What are the Pros and Cons of Paid Email Newsletters? #SubStack #Revue #ButtonDown

Writers and creators who wish to make money for their work have used advertising (e.g. Google Adwords, DoubleClick) or affiliate links on their blogs and websites since early days of the Internet. While this model has some benefits, many writers find it hard to create a sustained living from online advertising. Since generating content is a very labor intensive and creative process, the monetization models have not been sufficient to support creators. Journalists, writers, analysts, and editors are all looking find a different model to help them create a stable revenue stream, while producing content that is valuable to their readership.  

Pros and Cons of Paid Email Newsletters
Pros and Cons of Paid Email Newsletters

In the last 5 years, few writers such as Ben Thompson (Stratechery) and Jessica Lessin (The Information) among 1000’s of others have started to offer subscription offerings to their readers. Subscriptions start at $10 per month or $100 annually (many are lower or higher). Even with a small number of paying subscribers (e.g. 1000), the creator can start to make over $100K annually, creating a sustained living for them while pursuing the creation of great content.

As of 2020, SubStack, a platform for newsletter creators had over 20,000 writers and hundreds of paid newsletters. Similar platforms such as Revue, ButtonDown and ConverKit have together over 50K newsletter writers and over 100 writers are now making over $100,000 publishing paid newsletters.

The benefits of paid newsletters are multiple. First, they provide a sustained revenue stream for writers. Second, since writers don’t have to focus on “generating more traffic” for their blogs, they can focus on the research and content. Third, it requires fewer committed readers (thousands as opposed to millions of page views) who really love your content to create a sustainable business model.

There are downsides, however. First, if you are not a recognized brand as a writer, getting to 1000 paid readers will take a lot of time (months or years).  Second, if your subscriber churn rate is high (more readers unsubscribe after their subscription period), then your model becomes unsustainable. Third, readers expect consistency, which adds to the pressure of ensuring you have great topics and information to share constantly.

There are strategies to mitigate the downsides and create an enduring, reader driven sustainable revenue stream for you as a creative writer.


What is a good open rate for a email newsletter? #SubStack Newletter #StartingPoint

The 2nd most frequent question we get from potential clients after “How many paying subscribers can I get“? is What are good email newsletter “open rates”?

Email Newsletter Open Rate
SubStack email newsletter open rates

Most newsletter creators are early in their journey. We get this question from creators who have fewer than 1000 users and have been curating and editing their newsletter for fewer than 6 months.

We track and manage over 67 newsletters across multiple categories. Most are technology newsletters (22%), followed by general news, politics, self help, sports and business.

70% of our newsletters are paid, and 30% are free newsletters. 7 started before 2018, 49 in 2018 and 2019 and 9 in 2020.

Free newsletters have open rates between 35% and 62% with subscriber counts ranging from 300 to over 7200.

Paid newsletters have open rates between 47% and 64% with paid subscriber counts ranging from 150 to over 2800.

Some interesting insights from our free newsletters alone.

  1. Open rates for users of newsletters in 2020 are higher on a cohort basis than those that opened in 2019 by 7%. That means, email newsletters X weeks after starting their newsletter in 2019 had 7% lower open rates the same number of weeks in than those the started in 2020.
  2. Open rates for Politics and General News are the highest, followed by Technology. Open rates for Self Help category are the lowest.
  3. Open rates for weekend newsletter episodes than during the week newsletters in 73% of the newsletters
  4. Open rates for morning (before 11 am) newsletters are higher than evening (after 6 pm) in 63% of the newsletter episodes
  5. Newsletters that are sending 3 updates or more a week have higher open rates than those sending only 1 update weekly.

Competitive Landscape for Newsletter as a Service (NaaS) – SubStack Competitors and Alternatives

SubStack makes it simple for a writer to start an email newsletter that makes money from subscriptions. They provide a platform to publish, distribute and monetize independent writing by paid subscriptions from readers. This is different from most media businesses which make more money from advertisers than subscriptions.

SubStack Competitors
SubStack Competitors

If you look at the competitive landscape for SubStack, there are over 24 companies you could potentially see as options, SubStack alternatives or SubStack competitors.

