By Glenn Fleishman
March 16, 2015 7:00 AM PT
Last updated February 2, 2021
I, for one, welcome our new newsletter and podcast overlords
Note: This story has not been updated since 2021.
Back in the depths of time, newsletters were a big business. Printed inexpensively in small quantities for investors or people in specialized industries, like lumber or printing, subscriptions could run hundreds to thousands of dollars a year. A few hundred subscribers made them profitable; a few thousand, lucrative, allowing for staff writers and researchers.
These newsletters had timely information that wasn’t found in daily newspapers or weekly magazines. There was no cable news network, and radio was local with generally directed nationally syndicated programs.
Even when cable TV started to add channels, news radio proliferated, and early dial-up services added news features, focused information important for someone’s profession was difficult to find. Newsletters were exceedingly lucrative and appreciated. Some newsletters included or offered cassette tapes — proto-podcasts! — or omitted the paper part entirely and were just audio tapes. I knew of one on desktop publishing that was mass-faxed, and if I recall right, cost $495 per year for weekly dispatches. (MacPrePress, produced by the late Kathleen Tinkel and Steve Hannaford, for those with long memories.)
The Internet’s emergence derailed a lot of these newsletters, because scarce data became easily available, and specialized information sites rose quickly. Often some data previously acquired with scarcity justifying its high expense was suddenly or within a few years available freely, ubiquitously, and instantaneously. In some cases, the dollars shifted: the money paid on postal-dispatched paper shifted to online subscriptions to Web sites, email newsletters, and access to databases. The excellent credit-card industry newsletter, the Nilson Report, now delivers 23 issues in PDF form and snail mail each year for $1,495, for instance, plus the past fives years as an electronic archive. In others, they evaporated entirely.
Blogs were certainly part of the reason. Once easy-to-use blogging software appeared in the early 2000s, a hundred million blogs bloomed, and a tiny portion were dedicated to reporting and analysis, including my own Wi-Fi Networking News (WNN) blog. In a previous era, WNN would have been a newsletter that, based on the interest I saw on the site, would have grossed hundreds of thousands of dollars a year. (The blog brought in $30,000 to $40,000 a year in the mid 2000s.)
Many of the most prolific and focused bloggers who covered tech and finance turned those blogs into businesses, were acquired by larger media companies, or were hired by publications to write for them and often start in-house blogs.
Bloggy with a chance of reign
However, we reached peak blog in the last year or two. That’s not to say by any means that “blogs are dead” or even dying, nor that people don’t read them. But several simultaneous trends have pushed traffic elsewhere — social media takes attention away — and reduced the money one can make from blogging.
Google AdSense contributed to my best years at WNN following its launch, but the decline from peak was steady and rapid, even as traffic grew. Matt Haughey at MetaFilter (now at Slack) wrote about peak ads 10 months ago, and the pattern he saw is familiar. This is also true of regular non-targeted online advertising, where rates have dropped over time from $20 per thousand impressions (CPM or cost per “mille”) to $1.90 CPM. Premium content commands higher rates — up to $10 CPM. But that kind of site requires the right subject matter and traffic in the tens of millions of page views a month to gain access to the tools that allow the targeting to get the prices. A little bit Catch-22.
My statement of “peak blog” isn’t that blogs are done, but rather most people outside of alpha sites with high, sustained traffic and those folks in marketing, inspiration, and supremely specific sites — such as ones that provide job listings alongside posts — simply can’t produce enough revenue from their writing.
I did the math a year and a half ago for The Magazine, after many queries as to why I didn’t switch the model from subscription to advertising. To generate as much revenue as 25,000 monthly subscribers, who were paying for four or five features twice a month, I would need 20 million monthly page views —Â somehow achieving that with just a couple hundred articles in the archives. (In the end, for a whole host of reasons, subscriptions lagged and I shut it down.)
This seems weird because online advertising is growing like mad. Where are the dollars going?
What’s extremely effective right now is so-called native advertising: these are ads that appear in the same milieu or frame as the content on a site or in an app. SnapChat pushes ads in the forms of “stories” into its users accounts for $750,000 a day, and also lets publications release stories that include advertising at $150 CPM.
Buzzfeed has no banner or other ads as such, but rather charges companies to create advertorial: Buzzfeed articles that are tailored to the interests of the advertising and which have links to their products. They don’t post prices, but say clickthrough rates are ten times higher than banner ads.
Which brings us to the title of this piece. I’d posit that podcasts occupy a role postal mailed newsletters once did, and that newsletters (and similar subscription models) may be poised for a comeback.
