May 15, 2019 · 48m · y-combinator
Monetizing Podcasts and Newsletters - Chris Best of Substack and Jonathan Gill of Backtracks · Y Combinator
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gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions
Substack CEO Chris Best and Backtracks CEO Jonathan Gill discuss the future of audio and newsletter monetization, contrasting paid subscriptions with ad-supported business models. They examine open versus algorithmic platforms and share tactical guidance for independent creators looking to build sustainable audiences.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. How this is scored →
The partners as informed peer 3.9 Guest teaching 2.9 Guest disagreement 2.2 The partners pushing back 2.6
speaking balance: gold is the partners, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 1:15 Calling ad-supported podcasting 'small and sad'
Chris Best forcefully rejects Jonathan Gill's premise that ad sponsorships are the primary future for audio, dismissing the ad-supported market as small and sad compared to paid models.
Hardest push from the partners ▶ 13:31 Challenging individual creator viability with YouTube dataCraig Cannon pushes back on Chris Best's claim of an individual creator boom by citing YouTube data where creator number 1,000 cannot earn a living.
Biggest teaching moment ▶ 29:36 Detailing multimillion-dollar Chinese educational podcastingJonathan Gill educates the host and co-guest on how Chinese university professors earn millions by transitioning to paid audio lectures, illustrating the market potential of educational audio.
The partners hold their own ▶ 28:53 Breaking down Dan Carlin's windowed audio business modelCraig Cannon demonstrates domain knowledge by explaining Dan Carlin's windowing strategy and connecting it to broader trends in unbundled higher education.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | The partners as informed peer | Guest teaching | Guest disagreement | The partners pushing back | Why |
|---|---|---|---|---|---|---|
| Ad-Supported vs. Subscription Models and Measurement Challenges | 4 | 3 | 3 | 3 | Craig asks how podcast advertising tracks effectiveness, pointing out the shift toward affiliate codes for major shows like Joe Rogan. Chris and Jonathan outline opposing views on whether ad-supported audio is fundamentally limited compared to paid models. | |
| Market Size Potential and Subscription Pricing Mechanisms | 4 | 3 | 2 | 3 | Craig questions whether individual creators face price-anchoring resistance when subscriptions cost more than platforms like Netflix. The guests argue that overall society severely underpays for high-value niche culture. | |
| Individual Creator Monetization and Audience Quality | 5 | 3 | 3 | 5 | Craig pushes back against Chris's optimistic thesis on atomized creator earnings by citing YouTube's steep power-law distribution where mid-tier creators struggle to survive. Chris counters that ad-supported platforms inherently fail niche creators who need direct subscriber support. | |
| Platform Centralization, Free Speech, and Ecosystem Control | 4 | 2 | 3 | 3 | Craig and the guests discuss platform censorship risks and algorithmically homogenized content on major platforms. Chris playfully teases Jonathan about Backtracks being an official partner with Spotify. | |
| Content Discovery Strategies and Private Feed Distribution | 4 | 3 | 2 | 2 | Craig asks practical questions about how writers and podcasters solve discoverability when gating content behind paywalls. Chris explains the funnel model of distributing high-quality accessible work for free while reserving raw analysis for paying subscribers. | |
| Educational Audio, Long-Form Content, and Monetizing Expertise | 5 | 4 | 2 | 2 | Craig brings up the Chinese app Himalaya and Dan Carlin's windowing strategy to explore paid educational audio. Jonathan and Chris explain how professors in China earn millions independently and forecast a similar monetization wave for specialized knowledge in the West. | |
| Audience Growth Tactics, Content Quality, and Social Network Shifts | 3 | 3 | 2 | 2 | Craig poses audience questions regarding newsletter growth loops and whether Substack could replace social networks like Facebook. Chris clarifies that personal newsletters replace broadcast cultural consumption rather than real-world social graphs. | |
| Measuring Podcast ROI, Startup Podcasts, and Execution Advice | 4 | 3 | 3 | 3 | Craig inquires about how early-stage startups evaluate podcast ROI and budget production costs in-house. Chris admits skepticism toward podcast ad rates, suggesting download-based pricing operates like an emperor's new clothes. | |
| Key Takeaways, Final Advice, and Conclusion | 2 | 2 | 0 | 0 | The guests summarize final advice about consistency, iterative publishing, and overcoming perfectionism when starting a podcast or newsletter. Craig wraps up the episode on an agreeable note. |
Statements from this episode (21)
Gill: The podcast ecosystem is not ready for subscription content
“From our view, the podcast ecosystem at large is not really ready for subscription content”
Best: Ad-supported podcast market is small compared to paid audio
“I think that the podcast market that can be supported by advertising is small and sad compared to the audio market that could be supported if we had an effective way to pay for it.”
