Newsletter Business Model: How Email Built Media Empires
In 2017, Alex Lieberman flew to New York to meet with John Steinberg, then president of BuzzFeed and later founder of Cheddar. Morning Brew had 100,000 subscribers and was generating $300,000 in revenue. Steinberg’s response was polite but dismissive. “To be totally honest, the cost of the legal fees to do this deal would be more than what I would pay for you guys.”
Three years later, Morning Brew sold to Axel Springer for $75 million.
The newsletter business model has produced some of the most asymmetric outcomes in modern media. The Hustle sold to HubSpot. Milk Road built and exited in under two years. What began as a format that investors considered worthless has become one of the most predictable paths to a media exit.
The pattern is worth studying not because newsletters are novel, but because they reveal something counterintuitive about how value compounds in media.
What Is the Newsletter Business Model?
A newsletter business monetizes an email list through advertising, paid subscriptions, or downstream products. Unlike social media platforms, newsletters offer direct access to an audience without algorithmic intermediaries. Unlike podcasts or video, they require minimal production overhead. The result is a format with unusually high margins and defensible distribution.
Sam Parr and Shaan Puri have featured dozens of newsletter founders on My First Million, including the creators of Morning Brew, The Hustle, and Resi Club. The discussions reveal a business model that scales in ways most media does not.
The core insight is simple: email is the only distribution channel you actually own. Every other platform—YouTube, TikTok, Instagram—can change its algorithm or ban your account. An email list compounds independent of external forces.
The Morning Brew and Hustle Playbook
Morning Brew began in 2015 as a PDF called “Market Corner” that Alex Lieberman distributed to University of Michigan business students. Austin Rief joined as co-founder, and they renamed it Morning Brew. By 2017, they had 100,000 subscribers and 75 million.
The trajectory was not linear. It required an aggressive bet on paid acquisition that most founders would find terrifying.
Austin Rief described their approach to growth: they tracked daily cash flow to ensure they had enough money to operate, then put every remaining dollar into Facebook ads. At their peak, Morning Brew was spending $500,000 per month on paid acquisition. Rief’s only regret is that he could not find more money to spend.
The economics worked because subscriber lifetime value exceeded acquisition cost. But the psychological barrier was significant. Sam Parr admitted his own mistake in building The Hustle: “I had such a poor mindset where I didn’t look at it… You guys had this mentality of ‘I will spend 1.1, I will spend every 80,000 a month? That’s astronomical. It doesn’t matter what the return is.’ That was a failure. That’s an immature mindset.”
The Hustle took a different path. Parr started with events—Hustle Con generated 200,000 in profit in its first year. The newsletter came later, growing alongside the events business. By 2018, The Hustle had 500,000 subscribers and $5.1 million in revenue. It sold to HubSpot in 2020.
Both companies shared one crucial advantage: their founders started in college or shortly after. Lieberman explained why this mattered: “Austin and I were still in school. We had a year and a half to two years of fake timeline where we didn’t have to worry about revenue.” That runway allowed them to focus on product quality before monetization pressure arrived.
Revenue Models in Newsletter Media
Newsletter businesses generate revenue through multiple channels, often stacking several simultaneously.
Advertising and Sponsorships
The primary model for Morning Brew and The Hustle was selling sponsorships to B2B companies. The metric that matters is CPM—cost per thousand impressions. Niche audiences command higher CPMs than general audiences. A newsletter for CFOs can charge more than a newsletter for “young professionals.”
Austin Rief noted the Industry Dive model as an alternative approach: vertical newsletters focused on specific industries—retail, marketing, finance—that command premium rates because their audiences are more valuable to advertisers.
Paid Subscriptions
The Substack model inverts the economics. Instead of advertisers paying to reach readers, readers pay to access content. Resi Club, the residential real estate newsletter founded by Anthony Pompliano, charges $150 per year for its Pro subscription.
Sam Parr’s reaction to that pricing was instructive: “That’s so stupid, why aren’t you charging way more?” The question reveals a common mistake. Newsletter operators often underprice because they anchor to consumer expectations rather than value delivered.
Education and Courses
Both Morning Brew and The Hustle launched education products. During COVID, course revenue helped stabilize Morning Brew’s business. Lieberman described the impact: “We did an education—like a course and it made $300,000 in one month and it like helped save us.”
Audience Leverage
The most asymmetric returns come from using newsletter audiences to launch adjacent businesses. Sam Parr now runs Hampton, a community for entrepreneurs that charges $8,500 per year. When he announced it on the podcast, 5,000 people applied. The newsletter was the distribution; the community is where the value compounds.
Why the Arbitrage Is Closing
The newsletter playbook that worked in 2017 does not work the same way in 2026. Austin Rief stated the problem directly: “The value of a subscriber is significantly less than it was when we started because there are so many newsletters out there.”
