Is this idea crazy? Probably

Cannibalism or a sweet solution, you decide

Hey there, Karen here,

Today I learned about a new scheme in which creators with paid publications offer a cheaper version of their publication, with ads, on Beehiiv.

The idea is that the cheaper subscription fees on Beehiiv are offset by revenue from ads and cross-promotions (Boosts). Beehiiv has built-in, automated systems for ads and boosts which pay creators a portion of ad revenue.

The potential benefits

The benefit of this strategy is that readers who really want access to your paid offer but can’t afford it at full price get access to a cheaper version with ads through Beehiiv.

The (intended) result: you get more paying subscribers because you can serve readers who want to pay less for your work.

Would this work?

This idea would work to get you more paying subscribers and bonus revenue from ads, if - and only if - the main problem with your paid offer is pricing.

However, for almost everyone I talk to on Substack, the reason we don’t have as many paid subscribers as we want is not because of pricing.

Our problems are much more likely to be weaknesses in our paid offer, the way we communicate that offer, the perceived value of our publication as a whole and the relationship we have with our readers.

By far the biggest problem most of us have when it comes to paying subscribers is that we don’t have enough paying subscribers because we aren’t getting enough free subscribers.

The Beehiiv solution wouldn’t solve those problems.

The biggest problem for most paid publications is not getting enough free subscribers

What would it look like?

Let’s say your paid subscriber problems are definitely due to pricing, and you know you can get more paying subscribers if you offer a lower price point with ads. What would that look like in practice?

There is a person offering a service to deliver this solution. They do the work to upload your paid content to Beehiiv, run the ads and boosts and take 20% of the revenue generated on Beehiiv.

This is how they say it would work

“ABC Substack has 20,000 free subscribers. They have a paid offer at $10 per month, and 1,000 (5%) convert, for $10,000 gross revenue per month, and $8,500 net after fees.

ABC partners with Sharestack, and offers a sub-premium lite offering at $5 per month. 500 of the existing paid subs downgrade to the new offer, but 500 new subscribers convert from free, for no change.

The new lite offer runs ads and boosts, adding another $250 in revenue per month.”

Erm okay…

So let’s think this through. If you were making $10K per month on Substack, with a conversion rate of 5% do you think you would want to potentially confuse your readers by offering them a low-cost option on another platform, cannibalise your existing paid offer, add complexity to your workflows and lose control of your content by letting someone else publish it on your behalf on Beehiiv? For $250?

Not bloody likely!

The added $250 per month revenue, by the way, is before the service provider takes their 20% fee.

If I was making $10K per month on Substack that $250 per month would represent around 1 to 2 hours of my time. It would for sure cost me more time than that to deal with the Beehiiv service provider, approve advertisers and answer enquiries from my readers about the cheap offer.

Will you give this a try?

What do you reckon? Is this strategy worth trying? Let me know in the comments.

And if you would like to get in touch with the person who is running this service, just ask, I’ll happily send you their contact details.

Cheers,

Karen