The feud that's charting the future of social media & creator rights.

Hey, folks — welcome to [our digital disco]’s first deep-dive. In each of these longer-format pieces, I’ll be expanding on a key trend that has massive impacts on our lives as digital citizens. The focus today is on a rising feud between a long-sitting social media platform and a newer alternative. Happy reading!

Today we're diving into the ongoing feud between Substack and Twitter. This is a debate that's been heating up in recent weeks, with both platforms vying for the attention of content creators and their audiences. The media jumped into the conversation when Substack released ‘Notes’ the other week, a new feature described as a Twitter clone — which prompted Twitter to temporarily suppress Substack links and mentions on its own platform.

But what's really at stake here is the future of social media business models and the treatment of content creators. Will the creators, who drive usage on platforms, continue to be seen as simply a means to generate advertising revenue, or as a key component of platform content and user relationships?

The Substack vs. Twitter feud prompts this question because Twitter, like all other ads-based social media platforms, leverages user-made content as the primary bait for getting other users on the platform. That’s the essence of the network effect: The value of any social media platform increases as more people use it. This creates a feedback loop where the more users a platform has, the more users it attracts, and the more valuable it becomes for everyone. But the fundamental pre-requisite here is that the content created by users must be good enough to consume — and, once the users are consuming and creating, advertising companies pay to be present, too.

The issue at hand is the archaic business model of ads-driven social media, which has dominated the industry for years. Platforms like Twitter have relied heavily on advertising revenue to sustain their business, often at the expense of quality content. This has led to a noisy and cluttered social media landscape that's rife with irrelevant ads and low-quality, highly-divisive content.

But now we're seeing a new breed of social media platforms emerge, such as Patreon and Substack, that are challenging this model. These platforms provide a direct way for content creators to monetize their work; they remove the advertising middle-man, allowing creators to directly interact with their followers. Subscriber-driven platforms encourage creators to produce high-quality content that resonates with their audiences, rather than just trying to increase user engagement through clickbait headlines or irrelevant ads. This creates a more authentic and meaningful social media experience that’s not possible on prominent ad-driven models. And if these new-age platforms can make digital spaces similar to Twitter, without the fundamental faults of Twitter, I can see why Musk is getting antsy.

Moreover, without ads, users can directly support their favorite creators — creating a more free version of the ‘creator economy’ we see today. (E.g., without the overruling hands of TikTok or other platforms in determining when, why, and how much creators are compensated.) While Twitter is somewhat catching on — it revamped its Subscriptions program earlier this month for users to support creators and gain exclusive content access — Twitter still operates along a model driven by user engagement, not content quality.

So what does this all mean for the future of social content? Well, it's clear that the balance of power is shifting from the platforms to the creators themselves. And as more and more content creators turn to platforms like Substack, we may see a seismic shift in the way social media operates. In the end, this could ultimately be a win-win for both creators and users, as it would allow for a more authentic and high-quality social media experience.

How do Musk’s attempts to transform Twitter fall short from a true, subscription-based business model?

Twitter's ranking algorithms and monetization attempts limit any ability to create a healthier ecosystem. Let’s chat about Twitter Blue, for example, rolled out officially on 4/20 (hah). The paid service is meant to verify and signify users’ identity. Authenticated users can also subscribe to other verified users to access exclusive and even long-form content. Yet Musk has an indecisive, half-baked approach — many celebrities and other users may be excluded from paying, and those who are paying appear to be primarily right-leaning politically and/or crypto enthusiasts. In effect, he’s creating his own version of an exclusive community that not only shuts out many content creators, but also the potential for a more liberated free speech. Many culture-makers are left asking: Why would I pay a billionaire money so that I can make content for his platform?

The emergence of the subscription model presents an opportunity for ads-based companies to rethink their business models and prioritize compensating creators. In the case of others as well as Twitter, the underlying, ads-based business model proves to be a strong limiting factor. The resistance of Twitter Blue also speaks to the struggle for a company to make users pay for what was once free — particularly when the thing users would theoretically pay for content is actually produced by them. (In my eyes, that’s like asking me to grow avocados — then, once I have been freely growing avocados and making my friends avocado toast for years, Musk walking into my apartment to tell me i) I need to pay $8 a month to grow my avocados, and ii) my friends have to pay $8 to Musk to eat my avocado toast.)

Twitter’s attempts to make people pay to subscribe or pay to be verified users may not be enough to compensate creators and attract quality content. In fact, these moves may drive people away from the platform if they perceive it as being too exclusive or out of reach. Twitter's challenge is to create a new model that balances the need for engagement with the need for quality content and compensating creators fairly.

As the internet continues to evolve, it will be crucial for companies to find new ways to reward quality content and reframe how they treat content creators.

Let's take a closer look at how the most prominent social media platforms make $$$.

The birth of social media is closely connected to the eruption of internet advertising — the two sectors quickly formed a symbiotic relationship. Advertisers use social media to reach a large and engaged audience, and social media platforms use the revenue generated from advertising to sustain and grow their businesses. In other words, the rise of social media has enabled advertisers to reach their target markets more effectively and efficiently, while providing social media platforms with a viable business model.

