Substack’s Nazi problem

Hi, it’s Josh in New York. This is a newsletter about newsletters. But first...Three things you need to know today:• Apple must stop selling [View in browser]( [Bloomberg]( Hi, it’s Josh in New York. This is a newsletter about newsletters. But first... Three things you need to know today: • Apple must stop selling [certain watch models]( • Verizon wrote off [$5.8 billion]( • Russia-linked hackers [target Switzerland]( The great newsletter breakup Every company that allows people to post things on the internet, it seems, will have its Nazi moment. It usually starts when someone calls attention to extremist content on the platform. This quickly leads to demands that it remove the worst stuff in the name of decency and public safety — and that it leave it up in the defense of free speech. Substack Inc., the online newsletter startup, has been in its Nazi moment since late November, when the Atlantic [ran an article]( about White nationalist newsletters the service publishes. Writers and readers complained, and some high-profile Substackers promised to leave. The company didn’t mollify its critics when its co-founder Hamish McKenzie [responded on Dec. 21]( by saying it’d remove newsletters that incite violence but leave other extremist newsletters up because “subjecting ideas to open discourse is the best way to strip bad ideas of their power.” Given that this was an argument about policy decisions at a media company where the major players were all newsletter writers, many thousands of words have been devoted to Substack’s approach to content moderation. (Substack has always attracted a [weird amount of attention]( for a company of its size.) Some Substackers defended the company, while others loudly quit the service. Setting aside the merits of that debate, the episode is revealing for what it says about Substack’s business. There’s natural tension between web publishing platforms and the people who rely on them to make a living. Many YouTubers are perennially furious with YouTube, for instance. But they have little leverage over the platform because it’s hard to take their audiences elsewhere, and it’s hard to think of a better way than YouTube to expand an audience. These things aren’t true of Substack. The writers largely handle their own distribution and retain control over their subscriber lists. It’s not a big problem for them to migrate to other newsletter publishing services, some of which are more cost-effective. If Substack writers didn’t tell their readers they were leaving because Substack had too many Nazis, many readers would keep receiving their newsletters without even realizing anything had changed. As it has grown, Substack has added features that resemble those of other social networks. It has built a Twitter-esque feed and recommends newsletters it determines users may like based on their interests. These features can drive a lot of new readers to sign up for free newsletters — and a small number of paying subscribers. In his [goodbye-to-Substack newsletter](, tech journalist Casey Newton praised the company for helping attract 70,000 free subscribers to his Platformer newsletter in 2023. But he said later in an interview that his net additions in paid subscribers that year was just 200. Newton migrated to Ghost, which is run by a nonprofit and charges far less than the 10% of revenue he paid to Substack. “We really did make this decision for principled reasons,” he said. “But I was surprised when I looked around at how much better it was for our business.” For Substack, the social media-fication of its service is a way to try to create a business that feels more like the kind of internet company that gets truly huge. It’d like to become a destination in and of itself. When companies take money from venture capitalists, they implicitly agree to pursue this swing-for-the-fences business model. In Substack’s case, this decision sowed the seeds of the current controversy. In an [explanation]( of why he was moving his newsletter, Garbage Day, off Substack, the internet culture writer Ryan Broderick wrote that the company had been neglecting its core newsletter tools in favor of social features. Content moderation, he wrote, only becomes an issue once a service begins “trying to jam all of its users into one feed to compete with Twitter or whatever.” It’s unclear how much any of this impacts Substack’s business prospects. The company didn’t answer a set of questions, including a query about how many writers it has actually lost. Substack’s decision to leave writers free to break up with it may be more important than its laissez-faire approach to racists. An internet where writers, musicians and other creative types can take their audiences and go home when a distribution platform annoys them is, on balance, a healthier internet. Substack has long empowered writers to abandon it to find a better partner elsewhere. It’s not a surprise that some of them eventually did. —[Joshua Brustein](mailto:jbrustein@bloomberg.net) The big story Samsung unveiled some new gadgets. A new version of its flagship smartphone bets on [Google-powered AI features](. A smart ring will track a wearer’s health metrics in a [rival to Oura](. One to watch [Watch the Bloomberg Technology TV analysis]( of SpaceX’s upcoming launch. Get fully charged Apple will face a US antitrust lawsuit [as soon as March](. Another bit of bad news for Apple: The Vision Pro will debut [without a Netflix app](. The new Silicon Valley tech bus is actually an electric water taxi, and its [first customer is Stripe](. In other transportation news, a remotely driven car service is now [operational in Las Vegas](. An AI certification program will verify models as “fairly trained,” similar to how [food is labeled organic or fair trade](. Google is plotting a product overhaul in response to [the EU’s digital dominance rules](. Anthropic is building a feature for its chatbot [Claude to analyze images](. More from Bloomberg Get Bloomberg Tech weeklies in your inbox: - [Cyber Bulletin]( for coverage of the shadow world of hackers and cyber-espionage - [Game On]( for reporting on the video game business - [Power On]( for Apple scoops, consumer tech news and more - [Screentime]( for a front-row seat to the collision of Hollywood and Silicon Valley - [Soundbite]( for reporting on podcasting, the music industry and audio trends - [Q&AI]( for answers to all your questions about AI Follow Us Like getting this newsletter? [Subscribe to Bloomberg.com]( for unlimited access to trusted, data-driven journalism and subscriber-only insights. Want to sponsor this newsletter? [Get in touch here](. You received this message because you are subscribed to Bloomberg's Tech Daily newsletter. If a friend forwarded you this message, [sign up here]( to get it in your inbox. [Unsubscribe]( [Bloomberg.com]( [Contact Us]( Bloomberg L.P. 731 Lexington Avenue, New York, NY 10022 [Ads Powered By Liveintent]( [Ad Choices](