We show you the money!
A quarterly update on our experiment in the 'sletter economy
It’s been three months since we started this thing — a full quarter running a publication without any bosses.
Starting next week, we’re putting some stuff behind the paywall for the first time.
If you can’t afford a subscription but want to be able to read paid content, reply to this email. Our founding members are entitled to 10 paid subscriptions, and many opted to donate their extra subscriptions to those who can’t afford it. No need to show us your tax returns to prove you can’t afford it. Just ask.
And if any local newsletters are going to survive on this platform, we all need to understand the economics. So we’re sharing our numbers, so you, our readers, can understand where we are and where we need to be, and so other local journalists (we hear from a lot of you!) can gauge whether going independent would work.
But first, a quick word from our subscribers:
OK, so we have some fans. But are we making any money?
Most major success stories on Substack are national writers with big name recognition. We aren’t that. We will never have the scale they have, though we probably don’t need it. But we could — just maybe — make enough money to keep doing this.
We never know how many of you know who we are or what we’re doing, so as a refresher, this newsletter is run by two Arizona journalists, Rachel Leingang and Hank Stephenson. Sometimes, you’ll see us refer to ourselves in the newsletter, usually if Rachel is making fun of Hank.
As a reminder, Substack awarded us a $100,000 “advance” (a misnomer because we don’t have to pay any of it back) after winning its Substack Local program. Despite weird internet trolls’ misunderstandings, our sole funder is Substack — and all of you who have decided to pay for a subscription. That’s it. It’s really that simple. There are zero billionaires backing us. The most we’ve received from any single person or entity (aside from Substack, of course) is a few hundred dollars.
Without that advance, we wouldn’t have been able to quit our jobs because we wouldn’t have been able to pay our bills. Substack Local also provides tons of support, like a part-time editor, access to legal help, business mentorship, design services and other bells and whistles that make our lives easier and our product better. We hope they do another round of local funding — there are a lot of communities and journalists who could use it.
As of today, we have 2,589 total subscribers, nearly 600 of whom have chosen to pay.
(Our 34 “founding members” who paid $250 annually to support our work also receive comped subscriptions for their friends or colleagues as part of their higher subscription tier, as shown in the purple line.)
While we have no idea if this is “good” and have little to compare it to, we’re about one-third of the way to where we want to be by next August.
Until now, the only incentive to pay was liking us. No content was behind a paywall. We probably would’ve waited longer to paywall anything, but our contract required some paywalled content within 90 days.
But more than 20% of you decided to pay anyway. That’s a really impressive percentage — Substack says writers can usually expect about 5-10% of their total signups to pay.
Most of our emails are opened by 40-50% of our email list on a given day (a decent open rate, by Substack’s standards), but most of our stories these days get more views than the total number of subscribers we have.
Because we received an advance from Substack, the majority of the subscription money goes to Substack for the first year. They get 85% of it, we get the rest, minus fees from the payment processor. Next year, should we still be around, we get 90% (again, subtracting Stripe fees), Substack gets 10%, which is its standard cut from all paid newsletters.
So far, the paid subscriptions amount to around $50,000 in gross annualized revenue. We’ve gotten a few thousand from subscription payments, most of which we’ve used for expenses like supplies, records, meetings, etc.
That’s better than the salary of an early-career journalist in Phoenix. We are confident this newsletter will be able to sustain at least one of us via subscription revenue, and we’re hoping we don’t have to thumb wrestle to decide who stays on next August.
We haven’t published any stories we weren’t proud of, and that in itself is a feat. We have no news holes to plug, no upper management with goofy ideas to answer to. That’s probably the biggest perk of independence.
Our most-read stories won’t surprise you: the breaking news about the audit results and the longform story about reformed election conspiracist Staci Burk. These captured a national audience that our state-level reporting often doesn’t.
But one viral story doesn’t make or break a publication. In fact, the spikes in new traffic those stories brought in didn’t produce a huge spike of subscribers.
Instead, what seems to work is consistently asking people to pay for their subscription in our morning emails, and steady reporting detailing how government works (and doesn’t).
The stories you seem most interested in are ones that others aren’t already reporting. If we have a deeper, more thorough story on something others are writing about, that doesn’t seem to pull in as many readers.
You also seem to like hearing from people other than us. We’ve turned the newsletter over to Billy Robb, Beth Lewallen and Julia Shumway, and did a Q&A with Dave Biscobing. The numbers on those showed you were interested. We’ll keep doing that, when we find it useful and appropriate.
We’ve also been written about in the Arizona Republic, Arizona Capitol Times, 12News, Arizona Horizon, MuckRack, Phoenix Magazine and more. Local coverage of our newsletter has provided a solid boost in signups.
