The Newsletter Apocalypse: Survival Strategies for Content Creators

0:00And I think that's what motivated him to say. it wasn't, it didn't come out with as much of a conclusion or helpful. Like I like for us to, by the end of our conversation, come up with something either that we're going to do or that everybody can do, or that we're going to do that we can extrapolate to everybody. And so here's the thing. Basically he was writing about the major shift of media. And he talked about that newsletters were the surprising giant shift that has happened over the last several years.

0:39Hey, everybody. Welcome to another episode of Business Lunch with Ryan Dice and myself, Roland Frazier. Ryan, how are you doing this wonderful day? Outstandingly fantabulous. What about you? You're like about to get on an airplane or something, right? Man, I have had the craziest schedule between work stuff, events, and moth infestations. I have a giant semi of a freezer in my driveway right now where all of our clothes and carpets and pillows and things are freezing at minus 15 for 72 hours to kill, hopefully for the final time, all moth life in this. We talked about this in a previous episode.

1:20um so the freezer finally arrived give me an update on it how is it did it like not work the first time so you're doing it again or no we haven't we've my wife is like battled with them and i know your wife had that you said in the pantry um has battled with them uh for months and was you know gonna like to dry clean all of our closets of clothes was gonna be you know double our net worth um to uh you know to gas the house was going to put chemicals everywhere and possibly kill our pets and cause mutations. So we came on the least, it turns out that if you freeze things for 48 to 72 hours, that gets rid of everything.

1:59So then started the nationwide hunt for a giant freezer that I could put in my driveway, which manifested itself in having that. So we'll see. Hopefully we'll be moth free. And then yesterday I went up to get my wife's stem cell injections in her knees because they've been giving her, um, trouble forever. And this morning she's like, let's go play pickleball. And I'm like, Hey, Whoa, Whoa, Whoa. But I was like, that's, that's pretty great. Um, so I'm, I'm, uh, our son got them a couple of years ago and one, you know, one set of it fixed him. So, um, so I'm excited about that, but man, and then now I got to get on a plane.

2:37It's just been insane. So for me, the Thursday afternoon starts a life of freedom for at least a week or so. And I am very much looking forward to no personal house based things, no weddings I have to go to at the last minute in Mexico. No, you know, four day event back to back and no moths. And it's Thursday. I got to figure out something I can do to screw with you on Thursday just to make sure there's like pieces possible. I mean, and if you don't, so far the universe has been just doing just fine. Yeah. I'll see if it shows up and if not, I'll be there for you, buddy. But that said, and speaking of screwing with things, I read an article in the Perpetual newsletter, which I think is that by one of the Hustle guys?

3:28Yeah. Yeah. It's the guy, he was the director of office with Sam Parver at the Hustle. Great. like super smart guy, really like him a lot. And yeah, great. Writes a great newsletter. I think this, you sent it to me. I was like, I thought he stopped writing it. And I looked at it. It was like, it's my first issue in 15 months. I'm like, yeah, exactly. Yeah. But it was a really good one. And I think that's what motivated him to say. It wasn't, it didn't come out with as much of a conclusion or helpful. Like I like for us to, by the end of our conversation, come up with something either that we're going to do or that everybody can do, or that we're going to do that we can extrapolate to everybody.

4:05And so here's the thing. Basically, he was writing about the major shift of media. And he talked about that newsletters were the surprising giant shift that has happened over the last several years and how major media is now advertising in newsletters. And we have a few newsletters ourselves. You were miles ahead of the curve. I don't know, maybe what, like four years ago, five years ago, before it really became a thing to give you. I wrote a report called the great easing experiment back in 2007. So to say I was ahead of the curve on email newsletters. Well, but, but on the, what was the one that we started?

4:51Maybe it was like five. I mean, it was, it was when you really saw the trend. Cause I mean, there were news, there've been newsletters like forever, but I felt like you really spotted the trend and, um, and talked about it and, and like dove in as you do for your deep dive to kind of own the, the understanding of it. And, um, and you know, I'm just trying to give you props here. It was super, super cool to see how it evolved. We didn't do as good a job as we would have liked in, you know, in either taking advantage of it to create one. Although we do have a few now that I I think are pretty good with decent subscribership.

