(Welcome to the “Most Important Story of the Week”, my bi-weekly strategy column analyzing the most important (but often not buzziest) news story of the last two weeks. I’m the Entertainment Strategy Guy, a former streaming executive who now analyzes business strategy in the entertainment industry. Please subscribe.)
Substack rolled out a new feature a couple of months back, and I think I’ve already seen an impact on the platform. On its face, you might think I’d love it. That new feature?
A/B Testing of headlines for Substack newsletters.
Here’s how it works: A writer writes an article. Before they click send, they include two headlines. Then Substack sends out two versions of the article: one to a subset of readers with one headline, and another to a different subset with another. Then it sees which one was opened more and sends it out to everyone else.
That’s more data for authors and publishers, and more data means better decisions, right?
Wrong!
Wrong, wrong, wrong!
I mean, sure, it is more data. But this is where “strategy” and “data” collide. Data is only as good as the decisions you can make with it. And if a business can’t measure everything that matters, the things they can measure may actually lead them astray. Consider these two measurements:
- The open rate of an email.
- The rise in brand equity a customer feels after reading an email.
What should a Substacker author really want to know? They’d want to know data point number two. For a paid subscription newsletter, it’s not really enough to know how many people opened an email; it’s whether reading that email made them more likely to stay a reader or made them more likely to become a paid subscriber. But that second point isn’t something we can really measure. We can’t measure subjective “feelings”; we have to infer them from behaviors.
Thus we’re left with measurement number one, open rate. What this tells you is whether the headline was seductive enough to get the people who happen to be reading their emails at that time to click on it. Knowing that, you can imagine that it selects for headlines that sell the most extreme and, frankly, clickbait-y stories.
Therein lies the trap. If an email succeeds in getting opened, but does so by subtly misleading or overhyping the story, that could actually degrade measurement number two (brand equity), the thing we can’t measure. I stopped reading one website entirely after having opened an article and thought to myself, “That headline lied to me.”
Substack authors should think more like premium outlets and forget the lessons of digital mass media of the 2010s. Focus on brand equity, not cheap reach.
I don’t see that happening, though. Being honest, more Substack newsletters than ever seem to be serving up clickbait headlines recently. One new-to-Substack, very-big-deal author has repeatedly put out “the chart that defines the economy” or “news that shows what’s wrong with America”-style articles. Other newsletters use the word “apocalypse” at the drop of a hat. I get it: if it bleeds, it leads. And heck, if Satan has risen from Hell to conquer the world, that’s not just going to lead, but that will drive tons of newsletter openings.
But do they help your newsletter or website long term? That I’m not so sure about.
For me, I’m not using this feature because, as a customer, I hate when headlines mislead me about what I’m going to read. Sure, I’ve published some headlines that were probably too extreme, but I don’t plan to make a habit out of it. (Just a warning: I do have a joke headline planned for a future article that I will clarify in the first paragraph is fake.)
Anyways, on to an (overdue) “Most Important Story of the Week” article. I plan to catch up with a few of these stories over the next few weeks. I’m looking at Paramount Skydance’s big moves, the FUBO-Disney merger, the Apple-F1 news, and a whole lot more.
Let’s dive right in.
Most Important Story of the Week – Paramount Skydance Comes Out Swinging
I have to be honest, I’m not used to big companies following my advice so quickly! Sure, more than once now, I’ve noticed a trend or made a recommendation—be it sports documentaries, putting out shows weekly, the value of live sports—and eventually the streamers followed what I suggested.
But I often recommend aggressive strategies, and most executives avoid risky/aggressive strategies. Like, say, last July, when I recommended that Paramount Global-soon-to-be-Paramount Skydance should go all out to win the streaming wars after their merger closed. At the time, I read a ton of folks arguing that Skydance should sell Paramount for parts. (I love reading dealmakers anonymously advising everyone to basically give up and sell to Netflix. God bless their pro-Netflix hearts.)
Instead, Paramount-Skydance has gone on a buying spree and hasn’t sold any valuable library assets yet.
So let’s look at their buying spree, and importantly, judge whether or not we think they’ve done a good job.
Judging Paramount-Skydance’s Recent Moves
Let’s just run through each of Paramount’s recent decisions, and make a judgement call. I’m going to go in order of most important to least.
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