Do the paid-tier arithmetic first

Every few months someone I know announces a paid tier. Most of them have not done the multiplication, and the ones who have usually did it with the wrong number.

So here is the arithmetic, plainly, before the fun part.

The conversion rate is 2 to 4 percent

Across the newsletters I have seen real numbers for, free-to-paid conversion sits between two and four percent. Four is good. Above five means either a very narrow professional niche or a list built almost entirely from people who already pay you for something else.

That is the number to plan with. Not the one from the case study written by the company selling you the subscription tooling, which is invariably about a newsletter with forty thousand subscribers and a founder who was already famous.

At the usual rates, on a list of 5,000:

Conversion	Paying	At €5/mo	At €8/mo
2%	100	€500	€800
3%	150	€750	€1,200
4%	200	€1,000	€1,600

Before fees, before tax, before churn.

Now subtract

Payment fees. Roughly 3 to 5 percent all in, more if you are taking small amounts across borders.

Churn. Monthly subscriptions to a newsletter churn at something like 4 to 8 percent a month. That is not a disaster — it is normal — but it means a third of this year’s subscribers will not be here next year, and you are running to stand still. Annual plans cut it sharply, which is why every provider pushes them.

Your time. This is the cost nobody puts in the sheet. A paid tier is support requests, failed card emails, refund decisions, VAT, and the permanent low-grade obligation to deliver something extra. Call it four hours a month at the very least.

On a 5,000-person list converting at 3 percent at €5, you are looking at roughly €700 a month after fees, before tax, for a recurring obligation that never stops. That may be excellent — it is a mortgage payment for a lot of people — or it may be the worst-paid job you have ever taken. The point is to know which before you start.

The question is not whether people will pay. Some always will. The question is whether the amount is worth what you have to do forever to keep earning it.

The three shapes that work

Same issue, early, plus thanks. The lowest-obligation model there is, and the one Marco Peña argued for in issue 03. You are selling continuation, not access. Converts lower, costs almost nothing to run.

One extra thing a month. A deep-dive, an interview, a working file. Converts better. It is also a second deadline, which is the thing most people underestimate — you have effectively doubled your publishing schedule to serve three percent of your readers.

A one-off, not a subscription. A guide, a course, an annual archive. No churn, no recurring obligation, and it can earn more in a week than a tier does in a year. Badly suited to steady income, very well suited to people who do not want a second job.

What I would do at each size

• Under 1,000 subscribers. Nothing. Two percent of 800 is sixteen people. Write more issues.
• 1,000 to 5,000. A tip jar or a one-off. You want the money without the obligation at this stage, because the list is still the thing that needs your attention.
• 5,000 and up. Now a tier makes sense, and I would start with the cheapest version — early access and a thank-you — for a full year before adding anything you have to produce.

The mistake is almost never charging too little. It is building the expensive version of the tier first, discovering it converts the same as the cheap one, and being locked into producing it.

Next issue: Mara on the send button, and why the interface around it is quietly shaping what you write.