Substack built an empire on the promise that writers could own their audience and keep most of their earnings. That pitch worked brilliantly for years. Now a growing number of successful creators say the math no longer adds up.
They call it the Substack Tax. The platform takes 10 percent of every paid subscription in perpetuity. Add payment processing fees and the cut climbs closer to 13 percent. For tiny newsletters the amount feels manageable. Scale to tens of thousands of subscribers and the annual bill runs into five or six figures. Many writers have decided they would rather pay a flat monthly fee somewhere else.
The Verge reported today on the latest wave of departures. Matt Brown moved his sports newsletter Extra Points to Beehiiv back in 2021. With 71,000 subscribers he would owe Substack more than $25,000 a year. On Beehiiv the cost runs about $3,000. “Given the size of my publication right now, I would need to pay Substack over $25,000 a year in fees,” Brown told the publication.
Sean Highkin made the jump to Ghost last April. His basketball newsletter The Rose Garden Report now costs him $2,052 annually instead of nearly $5,000. Subscriber growth climbed 22 percent after the move. “When I first joined up, Substack gave me a big push,” Highkin said. “But once I wasn’t one of the ‘new recruited talent’ they could tout, they stopped featuring me and I saw my growth stagnate.” He now makes significantly more money.
The departures stretch beyond individual writers. The Ankler, the Hollywood industry newsletter founded by Janice Min and Richard Rushfield, left last month for Passport, a partnership with Automattic and Ben Thompson. “This transition marks a defining moment in what has been underway: a move beyond newsletters into a fully integrated media company,” Min and Rushfield said in a statement.
Anne Helen Petersen sent Culture Study to Patreon last October. She had grown tired of what she described as steady enshittification. “I didn’t want to be on a platform that had been steadily — and not so stealthily — enshittified,” Petersen said. Casey Newton took Platformer to Ghost in 2024 seeking an open-web home he could truly control.
Substack defends its model. The company provides free email delivery, discovery tools, and a network that drives half of all new subscriptions through internal recommendations and its Notes feature. Hanne Winarsky, Substack’s head of new media, pointed to creators who returned after testing rivals. “We’ve always believed that creators should own their relationship with their audience, including the freedom to leave if they choose.” Cofounder Hamish McKenzie noted that true walled gardens would never let writers export their full mailing lists and payment relationships.
Yet the financial reality bites harder as newsletters mature. A publication charging $10 a month with 10,000 subscribers sends roughly $15,900 monthly to Substack and processors. At 50,000 subscribers the figure exceeds $79,000 a month. Ghost starts at $15 a month for basic service and scales with add-ons. Beehiiv offers a free tier up to 2,500 subscribers and charges $96 monthly on its Scale plan for 10,000. The gap widens dramatically at higher revenue levels.
Alicia Kennedy detailed her own exit in a post six months after switching to Beehiiv. A Google Alert once informed her that Substack had published her content under its own brand. Open rates had fallen. Deliverability suffered. She suspected inflated subscriber counts. The 10 percent cut felt unsustainable. “I pay $250 per month, a transparent cost of business expense, rather than pay Substack 10 percent of each subscription,” Kennedy wrote on her new site.
Beehiiv assigned her a support representative who spent hours on Google Meet over several weeks. The team segmented her list by engagement, handled the technical migration, and continued providing responsive help. Kennedy chose Beehiiv over Ghost precisely for that assistance. She works alone and values paying for expertise in areas outside her control. After the move her open rate jumped from 45 percent to 70 percent. She added 1,000 organic subscribers. Retention improved thanks to Stripe renewal reminders. “The move made her happier as a publisher, more confident,” she reflected.
Substack itself shows signs of pressure. The company reached unicorn status with a $1.1 billion valuation in 2025. Annualized gross merchandise volume sits around $600 million. Platform revenue after the 10 percent cut lands between $55 million and $60 million. More than 50 creators earn over $1 million annually. The top 10 pull in more than $40 million combined each year. Yet churn runs at 50 percent for paid subscriptions. Writers must replace roughly 31 subscribers every month to maintain $50,000 in annual income at an $8 monthly price point.
