How to Monetize Your Newsletter

How to Monetize Your Newsletter

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Written by Casey Botticello

April 1, 2021

Disclosure: Some of the links below are affiliate links, meaning, at no additional cost to you, I will earn a commission if you click through and make a purchase. For more information, read our full affiliate disclosure statement here.

Newsletters are one of the oldest forms of communication on the internet. Yet, while everyone involved in internet marketing will tell you that “the money is in the list,” there are actually many ways to monetize your newsletter. Many of these monetization strategies have only become viable options to individual content creators in the last few years.

Below is a list of the best ways to monetize your newsletter. Each technique contains examples from real revenue generating newsletters. I encourage you to consider multiple monetization strategies with your newsletter. Newsletters vary tremendously in their content, structure, and audience, so there is no one-size-fits-all solution that works best for every newsletter. Let’s begin!

How to Monetize Your Newsletter

1. Selling Direct Subscriptions

Selling subscriptions to your newsletter is one of the most straightforward ways to monetize your newsletter. In its simplest form, the author writes the newsletter and readers pay for access to your content.

With recent advances in digital publishing technology and platforms (such as Substack, Revue, and Ghost), it has become much easier to create and operate your own newsletter.

You can create a subscription newsletter on your own custom platform, but this requires significant technical skills, and is not a strategy utilized by most of the top performing subscription newsletters.

For many newsletter creators, the direct paid subscription model is very appealing. There are a number of reasons that content creators love creating paid subscription newsletters, including:

  • Scalability-Subscription newsletters are highly scalable. No matter how many subscribers you have, the work required by a creator to produce content for their readers remains constant. In an extreme case, a subscription newsletter operator who has a single paying subscriber would produce content in the exact same way as they would if they had an audience of several million paying subscribers.
  • Profitability-Subscription newsletters are almost always immediately profitable (discounting the writer’s time). There are very low barriers of entry as anyone can create a subscription newsletter, for free, in a matter of minutes. And as implied with scalability, there is little or no marginal cost for adding an additional subscriber to your newsletter’s email list.
  • Portability-While there is always some risk of relying upon a third party platform to collect payments from your readers, there are now a number of alternative subscription newsletter platforms and services you could move your newsletter to, should the need arise. This is because your audience is paying for content coming from you as a creator. You have email list portability and can always connect with your audience, regardless of what platform is your email marketing system. Other models of newsletter monetization in this article are based, at least partially, on the access to a wider audience that is provided by the intermediary email marketing system or content management platform (i.e. display advertisements, sponsored content, etc.).

I have personally experimented with the subscription newsletter model, operating my own newsletter, Blogging Guide, as a paid newsletter on Substack.

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While I have been surprised at the success of my newsletter, operating a successful subscription newsletter is hard. In fact, of all the methods on this list, I would say it is by far the most challenging.

While the business model is attractive and very easy to understand at a high level, don’t be fooled into thinking the successful launch and operation of a direct paid subscription newsletter will be simple. Oftentimes this monetization method requires the creation of an online community, courses, eBooks, and one-on-one support for that newsletter to grow. Subscription newsletters also require high levels of digital marketing experience (or a pre-existing online fan-base) as you are responsible for driving all of the lead generating traffic to your newsletter).

2. Brand Sponsorship

Sponsorships through email can take multiple forms. One common approach is to allow a third party to sponsor your content in exchange for an advertisement or endorsement in your email. Here’s that approach in practice in a daily newsletter called TLDR.

TLDR is a daily, curated newsletter with links and TLDRs of the most interesting stories in tech. It is the ideal place to advertise developer tools, technical courses, developer job sites and tech conferences

The sponsorship approach allows TLDR to make money through advertising while maintaining control and trust with their readership. Like a native ad, this sponsorship fits in with TLDR’s content and is also in line with the TLDR brand.

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3. Display Advertising

Display advertising refers to the process of advertising a product or service through visuals like images and videos on networks of publisher websites or relate properties (i.e. newsletters).

Newsletter display ads are placed on relevant third-party newsletters in the form of banner, image, and text ads.

This is an ad placed in an email from vegan magazine VegNews. The ad perfectly blends in with the email and intrigues the reader with its text, “best snack of the year.” If you’re subscribed to VegNews’s email list, you’re likely interested in vegan snacks, so placing an ad informing subscribers of the year’s best rated vegan snack right above the recipe section is a perfect conversion setup. 

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4. Classified Advertisements

Classified ads are an increasingly popular way for newsletter creators to monetize their newsletters. Classified ads are a hybrid between sponsored content and display ads.

Advertisers pay to be listed in a section of your newsletter (usually labeled “classified ads”). Unlike display ads, classified ads are hand picked by the newsletter creator and are usually highly relevant services or products to the readers of the newsletter.

And unlike sponsored content, they tend to make their sales pitch in a short sentence or two (not a post written by the newsletter creator, which is typically written as an endorsement. The other advantage of classified ads is that the newsletter creator can hand pick the acceptable ad content, making the classified ads a value add for readers.

A good example of a newsletter monetizing through classified ads is Josh Spector’s newsletter (and related online community and products), For The Interested. For The Interested is a newsletter that explores ways creators can produce, promote, and profit from their creations.

The classified ads in For The Interested are a great example because the content being advertised is all highly relevant to the topics discussed in its newsletter (creating your own digital products, increasing your productivity using social media and other digital tools, writing, etc.).

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5. Affiliate Marketing

Affiliate marketing is the process of earning a commission by promoting other people’s (or company’s) products. You find a product you like, promote it to others and earn a piece of the profit for each sale that you make. This monetization strategy can also be implemented in a “free newsletter.”

As an example, take a look at Wellness Captain. The site describes itself as:

This is the place where you can find out how to look and feel better, stronger and happier than ever. It’s the place where we all come together with the right kind of information to improve our health, nutrition habits, and wellbeing.

