Newsletter valuation

How to valuate your newsletter

(update) Duuce has now a valuation tool where you can easily get a valuation for your newsletter. Find the newsletter valuation tool here

The most asked question I receive at Duuce is how much is my newsletter worth? In this post I’ll show you how to calculate the worth of your newsletter based on average revenue of 22 newsletters.

First of all, the formula:
(Potential) yearly revenue x multiplier = newsletter worth

Easy right? Well, what if you aren’t reaching the total revenue potential for your newsletter or you aren’t generating revenue at all? And what is your business model to begin with?

There are 4 newsletter business models

  1. Advertising
  2. Premium/subscription
  3. Freemium (both ads and premium)
  4. Indirect (building community to sell your own products/services)

This post looks at the first three. Most newsletters run an ad-based business model. They sell a few premium links, banners, or dedicated issues for one advertiser.

Another model that is becoming exceedingly popular is the premium/subscription. Substack shares that personal writers charge $5 p/m but business category $10.

The business model must fit the type of newsletter you run. A very niche, domain expertise type of newsletter is better suited for a premium model. First because people are more likely to pay for high quality content and second because you’re not reaching a mass audience and therefore paid advertising doesn’t really bring in the money.

Now back to the calculation. For the data part I’ve taken publicly available data on newsletter creator earnings and list size. Most of this comes from the Indiehackers website.

I’ve looked at 22 newsletters and filtered on business model and calculated the revenue per subscriber per year.

Results:

Ad sales businessmodel (N=13)

  • Average revenue per user per year: $2.87
  • Median revenue per user per year: $1.52

Premium subscription business model (N=9)

  • Average revenue per user per year: $147.66
  • Median revenue per user per year: $93

So, what does this mean?

Does this mean any newsletter is valued at 2.87 per subscriber? No, this data comes from newsletters which actually sell ads. That’s tough and should be not underestimated. Plus, the dataset is small. But you can use these numbers as an estimate and start your price discussion around this number. You’d better get your arguments ready on why it’s higher or lower than the average..

How about multiples?

Rule of thumb is 2.5-3 times net profit. And multiples are easier to argue with actual revenue. If your newsletter is not making any revenue  you have to sell the future potential on an average revenue per user + a multiple which could be difficult.

What about newsletter categories?

The dataset is too small to investigate categories unfortunately. But you can imagine that certain categories like business have a higher yield than poetry newsletters.

Conclusion

The average revenue per user is analyzed here is to be taken very lightly. The dataset is small and there are a lot more things influencing a valuation and price. But it could help you to start thinking about a price to sell or buy. An interesting insight is the difference between ad sales business model and the subscription business model, which is huge. A potential goal of buying a newsletter is to turn it into a subscription which will increase your rev per user.

I will keep on updating the list and insights with more data received for acquisitions on Duuce. Learn more about what you’d should be thinking about when building a newsletter with the goal of selling it.

Good luck with pricing your newsletter!

(update) Duuce has now a valuation tool where you can easily get a valuation for your newsletter. Find the newsletter valuation tool here

Newsletter dataset

  • influenceweekly.co
  • Dealflow.es
  • nocsdegree.com
  • nesslabs.com/newsletter
  • Sidebar.io
  • buchdeals.de
  • inboxreads.co
  • productdisrupt.com
  • tldrmarketing.com
  • softwareideas.io
  • belonging.substack.com
  • bullish.email
  • ThisishowIdoit
  • switchweekly.com/
  • bloggingguide.substack.com
  • investing.substack.com
  • www.stackedmarketer.com
  • ianalyst.substack.com/welcome
  • domaingraphy.com
  • django-news.com
  • startupresources.io
  • nichesaas.co

4 thoughts on “Newsletter valuation”

  1. Thanks Firat! Changed the link. And thanks for the review. My Turkish isn’t very strong but I believe the review was positive 🙂

Comments are closed.