The first-mover advantage mattered more than many realized. When Morning Brew launched, there were few competitors for the attention of young business professionals. When The Skimm proved the model worked, both Morning Brew and The Hustle rushed to replicate it. Now there are thousands of newsletters competing for the same demographic.
This does not mean newsletters are dead. It means the strategy must evolve.
Alex Lieberman identified the new path: “The more niche you go, not only can you get higher CPMs but the more clear it becomes how you can directly monetize your audience.” The opportunity has shifted from mass-market newsletters to vertical specialists.
Resi Club exemplifies this approach. Housing is the largest asset class in America, but there was no dominant media voice covering residential real estate. Anthony Pompliano described why he started it: “I love these types of businesses because they kind of look stupid almost in the beginning… ‘oh you guys just like created a newsletter’ like yeah that’s exactly what we did and then it turns into like a media and then it turns into a data product.”
The newsletter was profitable within the first month. The $100,000 in starting capital was never touched.
The Content Quality Imperative
Growth tactics matter less than content quality over long time horizons. Alex Lieberman explained the practice that kept Morning Brew competitive: daily content review sessions where the team would print and compare Morning Brew against Axios, The Hustle, and The Skimm.
His observation about standards is worth remembering: “The standard of your business is what you allow. And so like if you allow suboptimal content to be written, that is the new standard you set.”
The Hustle competed by hiring differently. Sam Parr described his approach: “The only people I could A, afford and B, convince to do this stuff were like Lindsay Quinn who was a blogger at a procurement startup.” The constraint became an advantage. Writers who had been overlooked by mainstream media brought energy and perspective that conventional hires would not have provided.
What Comes Next
The founders who built the first generation of newsletter businesses see opportunities shifting in unexpected directions.
Sam Parr suggested physical newsletters may be the next frontier: “Shows up quarterly in a manila envelope with stapled printer paper but really well-written articles.” The format sounds anachronistic, but scarcity creates value. Arena Magazine already operates this way—quarterly, beautiful, tangible.
The larger opportunity is content-to-product. Use content to build something more substantial than advertising revenue. Overtime began as sports media and now operates actual sports leagues. The newsletter is distribution; the product is where compounding happens.
FAQ: Newsletter Business Questions Answered
How much can a newsletter business sell for?
The range is wide. Morning Brew sold for 27 million. Milk Road built and sold in under two years. The multiple depends on subscriber count, engagement rates, revenue, and strategic fit with the acquirer. Media companies and software businesses pay premium prices for audiences that match their customer profiles.
How do you start a newsletter with no audience?
Begin with a niche where you have credibility or curiosity. Morning Brew started with Michigan business students—a small, accessible audience that the founders could reach directly. Focus on providing value before attempting to monetize. The subscription economy rewards patience. Many successful newsletter founders spent one to two years building audience before generating meaningful revenue.
Is the newsletter model still viable in 2026?
Yes, but the strategy has changed. Mass-market newsletters face saturated competition. Niche newsletters with clear paths to direct monetization—paid subscriptions, premium tiers, adjacent products—represent the stronger opportunity. The more specific your audience, the higher your CPMs and the more obvious your monetization options become.
What tools do newsletter operators use?
Beehiiv, founded by Tyler Denk who was Morning Brew’s first growth engineer, provides infrastructure for newsletter growth including referral programs and monetization tools. Substack offers a simpler paid subscription model. ConvertKit and Mailchimp remain popular for creators who want more control. The tool matters less than the content and growth strategy behind it.
Should I start a free or paid newsletter?
Free newsletters build larger audiences and monetize through advertising. Paid newsletters generate revenue directly but require consistently valuable content that readers cannot find elsewhere. Many successful operators use a hybrid model: free newsletters to build audience, paid tiers or premium products for the most engaged readers. The choice depends on your niche and your tolerance for advertiser relationships versus direct consumer transactions.
Sources and Episodes
- How to build a $100M+ newsletter business — Sam Parr interviews Alex Lieberman and Austin Rief on Morning Brew’s growth, acquisition tactics, and lessons learned
- [[episodes/3_business_ideas_you_should_st|3 Business Ideas You Should Start in 2024 (ft. Pomp) (#524)]] — Anthony Pompliano discusses Resi Club, niche newsletter strategy, and the content-to-data-product pipeline
- [[episodes/behind_the_scenes_of_selling_m|Behind The Scenes of Selling My Company For Millions | Suli Ali (#410)]] — Milk Road acquisition tactics and Sam Parr’s advice on transparency during due diligence
Related: Morning Brew | The Hustle | Sam Parr | Shaan Puri | Alex Lieberman | Austin Rief | Tyler Denk | Beehiiv | Substack | Content Marketing | Media Business Models | Creator Economy