How publishers monetize their newsletters with paid subscriptions
There’s no question that newsletters are on the rise. Legacy publishers are constantly launching new newsletter products. Quartz’s Obsession newsletter, for instance, picks seemingly random topics and goes deep on them. Vox’s VoxCare newsletter, a favorite of mine, covers new developments in healthcare policy.
But we’re also seeing a number of media startups that are producing newsletters without corresponding websites. The Hustle, a business-news oriented newsletter that has over 500,000 subscribers, keeps all its content contained within its newsletter and publishes none of it to its website. The same can be said for theSkimm, a female-focused newsletter launched by two former NBC producers, and Lena Dunham’s Lenny Letter.
So what’s the business model for these types of newsletters? Of course many of them rely on advertising, but we’re also seeing a number of new products enter the market that allow newsletter publishers to charge money to their subscribers, often in exchange for access to extra premium newsletters. For example, Hot Pod, a newsletter about the podcast industry, sends out a weekly free newsletter each Tuesday and a second one every Friday for subscribers who pay $7 a month.
Given the rise of paid newsletters, we’ve seen a number of new platforms spring up to service this type of publisher. One of those platforms is Revue, a newsletter distribution platform that was designed with content publishers in mind. I interviewed its founder Martijn de Kuijper about the platform’s offerings and the best way for publishers to convert casual newsletter readers into paying subscribers.
To listen to the interview, subscribe to The Business of Content on your favorite podcast player, or you can play the YouTube video below. If you scroll down you’ll also find a transcript of the interview.
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Simon Owens: Hey Martijn, thanks for joining us.
Martijn de Kuijper: Thanks for having me.
You cofounded a company called Revue, can you explain what Revue is?
Revue is a tool that allows you to easily create editorial newsletters. When we started this and told people we have a platform for creating newsletters, they always compare us to existing email marketing platforms. But that’s specifically what we’re not doing.
The way we differentiate, is we have a tool for editorial newsletters where most of the other email platforms are mostly focusing on promotional newsletters.
They’re focused on marketing. You’re for working with publishers, newspapers, magazine, or independent content creators. You’re more focused on editorial content.
Exactly.
The reason why I thought what you’re doing is relevant is there’s so much more focus on email newsletters today. You can’t listen to a podcast these days without hearing an ad for Mailchimp. Is it fair to say that newsletters are really making a comeback?
I think it’s fair to say. Over the last few years, and especially over the last year, there’s this huge renaissance of newsletters, and we’re mainly talking about these editorial newsletters. Promotional newsletters have always been there, and they’re growing as well, but you see these publishers or writers using newsletters to inform people, instead of selling products or promoting their business.
A lot of times newsletters are just used to link to web content, like they’ll just be links to recent articles, but we’re seeing a lot of publishers launching newsletters where everything you need to know is contained within the newsletter itself. The articles and content are within the newsletter. That seems like every single day we’re seeing a publication launching some kind of niche-specific newsletter.
Definitely. NPR wrote a great website where they talk about newsletters that go from skim to dive. The skim newsletters are almost automated, RSS-driven newsletters that contain links. On the other hand you have these dive newsletters you’re talking about, that have unique content that’s written specifically for the newsletter, and it allows you to read in your inbox. And everything in between.
I personally believe that in the middle — of course it depends on the audience — but I personally believe in what’s in between. The people who link to articles, but use them to tell a story. If you want more information you can click on the links. But I think that’s the most ideal format.
Why do you think we’re making this shift back? For years we were treated to headlines that email is dead, and then all the focus was on social media as the new form of communication. Why do you think there’s this shift back to newsletters? Obviously Facebook has changed its algorithm so there’s less focus on news and publishers. Do you think the rise of newsletters has to do with the distrust that publishers have for Facebook, considering email is one of the last open source distribution methods that aren’t controlled by an algorithm?
Yeah. I think that’s exactly it. There are a lot of advantages with newsletters, but I think the main reason is that these algorithm timelines have become saturated with clickbait and advertising and irrelevant information. And newsletters are a great way to reach an audience directly.
Next to that it’s also personal. It’s very intimate. In an inbox, people will actually read your content, and people are very loyal readers. So yeah, I think, especially the issues that social media platforms have these days, are driving this resurgence.
With Facebook and Twitter, you look at the analytics, and it’s way under 10 percent of the people who are even seeing the content, much less clicking on it. Whereas if you look at the analytics for a newsletter, probably 100 percent of your subscribers are at least seeing the subject line in their inbox, and then open rates can be as high as 30, 40, 50 percent, which is completely unseen on social media. It seems that email is getting much more engagement than you’ll ever see on social media.
Yeah, way more. We see an average open rate as high as 50 percent on our platform. And I think it’s mainly because people subscribe to these newsletters because they actually want to receive the information. When you sign up for a service or buy a product somewhere, you often get a newsletter, which might be interesting, but it’s not something you specifically signed up for. And these newsletters, people actually want to get them. I think that’s why we see these numbers. You don’t see it on other platforms.