In fact, if you look at the SubStack pitch deck, you will find them talk about subscription-based competitors such as Medium, Button Down, Revue and Pateron, vs Head content (Social Networks).

SubStack Pitch Deck – Competitive Landscape

However, the competitive landscape is a lot more fluid and complex.

Depending on the creator’s goal – making money from their writing using newsletters, or “building a brand”, or “positioning themselves as a thought leader”, or “getting an audience for their content” – the competitive landscape narrows dramatically.

For the purposes of our discussion I am going segment creators into 3 types:

1. “I dabble in content” users – who are social seeking, want to build their brand and don’t have a large following or traffic. These users are looking for an audience for their content. They will start with Medium, WordPress, or any other free platform to being their journey.

2. “Content is my side gig” users – who want to showcase their talent, and make money from their content, but dont have a large audience yet, but are making progress towards building a fan base of subscribers who might pay for their content. A subset of these users are technically inclined and tend to invest in a blog platform such as Ghost, setup payment options with Pateron and send emails via Sendy.

3. “Content is my business” users – deep experts, reporters, journalists, authors, and writers, who have a brand affiliation (former reporters, journalists, etc.) or have a strong social media presence and want to monetize their content with a steady income stream using subscribers instead of advertising.

These users want a single platform for publishing, payments, email newsletters, and community.

They are writers first and content is their domain. They are less interested in integrating multiple platforms together. A subset of these users are technically savvy as well and will end up with a “best of breed” solution with different products for each use case and integrate them together.

SubStack Competitive Landscape

In the competitive landscape graphic above, as the creator gets more serious, they go up the scale from publishing on content aggregation platforms, to managing their own paid newsletters.

If you need a platform as a “Content is my business” user, which does the following:

  1. Help you create and distribute content while you get paid for it,
  2. Have an audience that you can start with and grow,
  3. Help you engage with your community of readers and subscribers directly instead of going through a platform,
  4. Help you monetize your content with simple payment options, and
  5. Help you build your individual brand as a content creator

If you are looking for all those things, then the options for you are limited to: SubStack, Revue, Button Down, Convert Kit, Tiny Letter and Qazy.

Since the acquisition of Tiny Letter by MailChimp, the platform as languished.

Revue has mentioned that they focus more on media companies than individuals.

Qazy is a blogging first platform with email distribution, suitable for those who want to have users to come to their site.

That leaves Button Down and Convert Kit, which really are the two other companies closer to SubStack than any of the others.

Over the next few weeks, we will dig deeper to compare each of the top competitors of SubStack, but this post was to set the competitive landscape.

If you want a personalized assessment of your potential audience, feel free to reach out to us via email at admin @ and we will respond to create a market assessment plan – absolutely free with no further commitments!


Profile of SubStack the company, founding, SubStack investors and Growth metrics

SubStack Revenue Growth and Paid subscriber growth

What does SubStack do?

SubStack makes it simple for a writer to start an email newsletter that makes money from subscriptions. They provide a platform to publish, distribute and monetize independent writing by paid subscriptions from readers. This is different from most media businesses which make more money from advertisers than subscriptions.

When was SubStack founded?

SubStack was founded on 28th July 2017 at 1448 Cortland Ave, San Francisco CA 94110, which is the home of co-founder, Chris Best. The company, SubStack Inc. was incorporated on 29th of November 2017 in Delaware. The California state filing was completed on July 27th 2018.

Who are the founders of SubStack?

SubStack has 3 founders. Hamish McKenzie, who was a part time writer at Kik; Chris Best, who was the Chief Technology Officer at Kik and Jairaj Sethi, who was the head of platform and lead developer at Kik.

Hamish McKenzie serves as the Chief Operating Officer (COO of SubStack); Chris Best serves as the Chief Executive Officer (CEO of SubStack); and Jairaj Sethi serves as the Chief Technology Officer (CTO).

Where is SubStack located?

SubStack headquarters are in 244 California St, Unit 204, San Francisco, CA 94111.

What is SubStack’s mission?

