Rafael Henrique | SOPA Images | AP
After posting almost 200 videos, amassing hundreds of thousands of followers and racking up millions of views, Carla Lalli Music is quitting YouTube. Substack is her new focus.
Music is a cookbook author and food content creator, and she is shifting her focus to Substack, a subscription platform that lets creators charge users subscriptions for access to their content. Music told CNBC she came to that decision after earning more in one year of using Substack, nearly $200,000 in revenue, than she did by posting videos on YouTube since 2021.
Music is the exact kind of content creator that Substack is trying to lure to its platform as TikTok’s future in the U.S. remains in limbo.
San Francisco-based Substack launched in 2017 as a tool for newsletter writers to charge readers a monthly fee to read their content. The platform allows creators to connect to their followers directly without having to navigate algorithmic models that control when their content is shown, as is the case on TikTok, Google’s YouTube and other social platforms. Substack has raised about $100 million, most recently at a post-money valuation of more than $650 million, the company told CNBC.
This year, Substack has broadened its focus beyond newsletters, and on Thursday, it announced that creators can now post video content directly through the Substack app and monetize these videos.
“There’s going to be a world of people who are much more focused on videos,” Substack Co-founder Hamish McKenzie told CNBC. “That is a huge world that Substack is only starting to penetrate.”
Substack began this push after the social media landscape was thrown into flux as a result of the effective ban of TikTok in January that caused the popular Chinese-owned service to go offline for a few hours. TikTok was also removed from Apple and Google’s app stores for nearly a month.
The disruption to TikTok in January happened as a result of a law signed by former President Joe Biden to force a sale of the Chinese-owned app or have it effectively banned in the U.S. On his first day in office, President Donald Trump signed an executive order extending TikTok’s ability to operate in the U.S., but that order expires on April 5.
Days after TikTok went offline, Substack launched a $20 million fund to court creators to its platform.
“If TikTok gets banned for political reasons, there’s nothing to do with the work you’ve done, but it really affects your life,” McKenzie said. “The only and surefire guard against that is if you don’t place your audience in the hands of some other volatile system who doesn’t care about what happens to your livelihood.”
Moving beyond newsletters
McKenzie says that they are going after creators on competing social media platforms to start sharing their video content on Substack.
“Video-first creators, people who are mobile oriented, there’s a whole lot of new possibility waiting to be unlocked once they meet this model in the right place,” McKenzie said.
Already, Substack has more than 4 million paid subscriptions with over 50,000 creators who make money on the platform, the company said. Substack says that 82% of its top 250 revenue-generating creators have already integrated audio or video into their content, reflecting a growing emphasis on multimedia content.
Prior to the video announcements, Substack allowed creators to post videos on the app to Notes, which is the platform’s front-facing feed format. But the feature did not allow creators to publish video content behind Substack’s paywalls.
The update enables creators to put video content behind a paywall and it provides data on estimated revenue impact. It also allows them to track viewership and new subscribers.
Carla Lalli Music is a cookbook writer and food creator.
Carla Lalli Music
The push by Substack into video is a welcomed development for creators like Music, who was losing money from making videos for YouTube.
Music said each video costs her $3,500 to produce despite filming at home. If she published four videos a month on YouTube, she’d earn about $4,000 in revenue. Music was losing about $10,000 a month, she said.
“It’s really depressing to operate at a loss,” said Music.
Even with brand deals, which is an agreement where brands pay creators to post content that promotes their products, the earnings were barely enough to recoup the costs of posting on YouTube, Music said.
More than half of the $290 billion creator economy comes from direct-to-fan value. That includes ticket sales, courses, livestreams and paid memberships, according to a survey conducted by Patreon, a Substack competitor.
With her shift to Substack, Music said she’s now focused on writing another book, posting recipes behind the platform’s paywall and sprinkling in occasional videos.
“I have a lot more to benefit from focused attention on a smaller group of people than I ever did on throwing stuff and seeing what was going to stick with billions of potential audience members,” Music said. “It’s more sustainable.”
WATCH: Our base case for TikTok is that it gets banned in the U.S.: Lead Edge Capital’s Mitchell Green
