In late 2009, I wrote an article about the fascinating and very lucrative business behind email newsletters. In the world of Twitter, Foursquare, and Tumblr, it’s not the sexiest of businesses. In the past 9 months, a ton has happened in the space. New entrants have emerged and past entrants are doing even better. Let’s take a look:
Help A Reporter Out (HARO)– A few weeks ago HARO sold to Vocus for a reported 8 figure sum (I’ve heard 20 million). That’s right, a boostrapped email newsletter went from starting out as a facebook group, to email newsletter, to $1 million+ in revenue, and then a huge acquisition.
Thrillist– This is my favorite out of the group due to their new strategy: mixing commerce with content. Thrillist purchased JackThreads a couple of months ago in order to further monetize their audience and provide value. More importantly, Thrillist is officially on record to be doing $10 million+ in sales this year along with 2 million+ subscribers.
Since then a few new and interesting players have come into the field, including many that have been funded by Bob Pittman:
GeekChicDaily– GeekChicDaily was founded by the original founder of Wizard magazine and other publishing vets. It caters to a crowd I’m familiar with: Geeks. I have a list of verticals that I felt needed to be tackled, and this was one of them. They’re doing well with a claimed 425,000+ opt-in readers, along with a nice round of funding from Bob Pittman and others that totals 1.5 million dollars.
DailyWorth– I found out about Daily Worth from its founder, Amanda Steinberg, when I asked Quora for other verticals for email newsletters. It is a daily email newsletter for women focused on the topic of personal finance (talk about lucrative market). Forbes even called it one of the top 100 sites for women on the net. She already has 40k+ subs (and growing), along with an angel round of 250k.
Letter.ly– Letter.ly is a new service from the founder of Drop.io, Sam Lessin. The point is simple: create a premium subscription newsletter. Letter.ly is somewhat different from the daily content based newsletters without a price attached, but it still has the same belief: email is a lucrative and focused channel to distribute content on. Sam explains a lot of this on his last “blog post“. Darren Herman makes an interesting argument against Sam’s move, but also brings up another interesting point: Since I pay for the content, I find it to be more valuable.
Daily Deal Sites– This would have to be the huge elephant in the room. This space is absolutely killing it. Groupon has gone from 0-1 billion dollars+ in valuation in under 3 years. Other sites such as ScoopSt are also dominating it. Though I believe the use of Facebook is a primary driver of customer acquisition, the main driver of customer retention and repeat purchasing would have to be: daily emails.
I don’t think things are going to stop here by any means. Content is a huge business and customer acquisition can be done fairly easily if you’re sticking to a specific niche. There’s a reason Bob Pittman continues to invest here, and we’ve just scratched the possible verticals that can be attacked. The value for advertisers is not going anywhere either- email newsletters are a direct opt-in channel to a valuable targeted audience. That’s called Nirvana to a marketing pro. Have an email newsletter+some stats on the business that I missed? Email me.