The newsletter bubble

I went to my first spring training game yesterday. The Phillies took down the Twins 4-1, and three E-A-G-L-E-S chants broke out by the second inning despite it being a Twins home game. (The Twins mascot was also booed.)

Media rarely engenders that kind of long-term loyalty now. The social media era proved how flimsy many brands were when the algorithms changed. I’ve seen similarities for some time with the email newsletter world. This week, I spoke to newsletter veteran Adam Ryan, CEO of Workweek, about why newsletters are a channel, not a business.

• Getting Chegged. For all the hot air around AI, I am in the camp that it will be momentously disruptive to many businesses, and media always goes first. In the latest episode of People vs Algorithms, we came up with the businesses that face the greatest extinction risks (and some bright spots, I promise). YouTube | Apple | Spotify | other platforms
• Good times for regime media. Newsmax raising $225 million is a signal, according to Anonymous Banker. “While this level of funding was inconceivable before the November election, Trump-aligned media businesses now have the wind at their backs and are taking advantage of positive investor sentiment.” PvA Weekend

The newsletter bubble

Adam Ryan, CEO of Workweek, joined me this week on The Rebooting Show to discuss his recent warning that the newsletter sector is overheated. Some points from the conversation:

• Newsletters are a commodity. The number of newsletters is growing faster than the number of readers. Platforms like Beehiv have democratized access to sophisticated tooling, but most newsletters lack true audience affinity.
• The inbox is not a direct connection. It’s a platform like any other, subject to change. Apple has broken open rates, AI tools like Superhuman summarize newsletters without opening them, and inboxes are being segmented, reducing visibility.
• Paid growth is a weak foundation. Many newsletters rely on paid acquisition and cross-promotion. The moment that engine turns off, engagement often collapses because there’s no real audience connection.
• Winners are thinking beyond email. The most successful publishers are building businesses around community, events, and services. Morning Brew, Workweek, and Lenny’s Newsletter all extend beyond just newsletters.
• Newsletters are a starting point, not a business. They are an MVP—a way to build an audience—but real success comes from expanding into new distribution and monetization channels.

Apple | Spotify | other podcast platforms

My thoughts:

The current email newsletter business boom was set off by breakouts like Morning Brew, The Hustle and Industry Dive. They spawned a boomlet of independent publishing ventures based around a distribution channel that is controllable, bypassing algorithmic gatekeepers, and with an array of monetization options.

But as Adam pointed out in our conversation, newsletters themselves are rarely businesses. They are a channel and starting point. And like all channels, they are subject to disruption, saturation, and diminishing returns. And while email might not be dead, it is subject to the same compression as the overall media industry, which is regularly marked by boomlets and busts. Anything that is working gets copied, leading to an oversupply and aggregate decline in quality and hockey-stick increase in detritus.

The idea of building a media business solely on newsletters is a relic of a time when the inbox was underappreciated real estate. Morning Brew, The Hustle, The Skimm and Industry Dive proved that email-driven media brands could scale and exit successfully. 

Those businesses were built in a different era, before AI-powered curation, inbox filtering, and the sheer explosion of newsletters competing for attention. None of the email-first success stories are as email-centric today. The inbox is now as crowded as the Facebook feed once was, and publishers who built their businesses purely on newsletters are starting to face the same challenges that upended the traffic arbitrage models of the 2010s. A similar gold-rush mentality exists in the newsletters sector of today.

"The number of newsletters being created is far outpacing the number of people actually reading them," Adam said. "It’s a commodity now. The tools have made it easier than ever to launch one, but that just means more noise in an already crowded space."

Some of that comes down to tooling. Starting a newsletter business takes an hour or less now. You can set up a Substack or Beehiiv and go off to the races. You can hook into ad networks, sell subscriptions and courses. It has spawned an information entrepreneurial boom. Recommendation engines have made up-and-to-the-right subscriber charts common. The frictionless growth levers have undoubtedly caused many people to subscribe to a slew of emails by accident. This is like mobile ads having high interaction rates due to “fat thumbs.” What's more, institutional media has pivoted themselves to prioritize newsletters, further increasing supply.

Anytime I see claims of hockey stick growth in media, I know something is fishy. It is nearly always a mirage. I get flashback to when Little Things was heralded as the fastest growing media business in history. Something is off when there are 3,000 AI newsletters.

 "It’s all paid growth and cross-promotion,” Adam told me. “If you shut off that faucet, most of them collapse. There’s no core audience affinity."

