If you’ve been following the newsletter beat, you’ve probably heard that the buzzword of the last couple of months has been “bundle.” As in bundling together a few newsletters under one price, to feed off each others’ reach and prepare for the much feared newsletter fatigue. Various people in the space are already subscribed to multiple paying newsletters and are worried that readers will get tired of this multiplication and that said multiplication will hurt everyone, making it harder to grow a sustainable income or business. Here are somes things I’d like to push back on or expand, and a few other options.
On fatigue ⨳
I recently "attended” How to Build a Media Company Around Your Niche with Jacob Donnelly, there’s a short summary here (organized by Stew at Compound Writing). One of Donnely’s comments, paraphrased, was that to insiders it looks like fatigue but really, if you take all the top newsletters, it’s still a tiny tiny fraction of potential readers, we are nowhere near mass market or late adopters, there’s still plenty of room to grow beyond early adopters and the slice of them who today feel there are too many subscriptions. He also sees, correctly I believe, that B2B is another interesting angle.
“These are tiny companies from a revenue perspective and the audience sizes are huge out there. It is hard to fathom just how large the internet is. But that’s also why I’m a big fan of B2B media. When you throw something on a corporate card, which you can do with B2B media, fatigue is less of an issue. I’ve got an industry subscription. I don’t read it every day, right? I have it through my corporate card, and it just renews and I just expense it. If I get one good piece of information for $400 that then helps the business earn hundreds of thousands of dollars, they aren’t concerned. That’s a rounding error.”
I tend to agree on both points. Of course subscription supported newslettering needs to bust out of the current early adopter market but I don’t see why it wouldn’t, especially because older pre-guys-talking-about-tech newsletters have already been huge for some years, it’s just this new(ish) way of producing them and monetizing through subscription that’s currently in its early stages.
Here’s Kaitlyn Tiffany at The Atlantic, read the whole thing for more on subscription platforms and the pre-male-techy history of the newsletter:
“[Newsletters have] been a thing,” says Ann Friedman, who has written a weekly newsletter since 2013, has 40,000 subscribers, and is widely recognized as one of the leaders of the first newsletter boom, which happened mostly among women and on TinyLetter, which had no monetization mechanism. “The reason you have a tech reporter at The New York Times saying it’s a thing now is because people with money, most of them male, are newly interested in the medium writ large. Men with money are betting on people wanting to continue to consume this medium.”
Bundling at large ⨳
Bundling and unbundling is one of the great theories of Silicon Valley, often what is called “disruption” is simply that a piece of software—usually a webapp or mobile app—makes it possible to separate the valuable part of a business from the rest of it, monetizing just that bit of the business.
Craigslist offered a better version of classified ads, which used to be bundled in newspapers, creating a standalone version of these ads while disrupting (and gravely weakening) the newspaper business. In a different but adjacent way, Airbnb unbundled hotel rooms from the hotel building and service. Uber unbundled drivers from the taxi company. Banks bundled services after deregulations and are being unbundled by fintech startups like Stripe, Robinhood, and more. Podcasts unbundled radio, now Spotify is rebundling them.
In a different geometry but with some overlapping concepts, you can also talk about aggregation, which Ben Thompson has written on extensively. From this view point, the value is in the aggregation of customers / consumers / readers and the aggregation of advertisers. Craigslist aggregated ads and readers from around the world, Airbnb aggregates rooms and renters, Uber aggregates drivers and riders, Facebook aggregates advertisers and eyeballs, Amazon aggregates consumers and brands, Spotify aggregates listeners, etc.
Basically and very simplified; legacy businesses bundled some infrastructure and a number of components to make various services and products possible. Tech companies often unbundle the core of the product or service from the legacy infrastructure but aggregate supply and demand through a much thinner, more scalable—some would argue more extractive—layer of software. Network effects and using an API, and / or interface instead of brick and mortar stores with staff, all play into this model.
Substack is largely offering infrastructure to its writers but also some network effects through its lists of popular newsletter and because it’s so easy to be logged in for one newsletter, then one-click subscribe to others the next day. They are now using the aggregation of these writers to get the latter legal support, which individual writers would likely not be able to afford.
