Media Fortune Fame & Folly

What newsletters really mean

The first known newsletters were exchanged between officials and friends in ancient Rome. By the fifteenth century, merchant families used newsletters to share news about the price and availability of goods. By the seventeenth century, they had evolved into the first newspapers. Now, centuries later, newsletters are again threatening to change the the way news, information and entertainment is disseminated.

Everybody is talking about email newsletters and increasing numbers of people are reading them. But the picture of newspapers and magazines piling into this new-style legacy media should recall the last time they rushed in without thinking about the strategic consequences.

That was during the last months of the 20th century when print media everywhere poured their content – free of charge – onto the web, frightened of being left behind by the exploding online audience. Arguably, media companies have been paying the price ever since.

Email newsletters are seductive because they can be quick, cheap and simple – and are direct-to-consumer media. Targeting the inbox enables publishers to build reader habits, personalise the message, and breed data on reader behaviour. They can also be a vehicle for video and audio clips. There’s an obvious power to “push” media at a time when attention spans are short and readers are easily distracted. In that sense, it’s a “channel” that makes publishers feel right at home – at least until readers start diverting unwanted newsletters into the spam.

That’s just the start of the newsletter risk.

Many email newsletters look similar and they use the same easy-access technology to reach the inbox. But we may define four distinct types of newsletter produced by media companies:

  1. Content Marketing: Hundreds of newspapers and magazines use newsletters to promote their media brands. Most share the branding of, say, The Telegraph, Country Life, Vanity Fair, or GQ, and provide links to their web sites. Even if they generate data, have e-commerce offers and some ad revenue, most of these newsletters are simply promoting the primary brand.
  2. Brand Verticals: Some media companies use newsletters to provide narrowcast coverage distinct from the ‘bundle’ of newspaper and magazine content. Some – like the New York Times and the Financial Times – provide additional content exclusively for subscribers to the main news brand. These newsletters might also become a way for B2C brands to build adjacent B2B ‘channels’. They might have substantial original content but, again, they are slaves to the primary brand.
  3. Platforms: Substack, Facebook’s Bulletin (and plenty of others on the way) provide a marketplace for newsletters in which the branding of the platform inevitably competes with that of any one newsletter. With traditional media cutting budgets, individual writers have been turning to newsletters to themselves become media brands. These platform-hosted newsletters – while they might compete, in some respects, with existing media brands – will suit individuals much more than publishers with a platform of their own. Publishers are starting to fight back with The Atlantic and the New York Times offering newsletter publishers semi-independent platforms.
  4. New Media Brands: This is where the main action needs to be for publishers. Like many of those on, say, Substack, email newsletters can be a highly-effective and competitive publishing channel. Brands as diverse as Business Insider, Morning Brew, and Politico (all owned or about to be by Axel Springer) and Axios have captured large audiences, especially of young people. These media exploit the speed and easy access of the email newsletter but also seem appropriate for a post-digital news audience which prefers short, snappy content, bullet points and brevity. Whereas social media prioritises volume – and clickbait – the economics of newsletters reward those producing high-quality content or serving a specific niche. In that sense, the newsletter format is the antithesis of the ‘everything-for-everyone’ newspaper “bundle” which anyway attracts relatively fewer young people. Axel Springer is one publisher which sees newsletters as having a major role in the future of news media. The Morning Brew ad makes the point: Get Smarter in Just 5 Minutes. There’s a reason over 3 million people start their day with Morning Brew – the free daily email that delivers the latest stories from Wall Street to Silicon Valley. Upgrade your morning routine, while staying informed and entertained.” Many of these newsletters are funded principally by subscribers and are part of a swing away from a dependence on display advertising which is anyway less appetising on smartphone screens. But the US-based SmartBrief and Industry Dive are highly-successful advertising-funded email newsletters: ‘back to the future’ B2B publications whose targeting and low distribution costs can disrupt traditional B2B verticals. The point is that – whatever else they are – newsletters can be an important new business opportunity. Perhaps they’re the future of news and need to be developed by traditional media companies as something much more than ancillary products.

In the UK, the Telegraph – which now claims 500k paid digital subscribers, some 30% up in the year – has 300k readers signed up for its twice-daily Front Page briefing, one of its 40 newsletters described as ‘editorial’ i.e. not Content Marketing. Its sponsorship and advertising revenue from newsletters has reportedly increased by 80% this year. It is, of course, ironic that such ‘editorial’ newsletters derive their revenue from marketing not from readers. But that’s because they’re really all about building newspaper-centric subscriptions. The Telegraph team are feeling good about the subscriptions revenue generated by their increasingly profitable news brand. But are they missing the bigger opportunity by not developing some newsletters independently of the newspaper brand, competitors even?

The point about defining email newsletters as Content Marketing or New Media is that each of these newsletter types clearly does have value to media groups and others. But traditional media brands must take seriously the style, frequency and accessibility of newsletters as a way of attracting increasing numbers of readers who did not inherit the newspaper habit. That necessitates the open-eyed recognition that well-targeted newsletters can inevitably compete with legacy media, whether in print or digitally. If publishers of newspapers and magazines don’t seize those opportunities, pureplay competitors will.

While many newspaper-published newsletters really are targeted to appeal to people not routinely attracted to the traditional news “bundle”, publishers must pursue young and not-so-young readers who want to ‘pick and mix’ their content. In preparing themselves for inevitably challenging strategies, publishers can be encouraged by growing evidence that millennial readers really will pay for the news, information and entertainment they actually want – in the way they want it.

The opportunity of newsletters as new media business is more visible in the US than elsewhere, where an estimated 25% are (at least) weekly newsletter readers. But the preponderance of promotional emails (rather than creative new products) is a reminder of the time, 25 years ago, when traditional media rushed headlong onto the web without a business model.

It’s ironic that the 21st century equivalent of those early newsletters, which once led to the invention of daily newspapers, could now do the reverse. That’s the threat and the opportunity.