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Newsletter writers need to focus more on revenue diversification
Most creators should probably have at least two or three business models.
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Newsletter writers need to focus more on revenue diversification
Last week I profiled Maria Brito, an art enthusiast who’s built up an audience of over 200,000 followers across Instagram, Facebook, Twitter, and email. The most striking part of the interview came when she talked about why she’s largely eschewed the most common form of monetization for social media influencers: advertising.
Here’s the relevant passage:
Of course, the most prevalent method for monetizing a large Instagram following is to accept brand sponsorships, but Brito has been especially circumspect on that front. “I get emails every day from people who want me to promote things, but I’m not interested in making $1,000 for a dress I have no interest in wearing.” Whenever she does accept brand deals, it’s usually a longterm engagement with a brand she admires. “I did a 12-month partnership last year with Lavazza coffee,” she said. “Originally when I signed the contract I was going to go to Italy with them, and then I was going to go to Art Basel and the US Open.” But when the pandemic hit, the company still honored the contract. “I just made content in my apartment with my kids.”
Ultimately, though, Brito makes far more money from an art consulting client than any Instagram brand deal, hence why she doesn’t take on many sponsorships. “I don’t eat off of Instagram. Although it’s funny because I may eat off of Instagram when you consider all the deals that I’ve done through the DMs.” In fact, she’s grown frustrated with the platform’s DM filters, which have made it increasingly difficult for her to receive messages from potential art buyers.
Brito has built her art consulting business up into the seven figures. What I like about her model is that it’s much more scalable than the typical consulting business, which is limited by the number of hours the consultant can work and the hourly rate they can charge. Brito makes a commission on any art sales she facilitates, so her revenue grows as she brings in wealthier and more sophisticated buyers. Here’s how she talked about that scale:
Because her work is commission based, she’s been able to scale her business to seven figures as she’s taken on higher profile clients who are willing to buy increasingly expensive art. “I can do a high volume of transactions most days without leaving my house,” she said. “It has to do with clients being sufficiently sophisticated and being able to pull the trigger by seeing an image on their phone. They trust me. They know that I think it’s a good option and viable for them.” Those quicker transactions save her time and allow her to take on a higher volume of client work.
By my count, Brito monetizes her huge audience in four ways. The art consulting is, by far, the most lucrative. Then there are the Instagram sponsorship deals. She sells an online course for $300. And then finally she has a book coming out from a traditional publisher later this year.
I interview a lot of creators and bootstrapped media entrepreneurs for my podcast and newsletter, and I’ve been consistently impressed by their ability to develop new business models. YouTubers are especially good at this; the typical YouTube business monetizes in at least six different ways: programmatic advertising, direct sponsorships, affiliate advertising, subscriptions, live events, and merchandise.
If I had to pick a cohort that’s been slow to adopt new business models, it’s newsletter writers. I get a lot of journalists who reach out to me for advice on launching a paid newsletter, and my first question to them is why they want to monetize through subscriptions in the first place. Is it really the best way to monetize their audience?
I think the rise of platforms like Substack and Revue has oriented writers into thinking of subscriptions as the only viable option, and so they don’t even consider the other approaches they can take. And while yes, newsletter readers are especially loyal and therefore more likely to convert into paid subscribers, there are plenty of other options available. To get a sense of what I mean, check out this article I wrote about the five different ways Josh Spector monetizes his 25,000 newsletter readers.
Of course, I could probably stand to take some of my own advice on this front. For the first six or so years of this newsletter’s existence, I used it mostly as a form of lead generation for my content marketing consulting business. But though the newsletter was successful in bringing in clients, I was always frustrated by how that client work reduced the amount of time I could spend working on the newsletter.
In 2020, I went all in on paid subscriptions, and while that model has formed the bedrock of my business, I decided this year that I want to focus more on diversifying my revenue. That’s why I recently partnered with the University of Oregon to launch a new course on entrepreneurial journalism. I’m also strategizing around a way to introduce sponsorships into the free newsletter. I’ll probably have more to announce on both fronts later in February.
So if you’re a full-time, salaried reporter who’s dreaming of quitting your job to launch your own newsletter business, don’t just assume that a paid subscription model is the only one available to you. In fact, some Substack writers are making six figures in income without offering paid subscriptions at all.
Speaking of newsletter subscriptions…
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Twitter has never done a good job of explaining what "verification" is supposed to accomplish. It doesn't verify identity, since blue checkmark users can still change their names on the app. It doesn't verify fame, since some verified users have only a few hundred followers. So what's its point? [Press Gazette]
The Atlantic is no longer orienting its goals around subscription counts, but instead is setting goals for total reader revenue. The former can be manipulated by massive discounts. [Press Gazette] One interesting tidbit from this article: The Atlantic has actually INCREASED its print subscriptions within the last year, which seems to buck larger trends.
Man, G/O Media is just not good at keeping talent. [Gawker]
I've often wondered how publishers get featured on Twitter's "What's Happening" tab and whether there's an undisclosed payment involved. Turns out there's a team at Twitter that handpicks stories to be featured. [Press Gazette]
There's increasing appetite from retailers to syndicate content from publishers so they can run it on their own websites. [Digiday]
FUN FACT: Advertising revenue is basically a rounding error for Microsoft, and yet it produces more than Twitter, Snapchat, and TikTok COMBINED. [Digiday]
Jack Conte's filmmaking skills are amazing. It's incredible that he does all this while simultaneously running a major tech company. [Jack Conte]
This will probably go down as the definitive takedown of NFTs and "Web3." It's two hours long but so entertaining. [Folding Ideas]
YouTube "can enter practically any space it wants and immediately become a power player, because it's writing bigger checks to creators." [Protocol]
He already had a robust advertising business, but he wanted to foster a deeper connection with his audience.
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