Category: How-To

From 2020 to 2023, I helped run a multi-million dollar newsletter called Trends, which is the sister-publication of another even bigger newsletter called The Hustle.

While there, I had the chance not only to see behind the scenes of a successful media company, but also to help literally write the book on how 7-figure newsletters make money, interviewing leaders at other major publications like Axios, Buzzfeed, The New Yorker, Morning Brew, Motley Fool, Washington Post, and more.

I’ve also talked to lots of people you’ve never heard of, who still make 6- to 8-figures each year on their writing.

Do you want to know what they all have in common? It’s NOT a big audience, a fancy website, or even very good writing.

The people who make the most money from their writing understand one simple business model…

…Oh, and by the way, this works for different kinds of media too. Podcasters, TikTok-ers, Instagram influencers, and more – the ones that make money all do it by adhering to the same simple framework.

Here it is – there are three ways to make money from media:

1. Free products: Monetized via ads and affiliate deals
2. Low-cost products: Known as “front end” products, these are typically $100 or less (cheap enough to be an impulse buy) and designed to reach large audiences.
3. High-price products: Known as “back end” products, these are typically $500 and up (can go all the way up into the many thousands of dollars). Because of their price, they’re often designed for much more narrow audiences.

That’s it.

Anyone who’s making serious money is doing it through one or more of those 3 levers, whether they realize it or not.

And that’s the problem – big companies understand that this is how the model works, but a lot of smaller creators or media startups don’t realize that this is the game they’re playing. They feel like they’re taking shots in the dark.

On their own, any of the three can be a multi-million dollar business. You can also mix and match them. For example, 1440 makes money from ads alone, The Browser has both free and low-cost subscriptions, whereas The Motley Fool uses all three.

Once you understand how these pieces fit together, you’ll have a much easier time deciding what to create, and when.

I like to think of it as a bullseye.

Here’s how it works…

Each ring of the bullseye represents one of the three monetization methods (free, front-end, and back-end).

The size of the circle correlates to the breadth of the audience that you can capture with that product. The depth speaks to how detailed and specific your content has to be at each stage.

Let’s break down each…

Free Products

When I say “free products” I’m talking about media properties you run that your audience can access for free.

For writers, this is primarily free newsletters and blogs. But it can also be free YouTube channels, podcasts, Twitter accounts, etc. – really anywhere you can build an audience and place ads.

To keep things simple, let’s just use the example of a free email newsletter.

Your free publication represents the outer ring of your bullseye. It will always be your biggest audience because it has the lowest barrier to entry. There’s no cost, and people don’t need to love you to subscribe. They just need to be somewhat interested in your work.

Because of the broad reach, the content will be fairly broad too. You can typically cover several different topics if you want, and the depth of coverage doesn’t have to be super deep.

There are two ways this free audience can make you money:

1. Showing them ads & affiliate deals
2. Selling your paid (front- and/or back-end) products to them

Important: When it comes to your free audience, bigger doesn’t always mean better.

I’ve seen publications with 1k highly targeted subscribers make 6-figures a year. The Newsette did more revenue with 500k readers than Morning Brew did with over a million.

The key is understanding what makes an audience valuable. There are three factors that contribute:

1. Size: How big is the audience?
2. Trust: Are they taking action based on what you say?
3. Budget: How much do they have to spend?

You basically need two of the three for a valuable audience. Of those, No. 3 is the most important, since it dictates everything else (e.g. the kinds of advertisers you can work with, the products you can create/sell, etc.).

But if you have any two, you’re ready to start monetizing a free publication.

Affiliate ads are typically the easiest place to start. Or you can sell direct advertising to brands, or develop paid products for your audience to buy. Speaking of, let’s take a look at those…

The Basics of Paid Media Products

There are two types of paid media products – front end and back end.

The difference between them is their cost, as well as the depth, specificity, and value of the content you create. We’ll look at the particulars of each below.

For now, just know that both can be sold on either a one-off or subscription basis. The main benefits of subscriptions are that they create recurring revenue for your business, and they can scale in a way that other media can’t. But they also typically require you to continue creating new content over time, which can be tough. You’ve got to weigh your ability to do that when thinking about how to structure your offer.

Front End Products

The so-called “front end” products are paid products that are typically priced in the $50-$100 price range – cheap enough to be an impulse buy.

Most often, these are something like a short course, downloadable guide, or paid newsletter. But they can be other things too – a book you sell, images you license, even subscription apps or software. The distinguishing feature is that the price is in that impulse zone under $100.

Because they’re paid, the potential audience is narrower than your free product. But because the price is somewhat low, the aim is typically to reach several thousand customers (at minimum).

The content also tends to be more in-depth than whatever’s provided at the free level.

For example, at The Hustle, our writers reported on tech and business news every day in quick, pithy pieces (typically 150-250 words). That was the free newsletter. Our paid newsletter, Trends, offered deeper coverage specifically focused on emerging business opportunities for startup founders (usually in a longer format, and with much more data, insights, etc.)

Millions of people could subscribe to The Hustle because they enjoyed general business coverage. But Trends was for a narrower group that wanted to go deeper – people actively trying to build businesses.

