Most independent creatives are eager to find other ways to build their reputation and generate income. We know that the creative life can be incredibly satisfying, but it can also be difficult economically and reputational. A few creatives who work on the Patreon platform, the largest and most well-known creative community, are making a lot of money. But the vast majority do not.
No surprise then, creatives are eager to find adjacent ways to increase their income and reputation, which I have already mentioned. In this article, we take a look at how creatives can generate income by creating subscription newsletters. A recent NYT article describes the opportunity to generate impressive income; in some cases, more than $ 500,000 per year. Here’s how the NYT described a successful newsletter writing family:
“Sir. Lavery already has about 1,800 paid subscribers to his Substack newsletter, The Shatner Chatner, whose most popular article is written from a goose’s point of view. Annual subscriptions cost $ 50.
“The contract is structured a bit like a book advance: Substack’s bet is that it will get its money back by taking most of Mr. Lavery’s subscription income during those two years. The deal now means Mr. Lavery’s household has two Substack incomes. His wife, Grace Lavery, associate professor of English at the University of California at Berkeley, which publishes the Transgender Studies Quarterly, had already signed for an advance of $ 125,000.
As with Patreon, for every freelance writer who succeeds great – or even modestly – as a subscription newsletter author, hundreds are far less successful. What makes the difference? My friend and colleague Ethan Brooks, a software developer turned writer for The Hustle, has studied the newsletter space and understands what it takes to be successful. In a long conversation with me, he described his research and recommendations:
JY: Hi Ethan. Newsletters have a moment and many freelancers want to know if it makes sense to them. I guess the first question on most people’s minds once they’ve caught the bug is probably, “What kind of newsletter should I create… Paid or Free?”
EB: An excellent starting point! This is crucial because the answer will have a big impact on your plan. It turns out that most people approach it the wrong way: and, not Where. You should build both.
JY: It is surprising. Why is that?
EB: Let’s start with the basics. There are three main ways to make money from newsletters: free subscriptions that you monetize through advertisements, low-cost subscriptions, and high-price subscriptions. Anyone can be an important business. But together they’re monsters if you get it right. Building all three allows you to diversify your income, which is always a good thing. It also allows you to increase the lifetime value of subscribers.
JY: So how and where to start? Let’s take the free newsletters first.
THIS: I notice three things that trip people up when they decide to run a free newsletter. First of all, what niche should it be? Second, which tech stack should I use? And third, how do I grow my audience? Here is what I learned. First, the more niche the better. There is wealth in niches and a small audience can provide serious cash. The technological choice, until you send thousands of emails a day, doesn’t really matter. Choose what’s easiest and most affordable. When it comes to scaling, focus on quality and trust, as well as your unique voice. For example, a writer increased his newsletter to 10,000 subscribers in just one month. Don’t expect perfection. Just keep going, create value and don’t get stuck.
JY: How do I know if I have enough readers to monetize?
THIS: The answer is “it depends”. It’s frustrating but realistic. It depends on your niche, engagement with your readers, and other factors. Generally speaking, you are able to monetize a free newsletter when you have at least two of the three in place: a large audience (~ 75-80k +), a high number of “unique opens” (at least 20% + will open your email) and engaged readers who have at least some cash to spend. An audience that is capable and willing to spend money affects everything else you can do: what products to advertise, what you can charge advertisers, and how much you can charge for paid subscriptions down the road. So create an audience engaged in the subject and willing to spend at least some money!
JY: What’s the scoop on monetizing a free newsletter?
THIS: Glad you brought this up. There are two ways to monetize a free newsletter: affiliate offers and advertisements. Affiliate offers are easier to start because you can do it with a smaller audience and many programs are self-service. The pros say they check out ShareASale, CJ Network, and Rakuten. To sell newsletter ads and make it worth it, you definitely need a bigger audience. Realistically, it’s with 75,000 to 80,000 readers that it starts to get really appealing.
JY: How do you actually sell ads?
THIS: I recommend the BANT framework. Does your target advertiser have: Bbudget to afford it, Apower of decision, NOTneed to reach your audience and Timing – needed now. To find To find advertising clients, watch for advertisers in competing newsletters and recent fundraising reports in @TechCrunch, @crunchbase, Where @danprimack Axios Pro-Rata Bulletin. When startups raise funds, they get new growth goals (i.e. the perfect time to advertise).
JY: It’s super useful and readers will certainly appreciate the specificity. Other tips?
THIS: Yes, as your business grows you will want to develop several types of advertising inventory: Premium Ads; more affordable (but smaller) ads; cheap (and even smaller) tender ads. These actually work together. You start by offering premium ads. If it’s more than what customers can pay, you run the smaller, cheaper ads and add the free callers to sweeten the pot. You can get quite tall with this setup. But ultimately, you’ll want paid newsletters as well.
JY: Why not just stick with the newsletter and free ads?
THIS: It’s not that paid newsletters generate more revenue, although they can. Paid newsletters provide recurring income. If you’re selling $ 50,000 worth of ads this year, great. But come next year, you have to start all over again. But if you sell $ 50,000 in subscriptions and renew at 50%, you start the year with $ 25,000 “in the bank”. And paid newsletters can protect you from downturns in the advertising market and vice versa.
JY: Are there several types of paid newsletters?
THIS: Yes, there are two types. The main difference is the price and the specificity: front-end and back-end. The front-end newsletter typically charges $ 5-10 per month. Back-end products typically charge between $ 500 and $ 1,000 or more. The trick is to identify the parts of your free newsletter that people would be willing to pay for themselves. There is no practical limit to the properties of the media you can attract with this model.
JY: So, in the end, it is neither free nor paid. It’s both, isn’t it?
THIS: Exactly, you start with free. Then use it to support and market your paid products.
Long live the revolution!