Like many websites, there are numerous sign up forms advertising their free newsletter:

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Wellness Captain sends its subscribers recipes, health tips, and meal recommendations. As seen below, if you click on most of the product links, you will be taken to Amazon’s website. The link contains a tracking code which helps Amazon attribute the source of the sale.

If a newsletter reader clicks on a link, and makes a purchase on Amazon, the newsletter creator receives a commission as part of the Amazon Associates Program. This is evident not only upon inspecting the link, but in fine print at the bottom of their website (this disclaimer is required of all Amazon Associates affiliates).

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Although most affiliate commissions are relatively small, if a newsletter is targeted toward a very specific niche, this can lead to a higher than average click-thru-rate (CTR). It is also a strategy that becomes far more valuable as you grow your newsletter subscriber base.

6. Sell Your Own Information Products

When it comes to selling digital products, your email list is your most valuable sales asset. It’s the bridge that connects you and your audience, allowing you to share information, pitch products, and develop deep relationships that become more and more valuable over time.

In fact, according to a report published by eMarketer, email marketing has an ROI of 122%, compared to just 28% for social media and 25% for paid search, making it a powerful tool for any creator looking to build or grow an online business.

A good example of an organization that earns money by selling its own digital information products through its newsletter is Bellingcat.

Bellingcat is a British investigative journalism website that specializes in fact-checking and open-source intelligence. The Bellingcat newsletter is occasionally promotes eBooks, courses, or other tools that are can be purchased from their site directly. Below is an example of such a newsletter issue:

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7. Sell Merchandise

Finally, you can make money by selling merchandise affiliated with your newsletter. As with any brand, this will most likely require having an audience who is deeply invested in your brand.

A good example of a newsletter that is at least partially monetized by the sale of merchandise, is Morning Brew. Morning Brew is a daily newsletter that delivers news highlights and quick articles, geared toward millennial readers.

Readers can earn “points” by referring friends. Points can be used to order Morning Brew-branded merchandise. These products can also be purchased separately by readers and act as a major source of revenue for the newsletter.

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8. Ask Readers for Donations

Another way to monetize your newsletter is to ask your readers for donations. Services like Patreon and Ko-Fi enable readers to donate a one time amount to creators of their choice (or support them on an ongoing basis). The concept is similar to Kickstarter and IndieGoGo project based publishing platforms and relies solely on the generosity of the targeted audience.

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An example of a newsletter that raises money through donations is Sonia Weiser’s newsletter Opportunities of the Week. Sonia describes her newsletter as:

A few years ago, I made it a habit to spend 2-3 hours per night looking for pitching opportunities and writing jobs. If I didn’t, I’d get anxious about missing out on work—something that I couldn’t (and still can’t) afford to do.

 

So, I’ve created a twice per week newsletter to share all the calls for pitches that I can find. It also includes career advice, helpful resources, a place to showcase your landed articles, and more.

Conclusion

There has never been a better time to start a newsletter (well, other than yesterday…) and there has never been more tools to help creators distribute content. Ultimately, I would encourage you to try a mixture of the strategies described in this article if you are considering monetizing your newsletter.

Every audience is unique, but at least one of the newsletter monetization strategies listed above will work for you. In fact, I would venture that most newsletters could monetize their content using several of the methods above, at the same time.

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How to Price Your Substack Newsletter

How to Price Your Substack Newsletter

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Written by Casey Botticello

February 16, 2021

Creating a newsletter with Substack is a pretty straightforward process. However, the one question that most first time paid newsletter creators are left wondering is:

How much should I charge for my Substack newsletter?

This is a good question. After all, price your newsletter to high, and you may miss out on viewers. Price it too low and you may end up earning less money than you would for the same amount of work.

Luckily, now that Substack has been around a few years, there are a lot more subscription newsletters to look to as examples and data to help you pick the right price for your Substack newsletter.

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General Substack Newsletter Pricing Range

Most newsletters on Substack fall into a fairly narrow price range of $5-$15 per month. Substack does not allow you to charge less, so the $5 price point represents the lowest pricing possible (you can effectively offer your newsletter at a price below $5 by creating a discount, but as far as base price goes, $5 is the minimum).

You can charge more than $15 per month, but you will need to typically be a true subject matter expert, who is offering indispensable advice to an affluent group of readers. A prime example of this is Petition, which is currently $49 per month (or $500 per year).

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Factoring in Substack’s Fees

The fees that Substack charges its newsletter creators, are another factor that should be factored in when determining the price of your newsletter.

Substack collects 10% of all revenue generated by your newsletter. Additionally, Stripe, the payment processor Substack uses, charges 2.9% + $.30 per transaction fee.

So what does this actually look like, in practice?

Using my own newsletter as an example, a $50 payment, from a reader, for an annual subscription to Blogging Guide, nets me $42.75 (14.5% taken in total fees).

This might not seem like a lot, but if you are going to try to grow a large Substack audience, this amount can become a meaningful difference.

So it is important that you pick a newsletter subscription price, that will meet your needs net of the fees from Substack and Stripe.

Obviously, one solution is to raise the price of your newsletter, but depending on who your audience is, a small raise in price can trigger subscription cancellations.

It’s also worth noting that newsletter prices are not static, meaning, you can change them over time. So if you are stuck deciding between two prices, choose the more affordable option and revisit the issue after you actually have some paid subscribers.

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Offering Promotional Pricing to Early Supporters

One of the most effective Substack newsletter pricing strategies I’ve used, is offering your early subscribers a significant discount.

