> But the advances also had limitations. On a per-deal basis, we could never really do better than break-even. A Substack advance was effectively an interest-free loan that would never be paid back if a publication failed.
> With Substack Pro, we pay a writer an upfront sum to cover their first year on the platform. The idea is that the payment can be more attractive to a writer than a salary, so they don’t have to stay in a job (or take one) that’s less interesting to them than being independent. In return for that financial security, a Pro writer agrees to let Substack keep 85% of the subscription revenue in that first year. After that year, the deal flips, so that the writer no longer gets a minimum guarantee but from then on keeps 90% of the subscription revenue
- https://on.substack.com/p/why-we-pay-writers
Depending on the payment it's possible that a writer could lose money on this, because they would have made more from subscriptions than they did from Substack, but I'm guessing for very big names Substack is paying quite a bit more than they would have made from their first year of subscriptions.
Also, this wasn't public for a while and there's probably more that is still not public.
> We haven’t said anything about Substack Pro in public until now because we have been in a “figuring it out” phase, seeing what resonates with writers and how the deals perform over time.
