Why Substack, MailChimp, and Other Email/Subscriptions Services are a Bad Bet
Getting traffic is hard — don’t buy into the hype
You’ve all read them — the endless articles about how signing up to a subscription service makes a lot of money for writers. More than that, it gives you a fanbase who will pay you to dump a newsletter into their inbox everyday, every Friday, or every month.
So let’s work out the math.
If you have 100 subscribers at $5 each, that’s $500 a month. If you have 1,000 subscribers at $5 each, that’s $5000 per month. And, wow, if you have 10,000 subscribers at $5 each, that’s $50,000 per month. That is mindblowing, right? Who wouldn’t want that?
My experience earning on the web
First let’s talk about my experience on the web — just establishing my credentials for saying this.
I have been writing on the web since 1999. That gives me 22 years of experience of writing for money on multiple platforms. During that time, the number of followers I have had on various sites (most of which are now defunct) have ranged from about 150 to 40K.
I have had sites where three or four times a week I would hit up to 1.5 million reads a day, and for which I earned no money, and sites where I had 30 reads per month for which I I earned 30 cents for the month. I have had numerous of my pieces at the top of Google search (and other search engines) for years, and have earned a substantial amount of money for a couple of pieces. Over the past seven years, one piece has earned me $4200 as it has paid me about $50 each month. It’s an exception.
Every writer has excepttions.
Unfortunately, they’re few and far between.
There are several problems for the writer on the web. The first is the amount of traffic you get. If the algorithm doesn’t provide you with readers, you’re dead in the water. The second is that even if the algorithm does supply you with readers, the site doesn’t pay you (e.g. Quora). The third is that the site doesn’t provide you access to who your readers (or buyers of your books) are (e.g. Amazon, KDP). The forth is that sites like Facebook and Amazon play on the naivety of writers. They only provide one sale for each click (advertisement). Any ad agency will tell you that you should have at least 40 or 50 sales for each ad. Writers don’t appear to know that. The ROI (return on advertisement) is dysmal.
Subscriptions are a lie
In all business, there is a cycle. In the beginning, sales are poor. In the middle, sales are high. In the end, sales are poor. It’s no different for the subscription model. When it started out, it was difficult. Then there was a phase during which, if you had a list of email names, you made a fortune. And now it’s nearing the end.
Why is that?
People don’t want to subscribe to lists anymore
If you’re receiving a lot of email a day, and I think all of us are, the last thing you want is another suscription. You especially don’t want another subscription if it contains very little of value. Most subscriptions are just an excuse for the writer to sell you something else. It’s marketing bullshit. On occasion, I have signed up for a subscription in order to get a ‘free ebook.’ The ebook has NEVER contained anything of value or anything I didn’t already know. I have never, ever had a subscription for more than two weeks. They just irritate the hell out of me. I don’t want that much email in my inbox.
That’s pretty much the same story that everyone will tell you. In the beginning, when subscriptions were fun because nobody received that much email, those who sent newsletters made a mint. Now, that party is over. Very few people are willing to pay for subscriptions, especially if most of what that person writes is available free on the web.
So, no, having an email list is not a magic bullet for making money. It might have been at one time, but it’s not anymore.
Finding subscribers is not easy, and that’s an understatement
If you’re already a celebrity, or if you already have 10,000 followers somewhee else, you can be assured that a percentage of those will be willing to pay you because they really do want to hear from you. Of course, it will only be for a period of time. At some point, they will grow tired of your weekly periodical, and they will unsubscribe. Incidentally, the accepted percentage of of people who will sign up is generally recognized as between one and two percent.
If you have two thousand followers on Medium, you can assume that maybe twenty people will sign up to receive your subscription service, and then you’re dead in the water. You see, the one big failing of subscription services is that they don’t showcase your work to potential subscribers.
A content site like Medium does — however badly.
On Quora, for example, right from day one, whenever I have bothered to write for a few months, I have immediately garnered 600,000 reads per month. There are very, very few people who can do that. However, I have removed most of what I wrote on Quora (I have done that twice) and so you can’t see that.
Here’s the thing. Those sites that have a brilliant algorithm for gettting your work to potentially interested readers don’t pay you, and those that pay you have a poor algorithm — unless you pay them first.
