According to The Verge, Substack is under pressure because its 10 per cent revenue share increasingly pushes high‑earning writers to look for cheaper, flat‑fee alternatives like Ghost and Beehiiv. There seems to be a “new wave” of creators moving or at least experimenting elsewhere, which suggests that Substack’s own success is now generating dissatisfaction among some of its top producers.
A parallel with Etsy
Substack’s new “tax” fits very well with the piece I wrote earlier on Etsy: Ghost, Beehiiv, and others are explicitly trying to scoop up disgruntled writers who feel squeezed by a dominant platform that is changing the rules. In this piece, I explained how new platforms can “shelter runaway chickens” by welcoming users who feel mistreated on a large incumbent with rising fees and worsening conditions. This is exactly the play Ghost and Beehiiv are running: they offer lower (or differently structured) fees, more control, and growth tools to writers who now see Substack’s 10 per cent as excessive. It is a textbook judo move in platform markets: they try to turn Substack’s size and monetisation model into a liability, much like Etsy’s smaller rivals do with frustrated artisans.
An update about Etsy
Since I published my previous post (September 2024), disgruntled Etsy sellers have indeed tested alternative platforms, from niche marketplaces to their own Shopify stores. These “runaway chickens” have created a real competitive fringe and pushed more artisans into multi‑homing, but they have not coalesced around a single rival strong enough to overturn Etsy’s dominance. Etsy remains the default hub for handmade and vintage goods, largely because it still concentrates the most buyers and benefits from powerful two‑sided network effects.
In other words, Etsy’s behaviour has not triggered a mass exodus so much as a controlled erosion of lock‑in. Many sellers now treat Etsy as one channel among several, rather than their only outlet, which slightly weakens Etsy’s grip without destroying its central position. This pattern is exactly what we might expect for other mature platforms facing fee‑driven discontent: enough defections to create pressure and options, but not enough coordination among the “runaways” to build a new giant marketplace overnight.
Why I am staying on Substack
In my case, Substack’s “tax” is financially irrelevant because my newsletter is free and will remain so, which means I do not directly feel the pain that pushes paid writers away. At the same time, I still benefit from Substack’s investment in discovery and from the network effects it has built between writers and readers, which is precisely what I study in my work on platforms. If some high‑profile, paid writers leave, competition for reader attention in my niche may actually decrease, but there is a downside: if too many of them go, the platform may become less attractive overall, weakening the very network effects that help me reach new readers. This is the familiar two‑sided platform conundrum I often discuss: as a “seller” (a writer), I might welcome fewer other sellers on my side, but only up to the point where their exit begins to reduce the number of “buyers” (readers) on the other side.
So for now, I intend to stay on Substack, fully aware that I am benefiting from a platform whose fee strategy is simultaneously creating opportunities for rivals to shelter its runaway chickens.