5:27And, um, and we definitely have not to this day done a good job of advertising in them, which I think is still something that, that we are missing out on that. If you guys aren't doing, you should too. Um, even being able to monetize our own, we're just now saying, Hey, you know, we got a podcast with millions and millions of downloads. We've got a newsletter or two with hundreds of thousands of subscribers. How about if we tell those people, Hey, you want to buy something? So, um, but yeah, that's true. But anyway, so, so his, his thesis was that the newsletter era is over. Um, but then he's, then he's talking about, uh, a continuation or just to me, a nuance on the newsletter era.

6:16And so I loved all the history, but I felt like the conclusion left me kind of flat. And I wanted to see what your proposal, your, your take on it was. Cause what I got from it was he's saying the newsletter opportunity is gone generally. Um, and all these newsletters are going out of business now. Um, and the problem is, is that if you think you're doing great with a 50 % open rate, uh, which by the way, that's kind of a vanity statistic now because of all the intermediary things, then you're in for a surprise because already half your audience doesn't want to hear what you have to say. And the AI bots are coming and will basically be deselecting you from delivery to the people that have subscribed to you.

7:06Although in terms of span traps and algorithms that measure people's behavior and move things from the regular inbox to promotions, I feel like that's already happening. So I didn't see it like as a big breakthrough. I really liked the article and I really liked what he had to say. And I love the historical context, but I didn't feel the conclusion was particularly helpful or maybe even going to happen. So, uh, you know, or, or maybe insightful. What, what was your take on it? Yeah. I mean, so similar. I'm always suspect anytime somebody proclaims the death of something who wasn't necessarily there during the first iteration of it because they don't realize, they think that what they just saw was the first time this thing had ever happened.

7:53Yeah. And really what it is, is it's another evolution of it. And so what you perceive as the death of something is simply another evolution of it. You just don't, you haven't quite looked back as far as you might've thought you looked to get your historical context. So I do believe that there is a massive, massive, massive shift in terms of the way that human beings are gathering information. So we can call that media, courses, there is no doubt. And one of the points that he made in there that I thought was dead on, and what I do believe when he's talking about something dying, that I do believe as a format is going to somewhat, we're going to see die is a strong word, that we're going to see become less and less important because humans are going to value it less and less is the curated newsletter.

8:36So you had a lot of these newsletters, whether it was the hustle, morning brew, these kinds of things, where what you had was human beings going out, scouring the internet, doing a bunch of reading, producing a bunch of very well-written, humorous summaries of what was being read, packaging that up into a newsletter, clicking send and sending it out to everybody. Basically, I'm going to read the internet, everything on the internet about all this stuff so that you don't have to and tell you what matters. As AI comes on board and as AI becomes a part of everybody's life, it becomes that curation mechanism.

9:09And everybody isn't using it today, but everybody will. If you want a simple heuristic for identifying trends, here's one that's never failed me so far to date. As young people get older, do they act more like old people? Or as old people get older, do they act more like young people? It really is that simple. So let's take email, for example. Part of the reason that I got really excited again about email back in 2016, 2017 was the social was coming online. Everybody was saying, oh, email's dead because social's going to replace it. Well, what I was seeing was that young people, as they got older, started acting more like old people with respect to email.

9:56Because young people, when they're in school and they're all on social, they don't need email addresses. Email is stupid. And yet something happened to young people when they got older. They got jobs. And when they got jobs, they got email addresses. And they started using those emails every day. And so young people started acting like old people when they got older. What I'm seeing now with AI, though, and that's why I think email will always be here. And I'm very suspect of anybody who says that email is going to fundamentally change, that the way that we consume information via email, I think newsletters are always going to, email newsletters are going to have a place for the foreseeable future, even if the open rate is only 40, 50%.

10:30I just think that they can't be these curated ones because it's too easily replicable by AI. And what I am seeing is, again, in this case, old people, and I'm throwing up the air quotes, starting to act more like young people in their adoption of AI. So it obviously started with kind of the ussens, the tech crowd. My kids fell into it fairly easily because they're trying to figure out, you know, how do I get AI to write my term papers and stuff like that? So they were directly incentivized to do it. And now my mom, you know, I'm talking to my mom and she's like, oh my gosh, I finally figured out I can, you know, use chat GPT to help me come up with these exercises.

