a blog about the VC industry generated over $1 million from online courses

I’m looking for more media entrepreneurs to feature on my newsletter and podcast

One of the things I really pride myself on is that I don’t just focus this newsletter on covering the handful of mainstream media companies that every other industry outlet features. Instead, I go the extra mile to find and interview media entrepreneurs who have been quietly killing it behind the scenes. In most cases, the operators I feature have completely bootstrapped their outlets.

In that vein, I’m looking for even more entrepreneurs to feature. Specifically, I’m looking for people succeeding in these areas:

• Niche news sites

• Video channels like YouTube, TikTok, and Instagram Reels

• Podcasts

• Newsletters

• Affiliate/ecommerce

Interested in speaking to me? You can find my contact info over here. (please don’t simply hit reply to this newsletter because that’ll go to a different email address.)

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