Gill: China's paid audio market exceeds the US market
“The ecosystem for podcasting and paid for content in China is much greater than even the U.S. Market.”
Best: Podcast downloads resemble early internet banner ad impressions
“It feels a little bit like podcast downloads are almost like the banner ad impressions of the early internet.”
Gill: Publishers avoid Backtracks because it filters out fraud
“We have people not use us because we detect fraud, we remove things like that”
Best: Market failure causes society to underinvest in cultural creators
“We think there's basically a market failure where all of society would be richer if there was more efficient mechanisms to like allocate more resources to creative people that are making kind of culture writ large”
Best: Media will see a meteoric rise of individual creators
“So I'm not saying that everything's going to be individuals and there's not going to be any big sort of media things, but I think it's going to look like there's a meteoric rise of individual creation.”
Best: Creators with 10,000 superfans cannot make a living on YouTube
“But if you're someone that has, let's say, 10,000 fans that find you completely irreplaceable and wouldn't want to go on living without you because you're the most amazing thing in their life, but there's only 10,000 of them, you're never going to make money o…”
Gill: Podcasting and newsletters are the last channels for free speech
“Podcasting, and even, I probably say newsletters, it's one of the last ways to get direct free speech from someone's mind out into the world, and people will say things in a podcast that they couldn't Print or they can do something in a newsletter they couldn'…”
Best: Open podcasts guarantee audience delivery unlike algorithmic feeds
“When somebody subscribes to your podcast, if you make another episode, they're going to get it. In most good podcast players. Whereas if someone follows you on Twitter, and are they going to get your next tweet? Like, you never know.”
Gill: Metric-driven podcast production risks losing the medium's magic
“Metric driven content production that's very professionally done sometimes loses the magic of podcasting.”
Best: Consistently read newsletters achieve passive organic growth
“I mean, just, A, because text is really easy to, like, you know, if you have, like, a webpage, you can share it, and if you get an email, you can forward it, and so we often see, this is something I think you don't see in podcasting, but if you have a newslett…”
Best: Writers should offer their best content for free
“And the advice we give people is basically take your best, most accessible, most focused stuff and make that free. Right? Like make your sort of like your very thoughtful essay on a specific topic free, because that's how people are going to share it. That's h…”
Best: Consumers pay for online courses but not standalone videos
“People won't pay for videos, but they'll pay for online courses, which are just like a couple of videos.”
Gill: Chinese professors quit to make millions podcasting
“There's been, ah, basically professors that have quit their teaching positions to be full-time podcasters because they quite literally make millions of dollars podcasting.”
Gill: Future professors will monetize like branded sports stars
“Imagine professors as the sports stars of the future where, oh yeah, what are you wearing? What are you sponsored by? But that sort of means of monetization and where, where it's going for educational content. We think that that personal brand will become more…”
Best: Consumers now prefer paying for high-quality content
“I think the pendulum's really heavily swinging the other way now. Like people that were sort of like my generation were like the least likely to want to pay for stuff. And we are getting increasingly more likely to want to pay. And then younger generations are…”
Gill: Audio recall lasts 36% longer than visual media
“People actually do remember what they hear. Yeah. 36 to 39% longer than what they see and what they read, which is actually a video advertiser, like, hidden piece of research”
Best: Newsletters will replace social feeds for news within five years
“I think the answer is it won't replace the social network aspect of it. The thing that Facebook and the social networks are great at is having the relationship between you and like the people, you know, in real life... The part of it that should absolutely be …”
Best: Podcast ad rates per download will drop significantly
“I suspect as I kind of hinted before that there's a lot of podcast advertising that's in a little bit of like an emperor's new clothes state where like too much is it's overpriced. And because there's just not metrics there, it's just like waiting for like som…”
Best: Building an engaging newsletter is harder than monetizing it
“If you get to a place where you have a newsletter that people are regularly reading, like if they're just regularly opening it chances are you'll be able to charge for it if you want to at some level, because it's actually harder to make something that's good …”