Apple’s 30 percent App Store commission adds another headache. Substack long routed payments through the web to protect writer margins. After pressure in September 2025 the company began requiring in-app purchases on iOS, automatically raising prices. A $10 web subscription now costs $13.99 in the app. The change created friction and hurt mobile conversions. A data breach earlier this year exposed metadata for 700,000 users.
Beehiiv, founded four years ago, expects to nearly double revenue to $50 million this year. Its flat-fee structure and ad network appeal to creators who want to reduce reliance on subscriptions alone. CEO Tyler Denk draws a comparison to Shopify. “We don’t want to take credit for the work of our content creators. Shopify is empowering and building millions of these retailers’ own websites and businesses, and you actually would have no idea that you’re on a Shopify website, which is kind of the point.”
Ghost offers open-source software and complete data ownership. Publishers who choose it often cite deeper customization, no platform branding, and freedom from algorithmic recommendation pressures. Both alternatives emphasize tools that let writers build independent media businesses rather than remain tenants on someone else’s platform.
Readers, meanwhile, keep spending. A New York Times story published last year examined the phenomenon. Em Hermann-Johnson, a substitute teacher in Minneapolis, subscribes to 11 newsletters. Her total annual outlay reaches about $600. Some cost $5 or $10 monthly. Others run $38 to $60 per year. “I just want to support them and their work, and that’s how I feel like I can do it,” she said. Many of those subscriptions remain on Substack. The question is how long writers will continue to accept giving up a tenth of that money.
The shift does not surprise analysts who track the creator economy. Early adopters benefited from Substack’s discovery engine when competition was thin. As the platform matured, social features, Notes, and algorithmic feeds began to feel like distractions. Limited third-party integrations and persistent Substack branding on custom domains frustrated designers and strategists. For those who arrive with established audiences or strong distribution channels, the 10 percent fee starts to look like an expensive luxury.
Some large newsletters tested the exit and returned. SemiAnalysis, The Generalist, and others found that rebuilding growth without Substack’s network took more effort than expected. Yet the current cohort of defectors appears more deliberate. They accept slower organic growth in exchange for lower costs, cleaner data, and greater control over design and future product expansion. Many now treat the newsletter as one revenue stream among several. They layer on advertising, podcasts, events, or premium communities without surrendering a permanent percentage.
Substack continues to expand. The company entered the UK market and counts more than 500,000 paid subscriptions there. It invested $20 million in a TikTok creator fund and experiments with video, live streaming, and even a television app. These moves suggest an effort to become more than a newsletter platform. Whether they convince high-earning writers to stay remains uncertain.
The competition has sharpened. Beehiiv added podcasting tools earlier this year and positions itself as an all-in-one creator operating system. Ghost refines its content management strengths and SEO capabilities. Other players such as Kit and Memberful offer their own mixes of flat fees and audience ownership. The newsletter business has fragmented into distinct philosophies. One charges for access to a powerful distribution network. The others charge for infrastructure and independence.
Writers who leave rarely burn bridges entirely. Many keep a presence on Substack for discovery while routing payments and core content elsewhere. The platforms themselves have made migration relatively painless. Full subscriber lists, archives, and even some payment relationships can transfer. What cannot easily move are the social connections and algorithmic boosts accumulated inside Substack’s ecosystem.
That trade-off sits at the heart of the current exodus. Early in a newsletter’s life the platform’s promotional muscle delivers undeniable value. Later, when the audience stabilizes and revenue grows, the ongoing tax begins to feel like rent on land the writer has already improved. The decision to stay or go now hinges less on ideology than on simple arithmetic and personal tolerance for platform risk.
Substack built something remarkable. It proved direct subscription models could sustain serious journalism and commentary outside legacy media. Yet its success also created the conditions for sophisticated alternatives. Beehiiv and Ghost learned from Substack’s example while avoiding the revenue share that becomes burdensome at scale. The next chapter of the newsletter boom will test whether a centralized discovery hub or a collection of independent operators can better serve both writers and readers.
So far the evidence suggests many creators believe they can have both. They will grow through their own efforts, retain more of their income, and maintain the direct relationships they always sought. The Substack Tax, once a reasonable price for infrastructure and exposure, now drives some of the industry’s best talents to look for exits. The platforms they choose next will shape how newsletters evolve over the coming years.
WebProNews is an iEntry Publication