This can be accomplished through lowering the price for all of your potential newsletter subscribers. But it also can be accomplished through:

  • Offering limited time discounts. Substack allows you to offer potential subscribers discounts that expire on a certain date. In this scenario, you would typically notify your email list of the limited-time pricing so that the people who supported you from the beginning, can take advantage of this discount. However, other people following you, who may be intrigued can also sign up within the pre-determined time period of the sale, allowing you to test the general demand for your newsletter.
  • Creating a discount accessible via a specific link. Substack allows you to create a discount that is only accessible through a custom link. And you can create multiple custom links. This allows you to offer early subscribers deeper discounts than you may want to offer to new readers who are just learning about your newsletter. It can also be a good way of offering a promotion to a targeted group of people. For example, if you are on podcast, and are promoting your newsletter, you could offer an exclusive discount for the podcast listeners.
  • Substack allows you to offer group discounts or discounts that are only applicable to specific email addresses. This could limit a discount to students (people with valid .edu email address). More recently, Substack has allowed you to offer discounts to custom email addresses. So, you could offer promotions to people who have the same root email address. For example, you could offer all of the people with email addresses from a specific company or organization a discount (i.e. users from eBay who have an “@ebay.com” email address or users from the American Red Cross who have an “@redcrosstraining.org” email address).
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Monthly vs. Annual Pricing

The optimal price of your newsletter depends on a number of factors, including the length of the subscription.

Substack currently allows for two main types of paid subscriptions: monthly or annual.

Annual subscriptions are typically offered at a 10%-20% discount off the equivalent monthly pricing.

The more established your newsletter, the less this discount matters. Conversely, if you have a relatively new newsletter, I would highly suggest offering, at least initially, a 20%+ discount on annual subscriptions, for the following reasons:

  • Annual subscriptions allow for better revenue projections. If you have a lot of monthly subscribers, revenue will inevitably fluctuate since monthly subscribers have a higher churn rate. Additionally, as you change your newsletter subscription price over time, or offer promotional deals, these variations will be reflected more in monthly subscriptions than in annual subscriptions.
  • Annual subscriptions help weed out “problematic subscribers.” Based on my experience, most of the customer service issues come from a small group of monthly subscribers.
  • It is far easier to meet (and exceed) expectations of annual subscribers. Content production varies month to month. So if you have an annual subscription, you will see a better sample of the content that you can come to expect. Monthly subscribers might sign up in a month where you happen to produce less content. This may lead to them not upgrading to an annual membership or cancelling their monthly membership.
  • Annual subscriptions decrease the risk of payment failure. A small amount of subscriptions through Substack will fail because of outdated payment information. For monthly subscriptions, there is a greater risk of payment failure, since their are 12 cycles in a year, and only 1 cycle for the annual subscription.

In the case of Blogging Guide, my current pricing offers subscribers a ~42% discount on annual pricing, which is generally one of the larger discounts I have seen on Substack.

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Conclusion

Ultimately, Substack newsletter pricing depends on a number of factors. Some of these include pricing your newsletter competitively relative to other Substack newsletters, accounting for the fees Substack takes, whether you have an existing audience and want to offer them promotional discounts, and your desire to alter monthly vs annual pricing.

Even with all these factors, it is important to remember that at end of the day, you should feel good about the price you are charging for your newsletter and your price should reflect the level of income or extent of immediate need, from your audience. If you audience is comprised of high earning tech executives, who are looking for make-or-break industry insights, chances are you can price your newsletter on the higher end. If your audience consists of individual who are looking for penny pinching tips, you may need to keep your pricing on the lower end.

However, even if your audience has little disposable income, you can always justify a higher price if you add concrete value to people’s lives. In the example of an audience of penny-pinchers, if you can show them how to save thousands of dollars each year, your relatively high priced newsletter (say, $20 per month) may be worth it.

So while newsletter pricing is important, don’t let this stop you from producing content. You can update your Substack subscription prices at any time. The focus should still be creating the most valuable content for your audience.

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The Digital Publishing Landscape Powered by the Passion Economy

The Digital Publishing Landscape

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Written by Casey Botticello

January 13, 2021

Digital publishing includes the digital publication of e-books, digital magazines, and the development of digital libraries and catalogues. It also includes an editorial aspect, that consists of editing books, journals or magazines that are mostly destined to be read on a screen (computer, e-reader, tablet, smartphone).

However, in the context of digital content creation as part of the growing passion economy, digital publishing specifically refers to a subset of platforms that help content creators:

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These platforms all help content creators connect with and monetize an audience. Some of the popular tools offered by these platforms to entice content creators are hosted blogging platforms, newsletter creation platforms, e-commerce tools, membership subscription services, and premium gated content.

What is The Passion Economy?

Over the past four decades, most workers have been losing out in terms of negotiating power and wages. Globalization, the decline of unions and automation have made it significantly harder for the middle class to thrive.

For workers, this economy meant that it was best to conform, to follow the rules and show employers that they could accommodate their needs. Not following the rules meant taking risks that could jeopardize your livelihood. But becoming a mere cog in the well-oiled machine of the mass economy came with its trade-off: job stability and a decent pay.

However, this trade-off has lead to many workers having to work long hours in jobs that they hate, merely to survive. Many of those who have opted out of the “traditional” workforce are part of the gig economy.

This “gig economy” was marketed as the path to increased personal freedom and the chance to “be your own boss.”

In the gig economy, workers could easily monetize their time in specific, narrow services like food delivery, parking, or transportation. The platforms were convenient for both the user and the provider: since they took care of traditional business hurdles like customer acquisition and pricing, they allowed the worker to focus solely on the service rendered.

While these gig platforms offered workers some increased control of their time, the work was still largely unsatisfying to many.

This lead to the rise of the “passion economy,” which is based on individual knowledge-intensive skills, as opposed to commoditization task fulfillment.

Some examples of workers monetizing their individuality through platforms that power the passion economy:

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The passion economy is partly driven by a desire from workers to highlight their individuality. But it is also driven by the rise of many digital platforms that have enabled creators to monetize their content, knowledge, or skills. Below are some of the top platforms within the digital publishing sector that are competing for creators (organized by platform vertical).

Digital Publishing Platforms by Vertical

1. Pre-Monetized Blogging Platforms (Medium, HubPages, Steemit, Vocal, etc.)

Medium is one of the best examples of the digital publishing platforms that have enabled content creators to monetize their writing. Readers are charged a subscription fee to access stories across the entire Medium platform. Medium features stories from both amateur writers and major media publications. Writers on Medium are compensated through the Medium Partner Program. The amount of money a writer makes is proportionate to the amount of time readers spend engaging with their stories. 

