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Hello — quick one for you today. Two things I read this week that I found important for my work and yours.
One is beehiiv’s report on paid newsletters (built entirely on proprietary platform data). The other is an announcement that The New York Times is getting into local newsletters (outside of New York) in a manner similar to the local newsletter creators we often cover in the Spotlight.
My thoughts on both below.
— Francis Zierer, Lead Editor
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Takeaways from beehiiv’s paid newsletter report
Our colleagues at beehiiv recently put out a sprawling report on the state of paid newsletters. It’s based entirely on proprietary beehiiv data and is incredibly thorough.
You should read it. Even just skim through and examine the charts. You will, at the very least, come away understanding the basic viability of paid subscription businesses across different subject areas.
From the report, here are three common threads between top-performing paid newsletters:
They’re in verticals with clear dollar ROI. Finance and investing are especially strong examples: readers can directly tie the subscription to a financial outcome.
They treat paid as a separate product. Top publishers build distinct content, cadence, and community for paid subscribers rather than gating a fraction of what they already publish for free.
They invest in the early user experience. Welcome emails, clear expectations on what they’ll receive and when, and immediate access to the archive are table stakes.
And here is one of the charts, breaking down paid subscriber churn rate by industry. These are monthly churn rates (percentage of paid subscribers canceling each month).
Notably, it’s mostly lifestyle categories with lower churn rates, and work/utility categories with higher churn rates. It’s almost an inverse of the conversion rates by category. It’s tougher to convert lifestyle-category paid subscribers, but they stick around longer once converted (see the full report for more detail on conversion rates by category).
Additionally, there’s a list of five paid-newsletter takeaways at the end of the report. I’ve copied two in below. Find the other three here.
Your niche determines your ceiling more than your list size.
A 1,000-subscriber investing newsletter can charge $27/month. A 100,000-subscriber travel newsletter typically charges $7/month. The content vertical tends to set the anchor.
Expect 0.6% conversion to start. Aim for 2-5% over time.
The median free-to-paid conversion rate is 0.62%, but the top 25% of publishers across most industries convert at roughly 2-5%. Getting into that range is realistic with a strong value proposition and targeted approach.
Kudos to beehiiv’s Content Lead, Kanishka, for putting this piece together.
My completely anecdotal subscription hot takes
The beehiiv report is built on a rock-solid data foundation. The below points are not.
But if you pulled me aside at a Professional Networking Happy Hour and asked me to share everything I’ve learned about creator-media paid subscription businesses over the last few years, you’d hear some version of the following.
If you can’t get paid subscribers, “subscription fatigue” is not the problem.
Yes, there are too many subscriptions. The gym, three streamers, four newsletters, two newspapers, even household goods from Amazon. Everything is a subscription! Our credit cards are fighting for their lives! I certainly have too many subscriptions. This is subscription fatigue: we subscribe to too many goods and services.
For any serious newsletter operator, though this is useless, excuse-based framing There’s no room for unnecessary subscriptions; there is room for truly compelling, useful subscription products.
There are more newsletters, podcasts, and other creator-media subscription products than ever. Most of them aren’t worth paying for. The serious creator’s job is to know the difference between a product worth paying for and a product nobody needs — and to labor that their product rises above the rest. More competition creators more discerning consumers.
There are two reasons people pay for a creator-media subscription product:
Access to exclusive, timely, and/or useful information. This is why economy, finance, and investing newsletters top the beehiiv conversion rate. There’s an ROI. But it’s not just money-related newsletters; any information product that gives a consumer an edge in life will perform better than one that does not.
To support the creator. I’m currently paying for five different publications. I read three of them weekly — the value is in the information. I read two of them maybe once month. I pay for those two out of a sense of social duty; the work they do aligns with my values, and I want to make sure they’re able to continue doing it. Paid subscription products can win on this sort of social, emotional appeal.
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Just kidding, there’s a third reason:
People won’t pay unless you convince them to pay. Your paid subscription is a product that, like any other, must be marketed. Automations! Paywalls! Packaging! Pricing!
