In this episode, Kyle Scott discusses the current state of newsletters, responding to Sam Parr's claims that the medium is dead and saturated. He argues that while some areas may be competitive, there are still ample opportunities in niche markets and local newsletters. He compares the newsletter space to blogging and podcasting and how those platforms took decades to reach normal people. He concludes by encouraging listeners to think about newsletters as owned audience, and not just a single format, comparing Beehiiv to Shopify.
All right, welcome back to Monetize Media. I am Kyle Scott. Today I want to dig in to the notion that newsletters are dead or somehow saturated.
Piggybacking on a tweet put out by Sam Parr, who obviously founded the Hustle. And I want to start off by saying that first of all, I'm a big fan of Sam's. I've listened to a lot of my first million.
I was an early subscriber to the Hustle and Trends and really admire sort of the path he's taken.
But I do find it a little bit rich that someone who's had so much success in newsletters and is speaking at a newsletter conference next month, you know, puts out tweets like newsletters are lame last year and then a more recent one in December, which we'll get to in a second, about how the whole space has kind of played out and too competitive and everyone is kind of copying his playbook and it's not gonna work. I think there's some merit to that, but there's a lot that he's getting wrong and I disagree with.
So really want to dig into that concept and then also talk about where the opportunities are because indee indeed, the newsletter market is saturated in some spots and in others it's wide open. But before we get to it, I want to ask you a favor.
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Had an hour long conversation before with somebody about their local newsletter. Nothing in it for me other than just a good exchange of ideas. So yeah, keep the feedback coming.
Okay, so I want to turn my attention to this tweet from December from Sampar. Now I'm not going to read all of it, but the gist of the tweet is that the newsletters as content space is played out, saturated. Lol.
It's dumb, dead so on. And you know, I'm paraphrasing a bit there.
But earlier in:
But when I see people copy our results, I want to tell them that's a mistake. Or at least if they do copy, the results may not be as good.
And also if you're going to copy it, you for sure need to make a handful of changes to really make it great, which most don't. It's for sure possible. But things are different today. The world felt smaller then. We covered tech news and we did it via a business email newsletter.
There was very, very little competition. It felt like it was us, the Skim and Morning Brew. Now there's thousands of people doing it.
So his point is, is that there's a whole lot of copycats out there in the tech startup business and now AI space copying the format popularized by Morning Brew, the Hustle, which is generally short quip in the beginning, three or four main stories, a couple of side sections, a poll and move on with your day. That sort of aggregation, digest style content which is easy to read and consume in email. And he's right, it is definitely a saturated space.
A number of people have tried to copy that playbook, put a slightly unique, if at all spin on it and compete with much more established, well financed, well ironed machines that are the Hustle and Morning Brews of the world.
And that's that's almost certainly a bad business model today where I think he is very, very and he kind of went on to before I get into it, he kind of went on to say that, you know, they had to build A lot of the tools and services that we have today. So it made their businesses more defensible, which is true. They didn't have access to a beehive or substack.
I tried to do some stuff personally in the subscription space. I worked with John Clayton, rest in peace, former ESPN football personality.
n followers on Twitter and in:
ying, that in the kind of mid:
However, this sounds a lot like people who were early in blogging or early in podcasting declaring those things dead long before they ever went mainstream. And what I would say is the tech startup AI business circles are often very, very early on new mediums.
s, early:
in Philly, crossing Broad in:
So I did it for local sports and treated it like a business.
It wasn't played out at all yet it was still a relatively novel concept to Philadelphia sports fans, something that was maybe a 10 year old format to people that had been reading, I don't know, TechCrunch or Daring Fireball.
ain a classic blog in the mid:
And oftentimes when you feel like you're late, the reality is you're not.
It just may be everybody around you is aware of this space and you're viewing things a bit myopically and not realizing that 90, 95% of normal people out there don't run in these same circles. And these mediums can be very new to them. Podcasting, another great example.
By the early:
in who would have told you in:
with Podcasting again, early:
They had already been successful, these guys, but build a huge audience, build their own media company. Dane Cook established himself on MySpace. Right?
if you weren't on MySpace in:
stream media until last year,:
to tech podcasting by the mid-:
And there's a number of cohorts, I think, who are early to the newsletter space who think everybody's now late because these tools now exist because they don't have to blaze the trail and it's easy for everybody else. And listen, these tools are built on the backs of some of this trailblazing.