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Because the friction is slightly higher for your to sign up for the newsletter, you’re more likely to open it. Whereas with something like Twitter, it takes two seconds to hit a follow button on Twitter, so you’re probably not as engaged as you would be if you were to actually invite that publication into your inbox.
Exactly.
For years, the two major players that anybody heard of were Mailchimp and Constant Contact. Why are we suddenly seeing a lot of new entrants like your company?
Because these platforms are not created with the publishers in mind. These are created for promotional newsletters. For instance, if you go to the website for Mailchimp, you almost won’t see the word email on it. It’s mainly focused on how to sell more products. It’s specifically focused on marketing and selling products. And now they have web shop integration. They have Facebook ad integrations. And I don’t think they’re the right tools to create these editorial newsletters. That’s why we created Revue, to make it so much easier to make content and write within the platform itself. I think that’s the main reason why.
Why aren’t Mailchimp and Constant Contact friendly to publishers, whereas Revue is?
The feature set is different. They have algorithms that automatically pick the right product to promote to your audience. But also something simple, a Medium-like CMS, where you can just write and format your content. With us, you can also bring in content from different sources. From RSS, from Facebook, from Twitter. You can hook on your social media, and all the articles you shared you can drag and drop inside your newsletter. That is the main difference. The other platforms don’t have these types of features that writers and journalists really want.
So you’ve created a really slick CMS, what you would find on a Tumblr or Medium where it’s really easy to compose within the platform itself, rather than writing something off platform and having to copy and paste into it.
Yes, definitely. I’m glad you make that comparison. Because we like to compare to these platforms as well. Our output just happens to be email. We’re more in line with these platforms.
In terms of how publishers are using these platforms — how sophisticated are they? You go to an email marketing conference and they’re doing things like A/B testing subject lines where they’ll send out several different versions of the same email, but with different subject lines, to a small percentage of their email list, to really kind of test which subject line works best. And then once they have the results of that test, they then send it out to the entire email list using the winning subject line. We see them creating segmented lists, so if you happen to land on a particular piece of content and sign up for the newsletter, you get added to a specific list so that every single email is theoretically more targeted. You see marketing automation so if they do a certain action, it triggers a specific email. Do you see publishers engaging in this more sophisticated kind of email marketing? Or are they just sending out one email to their own list.
Roughly, it depends on the size of the publishers. How many resources do they have to do these sorts of things. We’ve been focusing on indie publishers and writers. They don’t have the need for these tools that you’re mentioning. But now, we’re focusing more and more publishers as well. And more and more publishers are moving to our platform, and they definitely want to use these kinds of tools. They’re actively testing subject lines. They’re segmenting. It’s definitely something they’re becoming more interested in.
It has to do with the maturity of the editorial newsletters. Although email is very old, these editorial newsletters are pretty new. Over time, more and more people will use these features. But we also see a lot who just want to get their content out there easily, without having to code templates.
One thing you’ve done that’s unique is add this membership layer, where someone who uses your platform can create special newsletters for paying subscribers, and you handle that all within the ecosystem. Did you see a need for this in the marketplace.
Yeah, definitely. It was mainly driven by our user base. A lot of people asked for it. We talked to a lot of people before launching it. We talked to people who coded their own solution. They integrated Stripe and used code to implement. What we heard from them is that they don’t really want to do this, because they want to focus on the content and focus on creating the newsletter. So it’s a lot of overhead and a lot of work to maintain it.
Another thing we also saw was people tying together multiple services. They used Mailchimp and then take another service that manages the memberships. But the reader experience isn’t optimal when you do this. For instance, look at Patreon. There are people who use Patreon, and when you want to sign up, you want to become a member, you have to go to Patreon and create an account there. So the flow isn’t ideal. That’s why we’ve created this membership functionality. Everything is integrated. You simply create a Stripe account, set a monthly fee, and you can simply start sending to everybody or just your paid members. So it’s really easy. I think it’s the core to what we’re doing. We make everything extremely easy.
I always thought a newsletter is the perfect way to enact a paid membership, because if you create some kind of paywall, then the paying members have to juggle a login and remember their password every time they visit the site. Whereas if it’s a paid newsletter — let’s say you have free content on your website and you want people to sign up for your paid newsletters — once they’ve signed up, they never have to log in again because it’s just sent to their inbox. They don’t have to constantly remember a login. It’s only delivered exclusively to the paying subscribers, so you don’t have to worry about people who aren’t paying getting access to the content, unless obviously someone could forward it someone else. It just seems like if you want to create a membership platform, it seems like a newsletter is the way to go.
I totally agree. Also about the access thing — people can forward it. But what we see, and again it’s because of this personal characteristics of newsletters, people start becoming a subscriber because they want to support the writer, or they want to support the publisher. So they can forward it or find ways to get access, but they don’t only pay for the access, they also pay to support people. And that’s what we see on our platform as well.
