Substack has to pay the "I'm being cancelled" blowhards huge sums to get them on the platform to begin with. They earn nothing from eyeball traffic; people want to be outraged, but they don't want to pay for outrage. And even if they did, Substack would earn a tiny pittance from their fraction of subscription fees from that demographic.
So in those cases, Substack provided financing and made money on it in the end. I don't know if that's true on average, though.
The content creator doesn't fully trust the new publisher/platform, so they need upfront monetary assurance beyond a normal advance/royalty type deal, in case the platform fails. Likewise the platform values exclusives from big names that will drive demand for the platform. So the platform gives up potential upside to secure the exclusivity rights and the content creators get a premium.
I imagine there must be some authors out there who didn't mmet Substack's expectations, but they're apparently few and far between.
> people want to be outraged, but they don't want to pay for outrage
Some prominent Substacks have tens of thousands of paying subscribers. Glenn Greenwald is apparently clearing (after Substack's fees), something like $100k USD/month. Matt Taibbi has even more paying subscribers, so will make even more; Andrew Sullivan is close behind. Last year Substack announced they had over 1 million paying subscribers (generally around $5-10/month), and the top 10 newsletters were at that point generating over $20m in revenue/year (ie, averaging over 2m each).
As it turns out, a non-trivial amount of people are willing to pay for writing, whatever the reason is.
You get a lot more interesting writers on board than Medium in that case. People who stick to the safe areas of thought don't make history (for good or ill).