Tyler Dank at Beehive built these systems for Morning Brew, and he productized it with Beehive Substack didn't exist then, so it is much easier to Start a newsletter now, but that doesn't mean the space is dead and there's not as much competition as you think.
Yes, if you are going to start a tech newsletter, a digest style newsletter, an AI updates newsletter, yes, you're late, there's a million people doing that, your chances of success are very, very.
But the reality is for things like local media, which we talk about a lot here and I'll get to in a second, and other specific niches or even broad topics, newsletters are not played out.
The average person, the average 48 year old woman or 52 year old man doesn't receive 50 newsletters in their inbox every morning the way maybe Sam Par and a bunch of the SF Austin types do or have been for the last five years. In fact, it's still a newsletters as content medium are still relatively new format to a number of normal everyday people.
And I think that often gets lost on people that are early to something just how long that adoption curve is. The other part of his argument is that the tools that exist now make it easier for people and thus invite competition, which is true.
But let's think about this rationally. Let's look at blogging and podcasting. Early on blogging you had to create your own website.
n't. I used to have a blog in:
And I would, each time I put up a new post, I had to move text and I had to update HTML in the background. It was, it was awful. And maybe I was a little, maybe could have used some tools that were available at the time.
went mainstream sometime late:
And I think very few people would actually argue with a straight face that the introduction of WordPress and the popularity of WordPress because it made blogging so competitive, made it very difficult space to enter and that you relate to the space if you got in because you weren't like the early tech guys who created their own blogs through blood, sweat and tears. Obviously that wasn't true.
early on, you know, if it was:
Do you know how you would do that? I don't. Right now. The tools exist. I can record this in Riverside, save it, upload it to Captivate, and it throws it on 15 different platforms for me.
Back then, you used to have to create, I guess, an I Tunes account, develop, I don't know, a producer account, save an MP3, upload it. You know, the point is create an RSS feed. It wasn't as easy. And no one would claim that.
The introduction of the tools to distribute podcasts, like, I'm gonna. I'm gonna forget some of the names. I'm not gonna attempt to enter them. But, you know, these tools have been around for over a decade.
The introduction of them, yes, it created more competition, but it didn't mean the space was dead or saturated. You were still very early ten years ago in podcasting. I'd argue you're still early today in podcasting.
And, you know, if we extend this to Substack and Beehive as platforms, yeah, they make it easier for people and they're inviting a lot more people into the space.
But it frees people to think more about the content format than the logistics of how do I send this to 10,000 people and how do I insert an ad and how do I clean my list or create a segment. You know, this is what we call progress, right? The introduction of the tractor didn't make farming dead.
It just sort of changed it and allowed for higher yield. And sure, maybe, I don't know, I don't know, maybe it created more farmers, more people could buy a tractor and have a small farm or whatever it is.
But the reality is it made them more efficient and created more opportunities. And I think the tools we have now for newsletters and communities, I would extend that mean we're just getting started in the space.
So, yeah, if you're entering podcasting today in business, tech, AI, finance, yeah, you're a little late with digest style stuff. I definitely think there are areas you can go deep niche on and find a huge audience.
Maybe it's CFOs of X type of company or AI for HR professionals, whatever it is, you can niche down and find a large addressable market in sub niches that probably is more valuable than a kind of general digest style audience like the Hustle and Morning Brew have. And you're seeing a lot of businesses do this, like Adam Ryan's Workweek.
I think you're seeing Morning Brew kind of niche down with some of their sub newsletters, Axios is doing this. This isn't like a new idea and that's just in these supposedly crowded spaces. What are the opportunities outside of that?
I would say, and we talk about this a lot on here. I think local is inherently slow on the uptake to embrace new mediums.
There are a number of reasons for this, but typically local ecosystems don't plug into the modern Internet the same way that 20 and 30 something guys and girls in San Francisco and Austin plug into the Internet.