SubStack’s stated mission is to “Make it simple to start a publication that makes money from subscriptions”. It has evolved from: Substack’s mission is to make it simple for a writer to start a paid newsletter.

Is SubStack public?

No, SubStack is a privately held company, with investments from multiple individual investors and institutional capital from A16Z, Garage Capital, YCombinator and Zhen Fund.

How much money has SubStack raised?

SubStack has raised over $17 Million. There is a mention of $19,086,734 on July 23rd, 2019 in a document filed with the SEC.

SubStack raised $120K from YCombinator as part of Winter (Jan) 2018 cohort.

In May 2018, SubStack raised $2.2 Million in a seed round from Bill Bishop, The Chernin Group, Fifty Years, Zhen Fund, Garage Capital, Twitch CEO Emmett Shear, Zynga co-founder Justin Waldron and others.

On July 16th, 2019, SubStack raised $15.3 Million in a Series A round with Andrew Chen from A16Z as the lead investor and YCombinator also participating.

Who are the investors in SubStack?

According to the filing with the SEC, there are over 32 investors in SubStack since their inception. They include among others:

1. Wie Guo

2. VentureSouq

3. UpHonest Capital

4. ZhenFund

5. YCombinator

6. The Chernin Group

7. Kenji Niwa

8. Justin Waldron

9. Garage Capital

10. Funders Club

11. Emmett Shear

12. A16Z – Andreessen Horowitz

13. Fifty Years

What is SubStack’s business model?

SubStack charges a fee for paid newsletters. The fee is 10% of the newsletter’s price. An overview of SubStack pricing indicates they also have payment processing fees (that goes to Stripe which are about 3% on average of the newsletter’s price.

SubStack does not charge for free newsletters. In the industry this is usually referred to as a freemium model.

How many people does SubStack employ?

As of August 2020, SubStack has about 20 employees across technology, writer operations and marketing.

Is SubStack hiring? What jobs are available at SubStack?

SubStack has 10+ open positions in engineering (technology and data), Writer team (recruitment, community and strategy) and support listed on the SubStack careers page.

Is my SubStack subscriber list confidential?

SubStack accidentally revealed hundreds of subscribers’ emails on Jul 2020, by emailing them in CC to an entire list. Other than that incident, there are no other reported incidents of data breach at SubStack. As a newsletter editor, only you will have access to your subscriber list.

What is SubStack’s revenue?

Since SubStack is a private company, they do not disclose revenue. However, doing a simple estimation based on publicly available data indicates they had over 100K paying subscribers (July 2020). Some newsletter brand such as The Dispatch alone, doing over $1 Million in revenue on SubStack. SubStack charges 10% of all newsletter fees. Given the average subscriber pays about $50 – $100 annually, we can estimate SubStack revenue is in the $1 Million to $2 Million run rate range.

SubStack Annual Recurring Revenue Growth and Paid Subscriber Growth

Do you have a copy of the SubStack Pitch Deck?

SubStack pitch deck for raising Series A indicates they were looking to raise over $17 Million after having raised over $15 Million from A16Z and YCombinator.

Their positioning in the pitch deck was

We empower any individual to launch their email newsletters that make money from subscriptions of “super true readers”

In the pitch deck they also indicate that they view Revue, Pateron and ButtonDown as direct competitors and Medium as secondary.

Is SubStack growing?

SubStack is growing dramatically. Of all reported metrics, there are 3 that we track. Paid Subscriber Growth, Average Revenue Per Subscriber, Paid Newsletter Growth and Annual Recurring Revenue Run Rate. SubStack’s core growth loop starts with great creators who attract subscribers, which attracts other great creators to the platform.

From July 2017 to July 2020, SubStack has grown subscribers by 110,000 and Annual Recurring Revenue (Run Rate) to over $1 Million. 2019 growth in subscribers was 355% and 411% in ARR.

If you want a personalized assessment of your potential audience, feel free to reach out to us via email at admin @ and we will respond to create a market assessment plan – absolutely free with no further commitments!

Pricing Subscribers SubStack

How much does SubStack cost? #SubStack Pricing

SubStack Pricing

SubStack, the newsletter platform allows individual writers, editors, and curators to publish content and get paid for their work.

