Can the Morning Brew model work with paid subscriptions?
Readers typically don't want to pay for daily news digests that contain very little original reporting.
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Ok, let’s jump into it…
Can the Morning Brew model work with paid subscriptions?
The first question comes from Ari:
There's still a lot of newsletters becoming the "Morning Brew of X." Most of them, like the Morning Brew, rely pretty much only off of ads and sponsorships. Do you see an effective paid-subscription model for these types of newsletter? Are there any good examples?
What’s so great about the Morning Brew model — and why so many other media startups have copied it — is that it allows one to create a high volume of content with very few resources. These types of newsletters are often only staffed with just one or two writers, and the daily cadence makes it relatively easy for them to grow an audience. Even better, the news segment format of these newsletters is optimized for native ads. It’s a great advertising vehicle.
But because the news digest format involves little to no original reporting, it doesn’t really lend itself to the paid subscription model. If you offer extra newsletters or a longer version of the daily digest, you’re not providing much additional value.
That’s not to say that a subscription model wouldn’t work. It would require two components:
Hiring additional journalists who are dedicated to the paid product.
Creating a differentiated product meant to appeal to a specific subset of your free newsletter’s readership.
Axios is building an interesting template for how this could work. For the first several years of its existence, Axios focused entirely on producing free, ad-supported newsletters (though it’s worth noting that Axios dedicated many more resources on original journalism than Morning Brew), and it’s only within the last few months that it started rolling out paid newsletters.
So how did it go about that? Let’s focus specifically on its media industry newsletter. For the last several years it’s been helmed by Sara Fischer, who’s done an excellent job of publishing weekly scoops that I often link to within this newsletter.
But when it came time to launch a paid product, Axios didn’t simply ask Fischer to start producing extra newsletters. Instead, it hired Kerry Flynn, a Digiday and CNN alum, to write a daily “deals” newsletter.
Let’s compare the two. First, here are some recent headlines from Fischer’s free newsletter:
Snap CEO endorsed Musk’s super app strategy
Biggest local media company you've never heard of
U.S. digital newspaper ad revenue to surpass print by 2026
Now let’s look at headlines from Flynn’s newsletter, which costs $599 annually:
Condé Nast's new biz dev exec
DirecTV signs ad tech deal with Yahoo
Inside Anheuser-Busch's Super Bowl budget
As you can see, Flynn’s focus is much more in the weeds and finance focused. The two newsletters compliment each other, but Flynn’s reporting appeals more to high level executives who are less likely to blink at a high sticker price. While Fischer’s newsletter gets read by anyone who’s even mildly interested in the media industry, Flynn’s is geared toward a more niche audience. Ultimately, Flynn’s target audience is much smaller, but that doesn’t matter, since it’s monetized through high-priced subscriptions.
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A subscription model isn’t always the answer
The next question comes from Joe Waters:
Is the subscription model that so many newsletter owners use really worth the time and effort when there are other ways to monetize your newsletter/audience?
Not always! A pet peeve of mine is that newsletter writers, in general, are too quick to pull the trigger on launching paid subscriptions. I blame it on the fact that many of the earliest editorial newsletter success stories centered on subscription newsletters. It’s the Ben Thompson curse!
Seriously though, people get enamored with Kevin Kelly’s “1,000 true fan” theory without realizing that it’s really, really hard to find those 1,000 true fans. Even if you have a decent paid conversion rate of 5%, that means you need to reach 20,000 free subscribers before you hit your goal. And the journey to those 1,000 true fans isn’t very fun; I can tell you from personal experience that it can be pretty frustrating to spend an entire day writing a newsletter that’s only going out to 30 paying subscribers.
There are plenty of other newsletter business models, but I think paid consulting offers the quickest path toward generating a living wage from your content. From 2014 to 2020, I leveraged my content to drive lead generation for my content marketing consulting business. I remember that there was one month in December 2016 that I managed to convert three retainer clients that paid a combined $9,000 a month. So an infinitesimally small percentage of my audience generated $108,000 in annual revenue.