In this arrangement, Medium functions as a marketplace for writers looking to monetize their work. Medium’s marketplace is entirely plug and play, meaning writers can sign up and start earning revenue with minimal set-up. 

Medium benefited from an early mover advantage as well as a financial advantage. Medium has received over 150 million in private funding and its founder, Ev Williams (co-founder of Twitter) has substantial personal wealth.

However, despite these advantages, Medium has struggled to define its business model. Although Medium has labeled itself a platform, it has at times tried to be a publisher as well.

A publisher is in the business of creating content and growing readership. Medium saw an opportunity to create a new kind of publisher. Unlike traditional publications, Medium incentivizes an army of independent journalists and writers to produce a constant stream of good quality content. The advantage of Medium’s approach under the “publisher” model is that it doesn’t have to employ a large number of writers or any at all. It needs to grow its readership (in particular readers who are willing to pay for content) and figure out the best way to distribute revenue from subscriptions to the writers.

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Medium-as-a-publisher provided readers with much broader and diverse content created by the army of independent writers and journalists. It’s worth the $5 per month subscription because you can’t get content from such diverse topics from many other publications. Subscriptions to a combination The Wall Street Journal, New York Times, Financial Times, The Atlantic, and other major publications, would cost users $250+ year.

A platform, on the other hand, provides tools for publishers to create and publish content, as well as engage and grow readerships and subscriptions. The responsibility for growing audiences lies in the hands of publishers, not the platform. The value of the platform comes from making it easy for publishers to create publications and engage readers.

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Medium-as-a-platform interested many publications because it promised to solve their tech, infrastructure, and SEO problems. Publishers want to create content, not deal with the headache of constantly maintaining their own platform. Not only is it challenging to replicate the site aesthetics of platform like Medium, but is is also expensive, requiring a staff of several people.

Both models are valid when viewed by themselves are viable. But they are fundamentally incompatible when used together. If you are a publisher, you have to focus on content discovery and readership growth. If you are a platform, you need to focus on infrastructure and readership engagement tools while accommodating the needs of publishers, or independent writers, to manage their publications.

The result of these two conflicting business models?

Medium is fighting off several other platforms who are offering writers clear (and potentially more lucrative) business models and platforms. A prime example of this is Substack, which is discussed in the following section.

Medium Alternatives

Although Medium is probably the largest player in the pre-monetized blogging space, there are several other competitors, including HubPages, Steemit, News Break, and Vocal.

HubPages is the longest running of these competitors, but due to mismanagement, battles with Google leading to SEO demotion, and a limited audience, the company is not a serious threat to Medium.

Steemit provides an interesting alternative to Medium since writers get paid in cryptocurrency called STEEM. However, Steemit doesn’t have the mass appeal or traction to challenge Medium.

Vocal is a great alternative to Medium, and the transparency of their payment model is appealing to many writers. However, Vocal does not have an auidence near the size of MEdium’s.

News Break is the newest of these pre-monetized digital publishing platforms. Its founders have sunk a lot of money into driving the creation of local news and content. News Break’s Creator Program is only a few months old (still to early to assess) and I doubt it will destroy Medium, but the guarenteed monthly payouts or payouts per article are appealing to many passion economy writers.

2. Newsletter Publishing Platforms

Substack is another popular digital publishing platform powering the passion economy, and perhaps the most popular of the newsletter-specific publishing platforms. However, unlike Medium, Substack’s business model involves hosting subscription newsletter creation tools for writers.

Substack requires creators to work independently to acquire customers (Medium provides a built in audience, with its Partner Program). Substack helps with distribution—providing tools for newsletter marketing, analytics, built in payment processing for multi-tiered subscriptions limited CRM functionality, and an easy to use email marketing system—but writers are largely responsible for growing their own newsletters.

Substack poses a threat to Medium because, as a SaaS tool (as opposed to a marketplace tool), Substack offers more financial upside for creators who already have a large customer base. There are several ways in which newsletter creation platforms (such as Substack) threaten marketplace tools, such as Medium:

  • Substack will poach top writer talent from Medium. Medium has attempted to slow this “platform brain drain” by keeping in place various systems that are frustrating to Medium writers, but are effective in discouraging these writers from starting on a new platform. The most obvious example of this is Medium’s low level of email list portability and the difficulty of communication with followers. As explained in the previous section, Medium has attempted to act as both a publisher and platform. This moat is largely superficial, though, as platforms like Substack prove. Since Medium requires no exclusivity from its writers, most writers eventually will make the determination that “owning their own email list” and being able to communicate with their followers, independent of Medium as an intermediary, is worth leaving the platform over.
  • Substack’s current business model is much more scalable than Medium’s business model. Medium is a marketplace where writers can easily monetize their writing. Substack is a SaaS tool which simply provides the technical infrastructure allowing writers to create their own newsletters. In the Substack model, newsletter writers are responsible for all writing, editorial planning, marketing, and ultimately building an audience. Substack makes money by charging a processing fee which is a percentage of a newsletters revenue. Medium’s model relies upon content curation, (some) editorial direction, and it needs to manually moderate content. All of this is time intensive and expensive, making it hard to scale.
  • Medium’s model was successful in driving growth over the past 8 years, but it also was effectively subsidized heavily by large venture capital investments. It is tricky to say since Medium is a privately held company, but there is no evidence that Medium is actually profitable. Substack, by its very design is much more likely to achieve profitability, first or faster. The team required to run Substack is very lean, and the marginal cost of adding a new newsletter to their network is extremely small.
  • Substack’s business model aligns the financial interests of writers and Substack better than the financial interests of Medium writers and Medium as a company. If I publish my writing on Substack, Substack only makes money if I succeed in selling subscriptions to my newsletter. Medium, by contrast, benefits from the content provided freely by writers. Medium writers, however, have little ability to control their earnings. They are dependent upon earnings that Medium allocates (Medium currently uses Member Reading Time to proportionately allocate earnings). Let’s say I write an article on Medium that goes viral through organic search traffic. This article could earn a very small amount of money (or none at all) because writers are only paid for reading time from paid medium subscribers. In the most extreme case, is is possible that I could write a viral article with millions of views, receiving little or no compensation for my effort, and Medium would reap the full upside of the article’s success as this helps boost paid platform reader subscriptions.