Here are the most frequently asked questions we have received from users about SubStack cost and pricing.

1. How is SubStack priced?


If you publish a free newsletter, SubStack wont charge you. It does not cost you anything and the price of your newsletter is zero even, if you scale to thousands of subscribers.

If your newsletter is priced, the SubStack charges you 10% of newsletter’s price. For example, if you charge $5 per month, then SubStack will take $0.50 or 50 cents every month. If you charge $100 annually for your email newsletter via SubStack, they will charge you $10 for a year.

SubStack uses Stripe for payment processing. Stripe charges you an additional 2.9% of your billing rate, plus 30 cents per transaction. So, if you charge $5 per month, expect to pay about $0.44 or 44 cents each month to Stripe. If you charge $100 annually for your SubStack newsletter, Stripe fees will be $3.2.

Your net payout if you charge $5 per month, per subscriber will be $4.05 and if you charge $100 annually, will be $86.8 per subscriber.


If you subscribe to a free newsletter you pay nothing. It does not cost you anything and the price is zero even if you subscribe to thousands of free newsletters.

If you subscribe to a paid newsletter, the pricing varies by newsletter (which is set by the publisher). We have seen prices from $2 per month to over $200 annual.

2. When will I get paid for my SubStack newsletter subscribers?

Since SubStack uses Stripe, it varies based on your location. Once you setup your Stripe account, it will ask you to “link” your bank account. Your first payout from Stripe will take 7-14 days (to establish the account). After that, expect to get paid between 2 days (US and Australia), 7 business days (India), 7 calendar days (most countries), 30 calendar days (Brazil), and Weekly (Japan). For a full list of payout dates, you can view Stripe’s schedule.

Payout dates will get longer if you get a lot of subscribers who request a refund because they are no longer interested in your content or they subscribed by mistake. If you have more than 2% chargebacks or disputes in each period (month), you might be subject to a Stripe withholding or reserved funds for up to 90 days or longer.

3. Can I use another payment provider besides Stripe with SubStack?

SubStack does not support any other payment option currently (Aug 2020) Stripe is the sole payment processor for SubStack.

4. If Stripe does not support payments in my country what can I do to get paid for my SubStack newsletter?

A few subscribers have used PayPal, Buy Me A Coffee or Instamojo, but these are not “integrated” with SubStack, so you will have to setup a separate payment option to get paid for your newsletter. The problem is you cannot seamlessly integrate paid content with free content into SubStack. If you don’t use Stripe, or if Stripe does not support your region or country, you are out of luck.

5. How much does SubStack cost?

For the newsletter publisher, SubStack is of no cost if your newsletter is free an as explained. It is 10% of your fee if you charge for your newsletter, plus payment fees.

Newsletter subscribers do not pay for free SubStack newsletters. For paid newsletters, they will pay the monthly or annual fee.

The other option that SubStack offers is an Everything bundle. Subscribers pay from $20 to $200 annually depending on the newsletters they choose. It is a very convenient way for subscribers to get multiple perspectives for one price. Publishers benefit as well by getting their content paid for as part of a bundled offering.

6. How much does it cost to map your domain to SubStack?

If you have a domain that you own (e.g., then you can point your custom domain to your SubStack URL ( and there is no charge.

SubStack does not offer custom domains. (August 2020)

7. How much should I price my SubStack newsletter?

Pricing your newsletter is long topic with its own set of frequently asked questions. For the purposes of this post, we will give you 3 pointers.

First, you can price your newsletter at whatever amount you choose.

Second, keep in mind there are heuristics or “comparable” newsletters, which have a price already. If you price much higher or lower, expect to get more questions asked by subscribers.

Third, what we have noticed is that if you offer multiple “media types” of content – for e.g. text, images, podcasts, videos, you can charge higher.

SubStack fees

8. Are there other SubStack fees? Are there fees for storing images or podcasts?

Besides the fees mentioned (10% of your newsletter’s price + Stripe payment processing fees), there are no other fees for SubStack currently (August 2020).

