From household utilities, to streaming services like Netflix, or even unlocking more horsepower out of one's vehicle1, as consumers it's nearly impossible to not be indebted some way or another to the recurring monetization model known as subscriptions.
Having built SaaS companies as a software engineer, I understand why the subscription model is desirable for businesses. In exchange for access to a good or service, predictable recurring revenue helps streamline accounting and ease other back office functions like scaling systems or improving customer relationships.
For many of those reasons, subscriptions are the de facto monetization method used by digital publishing platforms like Medium and Substack. These platforms have enabled independent writers to get paid for their work, often supported directly by loyal patrons via recurring payments.
Substack’s Model Doesn’t Scale for Readers
Unlike the Medium model where readers pay a single subscription fee for "Medium Membership," giving them access to all paid content on the platform across writers/publications, Substack's model differs in that each individual publication has their own subscription (pricing them as they see fit), which is required to read monetized content on that publication alone.
Whereas it only costs $5 per month to become a Medium Member, subscriptions on Substack aren't nearly as inexpensive, and their combined costs quickly add up. Paid access for a Substack publication costs anywhere between $5 to $20 per month from what I've seen personally. Of the 10 publications I follow on Substack, five of those are monetized: three cost $10/month, one is $8/month, and the other is $15/month (yearly plans typically offer 2 months free or a 17% discount). Assuming I paid for access at the discounted yearly rate for all five, I'd be spending close to $550/year to support just five writers. That's about 4x more expensive than Amazon Prime or 8x the price of a Costco Gold membership!
In his essay titled Thoughts on Substack’s Subscription Model, writer Jamie Todd Rubin corroborates this prohibitive pricing: "You can see the problem. Each of these newsletters/blogs is worth the money to subscribe to them, at least to me. But in combination they add up quickly. In total we’re talking about $170/year for 3 newsletters/blogs. This doesn’t seem scalable to me." He continues, "The problem is, as more and more writers move to this model, it becomes harder and harder for readers to fork out limited funds to support them. If ten writer I really loved to read had subscriptions on Substack for $60/year each, that would cost $600/year to read all of them. That’s a lot of money."
Cost Isn’t the Only Constraint
Not to mention I don't even have time to read all of the content I have access to as a subscriber. Just as I'm limited monetarily with who I can subscribe to, I'm also limited temporally by how much content I can consume. Readers on the platform like myself are forced to be selective of who they choose to support because of these limitations.
When access demands a recurring fee, and in that moment, you only have so much time and mental capacity to consume a limited amount of content at the time of purchase, the thought of remembering or even scheduling the cancellation of the subscription becomes too big a hurdle to even complete the checkout process. This binary "all or nothing" problem caused by Substack's singular subscription-only model is why a majority of readers don't convert to paid subscribers and thus writers end up leaving money on the table.
Medium Isn't Perfect
For what it's worth, Medium's model is not without its issues. Because readers pay Medium directly, they in turn must divide the sum of subscription revenue (less whatever fees required to run the platform) following a distribution model to calculate the exact payout per writer. Despite outlining how payouts are calculated, many writers struggle with maintaining any sort of predictable income month to month. In her article After 3 years and $11,000, I’m leaving Medium, Rosie Hoggmascall outlines the minutiae of Medium payouts: "The real issue is not the amounts, but the unpredictability. If earning is your goal, this bumpyness pushes writers to cross post elsewhere to spread risk. Virality is the only reliable path to earn on Medium — and that is impossible to produce consistently… If a reader loves a specific writer, there’s no guarantee their subscription supports their work."
The Missing Middle Ground
I can't help but think there has to be a better way for readers to support their favorite writers without compromising writers' own compensation. If a profit-sharing method can't guarantee writers being paid fairly, and a separate subscription per publication is cost prohibitive for readers wanting to support more than a handful of writers, where's the middle ground?
I believe the solution can be found in other creator economy platforms like OnlyFans, Patreon, or Twitch, where hybrid monetization methods are enabled, giving fans the ability to support creators how they see fit.
A reader who pays $2 for one article is more likely to subscribe later than random cold traffic. Writers are then capturing revenue from people burdened by subscription fatigue who would otherwise pay $0.
For Substack—where writers have greater control over their content and pricing—this would look like a micropayments or pay-per-post model, where instead of requiring readers to subscribe to unlock all content, they could be more selective with their funds and opt to read what's truly interesting to them. Give readers the option to pay something like $1 to $5 to unlock a paid post rather than needing to sign up for a recurring $10 fee just to read a few articles (and that $10 investment snowballing into $20, $30, $40 when they inevitably forget to cancel their subscription 4+ months later).
Just to be clear: micropayments should be enabled in addition to paid subscriptions. Subscriptions make the most sense for those who not only have the monetary means for supporting their favorite writers, but also consume most or all of the creator's content to begin with. Micropayments, on the other hand, allow those like myself who might be financially strapped or aren't familiar with a particular writer and fully committed to subscribing just yet2 to get a taste of their work without the hassle of committing to a subscription.
To reiterate, Substack should allow publications to not only offer course meals, but also include an à la carte option. As a reader, this dual system gives me the choice to enjoy content I'd want to read without having to overspend on content I might not consume otherwise. This in turn opens an additional revenue stream for writers while still being supported by their paid subscribers.
Some may argue one-time payments would cannibalize the higher-value subscriptions, but I like to think of a single post purchase as a paid sample or warm lead. A reader who pays $2 for one article is more likely to subscribe later than random cold traffic. Writers are then capturing revenue from people burdened by subscription fatigue who would otherwise pay $0.
This solution seems sound in theory, but would it have any meaningful impact in practice if actually implemented?
- Car buyers have to pay extra to unlock horsepower on Volkswagen vehicles
- How many times have I encountered a paid post on Twitter that I couldn’t bring myself to read because the mental effort required to subscribe, read a single post, and then cancel the subscription afterward was simply too much?