Why My Newsletter Costs $2.50

In the 1980s, Minor Threat frontman Ian MacKaye discovered he was opening for The Damned at a show where tickets cost $13.50. His response was to voluntarily cut his band's pay in half. When MacKaye later formed Fugazi, he instituted a rule that became legendary in punk circles: a strict $5 cover charge for every show. The logic: Five dollars was affordable to almost anyone who wanted to come, and it meant the person working the door never had to make change.

MacKaye even kept envelopes stuffed with $5 bills on stage. If someone started a fight or ruined the show for others, he'd stop the music, hand them their money back, and escort them out. Once refunded, they were no longer customers. 

Contract terminated. 

Problem solved.

The conventional wisdom in the creator economy oscillates between two poles. On one end, you have the "content should be free" crowd, who believe that removing all friction maximizes reach and that you can monetize attention through sponsorships, affiliate deals, or converting a small percentage to premium offerings. 

On the other end, you have the premium newsletter people charging $10-20 per month, positioning their work as exclusive insight worth serious money. 

Both approaches have their logic, and both work for certain people in certain contexts. 

But neither of them work for me.

The problem with free is that free attracts everyone. And when you attract everyone, you get everyone. You get the engaged readers who genuinely care about your work; but you also get the drive-by visitors who subscribed during a moment of mild interest and now mark your emails as spam because they forgot who you are. You get the people who forward your work to friends. You also get the people who reply with unhinged manifestos at 3am because something you wrote reminded them of their ex-wife. As Guy Picciotto of Fugazi once observed: "When it's five bucks, you get every jackass on the street who has five bucks and nothing to do that night." When it's zero bucks, you get every jackass with an email address and nothing to do that night.

The assumption embedded in the free model is that more subscribers equals more success. But subscriber count is a vanity metric that obscures what actually matters: the quality of attention you're receiving and the nature of your relationship with your audience. A list of 50,000 people who don't open your emails is worth less than 500 people who read every word and occasionally reply with something thoughtful. The second group will buy your book. They'll recommend you to friends. They'll stick around for years. The first group is just a number you can cite at shitty number-citing parties.

But premium pricing has its own distortions. When you charge $15 a month, you're implicitly promising that your content is worth $180 a year. That's a real sum of money. It's a Netflix subscription or a Spotify subscription (although not both these days.) You're now competing with professionally produced entertainment and professionally reported journalism. The psychological pressure to justify that price changes how you write. You start optimizing for perceived value rather than actual value. You pad things out. You add unnecessary sections so it feels substantial. You become a content farm of one, grinding out material to satisfy the expectation that Premium Content should be voluminous.

The $2.50 price point is cheap enough that the decision to subscribe is almost trivial. Most people spend more than that on diner coffee without thinking about it. Starbucks coffee is at least 2x that.

But it's not nothing. 

The act of entering payment information and committing to a recurring charge, however small, creates a psychological shift in how people relate to your work. They've made a decision. They've invested something. They're participants in an ongoing exchange.

This tiny barrier filters for exactly the right people: folks who find enough value in what I write to click a few buttons and spend less than the cost of a mediocre pastry each month.

No filter is perfect, and some jackasses still get through. But MacKaye's envelope system works at $2.50 too. If someone's being horrible in my comments, if they're sending unhinged emails, if they make me dread opening my inbox, I can refund them and revoke their access without a second thought. Two dollars and fifty cents. That's the cost of removing a problem from my life. I'm not losing a $180 subscriber I feel obligated to placate. I'm not agonizing over whether their behavior is bad enough to justify the revenue hit. 

The calculation is trivially easy: is your subscription worth more annoyance to me than a single cheap coffee? No? Here's your money back, contract terminated, goodbye forever.

MacKaye could hand someone a $5 bill and point them toward the exit without the band's finances collapsing. I can click a refund button and never think about that person again.

The economics work out too. You don't need massive scale to make a small subscription model sustainable. A thousand people paying $2.50 is $2,500 a month. That's not quit-your-job money for most folks, but it's still real money. It covers the hosting costs and the time investment and leaves something left over. And because the price is so low, people don't churn out the way they do with expensive subscriptions. 

MacKaye and Fugazi were strategic about making their $5 shows work. They rarely stayed in hotels. They routed tours to save gas. They ate cheaply. MacKaye handled booking and management himself to avoid paying intermediaries. The low price was a constraint that forced a particular way of operating. I think about newsletters the same way. The $2.50 price means I can't rely on premium positioning to carry mediocre work. I have to actually write things people want to read. And because I'm not promising $180 worth of exclusive insights, I can be more experimental, more personal, more willing to publish something short and strange that I find interesting even if it doesn't fit the Premium Content mold.

Is $2.50 the magic number for everyone? Probably not. The specific amount matters less than the principle behind it. You want a price low enough that price isn't the primary consideration, but high enough that subscribing represents a conscious choice rather than an accident. You want to filter for interest without filtering for wealth. You want to create a relationship where both parties are getting something without either party feeling exploited.

Would I make more money charging $10 a month? Almost certainly. Would my subscriber count be lower? Probably, though maybe not by as much as you'd think. Would I enjoy the whole endeavor more or less? There's where the calculation gets interesting, because the financial optimization and the psychological optimization point in different directions, and I've decided to optimize for the thing that actually matters to me, which is wanting to keep doing this for a long time without growing to resent it.

Fugazi toured for fifteen years on $5 shows. They never signed to a major label, never compromised their pricing, and by the end had sold millions of records while maintaining complete creative control.

The model worked because they cared more about the experience than the revenue, and structured their whole operation around that priority.

The instinct to leave money on the table in exchange for a better relationship with your audience is neither naive nor unsophisticated.

The right price is the one that lets you actually enjoy what you're doing.