You’re in the subscription business. Study it. Here are a few articles and podcasts from the Spotlight catalogue worth returning to:
Better businesspeople than you are giving their content away for free.
Information wants to be free. Allegedly. On a long enough horizon, though, any information behind a paywall does end up free. Someone shares a screenshot on social, forwards the email to their friend, uploads the webpage to an archive site.
Or a competitor, whose business does not rely on subscriptions (but on some mix of advertising and products or services), publishes the same information as you, completely for free. You’ve been undercut.
This is why access to information is not the only reason people pay for a creator-media product; people pay for creator-media products to support that specific creator. Do not underestimate the value of personality.
Subscriptions + ads > just paid subscriptions
Journalists I interview, like Stephen Totilo, often prize paid subscription revenue over advertising revenue. I get it — to know that 1,000, 100, even 10 people want to pay you directly for your work is an amazing feeling.
But I know very few creators who monetize on paid subscriptions alone. The best creator businesses I find (see: Nastja Mohren) always have multiple revenue streams … and brand partnerships or advertising is usually the biggest breadwinner.
Successful subscription-only creator businesses are the exception, not the rule.
Your audience belongs together.
Why build your newsletter on one platform, your podcast on another, and your website somewhere else? The more disconnected your tools are, the more disconnected your business becomes. beehiiv brings everything together in one place, so your audience can grow together too.
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The New York Times is entering the local newsletter operator game with a program called “The Local”
Our interviews with local newsletter operators are consistently among our most popular work. Both the podcasts and the articles get outsize attention when as soon as they’re published and for months after.
I wrote about this trend in February. These stories are popular with Creator Spotlight readers because they’re both aspirational and relatable. Local media is a clear, rules-based game: there’s a set format and a limited audience. Strategic decisions are made easier than in many other niches.
Part of why we’re seeing this trend?
TL;DR: Towns and cities across the country once had thriving local media businesses; the rise of the internet and economic change over the last half century wiped many of them out. What publications remained were often bought by out-of-town conglomerates.
All of this came to mind when I read that The New York Times is launching a local newsletter in the Twin Cities.
Actually, the Twin Cities newsletter is just a pilot for a larger program:
“We’re thrilled to introduce The Local, a new journalism initiative aimed at serving and engaging communities, starting in the Twin Cities. This pilot newsletter will launch in August with the goal of deepening our relationships with readers in Minneapolis and St. Paul and helping them feel more connected through journalism. Our hope is that The Local: Twin Cities can serve as a model for similar future efforts elsewhere around the country.”
They’ve hired “two creative and entrepreneurial Minnesota journalists” to “co-host” the newsletter. This language is very local-newsletter-operator, less traditional-local-journalist.
There’s still a ton of opportunity for local newsletter operators in towns, cities, and regions all across the country. But this tells me that opportunity is not granted forever.
The Times has adapted to the platform ecosystem and the creator economy better, arguably, than any other news institution in the world. (See how well they do vertical video.) This initiative, for a business of their size and scale, is vanguard. But other well-resourced businesses will follow. It might take a decade, even longer, but the opportunity for true-creator local media operators will shrink.
If you’ve been scheming and dreaming up a local newsletter business, but not yet taken your first steps, act sooner than later.
For local newsletters, ads beat paid subscriptions
Of the half-dozen or so local newsletter operators we’ve featured in Creator Spotlight, only one had a serious paid subscription product. The rest were funded largely by ads. (Many also monetize through events and physical products.)
Only one that I know of has a print subscription product — Catskill Crew has a quarterly edition, with each issue including “ a handcrafted mix of local stories, field guides, stickers, recipes, history, invites to private gatherings,” and anything else creator Michael Kauffman “can conjure up.”
Michael’s business is built on ads, though. Paid subscriptions are great. But they’re only one pillar of a durable creator media business.
Local newsletters tend to have low audience ceilings, defined primarily by location rather than industry; this means a higher advertising revenue than subscription revenue ceiling.
