Meta, which owns Facebook, is killing Bulletin, its newsletter product. Substack, a much-ballyhooed newsletter start-up, has cut back on advances to writers. The Atlantic is retooling its newsletter deals with writers.

After a rush of excitement around the potential for paid email newsletters to transform the media industry, there are indicators that the bubble may be popping.

“Text on the internet is arguably the most competitive medium in all of human history,” said Ben Thompson, who writes Stratechery, an influential media and tech publication. “If you’re going to ask people to pay for a newsletter, it has to be something they’re not getting anywhere else.”

Email newsletters have been a part of the publishing tool kit for decades, powering media start-ups like Politico, Semafor, The Ringer, Axios, Punchbowl News and Puck. Amid the noise of social media, journalists use newsletters to forge direct connections with readers, persuade them to pay for news and deliver them advertising.

In recent years, the humble email became a star in its own right. During the pandemic, media companies sought to cash in on a surge of excitement around the format from both readers and writers. But the fast-changing priorities of tech giants and the unforgiving economics of digital media have led to a reckoning at the inbox, as executives take a harder look at deals they struck with writers.

“Everybody had time to both create and consume,” said Jacob Cohen Donnelly, the publisher of the Morning Brew business news outlet and the author of the newsletter A Media Operator. “As the world has started to open, people don’t have as much time.”

The Atlantic has been one of the most prominent recent adopters of email newsletters. Last year, Nicholas Thompson, the chief executive, rolled out a program that allowed writers of certain newsletters to rack up major bonuses if they converted readers to Atlantic subscribers. At the upper end, some writers could earn total annual compensation approaching $400,000 if they converted 14,500 readers, according to people who spoke anonymously to discuss the details of confidential deals.

Newsletter writers were also paid a base salary, some exceeding $100,000, and some hit less aggressive targets for lower compensation.

The program attracted writers such as Charlie Warzel, Molly Jong-Fast and Nicole Chung.

But many of the targets proved too ambitious, and The Atlantic is reassessing the way it structures those deals, Mr. Thompson said in an interview. The company has offered to extend the contracts of its newsletter writers to assess how the emails affect the likelihood that readers maintain their subscriptions. Still, he said that the newsletter program had most likely made a small contribution to The Atlantic’s bottom line and that the company planned to continue the program.

“It’s not as hot and as frothy as it was 16 months ago, but I also don’t think this is the end of newsletters,” Mr. Thompson said. “There are going to be lots and lots of successful newsletters.”

The Writer Malcolm Gladwell, Wearing A Plaid Shirt, Leans Against A Wall Looking Forward In A Portrait.
Meta is shutting down its newsletter product, Bulletin, which featured writers such as Malcolm Gladwell.Landon Speers for The New York Times

There have been setbacks for email newsletters elsewhere. Meta said this month that it was shutting down its newsletter service, Bulletin, which included writers like Malcolm Gladwell and Mitch Albom. The New York Times has seen some prominent newsletter writers, including Kara Swisher and Jay Caspian Kang, depart for other opportunities.

And Substack has curtailed upfront payments it was making to lure writers to the platform, after scrapping plans to raise money and laying off some of its staff members, people familiar with the start-up’s operations said. The Information, a publication that covers technology and finance, earlier reported on Substack’s decision to cut advances.

One of the most-read politics publications on Substack, The Dispatch, moved off the platform last week. In an interview, Jonah Goldberg, the editor in chief and co-founder, said the publication “outgrew” Substack.

“Substack really wants to be a platform that is sort of forward-facing and is about Substack,” he said, adding, “We wanted to be our own independent media company.”

In an interview, a Substack co-founder, Hamish McKenzie, said it was inaccurate to associate Substack with other media and tech companies that had cut back on newsletter products. He said the company was more similar to tech platforms like Twitch and OnlyFans, which connect creators to financial supporters through a wide variety of formats including podcasts, not just email.

“The secret sauce of Substack is enabling that sense of ownership and independence for the creator or the writer, and it’s expressed through the direct relationship they have with their audience,” Mr. McKenzie said. “Email is a useful means to achieving that end, but it’s not the end.”

Substack’s co-founders, from left, Hamish McKenzie, Chris Best and Jairaj Sethi.Lauren Segal for The New York Times

Substack, like the other privately owned newsletter start-ups, doesn’t publicly disclose its finances or profit projections, but people familiar with the matter said in May that its revenue was about $9 million in 2021.

Newer entrants are also swerving away from email after experimenting with the format. Zestworld, a digital comics platform, initially modeled itself on Substack, emailing graphic stories from creators signed to exclusive deals. But when user growth plateaued one quarter after the service had begun, Zestworld realized that email wasn’t a natural environment for entertainment content and switched to publishing on its website. Growth has since rebounded, said Chris Giliberti, Zestworld’s chief executive.

“It’s really hard to control the user experience in email,” Mr. Giliberti said. “You can’t do a lot of rich, interactive stuff.”

This is not to say newsletters are going away any time soon. Some companies have found success with the format. Puck, a newsletter-powered media company that is approaching 20,000 paid subscribers, has recently held talks with potential investors with a goal of raising about $15 million at a valuation of at least $75 million, said two people who requested anonymity to discuss confidential conversations.

Jon Kelly, a co-founder of Puck, said subscription newsletters were part of a new model for publishing, comparing them to magazines in their heyday.

“If you take a look back to the history of the magazine industry, it was a business that had a total addressable market that ranged in the tens of billions of dollars focused on affinity-based creative products that people subscribed to because they absolutely loved them,” he said.

Mr. Kelly said Puck’s paid subscriptions had grown an average of 20 percent each month, but he declined to comment on any fund-raising conversations or the company’s revenue or profit targets.

Mailgun, the email delivery service used by Substack and Ghost, said the online publishing industry had more than quadrupled its sending volume over the last two years. The New York Times is continuing to add to its newsletter offerings for subscribers, including one written by the restaurant critic Pete Wells that began this week and another by the opinion columnist Ross Douthat that will come soon, a spokesman for the company said.

Emily Nunn, the writer behind the newsletter The Department of Salad, is one of Substack’s most popular.Melissa Golden for The New York Times

Many writers continue to benefit from the burst of enthusiasm around newsletters. Emily Nunn, a food writer who has worked for The New Yorker and The Chicago Tribune, writes a twice-weekly newsletter focused on salad that generated more than $20,000 in March 2021, the month after she began charging subscribers. Sign-ups have increased steadily since then, and Ms. Nunn said her newsletter, The Department of Salad, provided much more income than any of her previous journalism jobs.

“The salary that you get going in at newspapers rarely takes a leap,” said Ms. Nunn, who got an advance from Substack. “You can win a Pulitzer Prize, and they don’t say: ‘Here’s a nice chunk of change. Thanks for being you.’”

A co-founder of Axios, Jim VandeHei, said his company’s newsletter engagement was higher than ever, especially among influential readers.

“But I’m sure the market for crappy newsletters few people are reading has collapsed,” Mr. VandeHei said. “It’s not peak newsletters — it’s the end of weak newsletters.”

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