Creating digital magazines has been cheap and easy for more than two years; digital magazine marketing just caught up
“For $10,000 per issue I can create a magazine that the big boys can’t produce for $250,000. Apple and Amazon have given me a distribution platform where I can compete head-to-head. The big magazine companies have no idea where the industry is going.”
The above comment was shared with Don and me at a magazine industry event. The person who made the comment is a veteran magazine industry professional, who was recently laid off in yet another round of staff downsizing from a legacy magazine publishing company.
At first, we wondered if her comments were just sour grapes. While she is angry about losing her job, she’s not taking the matter lightly. She is launching a new digital magazine aimed at a niche that is covered in part by her former employer. Here are a few highlights of her business plan:
Digital only: her new special interest magazine will only be produced in a digital format suitable for consumption on the Apple iPad, Kindle Fire, Android devices and any other device capable of displaying HTML 5 via its web browser.
Retail partners: while she understands that Apple, Amazon, and Google are currently rushing to sign the big boys’ titles, she is confident that an automated process will soon be in place to approve new titles similar to the Kindle self-publishing program and the Apple App Store.
Subscription website: while the big boys seemed perfectly content to distribute their digital magazines exclusively through third-party retailers, she’s building a robust HTML 5 subscription website that will include a flip magazine issue archive, and an HTML 5 article archive and plenty of opportunities for subscribers to discuss individual magazine articles, and post their own relevant user generated content.
No employees: while she has partnered with a number of freelancers and service providers, she will have no employees, no office and little overhead.
Limited advertising: her business plan calls for no advertising revenue, however she is actively negotiating e-commerce deals with a number of online retailers in her space.
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I like to think of myself as a forward thinker. After all, it’s my job to help entrepreneurs launch successful, new online niche media businesses. Still, I am impressed by the simplicity, audacity, and timing of her plan.
From all I can see, Legacy magazine publishers will be slow to adopt a business model like the one described above. It seems likely they will remain advertising focused, spending most of their energy trying to aggregate audiences that can compete with television and the large Internet portals.
The magazine industry is heading into an entrepreneurial phase where Single Author Magazines using a business model like the one I’ve outlined below will drive much of the growth.
| Single Author Magazine | ||||||
| Business Model Summary | ||||||
| Line Item | 2015 | 2016 | 2017 | 2018 | 2019 | |
| New Subs Sold | 5,000 | 7,000 | 9,800 | 13,720 | 19,208 | |
| Annual Price | $29.97 | $29.97 | $29.97 | $29.97 | $29.97 | |
| New Sub Sales | $149,850 | $209,790 | $293,706 | $411,188 | $575,664 | |
| Renewal Subs Sold | 2500 | 5500 | 9300 | 14300 | ||
| Annual Price | $29.97 | $29.97 | $29.97 | $29.97 | ||
| Renewal Sub Sales | $74,925 | $164,835 | $278,721 | $428,571 | ||
| Total Sub Sales | $149,850 | $284,715 | $4585,41 | $689,909 | $1,004,235 | |
| Cost of Sales | $44,955 | $85,415 | $137,562 | $206,973 | $301,270 | |
| Net Sub Sales | $104,895 | $199,301 | $320,979 | $482,937 | $702,964 | |
| Content Services | $60,000 | $60,000 | $60,000 | $60,000 | $60,000 | |
| IT Services | $60,000 | $60,000 | $60,000 | $60,000 | $60,000 | |
| Consulting | $21,600 | $21,600 | $21,600 | $21,600 | $21,600 | |
| Overhead | $30,000 | $30,000 | $30,000 | $30,000 | $30,000 | |
| Capital Infrastructure | $50,000 | $50,000 | $50,000 | $50,000 | $50,000 | |
| Total Operating Costs | $221,600 | $221,600 | $221,600 | $221,600 | $221,600 | |
| Gross Compensation to Author | ||||||
| ($116,705) | ($22,300) | $99,379 | $261,337 | $481,364 | ||
If you’re a domain expert, welcome to the digital magazine revolution.
If you’re a legacy publisher of mass circulation magazines, prepare to have the little guys rock your world.
If you’re working on an independent digital magazine launch, tell me about it here.
Good luck, and best wishes for success.
This article was originally published in 2011 and is updated frequently.
hi-I have an independent digital magazine, the Herbal Collective. I would love to connect with more independent publishers.
What a timely article! I’ll be launching a digital-only magazine in January for travelers returning from an extended trip abroad. With a journalism degree and graphic design skills, digital seems to be the way forward for someone with my background. There are few start-up costs and a market that is increasingly moving away from traditional print media.