While Substack does have some advantages over Medium, I am not saying that Medium will collapse. I am also not ruling out the possibility that Substack itself will fail. Why?

 

  •  Substack is not competing for passion economy creators in a vacuum. Substack faces direct competition from platforms such as Revue or Buttondown. Further, the service offered by Substack is not proprietary, meaning additional competitors could enter the field at any given time.
  • Substack is vulnerable to “platform brain drain” much like Medium. In the case of Substack, top earning publications can and sometimes already have left Substack, in order to avoid paying Substack their fee or because they want to build a custom publishing platform, designed to meet their followers needs better.
  • Substack newsletters face less direct, but strong competition from private membership communities. These online community building platforms contain a wide range of features (with a newsletter being among the simpler platform features.

3. Video Publishing / Streaming Platforms

Twitch is a leading live video streaming platform, which caters to the viewers with videos of different genres, ranging from music, cooking, Q&A, and instructional sessions, to video games and everything in between. It is just like YouTube, but with live videos. Launched in 2011 by Justin Kan, Twitch made its initial impact catering to a niche of online gamers and was acquired by Amazon in 2014.

In 2019, Twitch streamed 2.72 billion hours, far surpassing YouTube with just 736 million hours of video streaming.

When your audience grows, so does your potential to earn money. But there are a few ways you can cash in as you’re still growing your following:

Donations

Twitch users like to support their own. One of the main ways they do this is by donating money to their favorite streamers. Add a “donate” button to your channel — via PayPal or a third-party app, such as Streamlabs — and let viewers show you the money.

Brand Partnerships

Companies use Twitch streamers to get their products in front of people, and the streamers get a kickback in return. This is typically referred to as a partner or affiliate relationship (not to be confused with Twitch’s partner and affiliate programs, more on that later).
Affiliate opportunities for Twitch streamers can come from companies that sell hardware and software, energy drinks and accessories, such as headsets and chairs. Commissions vary, but for example, Razer — the hardware and software company — offers affiliates up to 20% commission on the sale of its products.
Brands don’t typically come to you unless you’re a big-time gamer. Talk with other streamers to suss out affiliate opportunities.

Merchandise

If you have a dedicated audience, consider selling your own merchandise — think t-shirts, stickers, coffee mugs and laptop cases — via a third-party site such as TeePublic or Spreadshop. Just create a storefront, stock it with items — bearing your own design or curated from other sources — and promote it on your Twitch channel.

 While Twitch has been featured due to its high level of recent growth, it is far from the only video platform serving the passion economy.

YouTube is still the dominant player in the field, and mobile apps like TikTok are experiencing just as much growth, if not more. All of these companies offer creators the chance to monetize their video content.

4. Audio Publishing & Podcast Platforms

Listening to podcasts has become mainstream. Today, more than half the US population has listened to roughly a million shows. We’ve seen the rise of podcast creators, largely due to innovations in podcasting tools and hardware. Tools like Anchor have enabled any creator to host and distribute their audio content.

An app like Clubhouse provides an experience that is somewhere between a conference call, a podcast, and a live talk show. The content is ephemeral, like a traditional phone call, however it’s also a horizontal and public platform, which is more like live podcasting.

Donations to podcasters primarily happen off-platform today, via third-party tools such as Patreon, PayPal, and Venmo. The top podcaster on Patreon, Chapo Trap House, a political humor podcast, earns over $131K per month from almost 30K patrons. And some other listening apps also have introduced one-off tipping capability or patronage features.

Another monetization mechanism that companies are experimenting with is branded content. As opposed to advertising — which first start with the content and then sell ads to monetize — branded shows create a podcast in collaboration with a company, for a fee.

There’s also a lot of activity happening right now in the subscription and membership space. Recently-launched podcasting app Luminary Media charges $8 a month for access to a slate of more than 40 exclusive podcasts, and the app also has a free listening experience.

While audio and podcasting paltfroms still have a ways to go in terms of monetizing content, they are definitely a major source of passion economy creator earnings.

5. Course & Webinar Creation Platforms

The online course market hit $187.5 billion in 2018, and its value seems certain to increase in the coming years. Studies predict that the e-learning industry will reach $325 billion. This projected increase is likely due to a shift in workplace training needs, hiring trends, and industry developments like LinkedIn’s acquisition of Lynda. Professional success these days depends on continuous learning and development.

An industry survey of more than 1,000 entrepreneurs conducted by Global Industry Analysts found that 20 percent of respondents were in the process of creating an online course.

According to Statista, in 2017, the self-paced e-learning product market amounted to 46.67 billion U.S. dollars. Individuals and businesses continue to be interested in e-learning, and you don’t need any specific qualifications to get started. While academic subjects are popular, you can also teach practical skills or virtually any other topic. 

One example is Justin Jackson who has turned his blogging into a digital membership business, using one of the most populat online course creation tools.

Podia is a popular online course platform that can be used to build your entire storefront. It allows you to create all the educational content you could possibly need. You can build multiple online courses, create digital downloads, set up separate membership sites, and host them all in one place.

Another similar type of platform is Thinkific. Thinkific is a powerful all-in-one course software solution that makes it easy to create and sell courses on your own course website. It’s a robust platform that scales well as you grow and is capable of supporting millions of students.

 Course and webinar creation platforms have been lucrative since thier inception, so the success of this latest group of passion economy platforms is not a suprise. Education had been trending toward digital sources for years, with many colleges and universities integrating online course platforms. What has been a surprise though are the rise of e-learning courses and webinars led by individuals, as opposed to large incumbent educational institutions. Much of this tranformation started before the pandemic, but have been implemented at a staggering rate after the pandemic.

