Tangle Hits $1M in Subscription Revenue. What Comes Next?
By: Christiana Sciaudone
Political newsletter Tangle hit the $1 million revenue mark this summer. What’s next for the five-year old digital media venture?
Founder Isaac Saul has several ideas, the basis of which is his need to decouple—at least a little bit—from the brand. Hiring staff for editorial and growth is key. The question now is how to fund those new positions: go out and hire on the assumption growth continues as is; attract an investor; sell part of the company or find a strategic partner and go under the umbrella of a larger media organization that can help scale Tangle, while taking some of the risk off the table.
Conversely, Saul said he could keep the team to what it is today and find more efficient ways to work, perhaps hiring part-time help, and trying to create a handful of very lucrative jobs rather than a larger, average-compensated team. He currently has four full-time employees focused on four areas:
- Social media and ad operations
- Managing editor, runs Sunday newsletter
- Podcast and YouTube producer/editor
- Editor and media relations
The newsletter also has two part-time copy editors and four interns: Social media, business dev, editing and communications.
“Candidly, I don’t really know what we’re going to do,” Saul said in an August 27 video interview. Regardless, they are solving for the most immediate issue, the one where Saul is overworked and overinvolved. That should clear the way for franchising Tangle to other states or countries, or getting involved in topics like sports or culture. And then there’s the YouTube channel that’s suddenly showing plenty of potential.
Tangle has about 120,000 newsletter subscribers, and 90% of revenue comes from paid subscribers, which tries to bridge the giant political divide in America that shows no signs of shrinking. Tangle illuminates how both the left and the right cover a particular high-profile news story, and then Saul chimes in with his own take, all while trying to skirt potentially controversial language (think pro-life versus anti-abortion). While there will always be extremists on either side who insist there is only one way to look at an issue, Tangle appears to have appealed to those who have tired of the hysteria.
Still, the newsletter needs money to make money, and Saul is keen to invest in advertising on social media and in other newsletters—though it’s never quite clear what will pay off. Case in point: Saul cited a recent ad they ran in National Review’s main newsletter, which has about 500,000 subscribers.
“It just totally struck out,” Saul said. On the other hand, Saul’s friend, famous YouTuber Marques Brownlee, gave a shout out to Tangle at the end of a tech review video for his 19.3 million followers and that translated to some 3,000 to 4,000 signups for the free newsletter—and that’s not an avenue Saul would have ever thought to explore. The lesson learned? Try everything at least once.
“Generally speaking, I find that you’ll get some wins in places you don’t expect, and they’re worth trying to repeat,” Saul said.
Whether Saul will sell all or part of what he’s built depends on a lot of factors, including whether or not it would be a good fit, which limits the pool pretty quickly. A traditional media valuation would put Tangle at about $6 million to $7 million, he estimated, but he thinks that given the potential revenue, it’s worth a lot more. But he also doesn’t want to hang on too long and see a downturn with, for example, new technology that would perhaps negate the earning potential of newsletters. For the record, he’s not afraid of artificial intelligence taking over, at least not in its current incarnation. He’s tried to use ChatGPT to write a newsletter and found the results robotic, error-filled and lacking in personality.
“I’m sure it’ll get better, but I don’t really view it as a threat, and I don’t worry about it,” Saul said.
The newsletter remains the core product, but the lowest hanging fruit for development is improving the YouTube channel, which started out as a place to read out the newsletter, more or less. It’s evolved into a more dynamic, made-for-video format.
“We already have 10,000 or so subscribers on the channel, and even though we haven’t been doing great with it, it has grown faster than the podcast channel,” Saul said. Tangle can reach a younger audience and a more global audience, and videos have “discoverability, virality, all the things that newsletters don’t inherently have.”
He’s still cautious about video and podcasting, having seen media companies fail after having a really successful product and then expanding too fast, or overreaching, and then seeing that core product subsidize others until everything crumbles.
In the meantime, he takes satisfaction when, on a daily basis, readers reach out and tell him about canceling other media subscriptions and only reading Tangle.
“If we’re taking people off Twitter and Tiktok and Instagram and they’re deciding to invest enough as a news source, that’s a huge win,” Saul said. “Maybe a half a percent of the people who start reading our newsletter will do that. But you know, if we get a few million people on our mailing list, it’s a lot of people, and we’re fundamentally changing the way people are consuming the news. So I’m really excited about that.”
