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people have asked me about Substack& #39;s business model. Obviously it& #39;s impossible to know, but my best current guess is:
1) they only make ~$4.2mil a year from their 10% cut of publisher revenues
2) they& #39;ll soon make the majority of their money from "Pro"
1) they only make ~$4.2mil a year from their 10% cut of publisher revenues
2) they& #39;ll soon make the majority of their money from "Pro"
First: Substack self-reported "more than 500,000" paid subscriptions (not subscribers!) in February. Obviously "more than" could really mean "more than", but from experience Substack also counts comped subscriptions as "paid", so it might also be way less. I think =500k is fair
How much is a subscription? @daveambrose found this useful credit card panel data suggesting $18 average transaction value on Substack.
But note that that& #39;s a mix of monthly and annual subscriptions; from surveying publishers, 2/3rds annual and 1/3rds monthly seems common
But note that that& #39;s a mix of monthly and annual subscriptions; from surveying publishers, 2/3rds annual and 1/3rds monthly seems common
Backing that out, Substack would be making $4.2m a year from its 10% revenue share.
A sense check / alternative calc: if we just assume $100/year/sub for 500k subs we& #39;d get $5m instead.
Looking at the leader boards, $50 a year seems more common but some big tech and finance publications are $150+. I& #39;d guess $5m is a little high, and our ~$4m figure looks good
Looking at the leader boards, $50 a year seems more common but some big tech and finance publications are $150+. I& #39;d guess $5m is a little high, and our ~$4m figure looks good
