With roughly 1% of 273,000 readers paying $79/year, that would appear to generate around $215,000 annually before payment processing fees. That isn't a bad number and I am certain that this isn't your only income earning endeavor.
So will this new policy mean that no posts will be hidden behind a paywall?
Advertising is a better solution than applying a paywall, which is one of the unintended consequences of a platform built around converting readers into paying subscribers. When an author's income depends on recruiting and retaining subscribers, there is constant pressure to produce a steady stream of content, to justify the recurring subscription cost. But too often, quantity wins out over quality out of fear of losing subscriber eyeballs. "Hey, don't forget me! I'm delivering content!".
Substack authors generally fail (refuse?) to understand that most people can't afford to pay for 5, 10 or more subscriptions. IF someone subscribes, I suspect that the majority hold only 1 to 3 subscriptions. You should not feel unloved because more people don't buy a paid subscription.
It's sad that the Substack incentive structure often leads to frustrating reader experiences, such as articles that abruptly stop with the remainder behind a paywall, prompts to subscribe appearing throughout a piece, restricted commenting and/or comments that are visible only to paying members.
Over time, too many Substack authors end up placing more and more of their work behind subscriber-only walls, attempting to pressure readers into paying for something that they can't afford or don't see the value that the author imagines exists.
This results in a closed ecosystem in which the same small core group of paying subscribers read, comment, and reinforce each other's views
This is the definition of an “echo chamber”.
Whether intentional or not, the result is reduced exposure to outside perspectives and the creation of an environment that encourages repetitive thinking among both readers and authors.
----
Update (6/29/26) - I made some stylistic and flow changes but the original thoughts remain the same.
Hi Jojo you're making several unwarranted assumptions here:
(1) I didn't say 1% were paying — I said fewer than 1%
(2) Not everyone is paying $79 — many took advantage of discounts.
(3) I do not have any other sources of income — paid subscribers has been my only significant income source over the last year.
(4) We're a two-person team, so our revenue (which is less than $215k) has to pay two salaries.
All of which is to say that neither of us is making more than $100,000 per year from this newsletter. I think both of us could make significantly more money doing other work. We're doing this because we think independent journalism is important (and because we enjoy it). But we need to generate more revenue to make the business financially viable long-term — hence the experiment with ads.
I agree with some of your criticisms of paywalls and I would personally love to have Understanding AI be entirely ad-supported, but I think it's unlikely that ads will generate enough revenue to make this feasible. I would love to be proven wrong!
I made my assumptions based on the limited information available, so I apologize if I misunderstood anything.
That said, my previous comment was intended to be constructive, not directed specifically at your business or your aspirations.
Besides adding advertising, have you considered lowering the annual subscription price to something in the $20-$25 range? That seems like a price point that would be more accessible for not only Understanding AI but for much of the writing on Substack.
Right now, if about 1% of your readers subscribe at $79 per year, lowering the price to $20 would require roughly a 4-5% paid conversion rate to generate similar subscription revenue.
The interesting question will be whether a lower price would bring in enough additional subscribers to more than offset the lower fee. If, for example, your paid conversion rate increased to 10%, you would roughly double your subscription revenue compared with where you are today. This would be good, yes?
Now, I have no idea whether those percentages are realistic, but it seems like a pricing experiment worth considering giving your current situation. If it doesn't work, you can always raise the price again. But if it does work, you end up with both more paying readers and higher revenue.
You should check out this Substack writer. He has 3x your number of subscribers and has committed to his work always being free and open. He apparently makes his income through other consulting and marketing work, using the Substack writing as a source of connections and leads.
I have considered this, but I want to do journalism full-time, I don't want to be a consultant doing journalism on the side. Also, I try to maintain independence from the companies I write about. That would be hard to do if I were also doing consulting work.
So Substack now allows writers to include paid ads...didn't hear about that...let the enshittification begin (enshittificaton step one - degrade the user experience with ads to enhance revenue for the platform) .
I hope my ad-blocker works on Substack ads.
I agree with Jojo's comment that the paid subscription model will ultimately fail users because not many people are going to pay $5 or $10 a month for more than a handful of subscriptions, and the majority of paid subscriptions will go to main-stream media refugees and celebrities with following developed elsewhere.