11:07And, you know, I was putting together this part. And, and, and so there's no going back from that. Like AI is absolutely going to get embedded in everything. Humans, every person is going to use it. And it is the best curation distillation tool that mankind has ever seen. So if all you're doing in any aspect of your job, but certainly if you're media, if what you are is an aggregator and a distiller, you're dead. You're dead. Like AI does that so much better than you in seconds. So there's just, there's just no competition. And so many of the newsletters now are just that they aggregate and they distill and they click send.

11:49So many that are just, you know, they're going out like literally i've got some in the music world where i spend some time that they watch other people's videos not even as like a reaction they're just like yeah this thing came out and then they play it and they're like and then this thing came out and they play that and they're just sitting there watching it with and you i guess if you're lonely and need a you know a virtual friend to do it with but daggone it's like you know you could go watch those videos anytime without. So, yeah. Yeah. So I, I, so I think, I think what we're seeing right now with media is, is, is two things.

12:28Number one, and we talked about this on a previous episode, we talked about branding. I think what people are craving is unique points of view, unique voices, and, you know, people who have unique experiences. And, and the challenge that happens is when people start talking about things very often, they stop doing it. And so they become from a media perspective irrelevant. Yeah. That's kind of the first bit. One thing I like about Morning Brew, which I probably, I scan it maybe eight or 10 times a month because the headline catches me. And then I actually read it maybe twice a month because there'll be some sort of thing.

13:10But what I do like about it and what keeps me subscribing to that over a lot of other ones is that it has attitude and it has its own personality. The writers, so, so it's curation with personality and, um, what they could probably do better would be to actually get involved a little bit more, although they would risk losing me because if you go too far left or too far right, uh, you know, it it's, it's a turnoff to me. I like, I want funny entertaining, but I don't really want any agendized political kind of thing going on either way. You know, like I just, it's like, that's I'll get that another place, but let me have my safe havens from that noise.

13:57Um, but let's still laugh and let's, let's look at the, you know, bitcoins at this, you know, and tell me a funny story about it or something like that. Now, now you've infused the fact, the curation was something that's cool. And even if you're curating cool stories there that you're merging with the fact curation, I would actually still argue that that's something that could catch on because it goes to what we talked about on the other episode about branding of now it's more than just the features of we list all where, you know, we're the biggest curator of the most articles wanted anyone never.

14:33Right. You know, but, but like, you know, we make sense of the world for you, you know, or we take the world and make it, but the onion would be a good kind of example. Right. I, I like, I I'm attracted to that, you know, for me and other people will be attracted to other things. If you're, you know, a gun toting, you know, uh, the world is going to end person, somebody that doesn't just put all the bad things in the world up, but then talks about, and therefore you should go, you know, buy a lot of spam and put it in cans and put it in the corner. you know, that, but why, you know, that, like that, that seems to me like something that would still catch on.

15:08Do you have any thoughts about that as an evolution of the curated newsletter? I think it's the only option that they have today. And even that I think is going to be short lived because how far away are we from you? I mean, now that you mentioned that right now that you've said that I'm tempted to go and prompt chat GPT and say, Hey, tell me, uh, I need you to run down of all the, of all the stories and, uh, deliver them in a curated fashion to me and humorous in the tone of morning brew because guess what they could do it right or in the tone of this other person i like so i think if you're a faceless entity then it's going to be so easily easy to replicate at much better margins by ai and so somebody will ultimately do it so they'll deliver an experience that is at least as good if not better at far superior margins so they'll beat you So I think that's the problem.

15:57Now, what wins the game at the end of the day in any email related thing? You mentioned subject line and that's important. But the single biggest variable, bar none, to open rate is your front field. Front field. I mean, if you send me an email, the subject line is irrelevant. I'm opening it, right? So it goes back to the brand. Like, do I like and do I actually want to hear from this? And I'm going to use an intentional term, person. Yeah, person. I think more times than not, what we're looking at is the unique points of view delivered by somebody who we actually want to hear from. So I think that from a media perspective, we're getting away from the from the branded house and the house of brands style media into hyper specific, hyper individualized.