So if you show up and you try to sell a company like lmnt, the hydration company, a newsletter ad, they're going to say, oh yeah, you know, we advertise in newsletters a lot. It's a way we reach 28 year olds who are taking their health seriously because they listen to Peter Attia and Huberman Labs.
But if you go to your locally owned grocery store and say, hey, you want to put an ad in my local newsletter? They're going to say, explain to me what exactly a local newsletter is. And the point is, you know, local is much slower on the uptake.
More importantly, there is less competition. To explain that, I want to call your attention to a comment made by Morgan Housel on a recent podcast.
So if you don't know Morgan, he wrote the book Psychology of Money a couple of years ago. It's a bestseller. It is one of the best books I've ever read for thinking about just your personal finances at really any income level.
I love his way of thinking about the world in kind of from first principles and practicality. And he has a simple way of viewing things that I think is fascinating across the board, but especially his views on finance.
Anyway, he puts out a podcast a couple times a month where he kind of breaks down conventional wisdom and maybe talks about why society is generally right or wrong. And as he often does, he quoted, or at least it attributed the following comment to Warren Buffett.
And he said 100 years ago every town had an opera singer.
And what he meant by that was that today, whether it's in business or content creation, we increasingly see the most successful, the most talented go viral, get famous, make lots of money, and then nobody else gets anything or they're left fighting over scraps. This is the power of the Internet. The best musician, the best fun video maker like Mr.
Beast or Dude Perfect can go viral and reach tens or hundreds of millions of people and build a billion dollar business on the back of it.
But there are less opportunities for the the middle to earn Livable wages, entertaining people, especially online, because you're either as good as those guys or you're not. And the money will all accrue. And we see this in podcasting. There was some stat like something like the top 1% of podcasts earn 70% of the money.
And so the point about the opera singer is that when 100 years ago people wanted their entertainment, they would go see the local opera singer.
And that local opera singer didn't have to be great, they just had to be the best in town, the best in their area, the best in their small category, and enough people would pay to see them and they'd earn a livable wage and they wouldn't become rich and famous like Taylor Swift, but they would be well known in their town and they'd be able to have a successful living. Today, that obviously no longer exists.
We show up to see football stadiums full of people, to see Taylor Swift or Zach Brown band or Kenny Chesney or whoever it is, and then we get the rest of our entertainment fill by scrolling TikTok and Instagram, where there are no shortage of people creating entertaining content for free. I would include YouTube, obviously.
And because the algorithms increasingly and rightfully feed us the best, most engaging and watchable content, there are a few winners and lots and lots of, I don't want to say losers, but people who aren't able to earn a middle wage.
If you're sitting down to watch something entertaining for the next 25 minutes and you can see the crazy stunts being pulled off by Dude Perfect or some guy who's entertaining but doing those same things in his backyard with less production value and less shock value, which are you going to watch? Well, you're going to watch dude perfect.
And 100 years ago, that guy may have been able to entertain people locally and sell 150 people tickets, and now it's just like, you know what? I'll watch Dude Perfect, right? So that's kind of the point of this. Every town had an opera singer.
And in content creation, you want to try to find the areas where you can still be the opera singer, where you don't have to be the best in the world, but you can be the best in your area. Like local newsletters or a category like a niche B2B thing.
One example I love is I found the newsletter called More Than Teeth targeted at Sleep Dental professionals.
They had 14,000 sleep dental dental sleep professionals like Think like sleep apnea machines who subscribe to their specialized info on how to treat patients with sleeping additions through dental Devices. You talk about a specialized niche and a high value audience. Now, fun fact, this newsletter was for sale, induced for only $20,000.
And I actually contacted them about it and I put out a tweet about it and it turns out they had actually recommended they listed at this low price, I would argue 14,000 sleek dental professionals is such a high value audience, I could do a whole podcast about it. And one of the readers of the newsletter actually wound up buying it, although price undisclosed.
But I guarantee you it was way less than that audience is worth because of how much of a high value niche that is.
But the point being is the guy who created that didn't create a general medical newsletter, a general health and wellness newsletter, not even a general how to sleep better newsletter. He created a newsletter targeted at dental sleep professionals.
So he didn't have to be great, he didn't have to be as good as Huberman or Peter Attia or Tim Ferriss. He just had to be the best at specific content geared toward dentists who do these procedures. Same with local newsletters.