You know what would be great? If users could get multiple writers on a multitude of subjects, with fact-checking included, for one consolidated subscription rate (say $25/month - without advertising if the user chooses to employ an ad-blocker). The articles could displayed in a user friendly way so that articles of interest could be easily accessed...THAT WOULD BE SO...
Oh, right, that would be an 'old media' news site...fact-checking and consolidated subscription are soooo uncool.
I suspect Hamish & Co. will soon decide to impose ads on ALL contributor's material to boost revenue before selling to private equity or one of the tech giants.
In the days of old, I used to get 8-10 magazine subscriptions a month. But I would never pay more than $10/$15 annual for any of them. Almost all of them I 'd get through those magazine discount services, where an annual subscription might only be $5 while the formal offer in the mag with all those drop-out cards would be $20-$30/annually!
Substack should offer something similar but given that they can't even cobble together RTF support, I doubt they could figure out how to divvy up a gross subscription.
I understand why readers don't like ads and paywalls, and I wish there was some way we could just do great journalism without hassling readers for money. But the reality is that journalists need to pay our mortgages and feed our families.
I have nothing against mainstream media organizations, but you should understand that they are also struggling financially. I worked at three traditional news outlets — the Washington Post, Vox, and Ars Technica — in the decade before I started Understanding AI. All three of them have had to do layoffs in recent years.
I understand most people can't afford a paid subscription to my newsletter — that's perfectly fine. I'm happy to have most people reading my free content. But I'd ask you to have a bit of empathy for folks like me who are trying to do our best in a difficult economic environment.
As a novelist, I appreciate the difficult financial situation journalists and other writers face in today's media environment.
My beef is with the platforms. My concern is that allowing paid ads on newsletters will degrade the integrity of the content. The progression has been seen before on other platforms.
I expect professional journalists to maintain separation between writing and advertising as would occur at a traditional newspaper. However, as I'm sure you know, there is no enforcement of journalistic integrity from Substack or any other social media platform. It's 'caveat emptor' when it comes to discerning facts for the reader. Therefore, I expect content integrity will get worse from an already low level.
As a former elite cyclist, I can tell you that if there's no drug testing, riders will dope. I believe the same principle applies to the separation of advertising, content integrity, and fact-checking on Substack newsletters that attempt to pass as journalism.
This lack of enforcement allows numerous influencers (advertisers by another name) to push snake oil supplements and misinformation disguised as journalism, all to the benefit of Substack's owners.
I have no problem paying for legitimate journalism (that is, journalism separate from advertising content, fact-checked, and where a distinction is made between opinion and news). The challenge today is that the ability to distinguish legitimate journalism from influencing gets more difficult each day, and the platforms have financial incentives to make it that way.
Substack is a little different from your typical online platform. I own my relatinoship with readers and have the ability to take my audience with me to another platform (like Ghost or Beehiiv) at any time. If Hamish & Co. decided to "impose ads on ALL contributor's material to boost revenue before selling to private equity or one of the tech giants" I would leave the platform and continue doing my work somewhere else. This isn't an option on YouTube, Twitter, Instagram, TikTok, etc.
Of course, that doesn't mean you should trust everyone on Substack. There are many Substack writers with low ethical standards. But some of us are trying to set a high bar, and I hope we can communicate that to readers and earn their trust.
If you appreciate my work I'd encourage you to "donate" by purchasing a subscription. You can cancel right away if you want to do a one-time donation. Thank you!
@Timothy B. Lee What stands out here is how hard monetization gets once the audience is smart enough to notice every compromise. Ads aren’t automatically the problem. The problem is when the business model starts quietly training the writer to look away from the people paying the bills.
I like the way you’re thinking about the trust side of this.
Ads are not automatically a problem.
The problem is when readers can no longer tell whether the publication is serving them or serving the sponsor.
Keeping paid readers ad-free makes sense.
But the bigger move is drawing a clear line around who can advertise, especially in a space like AI where many sponsors could also become subjects of coverage.
That boundary is what protects the thing advertisers are really buying in the first place:
With roughly 1% of 273,000 readers paying $79/year, that would appear to generate around $215,000 annually before payment processing fees. That isn't a bad number and I am certain that this isn't your only income earning endeavor.
So will this new policy mean that no posts will be hidden behind a paywall?
