What are the business models for newsletters?
Newsletters is a trendy topic that recently find great business-model. I get more and more interested by the business model around content generation, such as videos, blogs, newsletters and so on.
I talked about a french newsletter in my personal finances plot called “Snowball”, which is about personal finance management.
In his 2020 report, Yoann, the founder of Snowball, detail a lot about his business model and his metrics. He advocates for a lot of transparency around how he make money from the newsletter and where goes that money, which is very interesting in multiple ways.
Some key points :
- Freemium business model
- Substack is the go to plateform for newsletter MVP. They take 10% fees in addition to those of Stripe
- I.e, after removing the fees and the share of French taxes for a 6€/month subscription, the writter get 3€43/month, i.e. 57,17%. of the total amount.
- Snowball have 19,65% of paid subscriber which is 2 to 3 times better than the average percentage of** user to customer conversion rate** for freemium, with a 31,6% MoM growth.
- His churn rate, at 2,31%, is about 50% inferior to the average 5-7%.
- His opening rate for free content is 56,73 and 75,7% for premium content, i.e. 33,44% more opening for premium content. Which is above the industry standard of 35%-62% average for free content and 47%-64% for premium content, according to this article.