Throughout my time in media I have seen canny operators find a distribution seam, only for the tricks to become widely known and exploited. It’s a repeat of the tragedy of the commons again and again. And then tech companies, which are always upstream of media, pull a “Daddy’s home.” This is particularly fraught as the AI era accelerates, pointing to an eradication of the kind of friction inherent in newsletters.

Email is somewhat protected from sudden algo shifts but not entirely. Tech companies control the inbox, and they will take action. The idea of a direct connection is belied by the need to beg people in a welcome sequence to move the newsletter to the primary tab or a sweaty plea to respond in the hopes of avoiding the promotions tab. These hacks won’t last. Adam points to his experience using Superhuman pointing to how AI is coming for newsletters. Apple’s so-called Apple Intelligence is currently at the imbecile intelligence level, but it will eventually get there and do smart summarization.

Even the core metrics of email are broken. I’ve written about the problems with engagement data before—open rates have become meaningless since Apple started preloading images, making it appear as though emails are being read even when they’re not. Click rates, another widely used KPI, are also flawed thanks to link-clicking bots. 

"Advertisers don’t want to pay for inflated engagement," Adam said. "And if you’re relying solely on a newsletter for revenue, you’re going to find yourself in a tough spot. The inbox is becoming a walled garden, and you have to diversify beyond it."

Newsletters are a classic minimally viable product of media. It was a starting point for me four years ago. But adding podcasts and gatherings was always part of the plan. A newsletter alone is rarely a sustainable business model —it is the first step in developing a larger, more robust media ecosystem. 

You need a cinematic universe. That means developing other distribution channels like podcasts, video and events. That’s the Lenny way, and how most success cases are using email. It’s a matter of sequencing. Increasingly, it will be hard to be a text specialist. I’m a writer by disposition, but I know that it is just one mode. Podcasting is not just a different distribution channel, it’s a different mode.

Most media businesses are front businesses. Look at Mr. Beast. He’s on his way to being a candy company with a media operation. The most successful media entities are arguably not primarily in the media business. Instead they use media to fuel ancillary businesses with better economics or for entirely different purposes like power and influence. Anyone building a newsletter business should consider what the next business is. That can be an agency, an events business or a data business. It won’t cut it to hang your hat on making people smarter about AI in less than 5 minutes. Plenty of consolidation will occur.

The e-commerce parallel is instructive. Shopify made launching a direct-to-consumer brand as easy as spinning up a store in an afternoon. This led to an explosion of DTC brands, many of which were indistinguishable from one another. The ease of entry created an oversupply problem. In the same way, new email platforms have made launching a newsletter nearly frictionless, but they haven’t created more engaged readers—they’ve just created more newsletters. The result? An arms race of acquisition strategies, paid referrals, and viral growth hacks that may build lists but don’t necessarily build businesses.

"Casper, Allbirds, all these DTC companies exploded because of easy access to tools and cheap capital. But the moment things got expensive and competitive, most of them struggled," he said. "We’re seeing the same thing in newsletters. The good times don’t last forever."

Substack is not immune to this. There’s a circular nature to Substack I’ve noticed on Notes. Even after I left Substack for Ghost, I continued to accrue subscribers and followers thanks to Substack’s recommendation system. Somehow I realized I accumulated over 70,000 followers on Substack Notes, so I spent more time there. What I’ve found is a lot of Substackers talking about Substack to other Substackers. It’s a bazaar full of hawkers selling to each other.

The winners in this landscape are those who see newsletters as a starting point rather than an endgame. They use newsletters as an entry into deeper relationships—whether through communities, events, or high-value business services. Substack has made a deliberate shift toward being more than an email platform, emphasizing community and engagement beyond the inbox. 

Workweek has evolved beyond its creator-driven newsletter model into a more robust ecosystem of communities and direct connections between industry professionals. Even Morning Brew, long synonymous with daily email newsletters, has expanded into courses, events, and multimedia content to hedge against inbox saturation.

"You can’t just be a newsletter," Adam said. "You need a bigger plan—whether that’s a community, a product, a service. The most successful media brands are thinking beyond email."

The lesson here is simple: media businesses are built on content, distribution, and monetization. Newsletters are a powerful distribution tool, but they don’t, on their own, constitute a business. The inbox is a platform, just like search and social before it. And as we’ve seen time and again, platforms change. The smartest media operators aren’t just building newsletters. They’re building multifaceted businesses.

I’m not posting much on X these days, but I’m posting more on LinkedIn.

For partnerships information, check out how we work with partners on programs.