16:46I want to hear what this person's take is on this. And this person's take is on this. From a news perspective, I think the free press, what do you feel about their politics? I think they've kind of got the idea right. If you want to look at a brand that I think has it figured out, because what they actually have is a lot of different points of view. And so you can go to one place and they've curated a lot of different, a lot of smart people who all think differently. So there's one place I can go, but it's not a monolithic thought. like if you go to like an MSNBC or a Fox News it's one place with a lot of different individualized thought and the curation is simply in the these people are all pretty smart idea so from a media perspective I think that's where it's going I think it's going to be really hard to maintain though from a broader media brand because all of these people want to work as individuals I think they're going to wind up just forming collectives and just doing their own things together and and being the centralized media organization that holds everything together.

17:49It's like, okay, great. So you're kind of running our payroll for us. Thanks. I just think that the value add is going to be limited in this kind of new world that we're going into. So I'd be very, very cautious about doing any type of media startup today. And incidentally, I feel the same way because I'm saying media, but I would expand this to all information aggregation. I think same thing in the course business. Nobody really wants to do a course anymore. I think everybody, and I think it's a combination of post-COVID, everybody bought courses and everybody realized like, oh, so if I buy a course, I don't instantly know how to do this thing.

18:27I actually have to learn it and go through it and that's hard and then do it and that's hard too. But I also think in an age of AI, we're just expecting the information to be fed to us. It's like nobody expects to learn how an internal combustion engine works to then drive a car. You just get in a car and go. I think the future of course businesses, they're going to service way more as internal trainings for service-based businesses. And that's the question that I'm asking across the board, like a digital marketer, historically a course-based business in a world that I think is valuing courses less and less and certification less and less.

19:05I'm looking at our different products and saying, how can we stop teaching people how to do this and instead use this as the basis for training internal teams and for training AI for prompting to then have an AI enabled service and just do the dang thing for them. I think that's where people are headed. With agents coming along, which is another episode we want to do, I think that will be absolutely doable for a digital marketer. Yeah, for sure. And I think that's where all these things have to go. So, I mean, I think if we go back to the article, he said, how can you protect yourself from this as an agency?

19:44He said, create content that can't be summarized. I'll buy that, right? I think all content can at some point be summarized. I would argue, create content that somebody doesn't want summarized because they want your point of view. They want all of it. They want to hear from you, right? I will tell you, and I don't know if you do this, but like, I will not buy, I will not buy abridged books. I will only buy unabridged books. I don't want a summary. If I'm, if I care enough to get in it and, and I've tried subscribing to, um, is it blink and a couple of other, like there there's three or four of those book summary services.

20:23And I think they're, maybe they could like do a better job of summarizing because I, I don't want, when I read a book, I find that they put way too many stories in. I know we just finished one where they kept saying, put more stories in. It's like, okay, you know, and I get it. But at the same time, like, you know, when I, when I'm reading a book that's nonfiction and it says, take the story of John. And I'm like, okay, let me find where they stopped talking about John and get back to the stuff. Cause it's, it's a waste of my, you know, it's a waste of my time, but people like it. So I don't know how to deal with that.

20:55But, but I don't want summaries is my point. Like if I care enough to go into it, I don't want summaries, but to kind of push back a little bit on what you were saying about moving into internal. So it's really though, it's still a course. Um, if you're doing train training of internal teams, uh, it's still a, you know, course maybe in a different form or under a different name to a different market. Sounds like that's more of, it's more form and audience than it is that we're not saying that these things are valid anymore. It's that the end user audience wants it less, but so it's more training the trainer kind of stuff.

21:37I think you still need to be able to, yeah, I think you absolutely, if you're in any type of information dissemination business, you still have to know how to do that well. Because I still want a course. I still want a course in how to play piano. I still want a Like if I'm learning something, you know, there's a software thing that's just gotten updated to a new version. I want the course in it. I've been waiting for the course to come out because it's organized and the course will actually take less of my time than any other way for me to get it. I think there will always be a market for it.

