$24 of Revenue Per Visitor Equals 6 Writers

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.

About Matt Shanahan

Matthew Shanahan brings Scout Analytics nearly 25 years of experience in the execution of business transformation. His specialties include business model innovation and new market development.
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