Memberful Launches Newsletter Platform to Compete with Substack

Recent Platform Issues Drive Creator Focus on Ownership

Recent disruptions, including outages on Facebook and data breaches affecting Twitch, have highlighted vulnerabilities for creators reliant on these platforms. Consequently, many internet-based content producers are actively seeking ways to diversify their revenue streams and maintain greater control over their audience relationships.

Memberful Launches Newsletter Feature

Responding to this trend, Memberful, a provider of membership software, is introducing a new newsletter functionality today. This addition expands the company’s existing suite of subscription-based membership services.

Pricing and Revenue Retention

Compared to Substack’s 10% revenue share, Memberful implements a 4.9% charge, alongside a monthly fee of $25 or $100, contingent upon the selected plan. For creators with substantial followings, the preservation of that additional 5.1% of earnings can be significant, even considering the recurring monthly cost.

Focus on Core Membership Functionality

“For the past eight years, our product development has centered on excelling in membership management, and then enabling integration with tools like Mailchimp, Discord, and WordPress,” explained Drew Strojny, founder and CEO of Memberful, in an interview with TechCrunch. “However, we’ve observed that communication – particularly via email – is fundamentally crucial to the digital membership model, leading us to believe this is a capability we must provide. Establishing a membership almost invariably necessitates regular email communication with members.”

Attracting Users from Competitors

Strojny noted that Memberful has already been attracting users migrating from Substack, even prior to the launch of its newsletter feature. The platform’s offering of white-label membership plans allows creators to exercise greater control over their branding and the presentation of their newsletters.

Ownership of Email Lists

Similar to Substack, Memberful ensures that users retain ownership of their email lists, a key benefit for creators seeking independence.

Memberful as a Patreon Subsidiary

Patreon acquired Memberful in 2018, but the latter continues to operate as an independent subsidiary, maintaining its distinct brand identity.

A Decentralized Approach to Membership

“Consider us a more decentralized extension of Patreon,” Strojny stated. “Often, consumers interacting with Memberful are unaware they are utilizing the platform, perceiving it simply as part of the website they are visiting and the membership they are joining.”

Comparison of Fee Structures

While Patreon hosts subscriptions under its own domain, Memberful empowers creators to embed subscription tools directly on their websites. Examples include the website for the YouTube series Good Mythical Morning and the membership page of podcast network Relay FM. Patreon’s fees range from 5% to 12% of creator earnings, depending on the plan, whereas Memberful charges a fixed rate plus a transaction fee – 10% for the starter plan, or 4.9% for the $25 pro and $100 premium plans. The premium plan offers a completely white-labeled experience, removing all Memberful branding.

Newsletter Feature Details

Initially, the newsletter feature will operate as a members-only blog and email list. Content access on the web will require user login, but future plans include the ability for creators to publish public posts accessible to all, regardless of subscription status. Memberful customers will also be able to schedule emails and target specific subscriber groups based on their membership tiers.

Integration with Existing Tools

This new functionality will be integrated into Memberful customers’ dashboards, alongside existing tools for conversion analytics, branding, checkout processes, and content hosting.

Content Moderation Policies

As a subsidiary of Patreon, Memberful adopts its parent company’s content moderation policies. Both platforms prohibit bullying, harassment, and hate speech. Substack also has policies against content promoting violence or discrimination, though it has faced criticism for inconsistent enforcement, adopting a “hands-off” approach.

Leveraging Patreon’s Resources

“We don’t need to develop content moderation from scratch, as our affiliation with Patreon provides us with established resources to effectively manage these issues,” Strojny explained. “This gives us confidence in our ability to maintain a safe and positive environment.”