Twitter Joins The Newsletter Game
Benjamin Franklin is known for many accomplishments. As an inventor, he created the lightning rod, bifocals, and the Franklin stove. As a statesman, he was one of the great leaders of the American revolution. He was also a noted writer and satirist. However, above all things, he considered himself a printer. The printing business he established in Pennsylvania was key to his early success in life and printed everything from the local currency to his influential newspaper, the Pennsylvania Gazette. He was, as it turns out, one of the first people in America to manufacture type, and one of the most popular typefaces, Franklin Gothic, is named after him.
As his newspaper business grew, a competition with the town’s other printer, Andrew Bradford, intensified. His anti-establishment paper mocked Bradford and his ties to the Penn Family and their appointed governors. While Franklin’s paper was popular among the growing working classes, he was at a major disadvantage in the publishing wars. Bradford was postmaster of Philadelphia and used that position to prevent Franklin from sending his Gazette through the mail. Here was an early example of the constant tensions that emerge between those who create content, and those who control the systems to distribute such content.
Some quick examples off the top of my head:
Writers vs publishers
Artists vs Spotify
The New York Times vs Google
Studios vs Netflix
Spotify vs Apple
Epic Games vs Apple
Everyone vs Apple
That brings us on to Twitter, who yesterday announced an agreement to acquire Revue, a Dutch startup that allows users to publish and monetize newsletters. While Revue is much smaller and not as well known as Substack, they do provide services for major content creators such as Vox Media.
The acquisition strikes at one of the major issues that has always plagued Twitter. The platform creates incredible value (“I can’t believe this website is free”) yet captures hardly any of it. One suggestion to remedy this was proposed by Scott Galloway — a subscription model levied on the most successful content creators. After all, why should Kylie Jenner be able to charge half a million dollars to promote a brand on the platform for free?
That’s one approach. Another is to actively promote paid content and take a cut of the revenue generated. This is where the Revue acquisition comes into play. Substack, a company that has been gaining huge traction recently, operates a similar model to that of Revue. Content creators publish newsletters through Substack, who take a 10% commission. The problem, as pointed out by Ben Thompson at Stratechery, is that at some point that commission becomes an incentive for creators to branch off on their own. In the Substack model, the creators own the customer relationship and build their own audience by delivering the best content. Twitter has already announced plans to cut Revue’s commission to 5% (half of Substack’s) while bringing something else to the table: user acquisition.
Twitter, as a platform for the spreading of information (in text format, importantly), could do remarkable things with this acquisition. Imagine if signing up for a newsletter was as simple as following someone. Imagine if controlling all your subscriptions could be done through a single platform (like Roku, for example). Imagine if Twitter could bundle multiple subscriptions into a single timeline and promote and cross-sell similar newsletters (or even podcasts).
Now, this is all speculative at this point. Making the acquisition is the easy part (remember Vine), integrating Revue into the current business model and executing on the vision is something else altogether.