As noted in a report from MIT Technology Review Insights:

The coronavirus pandemic has accelerated digital transformation strategies.

While most of the U.S. (and much of the world) is struggling to cope with the burden of COVID19, digital publishing platforms and passion economy platforms are growing at an unprecedented rate. Courses, webinars, and other e-learning products are quickly developing into the most lucrative passion economy vertical.

6. Online Community Engagement Platforms

The primary goals of building an online community include increasing user engagement, providing better support at reduced costs, building customer loyalty, and converting customers into advocates. However, there are people and organizations who have started to make a fortune out of their online communities by monetizing them.

Whether it is through direct or indirect monetization of an online community, the demand for online communities has led to a number of popular online community building platforms. Many of these are designed for users who have no experience coding or managing complex technical infrastructure.

PeerBoard is an example of the online community building tools that have been created. PeerBoard is software that allows you to build a branded, feature-rich community forum on your website, without requiring coding. PeerBoard is one of the leaders of the group of sites that are indirectly monetizing an online community. By that, I mean that PeerBoard is not currently charging member for access to the forums they host. Rather, community organizers are building communities in parallel to existing passion economy products (i.e. a Substack newsletter, an online course, or Podcast discussion group being built to enhance the community experience of an already monetized audience).

Another popular platform designed for monetizing online communities is Memberful. Memberful runs independently in the background helping online community managers sell memberships and manage the day to day work involved with running a subscription business. This is an example of an online community engagement platform that is allowing creators to directly monetize their audience.

7. Project-Based Funding Platforms

The idea of crowdfunding (project funding) is fairly old. Going back even to the 19th century, book printing was financed by donations from those interested in a specific book. Even the Statue of Liberty in New York was co-financed by donation campaigns, which raised a total of $160,000 to complete the base construction.

However, crowdfunding in the modern sense only became an easily accessible financing model based on the social and globally networked structure of Web 2.0 with the launch of the crowdfunding sites Indiegogo (2008) and Kickstarter (2009).

Indiegogo and Kickstarter are donation platforms that allow fans to donate to their favorite creators and the projects that these creators need help financing.

Creators use these platforms to raise money to publish their one-off books, comics, documentaries, short films, albums, etc. These project based funding platforms typically charge a 5% commission on any money raised.

These sites have led to the realization of the dreams of many indie creators, but many of these supporters prefer to more directly support content creators, and receive premium access or merchandise, as seen in the next section.

8. Tips, Patronage, and Fan-Based Funding Platforms

Patreon is the most prominent of the “patronage” type of passion economy companies. In a nutshell, Patreon allows creators—from musicians over artists to trainers, teachers and local venues— to offer paid subscriptions to their content. 

For creators, Patreon handles the audience management backend, the payment processing, and a moderate level of curation. For these services, Patreons keeps a stake between the 5% and the 12% of creators’ earnings, depending on the service level Creators select from Patreon.

More than 150,000 artists use Patreon to generate income by offering exclusive content and communities to more than 4 million patrons in over 180 countries (and they’ve earned well over $1B in the process). More than 30,000 creators launched in the first 3 weeks of March 2020 alone, and these new creators are acquiring patrons faster than usual.

The other popular example of this category are the series of “tip jar” platforms which have emerged. Instead of setting up a recurring donation to your favorite creator, you can also make one-time donations, which is much lower friction for fans to get involved.

Platforms like Ko-fi and Buy Me a Coffee gives creators the platform to ask fans for $5 here and there. These platforms can let creators reach their maximum audience by not requiring upfront payment, while still offering a way for fans to voluntarily support a creator financially. Some larger social networks also offer ways to tip creators, especially during livestreams, in exchange for shout-outs from their favorite streamers or special badges and added visibility to other fans.

 

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Substack Newsletter Review and Platform Tips (1 Year In)

Substack Newsletter Review and Platform Tips (1 Year In)

substack newsletter review, substack review, substack, substack platform review, best substack newsletters

Written by Casey Botticello

December 28, 2020

Substack makes it simple for a writer to start an email newsletter that makes money from subscriptions. Substack provides web and newsletter publishing tools that are purpose-built for paid subscriptions.

In many ways, Substack has emerged as a major player in the digital publishing space, not through creating or inventing revolutionary ideas, but by simplifying existing concepts, and making them accessible to the average writer (and even users who would have never have identified as “writers” but want to monetize their ideas, opinions, and insights.

Newsletters have a long and rich history. Even subscription newsletters (where readers pay for access to someone’s newsletter) existed long before Substack. Ben Thompson’s, Stratechery, being one of the best examples.

But this previous generation of newsletters were created almost exclusively by:

  • Tech savvy entrepreneurs who could easily build their own tech infrastructure;
  • Subject matter experts, with traditional credentials;
  • Writers who had already built up an established audience through traditional publishing channels.

Substack was unique in that it significantly lowered the barrier of entry into subscription digital publishing. Substack offered a content management system (CMS) built for publishing email newsletters, integrated payments through Stripe, and a website that can host free and subscriber-only content. None of these aspects were unique, but the integration of these three in a WYSIWYG platform was quite a unique offering.

As someone who writes about digital publishing, I was intrigued by Substack as both a game-changing platform (which I needed to investigate for my readers, many of which I anticipated would be eager to try out the platform) and as a new mechanism for monetizing my own content.

You can read a higher level review of Substack as a digital publishing platform, here. Below is an account of my personal experience using Substack, data from my newsletter, and tips for fellow Substack writers.

Creating Blogging Guide (My Substack Newsletter)

On January 1, 2020, as part of my New Year’s goal setting, I revisited a number of entrepreneurial ideas I had not pursued the previous year. I decided to create a subscription newsletter centered around digital publishing.

So I took a second look at Substack. Substack allows users to create a subscription based newsletter and blog hybrid, which intrigued me. I resolved to launch a Substack newsletter in the following weeks.

