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Summary
- Great Margins: Newsletters are a simple yet profitable business (e.g., Ben Thompson’s Stratechery is estimated to gross between $6-7m.)
- Ads or Subs: Core newsletter business models include ad-supported (The Skimm, Morning Brew) and subscription-based (Stratechery, 2PM)
- Newsletter Media Firms Hitting 9-Figure Valuation: Notable media companies built through newsletter have hit multi-million dollar valuations. (The Athletic was acquired by the NYT for $550m.)
- Multiple Business Lines: Media firms that begin as a newsletter can extend into other offerings (e.g., premium research, e-commerce, community forums, networking tools, podcasts)
- Secret Sauce: Newsletters have a number of strengths vs. traditional media including a direct relationship with end users, higher engagement, and lean operating costs
- What’s Next: Opportunities include B2B content niches and tools that provide curation (bundling) or paywall services
Bob Pittman—the creator of MTV, former CEO of Six Flags, Time Warner, AOL, and Century 21 Real Estate, and now current CEO of iHeartMedia—has had a hell of a career.
With an incredible background in the media business, Pittman turned heads in 2003 when he launched Pilot Group. The new venture was an incubator and investment fund for a business that many people wouldn’t have expected a media tycoon to get involved in: newsletters.
Trends readers have long expressed an interest in the nuts and bolts behind the newsletter business. This report will give you a behind-the-scenes look at how it works.
And in doing so, we’ll answer why Pittman (along with thousands of other entrepreneurs) have flocked to this simple, but surprisingly profitable business model.
A Brief History of Newsletters and Profit
In 1996, Microsoft released Internet Mail and News 1.0, a feature for its Internet Explorer browser. This was later renamed Outlook.
That same year, other companies like Hotmail started offering free email services that could be used anywhere. And email was born.