DEEP DIVE

Warning: This is a long ass post. For those who are serious about building a successful email newsletter it's worth reading.

Why? Over the past few weeks there has been a growing conversation online about “the newsletter bubble.”

Here’s a summary of the main points you need to know:

1) Beehiiv is doing to newsletters what Shopify did to commerce.

Adam Ryan the co-founder of WorkWeek wrote an article worth reading about this trend (and more). He says:

He goes on to say…

My take

It’s true. Starting a newsletter is easier than ever. Beehiiv, Substack, and Kit created software that enables mass adoption.

The acquisitions of Morning Brew, The Hustle, Industry Dive, and Milk Road got people excited to start newsletters in hopes of easy money.

It’s likely there are more newsletters now than ever. But how many newsletter creators will stick around?

Odds are, not many. Newsletters are not like e-commerce. Publishers need to create the product (the newsletter) again every day or week.

Most newsletters will follow the same curve as podcasts…

Only 3.9% of podcasts have 10+ episodes and have published 1 episode in the past 10 days. We don’t have the same data for newsletters but I expect the numbers would look strikingly similar.

Competition will enter — competition will burn out. Still, competition in the inbox will grow over time.

Does that mean you should give up on your newsletter? No.

• There are more podcasts than ever

• There are more YouTube videos than ever

• More TikTok’s, Reels, Shorts, Tweets, LinkedIn posts than ever

It’s true of every content medium.

Email is still the most valuable place to have an audience. I’ll explain why later.

2) Are newsletters a commodity?

Adam Ryan and Brian Morrissey did a great podcast about this topic. It’s worth listening or reading Brian’s summary.

The first point brought up is this:

My take

This is not entirely accurate.

Newsletters are content in the inbox. Some content is commoditized, some content is unique and insightful.

I agree, most newsletters lack true audience affinity. As do most media companies, content creators, or publishers of any type.

In my opinion, the newsletter space doesn't have content that's any better or worse than other mediums. There’s always good and bad.

I’ve seen mixed data to back up the statement that “number of newsletters is growing faster than the number of readers.”

It’s hard to measure. There’s not one platform with all the data on this. Some sources say newsletter readers are going up. Others say newsletter readership has fallen since 2014.

More e-commerce stores led to more online shoppers. The number of shoppers didn't remain the same as the e-commerce ecosystem grew.

Is that also true of newsletters? I don’t know. We’re not comparing apples to apples.

• More great newsletters could create more readers that read more newsletters.

• In the same vein, more bad newsletters could discourage readers from subscribing to newsletters.

3) The inbox is “not” a direct connection

From the Adam Ryan and Brian Morrissey podcast summary:

My take

There are nuances here worth discussing:

• Gmail, Apple Mail, Outlook, and other email service providers are platforms.

• Email is an open source protocol that isn’t owned by one big tech company.

My problem with this argument is it’s not practical.

Email isn't exactly a direct connection. But it’s as close as you can get.

If email doesn't give you a direct audience connection, what does?

• Podcasts require a player (Apple, Spotify, etc)

• Physical mail requires a carrier (USPS, Fedex, etc)

• Private communities require an app (Circle, Skool, etc)

• SMS requires sending infrastructure (Twilio)

• The web requires a browser (Chrome)

Maybe SMS is a better direct connection. But it sucks for delivering content.

Maybe live events and physical mail are even more direct. But you must have a digital content channel to survive.

4) The end of the open inbox

This part of Adam’s post spooked the most people. Here it is:

He goes on to share…

My take

This is speculation. We don’t know what the future of Gmail, Apple Mail, Outlook, etc will look like.

• Will it involve more AI? Mostly likely, yes.

• Will the user experience of email shift to a “digest” of 7–10 newsletters summarized by AI into one email? Probably not.

That sounds like a horrible user experience.

I believe people want to curate their own experiences inside the inbox. Not have an AI model decide for them.

Every social or video platform has an algorithm decide for you what you’ll see. It doesn't matter who you follow — the algorithm decides what you're most likely to engage with.

Every platform is becoming more and more like TikTok. This leads to more user time on platform. But also more unhappiness, anxiety, and depression.

I expect this trend to reverse.

People miss the open web. Users want to choose their own content instead of being force-fed content they can’t look away from.

That’s why email is refreshing. You can choose your own adventure.

People are intentional when sharing their email address. (That’s also why an email audience is so valuable).

Because users are intentionally signing up to receive content they don’t want AI deciding how and when they receive that content.

Instead, here’s how I expect the inbox to change:

• It will get easier to unsubscribe. Most email services have 1-click unsubscribe. That’s the new standard. Gmail prompts you to unsubscribe from email lists if you haven't opened. All email services will do this.

• In the future, email services may automatically unsubscribe you from newsletters or lists you have not opened in 2-3 months.

• Email services will create a 'list management' feature where you can see all your subscriptions and unsubscribe from any in 1-click.

• Email services will have an AI summary for every individual email you receive. You can tap “see more” to expand and read the summary. Or scroll down to read the email itself. This is already happening with transactional emails.

• There will be more tabs in the inbox. Instead of 4 main tabs: “primary” “promotions”, “social”, and “updates” there may be a “newsletters” tab too. Inbox placement of your emails will become even more important.

• Not all emails will be in chronological order. At the top of each tab there may be 2-4 emails labeled as “important” or “opened often”. In the primary tab these will be emails from people you correspond with often — or emails identified as urgent based on the text inside. In the “promotions” or “newsletters” tab these will be emails from senders you engage with often.

When will these changes happen? I have no idea. Most likely in the next 6-18 months.

Does this mean “most newsletters will disappear overnight”? No. But if most newsletters suck, they’ll disappear eventually.