And Twitter seems to work as the most consistent boost to our stories. We do not like tweeting whatsoever, so this is an unfortunate fact we have to live with.
We might discontinue our Friday Q&As answering questions about Arizona government since they don’t seem to grab the same traffic. And we’re trying to stay focused only writing when we have something interesting to say. We don’t want you getting sick of us in your inbox.
The work is really a collaboration. We write the morning emails together (Hank often does the top, Rachel usually does the Other News). For our original reporting in the afternoons, we tend to switch off as needed — sometimes, Rachel takes the lead and Hank assists, sometimes the other way around.
We both aggressively edit each other, and we have a part-time contract editor who helps with edits as well. (Unfortunately, there’s no fixing typos in a sent email.) We shape all the content and big ideas together.
Frequently asked questions
We get a lot of questions about this new project. These are the most common ones.
Is this a lot of work for two people? Yep. We are trying to teach ourselves that every story doesn’t need to be an epic. We now hope to have 1-2 reported stories in the afternoons per week, which seems manageable, plus our Daily Agenda each morning Monday through Thursday. Sometimes, it’ll be one afternoon email, because some stories just take longer. Sometimes it’ll be none because we need time to work ahead.
Which one of you is the boss? Both, and therefore neither. We own and manage the publication 50-50. But, really, Rachel1 is the boss.
Why is nothing bylined? Nearly everything we write is the fruit of both of our labor (and anyone else who assisted). The newsletter has its own voice that isn’t just one of ours.
Who handles the business side of things? Also us! The business side has been the biggest learning curve. And no one explained that self-employment taxes are really high.
Do you guys get sick of each other? Basically daily.
Can we work for you? Maybe someday! Probably not anytime soon.
Our most prolific commenter on our stories is none other than former Arizona Superintendent of Public Instruction John Huppenthal, who caught criticism for posting offensive comments under pseudonyms online when he was in office. The poetry of this is not lost on us. But we appreciate his (usually critical) thoughts.
We would love more comments to understand what’s important to our readers and any lingering questions from the reporting we publish. Please comment! We want the comments section to remain civil, though, so don’t get too weird. Or if you’re shy, you can reply to any email and we’ll see it. You can also just click the little heart button on our newsletters; it doesn’t really mean anything, but we love some validation now and then. (Shout out to our most prolific liker, Gayla M.!)
We actually don’t know a whole lot about our audience. But we have some assumptions: You care about local government and politics, you know how to use the internet, you have an email address.
The only thing we really know about you all is your email address and how often you interact with our content (whether you open our emails). That’s it. Some email addresses and names we recognize as our friends, other journalists, sources, elected officials, lobbyists and government workers, but most we don’t know. That’s great! That means there’s a lot of you here who just give a shit even though it’s not your day job, which was our hope from the get-go.
We ran one open discussion thread about your favorite government and politics book, and it was truly a delight. We’ll do more of these discussions in the future, and we hope you feel comfortable participating.
We do not want this to become yet another place on the internet that sucks. If you make it feel like that for anyone involved, we’ll cut off your ability to comment. Disagreements are good, but you all know when you’re crossing the line, so just don’t do it. Be decent.
Where do we go from here?
We’ll slow down a little over the holidays (and we’re taking a vacation for Christmas and New Year’s) while we prepare to cover the legislative session in January, which should be a doozy. We might even add some new features to the morning email. Bill of the Day, anyone?
We’ve set a goal of continuing the newsletter at least through the 2022 elections because we know that’s when the most people are paying attention to politics. That goal and anything beyond it will all depend on where we sit psychologically and financially.
All of our future success depends on you. That’s both a comfort and a terror. We were used to having our paychecks be a bit removed from our actual work output, and that’s not the case anymore.
Here’s what we need from you:
Please become a paid subscriber. We aren’t passing our profits on to any corporate overlords. We’re just two locals trying to pay the rent. A subscription is just $70 per year, but we’re going to increase that rate soon. The good news is, if you subscribe now, you’re grandfathered in at $70 a year. We won’t jack up your price.
And if you’re in the politics business and can expense your subscription, please consider signing up as a founding member for $250 per year.
Tell your friends, family, colleagues, neighbors and nemeses about us. Email our stuff to your entire listserv. All of our work can be easily shared, and you are critical to getting the word out.
If you already subscribe, give a gift subscription. The holidays are right around the corner. You can gift a subscription to friends and family using this link.
Keep us in the loop. Let us know what you like, dislike, any further reporting you’d like to see, how we can help you learn more about how things work. This is our newsletter, but it’s for you.
And if you’re an editor at a news outlet, feel free to republish our stories (with credit and a link back). We know it’s hard out there; there’s no reason we all can’t collaborate. If you have other ideas for collaborations, we’re all ears.
Unless you’re really mad; then you should call Hank.