Later January of 2020, I officially launched my first Substack newsletter, called Blogging Guide.

I didn’t expect it to be immediately successful, but I had developed a decent following on several digital publishing platforms (most notably, on Medium) and thought that over the course of a year I might be able to reach 20 paying subscribers.

However, even this seemed ambitious. As most internet entrepreneurs can attest, getting strangers to pay for one off products is hard. Convincing them to pay for a subscription information product? That is very difficult.

So Blogging Guide was initially launched as a free newsletter. There was not even an option for subscribers to pay (monetization was off).

I had received a lot of positive comments and feedback during the 100% free sign up only period.

I enabled paid subscriptions for my Newsletter on February 3, 2020. At this point, my audience was still mostly those trying to master writing on Medium, so the paid newsletter launched under the name Medium Blogging Guide.

I set the price as low as Substack would let me ($5 per month or $30 per year) and on top of that, I offered a 50% discount to initial subscribers (so it actually cost $2.50 per month or $15 per year).

Even though this is a very low price point, I was worried few people (if any) would subscribe given that most writers already pay $5 per month or $50 per year for reading articles on Medium.

I thought that I would give it three months or so, and see if I could even get a single subscriber.

On February 7, 2020 (four days after enabling monetization), I received my first paid subscriber! I was stunned to receive the email notification:

I had only published one paid-subscriber-only post a few days earlier, and figured it would require at least a month of publishing/building a large enough back catalogue to get a reader to even consider subscribing.

This “Zero to One” moment was a real game changer. The newsletter concept worked, someone found value in my writing, and I could charge for content that was higher quality and more in depth.

Though still cautiously optimistic, I decided to dedicate more time to developing my Substack newsletter.

Substack Newsletter Data Analytics / Results

Over the next few months, subscribers continued to validate the concept. Blogging Guide reached 100 paid subscribers on April 20, 2020.

This was an amazing moment! I considered this the major milestone which validated the concept of my newsletter.

In the context of the “1000 True Fan Theory” I was now 10% of the way to reaching a sustainable passion economy based business.

For those not familiar, the 1000 True Fan Theory:

More than a decade ago, Wired editor Kevin Kelly wrote an essay called “1,000 True Fans,” predicting that the internet would allow large swaths of people to make a living off their creations, whether an artist, musician, author, or entrepreneur. Rather than pursuing widespread celebrity, he argued, creators only needed to engage a modest base of “true fans”—those who will “buy anything you produce”—to the tune of $100 per fan, per year (for a total annual income of $100,000). By embracing online networks, he believed creators could bypass traditional gatekeepers and middlemen, get paid directly by a smaller base of fans, and live comfortably off the spoils.

In December 2020, less than a year after I started my newsletter, I hit another big milestone, reaching 250 paid subscribers to Blogging Guide!

While I am a very goal oriented person, I usually don’t focus on short term goals. I try to measure (and predict) success in intervals of at least a year.

So as I approach the end of the first year of running a paid Substack newsletter, I thought I would provide some of my data, observations, and tips to help other writers.

I’ve written a few articles covering Substack writing tips, Substack earning potential, Substack formatting, and platform comparisons of Substack to rival platforms. However, this post is more detailed, and likely the most useful since it contains a better sample of data.

Having a longer-term outlook is useful for a number of reasons, but most importantly to me:

Evaluating success using a longer period of time (at least a year) allows me to stop worrying about misleading short term trends. These short term trends are often more a result of a lack of data, as opposed to an actual shift that I need to react to.

A good example of this (which many writers/indie creators can probably relate to) is obsessively checking your stats for your blog, articles, newsletter, or product sales. 

While there is nothing inherently wrong with checking your stats often, there is a real risk of drawing flawed conclusions based on a limited set of data.

Take a look at the two charts below:

These two charts report the Gross Annualized Recurring Revenue from my Substack newsletter and writer community, Blogging Guide.

Both of these charts show some upward growth, but it would appear any growth that it is occurring, is quite gradual (with a number of drops and financial setbacks along the way).

This is especially apparent for the month of September, which, at the time, seemed dissapointing:

While I was tempted to make changes, I stuck with my long term content calendar, and I waited a few more months, to allow myself the time to properly contextualize the data.

However, even when viewing the gross annualized revenue all-time chart (long-term perspective), this period of time does not really explain much, when viewed out of context (although the trend looks somewhat better).

Take a look at the all-time graph (just short of one year’s progress):

When you “zoom out” and examine the broader trend, it becomes clear that:

  • The yellow highlighted period of time (seen in the previous graphs) was not actually that unique in the newsletter’s overall growth trend. It was also not a period of “failure.” Rather it was a fairly arbitrary fluctuation caused by a lack of data.
  • Any decisions made during this period (to change price, increase content production, etc.) would have likely been predicated on a skewed data sample.
  • Substack’s graph depicting gross annualized revenue can easily be influenced by a small group of users, who are monthly subscribers, with a relatively high churn rate. This is true for my newsletter too, even though 90%+ of my paid subscribers at any given time are annual subscribers. This volatility would be even more exaggerated in a newsletter with fewer annual subscribers.

Lessons Learned in the First Year of Publishing My Paid Substack Newsletter

1. Choose Your Newsletter Name Carefully

Picking a good name is essential to creating a successful Substack newsletter. Ideally, your Substack publication will meets most of the following tips:

  • Keep the name short — Generally, the shorter the name, the better. It is also ideal to keep your publication name between 1–3 words.
  • Keep the name simple — I would suggest keeping the newsletter name simple.
  • Try to pick a name with an available domain name — This suggestion is optional. But if you want to have the potential to build a brand beyond your Substack newsletter.

As you will notice from the Substack leaderboard, most of the top publications follow these basic rules.

2. Substack Has Very High Domain Authority & Indexes Well

For me personally, choosing the name “Blogging Guide” made sense as it was concise, easy to spell, and I had already started building a brand around that keyword search phrase. This leads me to the next lesson that I learned from Substack, which is that Substack has high Domain Authority (DA), and writers need to view each newsletter as both a new issue and a static blog post.

