Email may be an old medium for sending messages to subscribers, but it’s never been more relevant than it is now. Its latest iteration is newsletter-style content, where the email is the main attraction. Rather than focusing on getting readers to the next step in a sales funnel, the newsletter is the value proposition.
And they’re growing fast in popularity, with 54% of Americans admitting to subscribing to more than four newsletters.
For some, a newsletter may evoke the boring, here’s-our-company-update that no one wants to read. However, they’ve evolved into truly community-building content that can result in serious income if done correctly.
Email marketing has been around for decades. You find a service you’re interested in, opt-in for more information, and then get hit with a salesy nurture sequence.
However, newsletters (in this context) are generally more informational, entertaining, or educational. They’re often round-ups of news, tips, and stories designed to attract a more engaged subscriber.
A great example is Sam Parr, who built his well-known The Hustle newsletter by emailing his subscribers daily about business and tech topics. He sold it to HubSpot just four years later for a cool $27 million.
Or, you can reap the ongoing revenue rewards, like Newsette, the newsletter focused on daily lifestyle and business for women. It generated a whopping $7 million in revenue in 2020 alone and has only grown since then (Fortune claimed the company’s value to be $200 million way back in 2022).
How do these newsletters (and plenty others) sprint past the 7-figure mark? Let’s dive into the most common newsletter business models.
There are many ways to grow your newsletter revenue. Some companies focus on a single one, while others use all 7 in tandem.
With this model, you’ve already got a business running, but now you’re going to start a newsletter that keeps your brand top-of-mind and gets more engagement than virtually every other medium.
Most newsletters following this model aren’t sending out sales letters with a final button to buy. They seek to inform and teach, driving people to the conclusion that they need your product. But even if they don’t, the newsletter (pay attention to this part) is still informative enough on its own to keep subscribers interested.
In other words, you don’t push your products, but they’re available for sale. You’ll follow the affiliate marketing or advertising methods mentioned below, but you sell your own stuff instead of someone else’s.
For example, Buffer is a massively popular social media automation tool, but they also have one of the most popular newsletters in the marketing space. They’re banking on you coming to trust them as the expert and eventually using their tools.
Of course, there are variations on this model as well. For example, email marketer and copywriter Ben Settle uses his daily newsletter to sell his physical newsletter—with an obvious sales link in every email that follows a useful message.
A freemium business model means that there’s a free version and a more in-depth paid version. This is a common model because it’s fairly simple to set up two newsletter versions.
Here’s an example:
Here’s how Ballcard Genius, a sports card newsletter, does it:
The most engaged subset of his audience finds value in an expert’s insight on the hobby, good cards to invest in, and profitable trading strategies.
This is a rarer model, as showcasing what your newsletter offers is harder without a free version. However, if you’re catering to a higher-income audience, such as CEOs, you can get away with it if you have stellar content. Your best bet for growth will be through word-of-mouth, email forwards, and testimonials—which only happen if your newsletter is killer.
For example, the Stratechery newsletter doesn’t have a free version, but CEO Ben Thompson does offer articles on his website. He’s a sharp mind in the business strategy and technology space who targets serious people in the industry.
Here’s what that looks like on his website:
Affiliate marketing means you sell other company’s products or services, and they pay you a percentage.
The easiest examples are links to Amazon products or eBay searches. Neither pays well, but they’re plug-and-play with limitless product categories. Here’s how Newsette seamlessly adds Amazon affiliate links to their content:
Many affiliate structures are custom business deals struck between the newsletter owner and the business owner. As your newsletter grows more popular, you’ll likely have companies that sell related products reach out to you.
For example, perhaps you have a fitness newsletter, and a personal trainer reaches out to you. You’ll send traffic his way, and you earn 20% of any coaching programs sold from your traffic.
Sponsored content in the body is a common monetization strategy for content-only newsletters (e.g., they’re not sales emails).
These content blocks are designed to look similar to the newsletter’s regular content blocks, which encourages subscribers to engage more with the paid content.
Due to FTC guidelines, you’ll still have to mention that the content is an ad (as seen in the example below from the 1440 newsletter), but subscribers are often scrolling quickly and won’t realize it’s sponsored content until they’ve read a portion.
Finding companies to advertise in a newsletter can be tricky, but it’s getting easier with platforms that can source those for you. With Letterhead’s automated ad fill option, your newsletter can display ads and generate revenue with just a few clicks.
Another strategy for bringing in advertising revenue involves finding someone to sponsor the entire message. Usually, this shows in the form of the sponsor’s name in the header:
This strategy can work well with sponsored content to bring in additional revenue. However, some newsletter owners wish to protect their content, so finding a sponsor to call out at the top can bring in revenue without interrupting the body of the text.
In addition to earning money directly from the newsletter, some owners use theirs as the hub for other channels.
For example, your newsletter could link to YouTube videos, generating revenue from ads. You could also link to your blog, social media, or a podcast that can result in additional engagement and revenue.
For example, the Enjoy Basketball newsletter has links to their own podcasts and content they put out on X:
Of course, this can also work in reverse: those platforms can feed newsletter growth rather than the other way around. Or, a blog or YouTube channel can serve as the central hub with the newsletter as a smaller piece of the puzzle.
There are a number of factors that play into which model is right for your business.
Your topic and audience play a significant role in monetizing your newsletter. Are you in a niche where people are willing to pay money?
Think about golf, for example. It’s an expensive sport, and serious people are already paying thousands per year on clubs, balls, bags, green fees, lessons, and more. They’re likely to purchase through affiliate links or directly from you.
Conversely, let’s say you’re in the news round-up game. Affiliate marketing would be difficult as there will be few organic opportunities to link to products. Your best bet is to find advertisers willing to buy space in your newsletter.
Even a freemium model would be challenging in that space as there are so many others that do it for free and have millions of subscribers.
If you happen to be the voice in your niche, you likely already have enough people who know and trust you that you could likely launch a paid-only newsletter.
This works especially well in a small, tightly-knit community where what you say goes a long way.
However, most newsletter creators are likely close to unknown, meaning that a freemium model with affiliate marketing makes more sense.
Some newsletter creators are driven by profit, profit, and profit—and that’s great! However, that certainly doesn’t have to be you. This could be a labor of love, where you do it to be a helpful or entertaining resource and to plug into a community.
In those cases, perhaps dealing with sponsors or splitting up your ad into a paid and free version is something you’re not interested in. Or, maybe you’re not a techie person and have no desire to figure out how to handle anything complicated.
Maybe putting in some Amazon links to cover your technology costs (and maybe a bit extra) is all you’re looking for.
Then again, if it’s profit you’re after, perhaps you’ll combine all of the strategies above.
Stellar content will always be the engine that drives the success of your newsletter. The best-designed newsletter with a planned-out monetization strategy in the perfect niche means little if no one wants to read it.
It’s a daunting task to curate industry content and write about it consistently.
However, modern ESPs can help with much of the heavy lifting of your newsletter. A tool like Letterhead can retrieve your stories and even populate them automatically in your newsletter at scale.
Schedule a consultation with Letterhead today, and we’ll show you how simple it is to streamline your process in a way that drives results.