The newsletter gold rush is well under way. Media companies large and small are focused on their newsletter strategies. And the frontier towns of Substack, Revue and Ghost are packed with hopeful writers and journalists hoping to strike a rich vein of subscribers. But—as with real world gold rushes—there will be big winners and a wider array of also-rans, whose grand plans didn’t pan out.

Just as we are progressing from web2.0 to web3, the editorial newsletter has moved to the next level, driven in part by the emergence of integrated platforms. While the email inbox is still the destination for the final product, the ability to integrate sign-ups across social platforms and dedicated newsletter ad tools have propelled the medium to its next stage.

Between the development of those new tools and the recognition that completable, digestible news formats have value in the constantly updating nature of digital news, it’s small wonder that so much time and effort is being poured into newsletter strategy. And, driven in part by the pandemic, last year saw a raft of newspapers and magazines doubling down on newsletters for community development and revenue purposes.

The revenue models

Paid subscriptions to Substack’s newsletters exploded to more than one million late last year. Mid-2019, that number was closer to 50,000. And it isn’t just the newsletter platforms that have reaped the benefits of a bumper year for sign-ups.

The New York Times, which has around 17 million subscribers to its newsletters, announced last year that it is to make a third of those subscriber-only. Its decision around which were to be paid-for products was based largely on which newsletters it saw as being better for discovery and which had revenue potential. Its editorial director of newsletters Adam Pasick attributed that potential to growth in newsletter sign-ups from people desperate for news about the pandemic and the U.S. election.

Of course The New York Times is not alone. Organizations like The Financial Times and Axios also so their investment in newsletters pay off during the pandemic.

Perhaps the best measure of the maturation of the space is the level of experimentation that has gone into newsletter revenue strategies. Mel Magazine, buoyed by subscription success, launched a trio of paid-for newsletters in March 2021. In January of this year, the newsletter Dirt launched DirtDAO which allows its subscribers to use branded NFTs to vote on and commission stories for its writers.

On the other end of the scale, the Manchester Mill is a local newsletter published to a few thousand people in a Northern UK town. Its founder Joshi Hermann told me that 2020 and 2021 outpaced his expectations for signups: “In the first year, we’ve picked up just over 1000, which is really promising, probably slightly more than I expected given the notorious difficulty of building up subscriptions in the first place for massive content and stuff. So, I’m really delighted with that.”

Beyond paid-for newsletters, ad-supported formats are increasingly popular. Andreas Jürgensen, CEO and co-founder of newsletter ad platform Passendo, said: “There’s… a whole resurgence of publishers who are email first, and are basically building strategies around email. Then web becomes secondary, or might not even exist in the mix for them. These guys have seen the light, in regards to this as a trusted channel of the future.”

But that gold rush can’t last forever. There is increased competition amid a range of newly launched newsletters from individuals and newspapers alike. With a potential impending economic crunch, sponsors and advertisers will have to cut spend, and the public won’t necessarily prioritize newsletters. So while publications might be looking to newsletters for post-Covid revenue growth, they will have to contend with growing headwinds.

However, as bad as that might be for major publishers, it will be far worse for individual newsletter creators.

Squashed by the giants

Larger publications have the resources to keep newsletters going through a slump or take the time to transition the strategy, such as for discovery over direct revenue. Individuals who have launched newsletters will be first to feel the pinch.

Neal Freyman is managing editor of Morning Brew, which preempted much of the discussion around newsletters as an editorial product when it launched in 2017. He explains: “I think it was a bit of a pandemic blip kind of thing, as we’re seeing a lot of the pandemic winners kind of fall back to Earth.

“It’s an insane amount of work to put out a newsletter every day. So, I do think you’ll see the level of individual newsletter creators fall back down to earth and realize that you know, a support system is really needed. You might see some of these writer collectives start forming, but then you’re basically looking back at a media company, again, with sales and all that.”

One early piece of evidence for that was the closure of a long-running freelancer-focused newsletter in the UK. In the announcement, the sole creator Anna Codrea-Rado noted: “There are lots of reasons for this difficult decision, but they can be summed up quite simply: it’s just not working. Most pressingly, the maths doesn’t add up anymore. The number of paying subscribers isn’t high enough to make this one-woman newsletter business sustainable anymore.”

Some of that pressure comes from the fact that the majority of consumers who choose to be informed through newsletters signed up via major publications rather than individuals. According to the latest Digital News Report only 16% of that cohort are signed up to newsletters run by individuals. Meanwhile, 53% are signed up via “mainstream media organizations.”

The Report also notes that, to some extent, the newsletter boom is a US-centric trend: “The ‘Substack revolution’ for news is still primarily a U.S. phenomenon and it is not guaranteed to catch on elsewhere, especially given the difference in market size and context.” It is notable that most of the non-U.S .publications that launched paid-for newsletters did so with modest aspirations in terms of subscribers: Mel Magazine’s three paid-for newsletters had a goal of 10,000 subscribers within their first six months.

The outlook for individual-based newsletters, then, is iffy and exposed to volatility in the wider economy. But for bigger publications, newsletters are set to retain their primacy as a tool to entice readers into their ecosystems. There might the massive market for subscription newsletters the industry might hope fore. However, newsletters still offer unmatched value as a way to connect with audiences and add value for subscribers.