One of the most overlooked aspects of Substack is the fact that your newsletter doubles as a static blog post.

Why does this matter?

Normally, the ROI on any individual newsletter issue is relatively low. However, when each issue doubles as a blog post with high domain authority, this significantly increases the value of an individual post. Because far more people will end up seeing it through search engine traffic, there is an additional incentive to create high quality content (as opposed to churning out mediocre content, while trying to promote a product or service.

Your newsletter is the product or service being sold, so publishing each new issue helps you (1) continue to supply existing subscribers with new content (2) attract new subscribers by creating content that doubles as strong lead generation material.

3. Focus on Selling Annual Subscriptions

Substack currently allows for two main types of paid subscriptions: monthly or annual.

Annual subscriptions are typically offered at a 10%-20% discount off the equivalent monthly pricing.

The more established your newsletter, the less this discount matters. Conversely, if you have a relatively new newsletter, I would highly suggest offering, at least initially, a 20%+ discount on annual subscriptions, for the following reasons:

  • Annual subscriptions allow for better revenue projections. If you have a lot of monthly subscribers, revenue will inevitably fluctuate since monthly subscribers have a higher churn rate. Additionally, as you change your newsletter subscription price over time, or offer promotional deals, these variations will be reflected more in monthly subscriptions than in annual subscriptions.
  • Annual subscriptions help weed out “problematic subscribers.” Based on my experience, most of the customer service issues come from a small group of monthly subscribers.
  • It is far easier to meet (and exceed) expectations of annual subscribers. Content production varies month to month. So if you have an annual subscription, you will see a better sample of the content that you can come to expect. Monthly subscribers might sign up in a month where you happen to produce less content. This may lead to them not upgrading to an annual membership or cancelling their monthly membership.
  • Annual subscriptions decrease the risk of payment failure. A small amount of subscriptions through Substack will fail because of outdated payment information. For monthly subscriptions, there is a greater risk of payment failure, since their are 12 cycles in a year, and only 1 cycle for the annual subscription.

4. Develop a “Content Allocation” Strategy

Substack allows writers the ability to choose, each time they publish a post, if the post is free for everyone or only for paying subscribers. 

This leads to a question that I get asked by many Substack writers:

How should I allocate my content between free posts and paid subscriber-only posts?

There are several strategies that I have seen popular Substack newsletter writer utilize:

  • Post 3-5 free posts per week, and 1-2 premium or locked posts per week. This strategy allows writers to heavily market their work through publicly available posts and newsletter issues. Potential subscribers can get a taste of your content, and if they like it, may upgrade to paid subscribers, in order to access additional or premium content.
  • Post 1-2 free posts per week, and 3-5 premium or locked posts per week. This strategy is the exact opposite of the one mentioned above. Writers are still offering a small amount of content for free (typically, to drive traffic and potential paying subscribers), but they are placing the majority of their content behind a paywall.
  • Post content for free for an extended period. By forgoing monetization for an initial extended period of time, writers can build up an email list much faster. This is the strategy that I recommend to most Substack writers, although it does require a fairly significant investment of time, and it takes much longer to gauge the interest of your audience in actually paying for your content.
  • Immediately enable newsletter monetization, and build an audience at a slower pace, but start generating revenue sooner. This strategy has the advantage of allowing you to filter readers quickly. Some readers may enjoy your content, but will never pay for it. Others will pay for content because they understand the value proposition of your newsletter. You can also assess the potential of your newsletter, at an accelerated rate. However, this strategy can be risky, since you may miss out on subscribers who may have upgraded had they seen your content (not placed behind a paywall).

 

5. Create an Editorial Calendar

Similar to blogging, running a successful Substack newsletter requires planning and strategy. One of the best ways to achieve this is through the creation of an editorial calendar for your newsletter publishing schedule.

6. Mobile Optimization

Substack automatically does a great job formatting your newsletter content so that it can be read on mobile devices. This is especially critical since Substack’s core offering, is the ability to reach the inbox of your subscribers.

And more than 50% of all email is opened on mobile devices. So it is at least as important as optimizing your content for traditional desktop views.

So how can you optimize your Substack newsletter for mobile devices?

  • Limit the use of large image files or GIFs. These will both increase the time it takes to load and email and will increase the odds that your email renders incorrectly.
  • Preview your articles on a mobile device before sending out a newsletter. Occasionally, headings, images, and special font formatting will render incorrectly. This is especially true if you are writing your Substack newsletters in a program (i.e. Word, Notepad, etc.) other than Substack’s editor. Copying and pasting content can lead to formatting errors which may not show up on a desktop preview.
  • Enable colored links. If you go into your Substack newsletter formatting settings, there is a box that you can check labeled “enable colored links.” Enabling this function will allow you to change the color of hyperlinked text. When viewing colored links on desktop, they may appear excessive, depending upon how much you use them. But they really display well on mobile devices and encourage readers to click them.

7. Create More Than “Just Newsletter”

Substack does not facilitate much more than a subscription newsletter and a blog. But that doesn’t mean that you need to limit your subscriber benefits to just a newsletter.

I often refer to Blogging Guide as a writer community instead of just a newsletter. Not only does this sound better, but it reflects the broader efforts I’ve made to build a community around my newsletters central topic.

I’ve done this by creating private chat groups, offering free digital downloads, and a podcast. All of these related products are offered to paying subscribers.

Every newsletter is unique, so there is no single answer to the question of how to build a community. But below are a few ideas which may work:

  • Private Chat Communities. These can be hosted on platforms such as Slack, Facebook, Discord, and Reddit.
  • Digital Downloads. Types of digital downloads you can offer your subscribers includes digital templates, eBooks, courses, and custom software/tools.
  • Public Recognition. Forms of public recognition include shoutouts on social media, cross promotion of content, or offering jobs/opportunities to your paid subscribers first, and referencing this in future newsletter updates.

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