Newsletter Valuation

Valuing a newsletter business is currently still more of an art form than an exact science. However, here are some steps that can help you estimate the value of a newsletter business:

  1. Evaluate the subscriber list: The size and quality of the subscriber list are the most important factors when valuing a newsletter business. Determine the number of active subscribers, the rate of new subscribers, and the engagement level of the subscribers.
  2. Analyze revenue streams: Look at the different ways the newsletter generates revenue, such as advertising, sponsorships, subscriptions, or affiliate marketing. Determine the average monthly revenue generated from each revenue stream.
  3. Assess expenses: Evaluate the expenses involved in producing and distributing the newsletter, including content creation, email marketing platform fees, and any other costs associated with running the business.
  4. Evaluate the competition: Consider the competitive landscape of the newsletter’s niche. Determine how the newsletter compares to other newsletters in terms of content quality, subscriber engagement, and revenue.
  5. Estimate the future growth potential: Consider the potential for future growth in subscribers, revenue, and profitability based on market trends and the newsletter’s existing subscriber base.
  6. Apply a valuation multiple: Once you have estimated the future revenue and profitability of the newsletter business, you can apply a valuation multiple based on industry standards and comparable sales. A common listing valuation multiple for a newsletter business is 1-3x annual revenue.

Asset + Income Value

Ultimately you need to factor in:

  1. The value of subscribers – placing a niche dependent dollar amount on each open.
  2. The amount of revenue being generated – placing a higher multiple on subscriptions and a lower on one-off sponsorships

The marketplace Duuce does a good job at trying to combine both of these factors in its valuation tool:

newsletter business valuation

For example, a newsletter with 10K subscribers, with 5K opens, making $5K/m is worth $76,000 or $7.70 per subscriber.

Income valuation

Another way of thinking about the value of a single subscriber, is how much it would cost for you to acquire an engaged subscriber through paid acquisition, and what the payback period would be.

Typically media companies look to payback their spend within 2 months. So if you can acquire a subscriber for $5 and they earn $3 within the first month (through an automated funnel with own products and affiliate offers) and $1 every month (majority through sponsorships) it becomes profitable.

Asset valuation

Then there is the asset value of subscribers based on a monthly profit multiple. In the example above, each subscriber is earning $1 per month, so if you have a 10K email list, you’re bringing in $10K/m, combined with a 24 month multiplier equals $240K.

However, newsletter businesses typically have high content creation costs you need to factor in, which will bring down the revenue and also multiplier used.

Other factors

I asked on Twitter which other factors should be included when valuing a newsletter business:

And got some great responses such as the below from Paul Metcalfe:

  • market
  • market growth rate
  • newsletter growth/churn rate
  • how easy/hard/expensive to create the content
  • clicks/engagement
  • strength of brand (and how attached the owner is to the brand) – age of newsletter
  • business model
  • consistency of revenue
  • recurring revenue
  • subscriber acquisition channels/costs
  • other costs (people, tools)
  • LTV of subscribers