This is why they're having such a moment right now. Sure, the morning brews of the world are tapped out. If you start a general news newsletter. And I own one in TIP News. TIP News subscribe.
It's free, right? But it's a crowded space. Morning brew, crowded space.
But the reason why so many people are experimenting with local newsletters and why Beehive frankly, as a platform is embracing this is because I don't know how many downs are there in America in the world, right? Each town can have these and to have quote unquote success. And we can, you know, they kind of haggle over how you define that.
But to build an audience, you don't have to be great, you don't have to be as engaging as the Hustle is or Milk Road was. All you gotta be is the best in your town and good enough and bring value to people.
And if there's maybe one or two other people in your area maybe doing the same thing or some other old local newspaper, you just have to be as good or better than them or just be on a different medium like email, you know, just like the teeth guy, I'm guessing that he's probably not the most engaging writer, but if you're a dental sleep professional, he was bringing you the content you needed.
And I would extend this to so, so many top that, you know, they're almost limitless lifestyle stuff like food and drinks, certainly B2B niches speaking to some type of professional in some type of area or some type of athlete in some age range. Any of these niches have tens of thousands of people and many of them are kind of normal, everyday people who aren't up on the latest thing.
They just came around to listening to podcasts last year. They don't even know what the Morning Brew or the Hustle is.
And if you send them a newsletter about the thing that they really like or the job or service they perform, that's high value, you might be the only newsletter they're receiving and you're going to get 60% open rates and you're going to have no competition, much like local newsletters. Now we talk a lot about monetization on here and I think there's a whole separate episode about how to monetize these.
But again, step one is obviously building an audience and there's huge audience to be built in these and huge money to be made.
I honestly think the more niche you are, as long as the audience is some number of thousands of people, you can build a very, very lucrative media business. So I think the idea that newsletters are lame, that they're dead, that the space is saturated, is entirely incorrect for most people, yes.
For people in certain circles that may be the case or you may be in the middle innings. But I actually think that the creation of these tools will free people up to think about the format.
I think what we're learning lately is that shorter is better. It is a lift to read a long email.
You're scrolling through your inbox in the morning, you're trying to get through a bunch of stuff you want to provide, something that people want to open and they want to consume. Right then a lot of people don't come back to those flagged emails. I know. I certainly don't. It's not like a website.
You leave a tab open like you're scrolling, you either read the email or you don't. And I imagine a whole lot of people don't double back. So we're learning shorter is better. Consistency is obviously better.
There are all sorts of different formats that people are going to play with. And I think eventually newsletters is going to come to me, be a stand in for owned audience.
And that's going to include messaging communities and frankly, in person events. And this is where I bring in Shopify.
I don't think a lot of people would have told you that you were late to the E Commerce game when Shopify became widely available. You were still very, very early in the DTC space.
And what Harvey Finkelstein, CEO president of Shopify, always says is they want to be the os, the operating system for retail, and they don't care if you use the Shopify app, which they have and it's fine.
And they aggregate stores and the experience is pretty good, but they don't care if they come to your website, if you sell on Facebook, Instagram, TikTok or in person. Shopify aims to be the backend for all of that. Your inventory is cataloged across all those platforms.
The transaction happens in the same place in the background across all those platforms. Your settings and SKUs are set in one place and can be distributed and sold anywhere.
And I think when we use the phrase newsletters, we should really be thinking about the phrase owned audience.
And I think what Beehive is doing much different than Substack, which I'll get to in a second, is that they want to be the operating system for your own audience. And it starts with newsletters much the same way Shopify started with websites.
But it will eventually extend, I think to communities, to messaging groups, to organizing in person events, to paid subscriptions. Anything a quote unquote media company can do to engage its audience. Shop Beehive wants to help power that.
Now that differs a lot from Substack, which feels much more increasingly like a walled garden.
They are pushing out creators to make vertical real style videos, I think not coincidentally on the back of TikTok, maybe as a request recording this being banned in the U.S. you know, if we're using the analogy, I think they're more like Amazon.
You can build your own store on Amazon, you can build your own audience on Substack, you can own a portion of that customer relationship. But ultimately the E commerce and this is built solely on Amazon are at the whim of how Amazon wants to display and sell and market their products.