Bad newsletters and senders will disappear from the inbox faster than ever.

• If a newsletter/sender is irrelevant, overly promotional, or spam they’ll be unsubscribed from fast.

• If a newsletter’s content commoditized, people may read the AI summary at the top of the email — or leave it in the “newsletters” tab and ignore it.

Frankly, “most” newsletters and email marketing fall into those two buckets.

But, I believe newsletters that publish insanely valuable content will stand out MORE in this “new” inbox.

Here’s why

If your newsletter content is truly valuable… If your readers have a habit of opening, if you have a unique perspective and voice, if your content can't be summarized, if you're a real expert or authority — you’ll do better in the “new” inbox.

• When email services make it easier to unsubscribe — there will be less competition. The best newsletters will get read more.

• If your content is human, insightful, and opinionated — your email will be read over an AI summary.

• AI summaries will help users filter out transactional and promotional emails so they can spend more time on the emails (and newsletters) they care about.

• If there is a “newsletter” tab in the inbox — newsletters will stand out over promotional emails. (And, you'll still have the opportunity to be in the primary inbox if you play your cards right.)

• If not all emails are in chronological order and there is an “important” or “opened often” label — your newsletter will get more engagement if readers have a daily or weekly habit of opening.

Changes to the inbox aren’t the end of email. You just need to adapt to them.

Most likely, email is going to change slower than other platforms (as it has for the past 25 years).

5) The only way to win

Adam finishes his post with this point:

I love this. It’s always been true.

Right now, there are many newsletters with hundreds of thousands or millions of subscribers and mediocre content. They’re in danger.

But what most people don’t realize is that newsletters like this have never been successful. Well, at least not in the past 2-3 years.

Earlier in Adam’s post he says:

My take

This is not accurate. The newsletters that growth-hacked their way to 500k-1M+ subscribers with bad content are not financially successful. They never have been.

Those types of newsletters must continue reinvesting all of the revenue back into paid acquisition to fill a leaky bucket of subscriber churn.

People believe they are financially successful because they have big audiences. But an audience is not revenue or profit. Or engagement or trust.

I've seen the numbers.

Newsletters with big audiences and bad content don’t produce profit.

• They struggle to retain advertisers because their audience is not engaged and the advertisers don't get results.

• They can’t successfully sell products because their audience doesn't trust them and their free content isn't valuable.

These newsletters will shut down or sell for small amounts. That’s already been happening for the past 2 years or more.

My point is: it's easy to perceive people are making money “hand over first” in the newsletter space because people are growing their email lists so fast.

But the reality is, only exceptional founders are producing sustainable profits. And that’s true of any industry.

People can “growth hack” email subscribers but you can't growth hack profit.

This space filters out bad founders fast because:

• Nearly every newsletter is bootstrapped.

• Nearly every newsletter advertiser is direct response focused.

• Every consumer cares about value. They won't buy a product, subscription, or service from a newsletter that doesn't provide it.

6) Winners think beyond email.

Back to Adam and Brian's podcast:

I love this take. I’ve been harping on this point too.

From my post in August 2024:

I’d also add that winners think beyond sponsorships. I wrote about this in March 2023:

Adam and Brian go on to add:

My take

I agree, mostly. Newsletters are strategy. They’re a content, relationship, and marketing channel.

A newsletter itself is not a business model.

That said, a newsletter can be your primary channel. That’s not always a bad thing.

Newsletters can be an MVP media product. They can also be exceptional media products themselves.

Now, should your company be newsletter-only? No. You should diversify and build relationships with your audience in other ways.

Most likely, if you started with an email newsletter the next direct channel you should focus on is SMS, podcast, or community.

(I'm not saying start all these at once. They are nuanced things you need to know to be successful with other channels we don't have time to cover in this post).

Should all of your revenue come from an email newsletter? No. Ideally it’s diversified.

But let’s be realistic: Email is the best way to sell things. Another “direct” channel like podcast, SMS, or community will likely never produce as much revenue as email.

That’s okay. You’ll build a deeper audience relationship by having other channels — which will help you monetize email even more.

7) Newsletters are here to stay

Here’s my final take: Newsletters are not overhyped. There’s not a newsletter bubble.

However, there IS a bubble of “bad newsletters”. And like with any medium the publishers with poor content will either burn out or be drowned out.

Newsletters and email marketing are growing because they work.

• Email is still the most valuable place to have your audience.

• A great newsletter is the best way to get readership in the inbox.

There will be more newsletters, more competition, and inbox changes you must adapt to. But there’s still opportunity.

Let's be practical: If you want to build a direct relationship with your audience, here are your options:

• Email — The best place to start and a great primary channel.

• Podcasts — Difficult to grow and monetize without a large existing audience elsewhere. Hard to grow without becoming a “YouTube podcast.”

• SMS — Expensive, hard to grow, bad for long form content, and requires regulatory compliance.

• Private communities — Hard to start. Hard to scale. Communities have a negative network effect. As they grow they get worse. Communities rely on some type of app (like Circle, Slack, Skool, etc) or you need to build your own app. Communities rely on email to get people back into the community.

• Live events — Expensive to start, high friction to get attendees, hard to grow without an audience.

• Physical mail — It’s physical mail.

Founders should utilize many or potentially all of these channels. But the best option for now is still email. And it will be for a long time to come.

Plus, if you want to build a community, SMS list, live event, or physical mailing list — email marketing and newsletters are the best way to do that.

(The only exception is podcasts. Going on other podcasts is the best way to grow your podcast. Yet, email can still help.)

Last thing

Adam, Brian, and I agree on more than we disagree. I encourage you to read Adam’s post and listen to the podcast I’ve quoted from.

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