📊 ClassNotes 019: Substack Pricing Study
How much should you charge for your expertise?
Most will tell you to charge by product type (e.g., courses cost X, ebooks cost Y, etc.).
Here's why this is the wrong starting point and what to do instead.
Substack has grown into a behemoth in the online writing space, and for good reason.
The toolset and community they offer writers are truly unique, with some of the largest publishers attributing up to 30% of their audience growth to simply existing on the Substack network.
That’s wild.
But what's even more useful for us is how much data the platform has made public. For example, you can find the approximate subscriber number (both free and paid) for almost any writer.
Take a look at The Bear Cave by Edwin Dorsey, a Substack that’s amassed over 50,000 free subscribers and several hundred paying ones.
Because this information is hidden for most digital products, it's impossible to study what actually works (i.e., what you should be charging). Thankfully, in the case of newsletters, we can.
Substack Pricing Study Findings
For the final experiment of 2023, I started by collecting the top 5 highest-earning Substacks for each of the 28 categories they feature.
The 16 I chose to include in our weekly chart were a mix of the highest and lowest-priced options, as well as the most and least in-demand categories (determined by total number of subscribers).
From there, I found the average for each individual category. Then, for all 140 data points (28x5) I found the:
- Mode — most commonly used monthly price
- Mean — overall average monthly price
- Median — the “middle” price
Here are a few of the standout numbers.
- The highest average monthly subscription price was for the Finance category at $38.60/mo.
- Business was a close second at $33/mo and Technology a distant third at $20.20/mo.
- The lowest-priced categories were Humor at $5/mo, and Food and History, which both came in at $5.40/mo.
- For all categories: the mode was $5, the mean was $9.97, and the median was $7.
So, what should you do with this information?
How to price your digital products
Charge by topic, not product.
At the end of the day, all of these newsletters are delivering the same product — words. But the value of those words fluctuates drastically, as does their pricing.
Topic matters more than product type for pricing strategy.
One of my favorite examples of this is the company Draft.dev. It’s a content marketing agency focusing on technical content: blogs written by engineers for engineers.
You can hire very good, generalist blog writers for $300 - $1,000 per article. Draft.dev charges $2,000+ (based on what I could find online). Why so much more? Because their topic focus enables it.
Higher utility equals higher price.
How will people use the content you deliver?
This is the question we keep coming back to in almost all of my research on successful content. The easier your content is to use and the higher rewards it generates, the more people will be willing to pay.
Finance newsletters can charge the most because they know the information they provide is worth thousands of dollars (or more) to the right readers. The ROI is clear.
Subjects like History and Humor have a harder time proving their value. They're entertaining, but so are the millions of free, highly produced YouTube videos, podcasts, and more that customers can also consume.
Price collectively.
Most people paying for content subscribe to multiple publishers (newsletters, magazines, etc.). It’s highly unlikely you will be the only newsletter they pay for — just like when you sell a course or ebook, you’re not going to be the only digital product they buy.
Therefore, price your newsletter in a way that fits into their "stack."
For many, this means pricing on the lower end of the spectrum, in the $5-7 per month range. Yes, this is the only time I will ever tell you to price lower, but the proof is in the data. Most people choose this range because it’s working.
If I want to dive into a niche, I’m more likely to spend $5/mo on 4 great newsletters than I am $20/mo on 1.
1. Copy what works.
2. Let your topic dictate pricing.
3. Complement over compete.
Thank you for following along, reading these newsletters, and supporting my work.
In 2024, we'll talk about the future of ClassNotes & Content Class. Until then, enjoy this holiday season!
— David
📚 Extra Credit
- Where Good Ideas Come From. If you're looking for a read to help you think bigger and take more risks in the new year, I highly recommend this book by the legendary Steven Johnson.
- Start a Newsletter with Ghost. If you want to start a newsletter like this one, I recommend using Ghost. It's easy to use and affordable for new creators ($9/mo).