And I think that's the case for creators and journalists who are building on Substack. Long term they're going to be at the whim.
They might have access to these email addresses, they might earn money, but long term their audience's attention will be at the whim of Substack and its algorithm and its app and how it wants to display their content. Whereas Beehive, I think will function more like Shopify. Maybe they do have an app, maybe they do have a directory, just like Shopify does.
But at the end of the day they won't care if you engage your audience in their inboxes or through a message group or even plan an event in person. I think they want to be the OS for owned audience.
And so to kind of put a bow on it, if you have a newsletter, you're thinking of starting a newsletter, you're a business that thinks you can benefit from kind of the content style of a newsletter. I would extend the phrase newsletter to be owned audience. Algorithms are increasingly difficult on social.
Whether or not TikTok gets banned, whatever happens on X this year, it doesn't matter. These are great tools to build audience and gain recognition and you should definitely use them.
You always want to be thinking about how you can own and engage your audience today. Owning and engaging your audience. Newsletters are a great format to do that.
It's a great platform and medium to do that, much like podcasting is as well.
And I think that unless you are creating a media brand in one of these narrow, slim vertical of tech and startup aimed at tech and startup people, the opportunity is still massive to create a big media business to have a large owned audience that you can sell your products and services to using newsletters as a leading format. One last point about Sam's tweet. One of the things he mentioned was, you know, everyone's copying what we did. It's not going to work.
They're doing the same thing in newsletters with the same types of newsletters.
And I agree with him, him and he said he has always had success looking at people throughout history and the way they've done things and then tried to apply those things to his business, to the hustle in this case. An example I've seen in the past is, you know, some of these early.
I want to say it was like Budweiser was successful early on because they really cracked distribution and they were able to get their cases of beer on the rail lines and send them around the country.
I don't know, that might, may or may not be accurate, but I think the point still stands is that it was about like, hey, how important distribution is not just your product, right? And that's a lesson you could certainly take in media and almost any type of business.
And so Sam's point was he's looked at these examples throughout history and how do you apply it to your business? Don't just steal my newsletter idea and put it in a newsletter.
Steal my newsletter idea and put it in whatever the next medium is or whatever your business is, and maybe there's something you can learn. Totally fair point.
But what I would argue is you can actually take some of these newsletters concept that him and people at the Morning Brew have developed and Then apply them to topics where they haven't yet been applied. Right. The morning brew of X works when it's talking about real estate in a local vacation town. Right.
The people in that town don't receive 20 emails about that topic. They receive precisely zero of those emails.
And just because you're using a style that Sam and the people at the Hustle may have pioneered, it doesn't mean that it is not novel and useful elsewhere in the newsletter space. You just gotta pivot the topic. So I think the point is good.
You can always take lessons from different verticals and different industries and apply em to your own. But sometimes it's just as easy as looking at the things that worked in your industry and then finding a hook, a niche, a subgroup to apply it to.
And there's plenty of opportunities to build and expand upon that and find success. All right, hopefully you found this insightful.
This is a little bit longer than I usually go on, kind of the sole, but I think it was a really important point to make about how I think we're still early days, especially in owning your audience. If you liked what you heard, again, do me a favor, go on Apple podcasts, Spotify, whatever the heck Google has.
Leave a five star review, leave some commentary about what you like, what you didn't like, expand on a topic. I promise I will get in the comments on some of these and mix it up.
And certainly to the extent we have to play by the algorithm on some of these recommendation engines, that will definitely help. If you didn't like it or if you did, hit me up on xylescott L. You can DM me, you can me.
I will engage with just about anybody who's said they've put the time in to listen to the show. Again, I've heard from a number of you. I'm happy to have a call if you have a topic, anything like that.
I'm doing a lot in local media right now at Access media we have 15 websites in and around the Philly area. We're building out newsletters. We have a sports brand, I own a general interest news national newsletter and TIP News.
We're experimenting with some things in local real estate as it comes to product and obviously I'm doing this with monetized media. So I have lots of thoughts on any and all the above. Happy to engage, appreciate you listening, like and subscribe, all that fun stuff.