ConvertKit vs Substack take-rate battle

The real battle in newsletter software is over who gets paid first. Substack’s take rate works when a writer is small and wants everything bundled, but once a paid newsletter is throwing off real cash, the math starts to dominate and creators look for cheaper software plus direct payment rails. That is why ConvertKit pushed beyond email sending into sponsorships, commerce, and recommendations, so it could replace platform tax with creator earnings.

• Substack’s model is a revenue share business, while ConvertKit and Beehiiv started as SaaS. That means a creator paying readers through Substack keeps less of every new subscription than a creator using a flat software plan plus payment processing, which makes switching more attractive as newsletter revenue scales.
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• ConvertKit’s response was not just lower pricing. It added a sponsor network, paid recommendations through SparkLoop, and commerce tools, all aimed at making the platform a source of income and subscriber growth, not just a software bill. That changes retention because the creator is comparing net earnings, not monthly seat cost.
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• The market has since converged toward hybrids. Beehiiv now gets a meaningful share of revenue from ads and creator marketplaces, and Substack is now working on ads to keep top writers from leaving. The product category is shifting from newsletter editor to monetization engine.
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The next phase is a tighter race to own the highest earning creators, because those users attract advertisers, drive referrals, and pull in smaller writers behind them. The winners will be the platforms that can both lower creator takeout costs and send creators more money than they charge them.