Substack Poaches Patreon Stars for Expanded Push Into Podcasting

(Bloomberg) -- Substack, the online publisher known for hosting columnists like Robert Reich and Bari Weiss, announced a broader push into podcasting on Tuesday, including recruiting four shows from rival Patreon.

The San Francisco-based newsletter company now has dozens of podcasts, many featuring talent lured from other outlets. Substack's pitch, according to Chief Operating Officer Hamish McKenzie, is offering creators ownership of their subscriber lists. The company has also been providing grants to podcasters who make the switch, although McKenzie declined to say how much the company's paying. The money is worth it because the shows can be extended into other kinds of media, including print and video, he said.

“If you just think about it as a podcast, then that is only realizing a fraction of the percentage of the total potential around that community and around that relationship,” McKenzie said in an interview. “But if you start thinking of it as a Substack, which is this new media type, this new way to build an audience and connect with people ... then new things become possible.”

The company is focusing on recruiting programs that are primarily interested in a subscription business rather than advertising, McKenzie said. The four shows making the switch as part of this announcement include the foreign policy program “American Prestige,” which has over 2,000 paying Patreon subscribers, and the news analysis show “The Fifth Column,” which has over 4,000. Kmele Foster, “The Fifth Column” co-host, said his team received money to make the switch and “felt comfortable enough to be making this move.” 

Doing so comes with the risk of some subscribers not following them over, Foster noted. Patreon doesn't allow its users to maintain their subscribers when they leave, meaning shows like Foster's have to get subscribers to sign up again on Substack. Substack uses the payment processor Stripe Inc., and allows creators to keep their subscriber data if they switch platforms. McKenzie declined to share numbers around the subscriber retention rate for the seven shows that already joined Substack in recent months. 

Foster said he and his team appreciated Substack's “demonstrated commitment to free expression,” and hands-off approach to content moderation, which it outlined in a blog post this past December. McKenzie says the company isn't implementing technology to moderate shows and doesn't have plans to change its policies for podcasts.

Substack recently launched its app on Apple Inc.'s app store. Paid Substack-hosted podcasts can be listened to on any podcast player that supports private RSS feeds, a category that doesn't include streaming giant Spotify Technology SA. 

The podcast push comes at a time when more companies see potential in subscription-based revenue rather than advertising. Apple Podcasts launched its own proprietary subscription feature last year, which organizations like National Public Radio and Malcolm Gladwell's Pushkin Industries use to support their business. 

Spotify also introduced its own subscription feature, as well as partnerships with other platforms, such as Supporting Cast and Patreon's Memberful, to bring their content onto the platform. Substack currently doesn't support this technology.

Patreon has said podcasts represent the largest segment of creators on its platform and advertises having over 250,000 people using its service.

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