Posted by: Matt Shanahan
The New York Times article about upcoming mobile magazine Nomad Editions has a reasonably detailed description of the proposed business model. Nomad Editions plans to charge $24/visitor/year as a subscription fee. Additionally, Nomad Editions plans to generate revenue from advertising, but it appears to be a small portion compared to the revenue expected from subscriptions.
The fee of $24/visitor/year provides access to a particular “edition” (i.e., section on either food, movies, surfing, etc.). Editors of an edition will take 5% of the revenue ($1.20/visitor/year) and writers will take 30% ($7.20/visitor/year) of the revenue. This means that 65% of the revenue will go to development, operations, and profit or $15.60/visitor/year. The article also states that a writer should be able to make between $50,000 and $60,000/year from an audience of 50,000 visitors.
Each edition will be published weekly with 1-2 longer features and 4-5 shorter articles, or about 6 articles per week. It is reasonable to think that the 6 articles/edition/week would take up to 6 writers/edition/week. So does the projected $24/visitor/year cover the writers?
With those bottom up numbers, let’s see what it would be top down. 50,000 visitors at $24/visitor/year equates $1.2M/year. The writers’ share of the revenue would be 30% of $1.2M or $360,000. Splitting that up across 6 writers equates to $60,000/year/writer which matches the upper range quoted by Nomad Editions. Editors would make $60,000/year/edition (their 5% share). The remainder would go into development, operations, and profit.
$24/visitor/year = 6 writers for Nomand Editions in digital equilibrium.