Why is Everyone Going Gaga Over Newsletters

February 18, 2021

Email is not just staging a comeback. It’s disrupting the media business.

Morning Brew reports $20 million in revenue for 2020, of which $6 million is pure profit.

The newsletter company is not new to rapid growth. The reported revenue was close to $3 million, which ballooned to $13 million in 2019, before eventually hitting sky-high estimates for the last year. The revenue numbers are not bad for a short landing page and a few daily business snippets.

Who would’ve thought that Newsletters can grow that big?

Morning Brew is not the only Newsletter startup racking big bucks in yearly revenue.

(2019/2020)

Investors are re-discovering love for newsletters.

BuzzFeed, Vice, and similar media companies are in trouble because they compete for your attention via Google, Facebook, and similar platforms.

Both BuzzFeed and Vice enjoyed the spring of tech media in the early 2010s, where capital for funding these new companies was abundant. Fast-forward to 2020, and the same money has left the room, leaving all messages on seen.

Google is now openly upending search results to favor the company’s web properties and services. The search engine wants to surpass the SE label, and become an experience discovery platform, which is not favorable for the organic reach traditional media companies are hoping for. Your content can easily get reduced to a snipped, screenshot, or answer list.

Facebook, Twitter, and even Medium are no better at making sure that traffic doesn't leave the company’s ecosystem.

If you’re dependant on giant media platforms to keep your business afloat, then you’re taking incredible amounts of risk.

Nobody knows how the next policy can affect your business.

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Newsletters have a way to surpass search engines, external platforms, and content giants

Your email list is an asset you can take with you.

The tech media landscape changes at an unprecedented pace, but the number of interested readers is abundant, like never before in the history of tech. If you have a way to contact your audience, you probably have a lucrative business on your hands.

The adaption of email technology racks big numbers too.

Almost 4 billion active email users are out there, according to Radicati’s report.

Social media lags behind, with an estimated 3.5 billion active users globally. In comparison, the average open rate for email is 25%, while social media barely holds at 2%-3% CTR on paid advertisement. Linkedin has an astonishing low CTR of about 0.39%, making it an expensive platform for startups.

Email makes more sense for delivering news and all kinds of promotions, surveys, and communication.

News and information are knowledge, and knowledge is power

News media is large because people crave high-frequency information.

The world is changing rapidly. Readers want to know what’s new in their country, industry, and the world. The information you have at hand can change the core of your destiny. Your business can acquire more leads if you know more about your ideal customers. You can avoid travel holds if you’re following the latest coronavirus news. And you can optimize your personal finance, find the best party venues, and discover niche entertainment if you know where to look for it.

The unsubscribe rate is usually low for niche newsletters, and the overhead for running a newsletter is minimal.

Companies can get away with daily newsletters without disturbing the readers.

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Why are Newsletter Startups making a bank this year?

  • Business costs and expenses are minimum.
  • Delivery is simple and precise as mostly the right audience opts in to receive newsletters.
  • Advertising costs are low and sometimes almost non-existent.
  • Email templates, mail providers, and education are readily available.
  • The majority of millennials prefer business communication via email, including news and newsletters.
  • One person can run a profitable newsletter.

One gal with a list is a thing now

Similar to how Youtube is a platform for “one person with a camera,” newsletters offer a similar opportunity for “a single person with an email list.”

Daniel Vassallo amassed 400 paid subscribers in the first 24h of publishing his newsletter on Gumroad. Nivia Chanta shares a similar story. She’s the founder of Soapbox, a newsletter that helps you fight climate change.

“On Sunday night when I went to bed, I had 1,290 subscribers for Soapbox Project’s Changeletter, my startup’s newsletter that sends free bite-sized action plans to fight climate change. (I write it & I’m a solo founder with 3-digit revenue.)

Today, I have over 2,000. This spike came from a New York Times feature about 3 people telling you how to buy less stuff — one of those people was me!!”

Similar stories are popping up daily and often share intense revenue numbers.

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Here’s how newsletters make money.

  1. Traditional advertisement with native ads, takeovers, and advertorials. Advertising agencies and companies buy ad space in a newsletter. The key metrics include subscribers, CPM, CPC, CPO, CTR, and open rates. Morning Brew and The Hustle are good examples of newsletters that monetize from advertisements.
  2. Subscription-based newsletters. Customers pay directly for the information provided in a newsletter, usually in monthly or yearly payments. Newsletter founders can crate personal newsletter systems or can opt-in to use Substack or other growing services. The Dispatch is a great success on Substack, while Trends.co works better as a private service. Both newsletters have astonishing growth figures. The key to growing a subscription-based newsletter is in the quality of information. Niche topics work great, as users are willing to pay for valuable insights.

Should you start a newsletter?

Newsletter business is entering a new phase of the goldrush.

Great business success can come from creating picks and shovels for up-and-coming newsletters. You can build templates, email services and provide content research. Conversely, find a specific content-gap topic and go all-in on your newsletter.

Bundling and curation also work well with the rising new trends.

Everything is a good example of how bundling paid newsletters can create a whole new product that can get traction and offer readers immense value.

Two things to have in mind:

  1. Limited visibility. Paywalls and the lack of blog content make it harder for wanderers to find a newsletter. Newsletter rarely ever comes up in search engine results.
  2. Going viral is difficult. What’s the last time you’ve heard of a viral email? Exactly. While readers can share newsletters, it’s not a thing. Sharing becomes even more difficult for subscription-based services.

The gold rush has come to email info products

Info products are easy to maintain, have low overhead, and an astonishing short-to-midterm outlook.

Time, writers, designers, research, and advertisement are the costs, and attention is your biggest currency. When you place all the pieces together, starting a newsletter is actually a genius way to run a media company.

The old-new medium has more active users than any other singular medium out there, including social media (almost 4 billion).

The new form of delivery gives newsletter companies an incredible amount of instant attention. You can reach your audience directly on a device they carry around at all times.

Email is not just making a comeback. It’s disrupting the media industry in a new and unforeseen way.

Credits:

Written by yours truly, Toni Koraza

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