Here’s a fun pricing case study/creator economy brainstorm.
On substack, you are expected to offer a discount for your annual subscription. Like $5/mo/$50 per year. But this means you’ve soft-committed to writing steadily for a longer period out. Can you mess with that?…
Conversation
Assuming steady subscribe/unsubscribe rates, if you have 500 paid subscribers, distributed 50-50 monthly/annual:
Your expected mean commitment horizon is: ~0.5*(0.5*30+0.5*365)= ~100 days.
Your $ debt load for unwritten “mortgaged” newsletters is: ~500*0.5*(0.5*5+0.5*50)=$6,875
1
6
If you actually wanted to model this carefully btw, I’d suggest using a baseline poisson arrival/departure rate plus a power-law distribution of arrival spikes of various sizes. If you’re doing edgelord shit and also expect cancellation spikes, throw that power law in too.
2
8
I’m ignoring substack and Stripe commissions above.
This is basically short-term debt from readers. You take $50 today, pay back $60 in 52 weekly installments of 1 newsletter each. You can work out the interest rate.
This isn’t theoretical. It’s your actual walk-away price tag.
3
7
Replying to
Doesn't that seems important? Aren't you losing $3/trx, so monthly is much worse net?
1
Replying to
Not $3, it's 2.7% +$0.3. Substack's 10% comes off the top so $5 is 0.972*4.50-0.30 = $4.07. For $50 it's $43, so it amounts to $48/year monthly vs $43/year annual on $50 or $52/y on undiscounted $60... so yeah, important, but not in a way that affects the comparison that much.
1
1