Advertising is a better solution than applying a paywall, which is one of the unintended consequences of a platform built around converting readers into paying subscribers. When an author's income depends on recruiting and retaining subscribers, there is constant pressure to produce a steady stream of content, to justify the recurring subscription cost. But too often, quantity wins out over quality out of fear of losing subscriber eyeballs. "Hey, don't forget me! I'm delivering content!".
Substack authors generally fail (refuse?) to understand that most people can't afford to pay for 5, 10 or more subscriptions. IF someone subscribes, I suspect that the majority hold only 1 to 3 subscriptions. You should not feel unloved because more people don't buy a paid subscription.
It's sad that the Substack incentive structure often leads to frustrating reader experiences, such as articles that abruptly stop with the remainder behind a paywall, prompts to subscribe appearing throughout a piece, restricted commenting and/or comments that are visible only to paying members.
Over time, too many Substack authors end up placing more and more of their work behind subscriber-only walls, attempting to pressure readers into paying for something that they can't afford or don't see the value that the author imagines exists.
This results in a closed ecosystem in which the same small core group of paying subscribers read, comment, and reinforce each other's views
This is the definition of an “echo chamber”.
Whether intentional or not, the result is reduced exposure to outside perspectives and the creation of an environment that encourages repetitive thinking among both readers and authors.
----
Update (6/29/26) - I made some stylistic and flow changes but the original thoughts remain the same.
I love this comment 🤩
Hi Jojo you're making several unwarranted assumptions here:
(1) I didn't say 1% were paying — I said fewer than 1%
(2) Not everyone is paying $79 — many took advantage of discounts.
(3) I do not have any other sources of income — paid subscribers has been my only significant income source over the last year.
(4) We're a two-person team, so our revenue (which is less than $215k) has to pay two salaries.
All of which is to say that neither of us is making more than $100,000 per year from this newsletter. I think both of us could make significantly more money doing other work. We're doing this because we think independent journalism is important (and because we enjoy it). But we need to generate more revenue to make the business financially viable long-term — hence the experiment with ads.
I agree with some of your criticisms of paywalls and I would personally love to have Understanding AI be entirely ad-supported, but I think it's unlikely that ads will generate enough revenue to make this feasible. I would love to be proven wrong!
Hi Tim,
I made my assumptions based on the limited information available, so I apologize if I misunderstood anything.
That said, my previous comment was intended to be constructive, not directed specifically at your business or your aspirations.
Besides adding advertising, have you considered lowering the annual subscription price to something in the $20-$25 range? That seems like a price point that would be more accessible for not only Understanding AI but for much of the writing on Substack.
Right now, if about 1% of your readers subscribe at $79 per year, lowering the price to $20 would require roughly a 4-5% paid conversion rate to generate similar subscription revenue.
The interesting question will be whether a lower price would bring in enough additional subscribers to more than offset the lower fee. If, for example, your paid conversion rate increased to 10%, you would roughly double your subscription revenue compared with where you are today. This would be good, yes?
Now, I have no idea whether those percentages are realistic, but it seems like a pricing experiment worth considering giving your current situation. If it doesn't work, you can always raise the price again. But if it does work, you end up with both more paying readers and higher revenue.
You should check out this Substack writer. He has 3x your number of subscribers and has committed to his work always being free and open. He apparently makes his income through other consulting and marketing work, using the Substack writing as a source of connections and leads.
https://substack.com/@ruben/posts
WHY is my post hidden? Did I violate some Substack rule?
I'm not sure.
I have considered this, but I want to do journalism full-time, I don't want to be a consultant doing journalism on the side. Also, I try to maintain independence from the companies I write about. That would be hard to do if I were also doing consulting work.
I'm glad you're not going to listen to reader preferences. ;)
So Substack now allows writers to include paid ads...didn't hear about that...let the enshittification begin (enshittificaton step one - degrade the user experience with ads to enhance revenue for the platform) .
I hope my ad-blocker works on Substack ads.
I agree with Jojo's comment that the paid subscription model will ultimately fail users because not many people are going to pay $5 or $10 a month for more than a handful of subscriptions, and the majority of paid subscriptions will go to main-stream media refugees and celebrities with following developed elsewhere.
