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Most freelance creatives are eager to find more ways to build their reputation and generate income. We know that creative life can be incredibly satisfying, but also economically and reputationally challenging. A few creatives who work on the Patreon platform, the largest and best known creative community, make a great deal of money. But the vast majority do not.
No surprise then, creatives are eager to find adjacent ways to increase income and reputation, something I’ve written about before. In this piece we dig into how creatives can add income by authoring subscription newsletters. A recent article in the NYT described the opportunity to generate impressive income; in some cases, more than $500k annually. Here’s how the NYT described one successful newsletter writing family:
“Mr. Lavery already has about 1,800 paying subscribers to his Substack newsletter, The Shatner Chatner, whose most popular piece is written from the perspective of a goose. Annual subscriptions cost $50.
“The contract is structured a bit like a book advance: Substack’s bet is that it will make back its money by taking most of Mr. Lavery’s subscription income for those two years. The deal now means Mr. Lavery’s household has two Substack incomes. His wife, Grace Lavery, an associate English professor at the University of California, Berkeley, who edits the Transgender Studies Quarterly, had already signed on for a $125,000 advance.”
As with Patreon, for every freelancer who makes it big - or even modestly successful - as a subscription newsletter author, hundreds are way less successful. What’s 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 succeed. Over a long conversation with me, he described his research and recommendations:
JY: Hi Ethan. Newsletters are having a moment and many freelancers want to know whether it makes sense for them. I guess the first question on most peoples’ mind once they’ve caught the bug is probably: "Which kind of newsletter should I build... Paid or free?
EB: A great starting point! This is crucial because the answer will have a big impact on your plan. It turns out that most people are approaching this in the wrong way: "It's and, not or. You should build both.
JY: That’s surprising. Why is that?
EB: Let’s start with fundamentals. There are three primary ways to earn money from newsletters: free subscriptions that you monetize via ads, low priced subscriptions, and high priced ones. Each can be a significant business. But together they're monster if you get it right. Building all three lets you diversify your income which is always a good thing. It also lets you grow the lifetime value of subscribers.
JY: So, how and where do you start? Let’s take free newsletters first.
EB: I notice three things that trip people up when they decide to start a free newsletter. First, how niche should it be? Second, what tech stack should I use? And third, how do I scale my audience? Here’s what I learned. First, the more niche, the better. There are riches in niches and a small audience can provide a serious cashflow. The tech choice, until you're sending thousands of emails per day doesn't really matter. Pick what’s easiest and affordable. On scaling, focus on quality and trust, and your unique voice. For example, one writer grew their newsletter to 10k subscribers in just a month. Don’t wait for perfect. Just keep going, create value, and don't get stuck.
JY: How do I know if I have enough readers to monetize?
EB: 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+), high “unique opens” (at least 20%+ will open your email) and engaged readers who have at least some money to spend. An audience able and willing to spend money affects everything else you might do: products to advertise, what you can charge advertisers, and how much you can charge for paid subscriptions later. So build an audience that is engaged in the topic and willing to spend at least a little money!
JY: What’s the scoop on monetizing a free newsletter?
EB: Glad you brought that up. There are two ways to monetize a free newsletter: affiliate deals and ads. Affiliate deals are easier to start with because you can do it with a smaller audience and many programs are self-serve. The pros say check out ShareASale, CJ Network, and Rakuten. To sell ads in a newsletter, and make it worth your time, you' definitely need a bigger audience. Realistically, 75k-80k readers is where it starts to get really attractive.
JY: How do you actually sell ads?
EB: I recommend the BANT framework. Does your target advertiser have: Budget to afford it, Authority to make the decision, Need to reach your audience and Timing - needed now. To find To find ad clients, monitor advertisers in competing newsletters and recent funding reports in @TechCrunch, @crunchbase, or @danprimack Axios Pro-Rata newsletter. When startups raise money, they get new growth goals (i.e. great time to advertise).
JY: This is super helpful and readers will certainly appreciate the specificity. Any other tips?
EB: Yes, as your business grows, you'll want to develop multiple types of ad inventory: Premium ads; more affordable (but smaller) ads; loss leader ads that are cheap (and smaller still). These actually work together. You start by offering premium ads. If it's more than clients can pay, you offer the smaller, less expensive ads and toss in the free loss-leaders to sweeten the pot. You can grow quite large with this setup. But eventually, you'll want paid newsletters too.
JY: Why not just stick with free newsletter and ads?
EB: It's not that paid newsletters drive more revenue, although they can. Paid newsletters provide recurring revenue. If you sell $50k worth of ads this year, that's great. But come next year, you have to do it all over again. But if you sell $50k worth of subscriptions, and 50% renew, you start the year with $25k “in the bank”. And, paid newsletters can protect you from drops in the ad market and vice-versa.
JY: Is there more than one kind of paid newsletter?
EB: Yep, there are two types. The main difference is price and specificity: front-end and back end. Front end newsletter typically charge $5-10 per month. Back-end products typically charge $500-1000 or more. The trick is to identify parts of your free newsletter that people would be willing to pay for on their own. There's no practical limit to the media properties you can attract with this model.
JY: So, in the end, it’s not free or paid. It’s both, right?
EB: Exactly, you start with free. Then use it to support and market your paid products.
Viva la revolution!
