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How to build a Morning Brew style newsletter business

"Morning Brew for X" is the new "Uber for X.”

However, the companies that follow the Morning Brew model will be 10X more successful.

Here's how the newsletter business works — and why more newsletters will win in 2024.

Outcomes 

Morning Brew was acquired for $75M in 2020, just five years after it was founded.

In Q3 2024, Morning Brew is on track to surpass $250m in lifetime revenue.

More companies have found success with the newsletter-first model, too:

• Axios was acquired $525 million in 7 years

• The Hustle was acquired for $27M in 4 years

• The Peak was acquired for $3.75M in 3 years

• The Skimm grew to 7.5M+ subscribers in 9 years

• Industry Dive was acquired for $525M in 10 years

• Milk Road was acquired for 7 figures in 10 months

• The Newsette grew to 8 figures in revenue in 6 years

• TLDR grew to 1.2M subscribers 5M+ in revenue in 4 years

• MarketBeat grew $40M/year run rate and 4.3M subscribers

• 1440 Media grew to 3.6M subscribers and 8 figures in revenue

• Chartr grew to 400k subscribers and was acquired by Robinhood

How The Morning Brew Model Works

The model is simple: Write, grow, sell.

• Write an email every day

• Get people to subscribe and read

• Sell access to that attention to advertisers

The Economics

The primary way Morning Brew model newsletters make money is with sponsorships.

Newsletter sponsorships are typically priced on CPM (cost per 1000 impressions).

Newsletters count unique opens as impressions.

For example, let’s say a newsletter has:

• 10,000 subscribers and a 50% unique open rate.

• That newsletter will get 5,000 opens (5,000 impressions)

The CPM advertisers will pay for a newsletter ad varies from $25 to $250. But the industry standard is $40-$50.

Subscriber Life Time Value

Newsletters that sell ads at ~$50 CPM and have a ~50% open rate end up with a subscriber LTV of $6-$12

That’s low compared to other business models, but CAC is much lower, too...

• Newsletters that do paid acquisition well can acquire subscribers for <$2.00-$3.00

• With organic growth, blended CAC can be <$1.00-$2.00

That’s a pretty good CAC to LTV ratio.

Payback Period

• At a $50 CPM, newsletters make $0.05 per open.

• At 20 sends per month and a 50% open rate, that's $0.50 per subscriber per month.

So, at a $2.00 CAC, your payback period is 4 months.

This is where newsletters struggle...

That payback period is bad compared to e-commerce businesses that can break even on the first product purchase.

However:

• Subscribers can stay and open for years

• There are simple ways to overcome this we’ll cover later…

Content Strategy

MorningBrew, The Skimm, and The Hustle grew by covering general business and tech news.

That market is now saturated.

Newsletters that had success following their model own a niche.

For example:

• 1440 - Unbiased news - 2M+ subscribers

• Milk Road - Funny crypto news - 250k+ subscribers

• TLDR - News for software engineers - 1M+ subscribers

• The Peak - Canadian business news - 100k+ subscribers

• FootballGuys - Fantasy football news - 600k+ subscribers

Here’s how to find a niche for your newsletter.

Growth

Newsletters get subscribers from 3 primary channels:

1. Paid growth

2. Email platform growth

3. Social audience growth

Here's how they work...

Paid growth means:

• Meta ads, Google ad, ads in other newsletters, co-registration, affiliate marketing, paid recommendations, and more

Newsletters like MorningBrew, TLDR, 1440, Milk Road, and The Hustle acquire most subscribers from paid acquisition.

Here are the best paid acquisition channels for newsletters.

Email platform growth means:

• Forwards

• Referral programs

• Recommendations

• Cross-promotions with other newsletters

This is usually the smallest growth channel of the 3.

However, their open rate is much higher because subscribers come from other newsletters and referrals.

Social audience growth means:

Building a social following on Twitter, Instagram, Linkedin, TikTok, YouTube, etc

Then converting those followers and views into subscribers.

Making The Model Better

Earlier, we discussed how newsletters can have a long payback period on marketing spend.

In 2024, there are ways to reduce the payback period so you can invest more in marketing and grow faster.

Here are 4 ways to make money immediately after subscribers sign up for your newsletter.

Austin Rief shared more advice here.

Why More Newsletters Will Win In 2024 and Beyond

Here are five reasons why the Morning Brew model works now.

1) Access

When I worked at The Hustle, we had 2 engineers and 1 operations employee working on the newsletter's back end.

beehiiv replaces all of them.

It gives you all the advanced analytics and growth features you need to scale a newsletter business.

Try beehiiv free for 30 days and get 20% off here.

2) Easier to monetize

Marketplaces, agencies, and ad networks will now sell sponsorships for you!

Saving newsletter operators a ton of time.

Plus, more marketers are seeing newsletters as a growth channel.

Like influencers in 2016 or podcast ads in 2012, it's still early.

3) Change in behavior

People used to be conditioned to expect marketing emails when they sign up for a newsletter.

But as more editorial newsletters grow, that's changing.

People are seeing the value of newsletters for:

• News

• Education

• Entertainment

4) Content creators are starting newsletters

Newsletters are the best way to "own" your audience and build independent media businesses, separate from a personal brand.

It's early, but sharp creators are catching on:

• Tim Ferriss has 2M+ subscribers

• James Clear has 4M+ subscribers

• Sahil Bloom has 600k+ subscribers

• Matthew Berry has 400k+ subscribers

• Codie Sanchez has 700k+ subscribers

5) Email isn't going away

People have been saying "email is dead" for 20 years.

It's not. There are over 4.3 billion email users today, growing by over 2% a year.

The older something is, the longer it's likely to be around.