Congrats, you started a newsletter! Over time, your audience has grown. So has the community around your newsletter. Now you’re wondering whether you should monetize it. Or maybe you are a renowned specialist in your field with a large following. Your followers would readily pay for your take on the industry or professional tips. So you started a newsletter, intent on making it a business from the start.
But now you have to figure out how much to charge.
Set the price too high and you might scare people off. If the price is too low, you're at risk of losing the money you could be (and should be!) making. In fact, your readers might engage with your content more if they feel like they paid a fair price for it since they want to get their money’s worth.
A good way to start is to have a clear understanding of these the factors that affect your reader's willingness to pay for your content:
Are you in a crowded space with lots of other competing sources of similar information? Your chosen niche and how saturated it determine how scarce your content is. The scarcer, the more you can charge since you're not competing with anyone else. Study what similar newsletters charge. That will give you a ballpark estimate for how much your audience might be willing to spend. Newsletter subscription pricing usually ranges from $5 to $20 per month depending on how much you offer. A classic example of a medium-priced paid newsletter is Stratechery, which is $12/mo.
If you're a true expert, an influencer, you can charge more than your average newsletter. The Information and Petition know their worth and charge their subscribers $39 and $49 every month. And people are happy to shell out for trustworthy, in-depth information that’s high quality. If your niche is crowded, you can still price higher if you're widely considered the expert or have a unique point of view. Uniqueness gives you pricing power.
You should have a deep understanding of your readers and why they subscribe to you. Don't be afraid to reach out and ask them if you're not sure. Once you have a better idea for who they are, you can figure out what they can afford. What content would they be willing to pay for? What percentage of them would be willing to pay at different prices? Send a survey out with questions like "In addition to the content you get today, would you pay for a weekly premium post for $7/mo?" Understand whether you educate them, help them earn or entertain them, and what you can charge for delivering that value.
In general, businesses have larger budgets than consumers. Also, employees at businesses can often expense their information diet if it's vital to their job. For example, a hedge fund analyst might expense a financial markets newsletter. Stratechery at $12/mo is largely read by tech employees who expense it on their company. Cleaning the Glass is focused on sports entertainment. It likely can’t be expensed as a business cost. They charge a lower $7.5/mo. This doesn't mean that you should only start a paid publication if your writing is business-oriented, but it's certainly something to keep in mind.
This isn't a big factor but still plays a role in pricing. If you're charging a subscription, there's some expectation on the frequency with which you post. Most commonly, paid newsletters tend to post at least weekly. If you deliver a ton of content every day covering daily events, that might command a different price from a report that comes out twice a week. It's hard to compare them since the ultimate value of each isn't necessarily dependent on frequency. Keep this in mind when looking at other newsletters to price yours. Theirs might not be comparable.
Keep in mind that your newsletter can have multiple pricing options to suit the needs of your readers. Your goal is to price in a manner that's affordable to as many of your readers as possible and maximizes your revenue long-term.
In general, it's easier to start with a higher price and go lower than the other way around. You'd be surprised by how many people can afford to pay for quality content.
One thing to note is that a lot of platforms charge you more, the more you make. That's not very fair and doesn't scale with you as you charge higher prices. Make sure your platform helps you grow your revenue while keeping your costs manageable. Letterdrop, for example, drops take rate to 0-2% as you scale. Pricing scales with the volume of email sent and features instead of revenue. Platforms like Substack or Revue take a fixed 5-10% fee, which gets expensive as you start to earn more. Check what your current newsletter platform has to offer. The most popular platforms may not always be the right fit for your needs.
Pick a price on the higher side, stay consistent with your writing, and then analyze your conversion numbers. If you think dropping prices will lead to more conversion and offset the margin lost, go for it. Ultimately, experimenting through trial and error will reveal the best pricing model for you.
Give readers a discount with an annual plan. This helps you earn upfront for the whole year, unlike someone on a monthly plan who may unsubscribe at any time. We'd suggest using an annual plan in addition to a monthly plan since a year is a long time commitment, that a lot of people can't stomach. A popular daily newsletter, Sinocism, offers an annual subscription for $168 ($15/month) that' cheaper than their monthly plan.
Consider offering an early adopter discount or lifetime plan when first going paid. Your most loyal readers will feel like they're getting a deal. The key to pricing is tiering intelligently. Have a tier for everyone.
Even the most popular newsletters offer freemium content. You put out your very best work free to gain readers, then charge for access to more. Keep in mind that your content also serves as marketing, so you want your best stuff out in the open to convince people to subscribe.
Think about adding perks to different subscription tiers. The Information includes access to org charts of companies in its professional plan and tickets to their VIP event in their executive plans. If you're younger than 30, you’re in for a treat. It only costs $199/year for the first five years of subscription. They've masterfully segmented their audience into different categories and charge them accordingly with different perks in each tier.
Scarcity drives sales. Just look at Black Friday or Christmas sales. Letterdrop makes it easy for you to create discount codes and run timed promos. Holidays are usually a good time to roll out special discounts and deals on subscription. Build FOMO and get some subscribers.
Study what’s out there on the market and just pick a pricing structure that seems reasonable. Carefully listen to feedback and adjust accordingly. Letterdrop makes it easy to get feedback and stats on your readers’ behavior so you can hone in on the right model. Newsletter pricing depends on a bunch of factors and it might feel overwhelmingly complicated. But we hope that it doesn't discourage you from starting! Things that are hard are often worth doing. Know that you can always adjust your pricing model in the future and get started today!
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