Substack Fee Scales With Success
Justin Gage, founder of Technically, on how Substack earns its 10% take rate
This is the core weakness in Substack’s model, its pricing scales with a writer’s success even when the product does not. At roughly 2,000 paid subscribers paying $8 monthly or $80 annually, a 10% platform fee can turn into a five figure annual bill. For many mature newsletters, the real lock in is not superior software, it is the pain of moving archives, subscriptions, search traffic, and reader habits to a new home.
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Technically had about 49,000 total subscribers and around 2,000 paid subscribers in April 2023, which makes a nearly $20,000 annual platform bill plausible at its pricing. That shows how fast Substack’s fee shifts from a convenience charge into a major line item once a publication reaches scale.
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The tradeoff is that Substack still supplies growth and distribution. Its recommendations feature helped add 10,000 free subscribers in about four months for Technically, even if many were low intent. Writers are paying not just for email software, but for access to Substack’s in network discovery and default subscription flows.
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Rivals attack this exact pain point with SaaS pricing. Beehiiv was built to undercut Substack’s 10% take rate, and Kit monetizes through subscriptions and newer add ons rather than a tax on each paid subscriber. That gives larger newsletters a clear economic reason to evaluate switching once fee spend compounds.
The next phase of competition is about whether Substack can add enough monetization and audience growth to make its toll feel earned. Its push into ads and broader network features points in that direction. If those tools keep increasing writer revenue, the 10% fee will hold. If not, the biggest publications will keep drifting toward flat fee platforms.