Take Meta and Twitter, for example, which make the bulk of their money from advertising revenue. Advertisers pay these platforms to display ads to users, and the platforms use algorithms to ensure that the ads are displayed to the most relevant audience. This model (see more below) incentivizes platforms to prioritize content that generates the most engagement — largely the most extreme and divisive — over content of quality.

The ads-driven drives two key consequences. First, that in this system, creators are considered equal to users — despite that creators largely drive engagement and platform revenue. Second, the role of advertising has led to the rise of "clickbait" and other attention-grabbing techniques, which prioritize views over substance. The content that generates the most views is more likely to be seen by advertisers as valuable, and therefore more likely to be promoted by the platform. This is why there has been so much talk about the rise of extremism, cancel culture, and political polarization by way of social media. While some platforms (incl. Instagram and TikTok) offer a creator fund, which pays creators based on views generated, this form still operates within the context of the advertiser model, and incentivizes catchy over substantive content. Content creators are left to the whims of the platform on which they play.

To “win” in the ads-based system, creators are incentivized to produce extreme or divisive content that generates more engagement and viral activity, rather than content that prioritizes quality or intellectual rigor. This is a key reason why platforms like Facebook have become breeding grounds for misinformation, offensive commentary, and other low-quality work. The engagement dynamic can create a vicious cycle where creators are forced to chase viral activity on one platform (e.g., Twitter, Instagram) in order to gain exposure and compensation on another (e.g., Youtube, Substack) given differences in each platform’s compensation models.

In contrast, subscription-based models such as Substack prioritize creator compensation and communities. The introduction of Substack's Notes product provides yet another avenue for content creators to connect with their audiences and be compensated for their work. While Notes allows writers to share short-form content in a similar way to Twitter, and may seem like a copycat of Twitter's model, the model feeds supports creator by building larger communities around their work — without any advertising middleman panning for attention. This yields a significant difference creator treatment and the type of content that’s incentivized. This also means that Notes can potentially generate even more revenue for creators than Twitter's advertising model. In this light, it makes sense why Musk freaked out, temporarily blocked Substack, and quickly released his own half-baked feature for creator compensation.

The power content creators have in gaining an audience directly impacts our experience on social media and our broader lives. When creators are treated fairly, they can gain a following through means other than the most extreme and short-form content, have direct relationships with their followers, and are more likely to be able to sustain themselves as independent creators. This healthier ecosystem can lead to greater nuance, diversity of voices, and perspectives in the content we consume.

How might emerging tech challenge how creators are treated in the social media ecosystem?

As alternative models develop, we're also starting to see a shift away from engagement-based ranking for revenue to other tech-driven modes. One such technology is blockchain. This technology could allow creators to receive direct payments from consumers without the need for intermediaries — in theory, enabling creators to retain control over their work and ensure fair compensation for their contributions.

Another trend to watch is the emergence of federated social media. This decentralized approach to social media allows users to host their own instances of social media platforms, which could create new compensation models for content creators. By hosting their own instances, creators can retain control over their content and monetize it in ways that are more aligned with their values and goals. (See my recent post on federated social media here.)

So — what’s next?

It will be interesting to see whether Musk is able to scrape together a profitable, subscription-based Twitter model. He might have a shot, perhaps by completely removing advertising and transforming the way creators are treated. My theory though is that if anything, Musk has shown — by censoring journalists, prioritizing his own tweets, and other cases — that he sees Twitter not as a public space for substantive content, but as a Musk-driven and Musk-focused town square. For those who align with the billionaire’s values and worldviews, Twitter might be a great spot. For those that want perhaps a bit more diversity in thought, or more respect to the creators, they’ll venture to some of the newer platforms rising in the peripheries.

Breakdowns — Notes on the relationships among platforms, advertisers, users, and creators.

It's no secret that the internet has made it easier than ever to create and distribute content to a global audience. But what's not so easy is making a living from that content.

The problem lies in the business models of many social media companies, particularly those that have been around for many years. Many companies have business models that generate revenue primarily from advertising. Here’s how it works:

• Users post content + consume each others’ content

• The platform learns about the users and provides advertising companies with personalized data

• Advertising companies tailor ads to users + pay to put these ads on the platform

• The more users are on the platform → the more ads the users consume → the more money the platform makes from the advertising companies

Implicit in this model? Users need to be using the platform. The more the users stay online, the more ads they will consume, and the more money the platform makes off the advertising companies. The latter system raises three major concerns:

1. What keeps users online + consuming isn’t quality content. It’s extreme, divisive content.→ Social media platforms discovered the latter a long time ago, and prioritize their feeds so that users are more likely to consume this ‘extreme’ and/or low-quality clickbait over more nuanced or other content.

2. The model equates users with content creators… Yet this assumption isn’t exactly accurate.→ Much of the content users consume is largely produced by a few creators.→ Many platforms have realized that these content creators help generate revenue, and both prioritize their content and (sometimes) reimburse them for the engagement they drive on the platform.

3. In the advertising model, content creators are still incentivized to create content that goes viral, because this is the primary way to receive the attention and segment of advertising revenue.