Substack Revenue Calculator

The calculation is a two-stage funnel followed by a fee stack. A free list times a paid conversion rate gives the paying base, that base splits between monthly and annual plans, annual revenue is divided by twelve so it can be expressed monthly, and a founding tier is added at a multiple of the standard price. Fees then come off in two layers: Substack takes 10 percent of gross subscription revenue, and Stripe charges roughly 2.9 percent plus 0.30 US dollars per charge, giving an all-in drag near 13 to 14 percent on a 10 dollar monthly plan. The fixed 30 cents is the part that punishes small tickets. On a 5 dollar monthly plan it alone is 6 percent of revenue, while on a single 100 dollar annual charge it is 0.3 percent. Annual mix therefore helps twice, cutting fee drag and cutting churn, since an annual subscriber faces one renewal decision a year rather than twelve. Typical working values are 5 to 10 percent paid conversion, 5 to 15 dollars monthly or 50 to 150 annually with the annual rate set at roughly ten months of the monthly price, monthly churn of 3 to 8 percent, and founding members at 1 to 5 percent of the list. Several simplifications apply: annual revenue is amortized evenly although the cash actually arrives upfront, churn is applied as a flat monthly drag rather than as cohort decay, and refunds, sales tax and VAT, and cross-border card fees are excluded.

Substack was founded in 2017 by Chris Best, previously co-founder and chief technology officer of the messaging app Kik, Hamish McKenzie, a journalist who had written for Kik and covered Tesla, and Jairaj Sethi. The design choice that defines the platform was refusing advertising and taking a flat 10 percent of subscription revenue instead, which tied company income to writer earnings rather than to page views. It went through Y Combinator in the winter 2018 batch and raised a Series A led by Andreessen Horowitz in 2019. The model only became practical because recurring card billing had already been commoditized. Stripe, founded in 2010 by Patrick and John Collison, let a small team embed subscription payments without building a merchant stack, which is why a platform fee and a separate processor fee appear as distinct lines in every calculation of this kind. Substack Pro advances in 2020 and 2021 recruited established journalists and drew criticism over which writers were subsidized, and the company reported passing one million paid subscriptions in November 2021, growing to several million in the years that followed. Competitors then formed around the fee itself: Ghost, run by a non-profit foundation launched in 2013 after a Kickstarter campaign by its founder John O'Nolan, added paid memberships around 2019 with no revenue share, and beehiiv launched in 2021. That competition is why the 10 percent line is now routinely compared against flat monthly hosting costs.