The bundling we’re talking about here for newsletters is not the exact same thing, but bundling-disruption and aggregation theory are useful to know about and consider in this context.
Content bundles ⨳
The analog to newsletter bundles is of course the newspaper or magazine. They not only bundle together some infrastructure and services but also types of content. Local news, international news, arts & culture, sports, classifieds, etc. Magazines bundle differently but usually at the very least a number of authors and most often a variety of topics around a central interest. They are interesting for the curation of what goes in, for the local relevance, or simply because it is (mostly was) the best way to get the things you are interested in and the rest just comes along. Few people read everything in their local newspaper and most readers don’t read Monocle, WIRED, or Kinfolk cover to cover but enough of it interests enough readers for them to remain relevant as a bundle of topics and writers.
Even online magazine-like sites keep bundling topics together, where arguably most readers won’t be interested in all topics, but they are aggregating various profiles of readers to offer bigger audiences to their advertisers.
Having said that, paid newsletters are often compared to magazines, including here and in Tiffany’s piece above, where Ann Friedman says that mags cost $50 a year so a simple newsletter shouldn’t. However, a paid newsletter is usually at least monthly, ad-free, and more of a direct relationship. Sub $50 monthly mags are piles of ads, the price is not sustainable without it. Indy mags are often published once or twice a year, cost >$50 and have no or few ads. Which pricing properly values the ideas within? That remains to be seen.
Newsletter bundles so far ⨳
Basically the idea is two-fold. Wrap a few newsletters together under one price, where the price is higher than each would charge individually, while providing more. Five (or six, or…) for the price of four if you will. Each audience (hopefully) feeds into the other, both by making it more likely for each reader to buy the bundle than any unit, and the group as a whole bringing readers to each other.
Does it work? Hard to tell so far, there are to few examples. The big one that got most of this buzz going is Everything, which groups five newsletters and a podcast under a $20/200 (month/year) price. That’s twice the price of most “expensable newsletters” (usually on a business topic and viewed as a work expense) and four times the price of most non-business ones. Purely by the numbers, great deal. If you are interested in all of them. And that’s where bundles might have a problem.
How many newsletters on an adjacent topic do you want to pay for? Is it really easier to pay $20 for five-six good titles that fit together but which you don’t select? Or $20 for four you do select? Sure, they might grow to ten titles, which might make it an easy decision but then, are they really all pulling their weight and is the group really scaling so much more that a tenth of the revenue makes more sense than going at it alone? If it doesn’t, how much are the writers with the smallest audience paid? Is it really a bundle or more of a newspaper with ten columns led by a headliner?
What if they aren’t on adjacent topics? Why do you pay for five or ten newsletters of which six interest you? Unless of course the group manages to get so large that they can offer 20 (50?) titles/writers for the price of five, curated well enough that every reader gets enough value, regardless of their interests.
And remember, they are newsletters, not columns on paper or a website, you are getting every title in your inbox so obviously you don’t want 20 emails, of which only five are of interest. So it’s not really a bundle anymore, it’s a service with subscriptions where you check the ones you want and every issue of every title is on the archive site. Which means basically you now have an internet publication with “email feeds” of the writers you like. Is that still a bundle of newsletters?
All of this to say that there’s probably only a thin sliver of market opportunities for a few writers to get together under one price umbrella. Too diverse and people will subscribe piecemeal (if they can, otherwise to competitors), too numerous and you need to charge too much, or have wildly varied readerships, or grow too big to make sense as just a bunch of emails.
Perhaps I’m spending too much time thinking of my subscriber numbers (very likely) or perhaps I’m overthinking it (also likely) but one of the big hurdles to the bundle idea, in my view, is the size of audience for each title. For it to be a group price and to know how to split, you need to have either similar audiences sizes, a formula for how to split revenue (readers, open rate, …), or a “lead title” that gets the lion’s share and basically pays others to join its pride.