In a similar way, your front-end product will be a paid solution that you know a sub-set of your free audience is interested in.

There are two big mistakes people make with front-end products:

1) Pricing: People often price these willy-nilly. For example, at Trends, we priced the subscription at $300 for the year because we didn’t know any better.

That price point is kind of a no man’s land – you don’t know if you’d earn more by dropping the price (going after a bigger audience) or increasing it. So stick to $100 or less on your front-end product unless your audience is big enough to do proper A/B tests.

2) Value Prop: The bigger problem people face is not getting clear on the value prop. SO many creators offer a “paid” tier which is just more of the same kind of content they give away for free. It often goes something like this…

“Welcome to my newsletter. You’re on the free plan, which is just one email per week. But if you sign up for my patreon, you’ll get two emails per week, plus access to the archive.”

DONT do this.

The problem here is that you’re not really offering anything unique to the reader. Just more of the same. If they do sign up for the paid subscription, they’re often only doing it because they like you as a personality, and that’s not a sustainable way to do business.

Instead, use your relationship with your free audience to figure out what their main frustrations and pain points are (the valuable ones you can solve), then solve those with your paid products.

Back End Products

Much more specific, much deeper coverage, and much more expensive.

Back end products typically start at $500-$1000 and can go up into the many thousands of dollars per year.

How, you ask?

Well, back-end products are typically very focused on value creation. Think insider-business know-how, or industry data. They can even be high-end consulting packages, or expensive live events.

What ties them all together is that they’re typically focused on helping customers make money, save money, or save time. That’s why they command a high price.

For example, James Altucher has several back-end newsletter subscriptions that run $4-$5k+ each year. They’re focused on specific stock trading strategies he’s developed, and the allure for buyers is that one great trade can return many times what the newsletter costs them.

In a different example, Industry Dive licenses content to other companies for thousands of dollars a year. They also have custom research services they offer. Companies know they’re saving tens- or even hundreds of thousands of dollars not having to create the content themselves, and they believe it’ll help them attract more customers, so they’re willing to pay.

Your back end products will always have the narrowest audiences, so it’s important to price them high enough that they can make money with relatively few subscribers (often <1% of whatever your free audience is).

Pulling It All Together

Generally speaking, your free product sells your front-end, and your front-end sells the back-end, so that the whole system is set up to attract free readers and gradually convert the most dedicated ones to high-paying customers.

You can have multiple free, front- and back-end products if you like.

The most important thing is to know that you’re not obligated to have any of them. This model is a choose-your-own adventure.

For a long time, Morning Brew did tens-of-millions with just free products. On the other end of the spectrum, someone like Kevin VanTrump makes millions on just a paid newsletter about corn and soy (there’s a free trial, but no permanently free subscription).

A really robust media company, like Motley Fool or Agora might look something like this…

When you know how the model works, you can pick the pieces you want and spend less time guessing.

Wrapping Up

So that’s it.

Obviously, there’s a lot more that could be said about the nitty gritty of pricing, growth, content strategy, technology, and more.

But you now know the model used by all media companies to thrive.

Dive deeper into this site for case studies that show this model in action.

Back in the spring of 2021, I published a Twitter thread about some research I’d done on 7-figure newsletter companies.

I had been lucky to get unprecidented access to leaders in that industry, and over the course of about six months, I’d boiled down the business model in a way no one had really shared up to that point.

Newsletters were very popular, and the tweet spread fast.

A friend at the time recommended that I publish another thread. And another, and another. One a day for the next 30 days or so, in order to ride the wave, build my Twitter following, and establish my name as a go-to resource in the field.

It would have been easy enough. I had 500+ pages of edited insights, plus hundreds more in interview transcripts, P&Ls, and more.

In about twenty minutes, I wrote an outline of what the publication schedule would look like.

The first few days went well, I was stacking followers like never before. But then two things happened:

1. I hit a day where I didn’t feel like writing, and
2. I worried, “What if I run out of things to say?”

That was two years ago, and in a lot of ways, my career went on pause that day.

I’ve continued to work (a lot). And learn. And publish in other places.

But my personal audience-growth (especially on that topic) mostly stalled, and I still haven’t worked my way through that original list of 30 threads. And now I think that was a mistake.

Giving in to number one is always a mistake. Any pro knows that.

But number two was more complex.

Because in a weird way, it became a self-fulfilling prophecy. I was worried about running out of things to say. So I didn’t say anything. And the effect was the same, except now, my research isn’t out in the world working for me like it could. And I’m also sort of stuck, because I can’t possibly move on to anything new until I get this out in the world.

Don’t feel too bad for me. The last two years have been fun.

But the lesson is an important one: It is both selfish and self-destructive to hold back your ideas just to make them last longer.

If I were giving advice to my younger self, I’d say, “Do the opposite.”

Share a little more than you think you can sustain.

Not only will that help strengthen your creativity muscle. But staying out at the leading edge of your content ideas will help ensure that you can continue to evolve and reinvent yourself as the situation demands. Whether that’s because the industry changed, or because you find something you’re more interested in.

This game, of audience building and idea-sharing for money – it’s all about movement. You need to stay moving. Stay curious. Stay publishing.

As in life, stagnance is death.