Can Substack Sustain a Free Model Forever?
And if not, what then?
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Substack is a strange beast, isn't it?
The idea is old, newsletter are everywhere, they don’t offer anything special, and yet, Substack’s booming like crazy.
But here’s what makes a difference for many people, including me.
The “free” plan
On most platforms, the free plan is like a free sample at the grocery store. You try, you get hungry, and then you’re annoyed because the real deal costs $19.99. That’s most free plans to tools these days. You get a few features for free, but when you really want to work, you’ve got to pay (a lot in many cases).
But Substack? They hand you the whole thing.
For free.
You can publish posts. Upload images. Share videos. Host podcasts. Send them all to thousands of subscribers. Build your brand. And they won’t take a single cent from you unless you start charging readers and someone actually pays. Which rarely happens compared to all the free users.
It’s almost suspicious, isn't it?
Because all these features are anything but free. Substack hosts all of our stuff (gigabytes of data) on their servers for free.
This feels countercultural.
Everyone else is looking for ways to squeeze every penny out of creators. They take a cut. They charge writers monthly. They have hosting fees. Even your favorite note-taking app has a “Pro”.
And newsletter tools are even worse. You pay for the number of subs. And it gets freaking expensive as your list grows.
Yet, Substack says: Here’s everything. Build your audience. Pay us only if you make money.
Strange…
The Free Mountain
It’s worth spelling out just how much Substack gives away for free:
Unlimited publishing — Whether you post once a month or three times a day, it’s all on them.
Email distribution — They send every post directly to your subscribers’ inboxes, no extra cost.
Podcast hosting — You can upload full episodes and have them syndicated to major players like Apple Podcasts and Spotify.
Video uploads — Yes, even video — without a hosting bill hanging over your head.
Analytics — You can track your growth, see open rates, and figure out what’s working.
Community tools — Comments, chat, recommendations, cross-promotions with other writers and social media with Notes.
You can have hundreds of thousands of subscribers and still pay them nothing if you never charge those subscribers.
It’s a model that seems… unsustainable, doesn’t it?
The Economics of “Free”
Substack only makes money when you do.
If you offer paid subscriptions, they take 10% of the revenue. That means their profits scale directly with the success of their paid creators.
No ads, no upsells, no algorithm tweaks to make you buy “boosts.” They win when you win.
And that’s not going to last forever, I fear.
The vast majority of Substack newsletters are free. Many writers on Substack don’t offer paid subscriptions at all. And even less get paying subscribers. That means they’re essentially hosting, delivering, and storing huge amounts of free content at their own expense.
For now.
And this isn’t cheap. Sending millions of emails a day costs real money. Hosting podcasts and videos isn’t free, either. Every free newsletter with thousands of readers is a cost center for Substack.
So the sustainability question is genuine.
What Keeps It Going (For Now)
There are a few factors working in Substack’s favor:
High margins on paid subscriptions: When a big-name writer charges $15/month to 50,000 subscribers, that’s serious revenue for Substack with zero marketing spend on their side.
Long-tail potential: Even if most writers start free, some eventually convert a percentage of their readers to paid plans, creating ongoing revenue.
Investor funding: Substack has raised significant venture capital, which means they can afford to prioritize growth over immediate profitability. But that won’t last forever, and VC expects long-term results. That’s the important part.
Forever Free
Here’s where reality might get uncomfortable:
Server and delivery costs scale with growth: Every time Substack gains more free creators, their operating costs rise.
Paid conversions will plateau eventually: Not every niche audience is willing to pay for content. If too few writers monetize, Substack may not cover costs. Subscription-fatigue is a thing. And competitors will always be there.
Venture capital isn’t infinite: At some point, investors expect a return. That could lead to pressure to monetize free users in other ways.
We’ve seen this movie before. Platforms start free, hook the users, and eventually slap on limits, ads, or fees.
Could it happen on Substack? Very possible.
How They Could Keep It Free (Mostly)
If Substack wants to preserve its free model, they’ll need to:
Keep attracting high-earning paid writers: The more big earners they have, the more they can subsidize free creators.
Add optional paid tools for power user: Without punishing small creators, they could offer premium analytics, design tools, or integrations.
Leverage network effects: The more writers and readers they have, the more likely free creators will see value in upgrading to paid.
Free, But With a Catch
If I had to predict the future, I’d say Substack goes the route others have before. It stays free… but with limits.
“Free up to X subscribers” or “free up to X gigabytes of hosting.”
Heavy users might need to upgrade to a paid tier, while casual writers keep the all-you-can-publish buffet.
Or they incorporate other income streams, like ads, sponsored newsletters, or paid boosts.
The good news is that Substack has, so far, shown no signs of changing their model. Not really. But that’s because VC is still working.
The Bottom Line
Substack’s free offering is one of the most creator-friendly deals in the entire online publishing space. It’s the reason I switched from WordPress to Substack entirely.
But “forever” is a long time.
Substack can’t sustain this model forever without tweaking a few minor things… or a few major things.
We’ll see.
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Yeah, well articulated. We of course don’t see what Hamish and co do on the numbers but it would not be hard to guess and not be far away. I understand Substack has recently secured more funding, which probably kicks the can a little further. If - knowing what I know I.e what I can see, which is essentially nicely summarised in your article, and knowing I don’t know what I don’t know - I were applying my 40 odd years of business / change guidance know-how, aside from reviewing when / where the growth / costs graphs have pinch points I’d be asking “what could we monetise, that sticks to our principles, that adds value to our creators and… also eats someone else’s lunch? Because in my view… there is an answer. And that’s to offer to sell one off product. Many potential customers don’t want to commit to 5/10/15 £/€/$ a month but, they may pay 5/10/15 £/€/$ once, or twice … over a year. So, with the above caveats on knowledge, there are lots of creators on here who send their (& Substack’s) customers to another platform. Offering a within Substack platform solution to something that is already being done, seems to me like a win win. Not for all as some creators will prefer other solutions, have their own reasons for sending them elsewhere, that’s fine. But many creators, I think will either offer on Substack and elsewhere, or simply sell via Substack as Substack is already the place for as much of a “one stop shop” which, as your article nicely outs… is the one of the main reasons why these creators are here in the first place.