Newsletters are DEAD

Summary

In this video, Matt discusses the evolution of the newsletter business model, emphasizing how the traditional ad-only approach is no longer effective. He highlights key changes such as rising competition, acquisition costs, and the rise of AI. Matt introduces 'Newsletters 3.0,' where content must evolve beyond summarization, diversify revenue streams, and embrace multiple audience channels. He stresses the importance of becoming a marketing partner, focusing on both paid and organic acquisition strategies, and creating flagship products. Matt's advice aims to help media businesses thrive in the new age of digital content and email marketing.

Takeaways

• 😀 Traditional newsletter ad-only business models are no longer effective in the current market.
• 😀 Newsletters 1.0 (2000-2012) focused on early pioneers like Daily Candy, which had massive success with large subscriber bases and acquisitions.
• 😀 Newsletters 2.0 (2012-2022) saw rapid growth for major companies like Morning Brew, The Hustle, and The Skimm, which monetized primarily through ads.
• 😀 Newsletters 2.5 (2022-2025) emphasized niche audiences, AI newsletters, and rapid scaling in areas like AI-focused content.
• 😀 The success of the newsletter business model from 2000-2022 was driven by three pillars: content creation, effective growth strategies, and monetization through advertising.
• 😀 The current newsletter market faces challenges: increased competition, rising acquisition costs, declining ad rates, unreliable inbox tracking, and the rise of AI-generated content.
• 😀 Despite these challenges, newsletters remain a powerful tool for building audience relationships and driving sales.
• 😀 The traditional ad-based model is no longer viable for long-term growth, and businesses need to diversify their revenue streams beyond ads.
• 😀 Newsletters 3.0 focuses on providing unique insights, reducing reliance on summarization, and delivering high-value, original content.
• 😀 Successful newsletters should master multiple audience channels (e.g., email, SMS, podcast) and offer comprehensive marketing partnerships, not just ad space.
• 😀 To build a sustainable media business, focus on customer lifetime value (LTV) over customer acquisition cost (CAC) and consider developing flagship products or services.

Q & A

What is the main reason Matt believes the traditional newsletter ad-only business model is doomed?

Matt argues that the traditional newsletter ad-only business model is failing due to increased competition, rising acquisition costs, declining ad rates, unreliable inbox tracking, and the rise of AI tools that can replicate much of the summarization work done by newsletters.

How did the evolution of newsletters progress from 2000 to 2025?

The evolution can be broken down into three phases: Newsletters 1.0 (2000-2012) with pioneers like Daily Candy, Newsletters 2.0 (2012-2022) with major players like The Skimm and Morning Brew, and Newsletters 2.5 (2022-2025) with niche newsletters and AI-focused content.

What were the three key pillars that made newsletters successful from 2000 to 2022?

The three key pillars were content (digestible and informative summaries), growth (acquiring subscribers at low costs), and monetization (revenue from advertising, typically through 1-2 ads per newsletter).

What are the five major changes that began to break down the newsletter ad-only business model?

The five major changes are: more competition due to easier tools for starting newsletters, rising acquisition costs with changes in advertising platforms, declining ad rates, unreliable open rate tracking due to Apple's privacy updates, and the impact of AI on content summarization.

Why does Matt argue that newsletters are not dead despite the struggles of the ad-only model?

Matt argues that newsletters are still powerful because they offer a direct relationship with an audience, which is ideal for selling products and services. The issue lies in the outdated approach of relying solely on ads for monetization.

What does Matt say about the future of daily newsletters with summarized content?

Matt believes that daily newsletters with summarized content no longer stand out as they did in the past. This style is now common, and newsletters using it are often not unique, making it harder to build trust with readers.

What does Matt mean by 'Newsletters 3.0' and what changes does it require?

'Newsletters 3.0' is the next evolution of media businesses that focuses on original insights, world-class human curation, and a diversified revenue model. This means newsletters should offer deeper, more unique content and explore additional revenue streams beyond advertising.

How should a successful newsletter diversify its revenue model, according to Matt?

Matt advises newsletters to diversify by selling both their own products or services and those of other companies. Sponsorships should not be the only revenue source, and newsletters should explore new monetization opportunities such as dedicated emails, custom content, and lead generation.

What is the importance of mastering multiple owned audience channels for a newsletter?

Mastering multiple owned audience channels, like email, SMS, podcasts, or private communities, is important because relying on just one channel, such as email, is risky. A diversified approach provides stability and helps reach a broader, engaged audience.

How can newsletters improve their partnerships with sponsors to boost revenue?

Instead of just selling ad space, Matt suggests offering comprehensive marketing partnerships. This could include webinars, sponsored content, custom advertorials, lead generation, and dedicated marketing emails, which lead to better results for sponsors and higher revenue for the newsletter.