Podcasts, such as the ones hosted by our dear Six Colors editor, Jason Snell, can leverage relatively small audiences, in the thousands to tens of thousands, to produce per-episode gross advertising revenue in the hundreds of dollars to above $10,000. Accidental Tech Podcast and The Talk Show can sell three sponsor slots an episode for a listed rate of $4,000 a pop because they have 80,000 weekly listeners a decent subset of whom purchase stuff. Advertisers know if purchases are happening, because of coupon codes, custom URLs, and “where did you hear about us?” radio buttons. (John Gruber, by my back-of-envelope calculations, grosses more from his podcast than his RSS feed, which in turn grosses more than his low-key advertising from The Deck.)
Conversational or casual podcasts that are recorded straight-through and then aired with relatively little editing — a ratio of one-to-one up to three-to-one editing time to time aired —Â are inexpensive to record, produce, and distribute. They take mostly labor. An episode of my currently on-hiatus The New Disruptors podcast, which was typically about an hour long, took from 6 to 10 hours a week between my preparation, recording, and posting an episode and my audio engineer’s work. Some networks push out shows with regular hosts within an hour or so of taping.
The ability to have a relatively high degree of leverage — if one can attract good numbers of listeners and those listeners have an interest in the goods and services — makes an editorial site as much an advertisement for listening to the podcast as the other way around.
There is no centralization of podcasts; Apple’s iTunes directory is the closest thing. You can host your podcast wherever, stick it in a standard RSS feed format, and you’re a podcaster. No gatekeeper. Bandwidth costs are effectively zero, using either unlimited-bandwidth plans at some sites or the flat-rate, low-cost SoundCloud podcast option (which requires applying for, but is always granted, as far as I can tell).
Ad networks exist to sell sponsorships, if you reach enough people, or you can sell directly or use Patreon or other means to find paying subscribers. No one can stop you from podcasting, which is part of its appeal, like blogs before it.
Extra, extra, read all about it!
A new interest in newsletters has emerged as banner-ad rates and Google AdSense rates declined. Several cartoonists I know have $20-per-year newsletters that have attracted hundreds of subscribers or more who get early access to cartoons, some original content, and the exclusive thoughts of the creator. Patreon has also been a way to pay per something, whether unique writing, videos, songs, or even a monthly stipend for a creator.
Subscription blogs are also of interest. They’re nothing new, but the scale of success is. Andrew Sullivan famously two years ago took his blog, The Dish, which had had a few different homes over its long run, and went indie, raising enough money from subscriptions, and offering a bit of content through a “leaky” paywall to attract new readers, that he could pay himself and a modest staff. (He recently decided to shut down his site due to what sounds like exhaustion after many years of writing online continuously.)
But I’m particularly interested in Ben Thompson, who runs an analysis firm called Stratechery. Ben is a smart fellow, and I just had breakfast with him as he passed through Seattle, and learned a thousand things in a couple of hours of talking. But he didn’t have a vast reach. He started with a blog in 2013 after years of working in the industry, at companies like Apple and Microsoft, and almost a year ago, he decided to offer a daily newsletter of insight plus member forums for $10 per month or $100 per year. One piece a week would be available to the general public on his site.
Hoping to have 500 subscribers by this April, he instead has found himself with about 2,000 before his one-year anniversary. (I’m one of them. It’s absolutely worthwhile.) That’s $200,000 before credit-card fees, which is a very decent sum indeed.
As a former member of the sui generis club, someone who was cited as an example with WNN of what a reporter could do on their own with a blog, I don’t want to either turn Ben into a unicorn or claim everyone can do what he is. But the newsletter model is also about scale.
I use MailChimp, Squarespace, and Stripe — mailing-list management, web-site creation and hosting, and credit-card processing companies, respectively. They integrate with each other in interesting ways. I just published my first ebook on my own via my personal web site, which is hosted by Squarespace. Adding Stripe for ecommerce requires a free Stripe account and it’s included in the Squarespace hosting cost. MailChimp has a free level, too. You can add MailChimp and Stripe integration with just a few steps, and gain the power of all these working together.
It’s no longer hard to run a subscription site or a subscription newsletter: you don’t need any custom programming or site design. My ebook can be purchased using tools I didn’t have to build or link up. (MailChimp has an API used by some partners to offer paid subscription management, but you can do it more or less yourself with little fuss via Squarespace, too.)
As with podcasting, no one can prevent you offering a subscription list or charging for access to part of a web site.
A market on the… grow?
I only wish I could say there were 2,000 podcasts that made their hosts a living and 10,000 subscription newsletters and sites covering some or all of someone’s income needs. That’s so absolutely not the case.
But I always look at pain points that separate readers or communities from voices they want to hear. Podcasts and pay subscriptions have very, very low bars to entry now compared to a few years ago for producing, distributing, and charging.
Six Colors itself is an excellent example. It’s an editorial site that has the look and feel of a blog, but which could go many directions. Jason has many podcasts, some tech focused and others that are pure entertainment. The site doesn’t yet offer a premium version or a paid newsletter, but no door is closed.
The future of independent editorial operation is right here on this page. What direction it takes is just as unknown here as for all of the rest of us.
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