Let me reiterate. Finding a site where the algorithm works in your favor, is difficult, and subscription sites do not find you potential readers.
What you didn’t know about Substack
Here’s what you didn’t know about Substack.
Intermittently, Substack has offered to pay some writers (with huge followings) $3,000 per month to switch to Substack, and that amount would continue until they were established. It also offered between $1000 to $3000 per month to some writers in 2020. So those writers had a cushion during their start-up period. More than that, there is no way that Substack offered that kind of money to people who didn’t already have a strong following.
Let’s look at the current income base of Substack. Currently (January, 2022), it has half a million paying subscribers. That means there are half a million readers who pay to read the work of writers on Substack.
In line with all content writing sites, somewhere around 5% of writers generate an income. On Medium, that holds true. Only some 5% hit the $100 per month level. On Hubpages, only 5% have ever hit payout ($50) every month.
Now let’s do some arithmetic.
If there are only half a million paying subscribers on Substack (and the rest are all writing freebies), let’s look at how many of those subscribers are paying for the above newsletters. I think it’s important to establish that, because that means that anyone else who is trying to find paying subscribers isn’t doing very much at all.
There are twelve newsletters that have ‘tens of thousands of subscribers.’ There are twelve newsletters that have ‘thousands of subscribers.’ There is one newsletter that has ‘hundreds of subscribers.’
If we say give a minimum of 20,000 subscribers to those who have tens of thusands, it means that’s 240,000 subscribers are paying for the top ten newsletters on Substack. Then add those who have thousands of paid subscribers, and lets’ give an average of five thousands subscribers. That would mean that would be a further 60,000 paying subscribers to those newsletters. I’m not even going to count the one loan newsletter that has hundreds of subscribers.
So that’s 300,000 paying subscribers (of that half million) paying the 25 above mentioned writers. Substack claims there are thousands of writers on its playform. So, the word ‘thousands’ would imply that there are at least 3000 writers on Substack, but I would bet that there are a lot more, simply because of all the hype about how much money is made by offering subscriptions.
So, if more then half of the subscribers are subscribing to the very top two dozen writers on Substack, that means it’s unlikely that the other writers are making more than $60 per month on average.
$60 per month on Substack?
Just as the top 1% earn in real life, and the bottom 80% are fighting their guts out to survive and pay the monthly bills, so, at least the bottom 80% of those who are trying to find paying subscribers on the various subscription sites are earning peanuts. I would venture to say that their small successes on Medium, plus the hype that is propagated by various Substack writers, has led them to believe that they will earn a lot more on Substack.
I challenge that with every bit of my knowledge about the web.
Also, a while ago, I was curious whether Substack offered their writers an affiliate fee for bringing in more members. Generally, most sites do this. They want to grow their sites, so they offer a percentage of the fee to those who are responsible for bringing in more readers/writers. I’m almost sure that, at one point, curious to know if Substack had an affiliate fee, I googled it and found it. I can no longer find something like that. So, perhaps, I misread somethng.
There are reasons I will never offer a paid subscription service
Perhaps I lack confidence in my writing (I don’t), or perhaps I lack confidence in my ability to market my wares to readers (I do). I’m not a marketing person. I don’t have it in me to ask people to pay for my writing. I was dragged kicking and screaming to open a Patreon page by various Google Plussers some years ago. Since then, I’ve become more accustomed to putting a beggging letter at the bottom of each article I write. I still feel awkward about it, but I’ve finally realized that there are actually readers who will pay for my writing.
The bottom line is that I prefer to write on sites that have an acknowledged readership and a high page rank on Google. To me, that’s my best bet. If you’re an unknown writer (like me), then I would think that’s the best bet for you as well. I’m not Glen Groenwald or some other famous person.
This year, however, I am going to be writing serial fiction. In the past, I’ve been told I’m a damned good writer (once by David Baldacci), and so I hope that it will take off. And, yes, I will ask people to pay a fee to read my daily serial. I hope I have what it takes. Take note, it’s a hope — not an arrogant certainty.
I can never promise writers that if they pay for my course or pay for a subscription they will gain immense benefits. I’m not that kind of person. Perhaps you are, and perhaps you’re right.
For most of us, I think that we are a bit more humble, a bit more uncertain, a bit more realistic.
I’ll leave it at that.
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