9. How does SubStack pricing model scale?


SubStack pricing scales linearly. As the number of subscribers grows your payment to SubStack is 10% of your total newsletter revenue. We are not currently aware of any discounts for large subscribing newsletters.


SubStack pricing for newsletters is priced by newsletter. The other option is the Everything bundle mentioned above.

10. What are the other costs that I must account for in my paid SubStack newsletter?

There are no other costs and fees for publishing your SubStack newsletter. Of course, you will have to pay for your internet access, or computer, but we assume you have paid for those already.


How many paying SubStack subscribers can I get?

This is the first question we get from most new SubStack writers. As the world’s first SubStack Agency, we understand that is one of the main reason’s writers are starting a newsletter on SubStack.

The worst answer we can give based on our experience, is “It depends”. We have tried it hundreds of times and got “Ghosted” after that first 15-minute introductory call.

If we cannot answer their #1 pain point and question, why bother?

So, we started to put a methodology to answer that question, with the best way we can – data and facts.

There are 4 primary and 5 secondary variables to help you answer that question with data. Our Assessment service helps you leverage our data from 1000’s of SubStack newsletters and surveys to give you a tighter range. You can do this calculation yourself, but we do this for free, after a 15-minute discussion with you, so it helps to use our experience.

What are the variables to help you determine the # of subscribers (paying) for your SubStack newsletter?

SubStack subscriber variables
The important things to grow your SubStack subscriber count

First, the category and subcategory of newsletter. We track over 8000 newsletters (free and paid) as of Aug 2020.

The top 5 categories are: Politics, Sports, Technology, Food and Self Help. Subcategories within Politics (for paying subscribers) are conservative, opinion, economics, and foreign policy. For sports, American Football, Basketball and then Baseball are top.

Within American Football for e.g. Fantasy Sports does better than most team newsletter. To give you an estimate, we have political newsletters with over 700 paying subscribers, and the top Self-Help newsletter has fewer than 200 paid subscribers.

Second, How big of a brand the author is. Authors with a large following on Twitter, LinkedIn, Facebook, and an engaging social media presence have a larger subscriber count.

Third, is the location or country of subscribers. SubStack subscribers are very much focused on North America (US, Canada).

For the same category and subcategory (e.g. Machine Learning and Artificial Intelligence within the Technology category) we track 2 different newsletters – one written by a writer in SF and another based in UK. Both have similar social media profiles and similar tenure (7+ months on SubStack). The one from SF has over 50 paid and 400 free subscribers, while the European one has 3 paid and 100 free subscribers. The free subscribers are also in the United States. For the European newsletter, of the 100+ free subscribers, over 70 are in the US, to 12 in all of Europe and 2 paid subscribers in the rest of the world.

Fourth, the tenure and consistency of your publication. Paid subscribers expect frequent, dependable, and regular news.

We know of 2-3 SubStack writers who received emails within 3-4 hours of a “delay” in their newsletter being published. Longer tenured newsletters get more subscribers.

The secondary things to grow your SubStack subscriber count

There are a few secondary variables as well.

Length of each update in your newsletter. Writers who writer longer (> 1000 words) on average have more subscribers.

Use of images and visuals. Writers who write only text (old school) tend to have fewer subscribers.

Multiple offerings enhance subscriber count. Writers who supplement their newsletter with podcast content do an order of magnitude better than those that write only text-based newsletters.

Uniqueness of content (controversial, different, distinctive, quirky). This is highly subjective, so we use AWS Comprehend and our own humans to score each newsletter on 1-5 for “uniqueness”. The bottom line is the more “controversial” the news article is, the more subscribers.

There are other unknown variables which we are trying to score and map including

a) Newsletter name and Logo,

b) Age demographic for your content – Email is still a largely older, 35-year-old audience,

c) Author’s background – those from “known publications” such as New York Times, are doing better than those who are just getting started,

d) Time of your posting – Saturday and Sunday work better for politics and sports, and Wednesday works better for technology categories.

If you want a personalized assessment of your potential audience, feel free to reach out to us via email at admin @ and we will respond to create a market assessment plan – absolutely free with no further commitments!