Substack, the popular newsletter platform that empowers independent writers and creators, has officially rolled out in-app purchases (IAP) for its iOS app, allowing users to subscribe to paid newsletters directly through Apple’s payment system.
Initially tested with 30,000 creators, the feature is now available to all paid publications on the platform, marking a significant shift in how subscribers can access content. While this update offers a seamless experience for iOS users, it comes with a steep price — both figuratively and literally — for creators, raising questions about fairness and platform dependency in the creator economy.
The introduction of in-app purchases is a response to Apple’s App Store policies, which mandate that apps selling digital content must offer IAP, with Apple taking a 30% commission in the first year of a subscription (dropping to 15% in subsequent years). Substack’s iOS app, which drives over 30% of all paid subscriptions, is a critical channel for discovery and monetization.
To comply with Apple’s rules, Substack has enabled IAP across all paid publications, but this convenience for users creates a financial dilemma for creators.
To ensure creators receive the same net earnings as web-based subscriptions, Substack automatically adjusts in-app prices upward by approximately 30% to offset Apple’s commission. For example, a $30 monthly subscription on the web might cost $39 through the iOS app. Alternatively, creators can choose to keep in-app prices the same as web prices, but this reduces their take-home revenue after Apple’s cut and Substack’s standard 10% fee.
This pricing structure puts creators in a tough spot. Raising in-app prices risks alienating subscribers sensitive to higher costs, while absorbing Apple’s commission means earning less per subscriber. Either way, creators bear the brunt of the financial impact.
As Substack’s blog notes, “Apple applies a service fee for in-app purchases, which is deducted from your take-home revenue along with Substack’s fee.” For a platform built on empowering independent voices, this dynamic feels like a step backward, as creators are squeezed between platform fees and subscriber expectations.
Tyler Denk, CEO of Substack’s competitor Beehiiv, has highlighted another critical issue: platform lock-in. Unlike web-based subscriptions processed through Stripe, where creators retain full access to subscriber billing information, Apple’s IAP system restricts access to payment details.
If a creator decides to leave Substack for another platform, they can access subscriber email addresses but cannot transfer billing relationships for IAP subscribers. This creates a dependency on Substack, as creators risk losing a portion of their paying audience if they switch platforms.
Denk emphasizes that Beehiiv’s model, which avoids such restrictions by relying on direct payments, offers creators more freedom and control. “Substack’s approach ties creators to their ecosystem,” Denk said in a recent interview, underscoring the contrast with Beehiiv’s 0% commission on subscription revenue and seamless migration tools.
The broader implications of Substack’s IAP rollout reflect a growing tension in the creator economy. Apple’s commission structure, while not new, disproportionately affects smaller creators who rely on every dollar of revenue.
Substack’s decision to enable IAP was driven by necessity — Apple’s rules leave little room for negotiation — but it highlights the power tech giants wield over independent platforms. As Denk notes, platforms like Beehiiv prioritize creator autonomy, offering tools like referral programs and ad networks without taking a cut of subscription earnings, in contrast to Substack’s 10% fee plus Apple’s commission for in-app purchases.
For subscribers, the choice is clear: paying through the Substack website via Stripe avoids the Apple tax, ensuring more of your money goes directly to the creator. Web-based subscriptions also maintain Substack’s standard payout schedule, unlike IAP, which involves a 45-day delay.
However, the convenience of one-tap payments in the iOS app is undeniable, especially for mobile-first users. Substack’s data suggests that the app’s seamless subscription flow has boosted sign-up rates for some creators, but at what cost? The higher prices or reduced creator earnings undermine the platform’s mission to foster direct relationships between writers and their audiences.
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As the creator economy evolves, Substack’s IAP rollout serves as a reminder of the trade-offs between convenience and control. For those looking to support their favorite writers, the message is simple: skip the in-app purchase and subscribe directly through the website.
Your extra click could mean more money in the creator’s pocket — and less in Apple’s. In an era where creators are fighting for financial independence, that choice makes all the difference.