In my experience, it’s a hell of a lot easier to convert three readers into paying $3,000 a month each than it is to convert 1,000 readers into paying $10 a month each. And yet so many new newsletter entrepreneurs automatically default to the second option. They really shouldn’t!
I actually wrote a little more on this topic back in January: “Newsletter writers need to focus more on revenue diversification.”
Can local news outlets monetize non-local readers?
From Jason Chupick
My question isn't fully formed. I was interested in the latest on the unsolved Mo Wilson murder and hit a series of paywalls. I don't feel like buying a subscription to the Austin paper or others since I don't live there. Where are we going with this?
So I guess to reframe your question: Is there a better way for local news outlets to monetize non-local readers?
This is a gripe I encounter pretty often on Twitter. A local news outlet publishes an important piece of journalism that attracts outside interest, but readers grow frustrated when they hit a subscription paywall and are understandably unwilling to subscribe to a news outlet that operates somewhere they don’t live.
Usually, this gripe is accompanied by the age-old question: why don’t these news outlets embrace micropayments? But as I detailed in my piece titled “The 4 hurdles micropayment platforms can’t overcome,” there’s just no economic incentive to implement such a system. Even if a local news publisher managed to sell 1,000 articles per month for $1 per piece, that would only add up to $12,000 a year, and it would also involve cannibalizing its own subscription funnel.
Most local news outlets would also struggle to monetize national audiences via advertising. Local businesses don’t care about non-local readers, and local publishers rarely generate enough traffic to utilize programmatic ad tech. Unfortunately, it’s really just not worth it for individual local news publishers to cater to a national audience.
So what’s the solution for the reader who really wants to access a paywalled story? It’s not an elegant solution, but here you go:
Subscribe to the outlet at the lowest monthly price. Bonus points if there’s a free trial or initial discount.
Either read the article or save it for later.
Is there another solution I’m missing here? Sound off in the comments.
What's kind of amazing about The Economist is that it rarely publishes blockbuster stories that get everyone talking, and yet it's extremely good at convincing people that it's worth subscribing to. [Press Gazette]
"[Vox Media's] entertainment arm has around 18 shows in production, having debuted 48 series since its inception" [Digiday]
A good profile of The New York Times's new executive editor. [The Fine Print]
"Our experience as a publisher with Taboola is like working with the mafia. The company withholds publisher payments as a hostage. They knowingly give publishers low RPM. Their contract puts publishers entirely at a disadvantage." [Medium]
Roku has become an increasingly powerful player in the video advertising space. [Protocol]
I never thought I’d end up seeing — much less enjoying — the new Top Gun movie. How the hell did it become my favorite movie of the year so far???
ICYMI: How two YouTubers turned their hunting vlog into a thriving business
Big hunting brands pay Dean and David Giarrizzo to feature products in their videos.
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As a counter-example to daily digest emails that people pay for: The Browser. It's the only such example I know of, but they did build a sustainable business model on top of it and grew to 10,000 paying subscribers (paying $34-49/year each). The Browser was one of the top paid newsletters on Substack before they moved off to build their own platform. Source: https://medium.com/the-business-of-content/this-indie-newsletter-generated-over-10-000-paying-subscribers-c5a9ad826dba
So I'd say there is one example of this, thought it took ~7 years to get there, and I agree with you that it's not a common path. Sponsorships and ads are far more natural to newsletters with large readership but little original reporting. Also see the TLDR newsletter which likely makes ~$1-2M/year (charging $5,500 or $3,500 per ad slot, 2 ad slots per newsletter). That newsletter is growing quickly, and at close to 300K subscribers.
I'm not from the US and don't have any experience with local news, so this could be a terrible idea, but how about a bundle service, made up entirely of local news organisations, that allows you to read a fixed number of articles? This could be a subscription or a PAYG-type model.
It wouldn't make financial sense for a local to subscribe just to get their local news because they would hit the limit pretty quickly, but it might be enough for everyone else who's only interested in having access to a few articles.
It would only work because your plan would give you access to local news throughout the country and not lock you in to a specific organisation, making the bundle a lot less restrictive and a lot more appealing. Obviously it would be a coordination nightmare to get enough organisations onboard, but they would be expanding their effective user base to everyone non-local (including interested international readers).