What are some of the best strategies you’re seeing where people are able to convert subscribers of the free newsletter into paid subscribers.
How we created it is that you could either have a free newsletter, or a free and paid version. So people can always sign up for the free version and decide to become a paying member. That’s also a result of the people we talk to — most people want to do this model. And we believe this is the best way to get people to sign up. Get them subscribed. Send them out a weekly curated newsletter, with interesting links or some commentary. And then with the second or third newsletter, you can dive into a topic, have a more longform kind of newsletter that people would want to pay for. And then ever free newsletter has a call to action for people to become paying member. I think that’s the best model for people to convert their subscribers into paying members.
So a freemium model. Trying to get people hooked on the free newsletter. Try to win their support and their brand loyalty. Then trying to convert, over time, some subset of that list into actual paying subscribers. So they get, maybe you send out two newsletters a week, the one you send on Tuesday is the free newsletter, and then the one you send on Thursday is the paid version.
Exactly. We also see newsletters that are strictly paid. But they’re very niche, on a very specific topic. And people who sign up already know what they can expect. And then we also have people who have paid members, but they only send their newsletter to everybody, because the payments are just for support. They want to make sure that the author can continue sending the newsletter. Because it still takes a lot of time to produce them, as you know. We see all kinds of models. But the freemium model works well.
It must be hard to convert people to a paid newsletter with no free newsletter to go along with it. People like a taste. It’s hard to create that kind of brand loyalty that leads to them opening up their wallets without allowing them to taste the free stuff first.
Definitely. Another interesting model might be to have a number of issues for free, or maybe one or two months for free, and then maybe then they’ll start paying. That’s maybe something we’ll add later. I’m curious to see how they will work out.
What about newsletter advertising? Is there a demand for this kind of advertising? How easy it for a popular newsletter to find interested advertisers?
It’s interesting. We want to help people create these newsletters and make money off them, so it does make sense for us to look into advertising as well. If you go back to the personal nature of the newsletters, I don’t think simple, plain ads work very well. I haven’t seen it work well. I’ve talked to a bunch of people who do it, and the results aren’t very good. I think the sponsorship model lends itself better for newsletters. So I’m really curious to see how that model will work out. There are a lot of services that help you find these advertisers, specifically for newsletters. But we’re not there yet.
But you think there’s a demand for it. I can’t get a read on whether brands, when they’re allocating their ad budgets, whether they’re putting any aside for newsletter advertising. They’re thinking print, video, social media, or search ads.
That’s why I think sponsorship can work really well. I don’t know if they work well.
Do you think the newsletter space is getting crowded. It seems like since people have been turned on to the resurgence of it, publishers left and right are launching newsletters. I’ve noticed that it’s been a little bit harder to get my open rates to what they once were. Do you think inboxes are getting a little bit crowded now with all these newsletters?
Yeah, that might be. After a while, when your list grows, your open rate goes down. I’ve seen other people start to talk about this. That’s why I think newsletters are great for more niche topics. When we started Revue, people said, it’s great what you’re doing, but after people get four, five, six emails from a specific platform, what are you going to do about it? And my answer is, if we get to that point, we’ll be doing really well. There are a lot of people out there, and they’re all interested in different topics. That’s why I think a newsletter lends itself to niche topics.
So publishers left and right are sending newsletters. And I can imagine that people are getting tired of those more general newsletters. But I think that will evolve into publishers focusing more on topics and niches, so people can decide which ones they want to receive. I think that’s something that will happen in the future. But I don’t think there’s a newsletter fatigue right now. That’s something way too early still.
One of the appeals of newsletter marketing is that it’s not algorithmically based. But we’ve been seeing moves lately, specifically from Gmail, where they are tinkering with the inbox. A lot of email marketers were upset when they rolled out their various tabs, including their promotions tabs, which were relegating their newsletters into a no-man’s land that was driving down open rates. Google is continuing to innovate in prioritizing different sorts of email for you. Do you think that people in email marketing should be nervous that some of these email platforms are a threat?
We do see a lot of people who don’t know where the newsletters show up. They say hey, it’s in my spam, and then when you ask them, it’s in promotions, and it’s definitely more confusing. Right now it’s mainly Google. I’m not sure that they will go into the algorithmic route to give certain newsletters a more prominent place in the inbox. I think they’re trying to help people manage their inboxes more. There’s a different incentive there. I’m not worried yet. I wish we had more control over where the newsletters end up, because it’s a little confusing, but I’m not worried about it right now.
Yeah, I’ve seen some newsletter writers instruct their readers how to pull it out of the promotions tab and put it in the main tab. That’s probably not the most efficient way to deal with this problem, but they seem to be getting around it.
Definitely.
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Simon Owens is a tech and media journalist living in Washington, DC. Follow him on Twitter, Facebook, or LinkedIn. Email him at simonowens@gmail.com. For a full bio, go here.
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