22:12I just think that what we saw as like everybody wanting it, and this is a massive emergence. I think that's not there. And I think that there, again, are young people acting more like old people as they get older or old people acting more like old people as they get older? I think as things are headlong, more people are saying, I don't want to learn it. I just want it done for me. Or I can just go and pull the recipe straight from, you know, Chad, it'll just tell me how to do the step-by-step. I don't need to learn all the stuff behind it. We didn't have that as an option before. AI now does. You kind of had to learn it.

22:43Now it's like, no, no, just do this and this and this and this and this. So I think like, so going like, like recapping though, I do think creating content that can't to be summarized. I think that's tough. I think creating content that's so good that people don't want it to be summarized. They want to hear it from the horse, like straight from the horse's mouth. They want to hear your take and they're excited to do it. The second point of not, how do you protect yourself? Owning the relationship beyond the email address. So making sure that you can connect with people through SMS lists, community spaces, having direct relationship.

23:18Yeah. I mean, that's, to me, that's, that's kind of obvious. Like if you were only own a single channel of communication with your audience, that's always going to be problematic. I think that. And God forbid that you don't even own that, that you're going through Substack or some other aggregator or social media, and that's where your audience is so that you break the rule one time or don't, but they think you did and it's gone. Your entire audience. So you got to have that. And just the first person media and the changes in privacy and advertising, you got to do that. Get them in as many places as you can, for sure.

23:52And defining, I think the biggest mistake, one of the biggest mistakes that entrepreneurs and business owners make is defining the business by the products they sell or the services they offer, as opposed to the people they serve. And so, yeah, if you define yourself as I run a newsletter business, that's so limiting, right? Define it by the audience that you serve. And one of the ways that you serve them is a newsletter, but you can also have SMS, you can have events, you can have all of these other things. And so So definitely broaden it out. Think about it as a market-centric business, not a product-centric business.

24:22Totally agree with that. I just don't think it's anything new. I would argue that's been business forever. Coco Chanel got that. She didn't define herself by the little black dress. Yeah, anyway. Whereas other companies that are in the wastebasket of business did, and that's why they're not here anymore. Blockbuster. um the other last one don't be a commodity again most e-commerce brands failed because they uh sold generic products most newsletters will fail because of the same reason if you aren't differentiated you will be replaced i feel like that's kind of saying point one if you can be summarized and then you're pretty commoditized yeah so so if your business is summarizing you're kind of screwed right i mean like if i go and read you know i get why a high school or a junior high kid is gonna is gonna read spark notes or something like that for a book that they don't really want to read like i don't really want to read tom sawyer like i'm gonna go read i don't want to read the situation yeah right but if somebody is actively looking to consume your information they should not desire to have it summarized so the audience that you want then is the non-summarizing wanting audience, right?

25:42That's an important distinction, I think, to make. And to produce content, information, media that is so good, they don't want it summarized. They want the whole piece there. You don't go to nobody. You know what? Nobody speeds up because I'll listen to people are probably listening to this right now on 1.5 speed. Yep. You know what? Nobody speeds up music songs, you know, they want to hear it in the way that it was intended to be recorded. So, cause it's, cause it is an audio first medium. I think you're looking for different thing though. When, when you're listening to songs, you're not trying to gain information.

26:15You are desiring to be entertained. Um, and if I, so I can listen to a book that's a nonfiction book, I'm much more likely to listen to it at regular speed, depending on the narrator. Um, whereas if I'm watching something like this, um, I'm either it's on and I'm in the car and I don't care or I'm listening. Like I want to know everything there is about this. I'm in rapid consumption, you know, voracious mode. And what I'm going to do is I'm going to put it on, you know, as high as I can without it clipping and skipping because I want the information. I don't want it summarized because I don't want to miss anything.

26:53I have FOMO there, but I also want to consume faster than I am able to consume it faster than the delivery mechanism. So speeding it up is kind of like plugging into the matrix, you know, and learning how to fly a helicopter or something. So I think that's it though. But I think it's a big, big thing that yes, you don't want to give information that can be summarized, but even more importantly, you want to find the people who don't want it summarized. And that if you can do that, then that's your audience. And you don't need a ton of those people to be wildly successful. I agree. Yeah. And it's an imperfect analogy, but you said what I was in a much better way than I was trying to say it.