The Diff | Byrne Hobart | Substack

When you read the Wall Street Journal because someone throws it on your lawn every morning, a Journal writer can’t go independent. But when you see the same articles because they make it into your Facebook news feed, you may end up following the writer directly—they start to take control of their distribution.

This is all very good news, for writers and for readers. Filtering news and adding useful commentary is a nontrivial task, it’s hard to scale, and scaling it in one domain doesn’t imply skill in doing it somewhere else (if I switched places with someone who wrote a sports newsletter, we’d both lose all our readers). But the subscription newsletter ... See more

This implies that in niches where there’s too much information for any one person to absorb, the most economically efficient outcome is for media coverage of that niche to be dominated by exactly one person, who works fairly hard and has more comprehensive knowledge of the topic than anyone else.

And as soon as a bundle is partially unbundled, there are two options: stop offering the part of the bundle that now has a competing single-purpose product, at which point the bundle switches from optimally-priced to overpriced, or keep offering it and accept lower margins. Bundles grow gracefully and shrink painfully.

Bundling reacts to differentiated desires by creating a less differentiated publication that’s fairly valuable to everyone. But as the cost of the reader’s time rises, focus pays off. And the subscription newsletter model makes it easier than it’s ever been to profitably focus on exactly one topic, and build a one-person monopoly.

A bundle essentially lets a group of newsletter-writers dynamically price-discriminate: most readers are subscribing because one or two components of the bundle are great and the rest are nice-to-have, so Everything’s $20/month sticker price is implicitly charging something like $15 for one newsletter in the bundle, $1 for another, $0 for another—b... See more

The bigger a bundle gets, the more likely it is that a subset of users are all paying for basically one piece of the bundle, which could be sold separately at a better price.