What does Newsletter revenue diversification actually look like in 2024? What percentage do big Newsletter make from paid vs. Sponsors? What are the baselines of this per category? I wish this data was publically available. Because depending on the year, it's a very different split in media and for Newsletter Creators.
If Substack has 40k Newsletter and half of them are inactive, there's a reason why that is.
I think that's a *really* hard question to answer and it obviously depends on the platform.
For example, I imagine YouTube is very much sponsorship-centric, even though a solid collection of channels have decent Patreon subscriptions (and YouTube channel subscriptions, though I still haven't heard any major success cases with YT channel subs).
For newsletters, Beehiiv certainly has more advertising-centric publications than Substack, but there are some larger sponsorship pubs on Substack too: Not Boring, Huddle Up, etc.
Then there are several publications that do both sponsorships and subscriptions. I tend to think the "you are what you eat" thing applies for newsletters. If you're sponsorship-centric (say, more than 70% of your revenue is sponsorships), then you tend to focus most of your time and energy on serving sponsors. Vice versa, you tend to think mostly of your paid subscribers. There's an inherent tension in how you allocate time, energy, and value between these two revenue streams.
I think it's more about finding what the best business model is for your publication, not so much making decisions based on platform benchmarks or trends, an inherently difficult data set to make reliable and useful (there's just so much variance).
As always, thank you for dropping by with the comment, Michael! 🙏
What's the most time-consuming part of sponsorships today? Curious if you've tried using any 3rd party tools (e.g., Passionfroot)?
Most the folks we've talked to point to sales or generating sponsorship demand as the core problem to solve. All the other stuff — negotiating rates & agreement, aligning on ad creative, getting paid, etc. — doesn't seem like too much of a problem. So we've mostly been exploring how we could help generate prospective sponsors. But very curious to hear where you're facing challenges.
FWIW, I'm referring to leads for buying higher-priced, custom sponsorship packages, not building an ad network or brokering cost-per-performance ads. There's already quite a few products and businesses trying to solve that problem.
Just build a Copilot to handle the business development side. That optimizes how Paved, Passionfroot and others work. Then charge Newsletter operators a subscription. It needs hook into aggregate data from Subsack, beehiiv and ConvertKit.
I've been working with brands and have done a few different types of sponsored content. And I'm just starting a paid version of the databeats newsletter (here on Substack). Happy to join the beta and share insights!
...what a great deep dive as always man...such an awesome growth resource ...we pitched a sponsorship deal last week created through a mutual connection and my large learn from the experience is aim to find and work with sponsors who share a message with your content...there are so many potentials for overlap for most brands they might not even consider...finding and funneling and creating those conversations to cultivate has got to be one of the goals...cold calling is never great but can work if you aim specific and are honest about the true connect between product x product...i think it is a large win for both sides to create longstanding sponsor relationships where both parties embed in eachother's missions/goals/values...
What does Newsletter revenue diversification actually look like in 2024? What percentage do big Newsletter make from paid vs. Sponsors? What are the baselines of this per category? I wish this data was publically available. Because depending on the year, it's a very different split in media and for Newsletter Creators.
If Substack has 40k Newsletter and half of them are inactive, there's a reason why that is.
I think that's a *really* hard question to answer and it obviously depends on the platform.
For example, I imagine YouTube is very much sponsorship-centric, even though a solid collection of channels have decent Patreon subscriptions (and YouTube channel subscriptions, though I still haven't heard any major success cases with YT channel subs).
For newsletters, Beehiiv certainly has more advertising-centric publications than Substack, but there are some larger sponsorship pubs on Substack too: Not Boring, Huddle Up, etc.
Then there are several publications that do both sponsorships and subscriptions. I tend to think the "you are what you eat" thing applies for newsletters. If you're sponsorship-centric (say, more than 70% of your revenue is sponsorships), then you tend to focus most of your time and energy on serving sponsors. Vice versa, you tend to think mostly of your paid subscribers. There's an inherent tension in how you allocate time, energy, and value between these two revenue streams.
I think it's more about finding what the best business model is for your publication, not so much making decisions based on platform benchmarks or trends, an inherently difficult data set to make reliable and useful (there's just so much variance).
As always, thank you for dropping by with the comment, Michael! 🙏
I didn't know you left Substack, does Caddie make Substack sponsorships easier? (Right now it's entirely manual)
Thanks for dropping a comment, Peter!
What's the most time-consuming part of sponsorships today? Curious if you've tried using any 3rd party tools (e.g., Passionfroot)?
Most the folks we've talked to point to sales or generating sponsorship demand as the core problem to solve. All the other stuff — negotiating rates & agreement, aligning on ad creative, getting paid, etc. — doesn't seem like too much of a problem. So we've mostly been exploring how we could help generate prospective sponsors. But very curious to hear where you're facing challenges.
FWIW, I'm referring to leads for buying higher-priced, custom sponsorship packages, not building an ad network or brokering cost-per-performance ads. There's already quite a few products and businesses trying to solve that problem.
Thanks again, great to hear from you! :)
Just build a Copilot to handle the business development side. That optimizes how Paved, Passionfroot and others work. Then charge Newsletter operators a subscription. It needs hook into aggregate data from Subsack, beehiiv and ConvertKit.
I've been working with brands and have done a few different types of sponsored content. And I'm just starting a paid version of the databeats newsletter (here on Substack). Happy to join the beta and share insights!
Hi Arpit, appreciate you dropping a comment, awesome to see you over here on Substack.
And thanks for being open to joining our beta — will DM you with more details soon.
You're very welcome and looking forward!
...what a great deep dive as always man...such an awesome growth resource ...we pitched a sponsorship deal last week created through a mutual connection and my large learn from the experience is aim to find and work with sponsors who share a message with your content...there are so many potentials for overlap for most brands they might not even consider...finding and funneling and creating those conversations to cultivate has got to be one of the goals...cold calling is never great but can work if you aim specific and are honest about the true connect between product x product...i think it is a large win for both sides to create longstanding sponsor relationships where both parties embed in eachother's missions/goals/values...
Exactly right, it's all about threading that needle. Thank you for the kind words amigo! 🙏