You know what would be great? If users could get multiple writers on a multitude of subjects, with fact-checking included, for one consolidated subscription rate (say $25/month - without advertising if the user chooses to employ an ad-blocker). The articles could displayed in a user friendly way so that articles of interest could be easily accessed...THAT WOULD BE SO...
Oh, right, that would be an 'old media' news site...fact-checking and consolidated subscription are soooo uncool.
I suspect Hamish & Co. will soon decide to impose ads on ALL contributor's material to boost revenue before selling to private equity or one of the tech giants.
In the days of old, I used to get 8-10 magazine subscriptions a month. But I would never pay more than $10/$15 annual for any of them. Almost all of them I 'd get through those magazine discount services, where an annual subscription might only be $5 while the formal offer in the mag with all those drop-out cards would be $20-$30/annually!
Substack should offer something similar but given that they can't even cobble together RTF support, I doubt they could figure out how to divvy up a gross subscription.
Hi Christopher!
I understand why readers don't like ads and paywalls, and I wish there was some way we could just do great journalism without hassling readers for money. But the reality is that journalists need to pay our mortgages and feed our families.
I have nothing against mainstream media organizations, but you should understand that they are also struggling financially. I worked at three traditional news outlets — the Washington Post, Vox, and Ars Technica — in the decade before I started Understanding AI. All three of them have had to do layoffs in recent years.
I understand most people can't afford a paid subscription to my newsletter — that's perfectly fine. I'm happy to have most people reading my free content. But I'd ask you to have a bit of empathy for folks like me who are trying to do our best in a difficult economic environment.
Hi Timothy!
As a novelist, I appreciate the difficult financial situation journalists and other writers face in today's media environment.
My beef is with the platforms. My concern is that allowing paid ads on newsletters will degrade the integrity of the content. The progression has been seen before on other platforms.
I expect professional journalists to maintain separation between writing and advertising as would occur at a traditional newspaper. However, as I'm sure you know, there is no enforcement of journalistic integrity from Substack or any other social media platform. It's 'caveat emptor' when it comes to discerning facts for the reader. Therefore, I expect content integrity will get worse from an already low level.
As a former elite cyclist, I can tell you that if there's no drug testing, riders will dope. I believe the same principle applies to the separation of advertising, content integrity, and fact-checking on Substack newsletters that attempt to pass as journalism.
This lack of enforcement allows numerous influencers (advertisers by another name) to push snake oil supplements and misinformation disguised as journalism, all to the benefit of Substack's owners.
I have no problem paying for legitimate journalism (that is, journalism separate from advertising content, fact-checked, and where a distinction is made between opinion and news). The challenge today is that the ability to distinguish legitimate journalism from influencing gets more difficult each day, and the platforms have financial incentives to make it that way.
Substack is a little different from your typical online platform. I own my relatinoship with readers and have the ability to take my audience with me to another platform (like Ghost or Beehiiv) at any time. If Hamish & Co. decided to "impose ads on ALL contributor's material to boost revenue before selling to private equity or one of the tech giants" I would leave the platform and continue doing my work somewhere else. This isn't an option on YouTube, Twitter, Instagram, TikTok, etc.
Of course, that doesn't mean you should trust everyone on Substack. There are many Substack writers with low ethical standards. But some of us are trying to set a high bar, and I hope we can communicate that to readers and earn their trust.
Might a donate button work?
If you appreciate my work I'd encourage you to "donate" by purchasing a subscription. You can cancel right away if you want to do a one-time donation. Thank you!
thought this might be of interest to you...
https://www.beehiiv.com/blog/the-state-of-paid-newsletters-2026
@Timothy B. Lee What stands out here is how hard monetization gets once the audience is smart enough to notice every compromise. Ads aren’t automatically the problem. The problem is when the business model starts quietly training the writer to look away from the people paying the bills.
Yes, this is why we won't be running ads for companies we're likely to write about!
https://www.higherorder.club/
I like the way you’re thinking about the trust side of this.
Ads are not automatically a problem.
The problem is when readers can no longer tell whether the publication is serving them or serving the sponsor.
Keeping paid readers ad-free makes sense.
But the bigger move is drawing a clear line around who can advertise, especially in a space like AI where many sponsors could also become subjects of coverage.
That boundary is what protects the thing advertisers are really buying in the first place:
reader trust.