Everything, to use the same example, was originally two friends joining together (Baschez and Shipper), they then added one big name (Forte), and one contributor who seems to be on salary. If you aren’t equal(ish) or have a nice way of splitting revenue, to my mind it quickly becomes main titles with second fiddles and then why wouldn’t the main title simply hire someone to write under the same brand, and why would the second fiddles bring their brand under the main? Doesn’t mean it doesn’t make sense for some cases, but it feels like a different idea.
- Lets say Ben Evans (150K subscribers) wants to be more than a one man operation, does he try to find other similar titles and get together as a bundle? Or does it make more sense to pay writers and add “columns”? Perhaps paying an AI specialist to write-up a deeper dive every couple of weeks?
Alternatively, at this size of audience, he could probably get huge rebates that still make sense for other writers. Lets say you run a 7-8000K subscriber newsletter at $5/50 membership fees, how much do you ask for to be syndicated within Evans’ price and in front of his audience? $10/year per member? $1? (Note that a good rule of thumb is to consider that ±5% of subscribers to a free newsletter will become paying members.)
- nothing here, for their part, “bundle writers” under one publication. I don’t know how they split the revenue, but it doesn’t really matter, they are all participating in the production of each issue, it’s a collective publication.
- There’s also likely a case for the bundle as purely a rebate deal. X number of newsletters with payment schemes of their own also send their paid content to another list with a separate subscription fee, split however they like. Pay Dumbcities $5/50 directly or pay $20/200 to get Dumbcities and four other newsletters’ members’ issues. (Yes, similar to Everything but keeping each publication standalone while also adding a bundled price would be key here.)
- There could also be a kind of content bundle. Lets say ten writers each post their locked content to a common website, subscribers pay $10, $20, $30 a month which gives them access to everything, or perhaps it’s a wallet and it depletes by $1, 50¢, or whatever per issue the reader chooses.
I tweeted previously that Substack should do this but unless the writers form this together, paying per issue might detract too much from paying for the whole year, which might be a problem at Substack’s scale. Then again, perhaps they have enough readers to make it work, à la Medium.
Media or group? ⨳
In the end, my reckon so far is that since there’s no physical or logistical reasons to wrap things together, a bundle must make a lot of sense content, deal, and revenue wise. All other combinations either fail or represent the first steps in becoming a more common publication.
Some of the larger newsletters might evolve into more diversified publications still closely curated and associated with the founding writer; others will just become much bigger and resemble the current online “magazines” (think of The Athletic if it had started as one newsletter); and hopefully a few tribes / guilds / squads will find original solutions along the lines of my ideas above. The sustainability of the subscription model, and its evolutions, promise to be an interesting field to track.
Further reading ⨳
- Very interesting 🧵 by Andrew Wilkinson who started a local newsletter, grew it, and is now turning it into a larger media. In 2019, I set out to do something simple: Recreate the local newspaper in digital form, by creating a simple daily newsletter focused on Vi…
- 🧵 by Jay Owens sharing some bit from her newsletter research, she also highlights the 5% conversion rate mentioned above. Notes on newsletters, w/c 31 August 1. Interview with Nicole Cardoza, of Anti-Racism Daily. NB 5,000 paid subscribers to “about 100,000” free, indicating a 5% conversion rate.
- Bundling and Unbundling. “Media has been the most obvious target of digital unbundling because of the internet’s ability to subsume other forms and modularize their content. But almost anything can be understood as a bundle of some kind — a messy entanglement of variously useful functions embedded in a set of objects, places, institutions, and jobs that is rarely optimized for serving a single purpose.”
- Aggregation Theory. “Zero distribution costs. Zero marginal costs. Zero transactions. This is what the Internet enables, and it is completely transforming not just technology companies but companies in every single industry. Old moats are gone — and new ones can be built — and Aggregation Theory helps you identify both.”
- Cherie Hu last year. I haven’t tracked her project closely but an early signal. This is an experimental nudge toward potentially building a collective of independent newsletters—similar to podcast networks like Radiotopia, in which shows each have their own independent voices/audiences, but collectively share business resources.
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