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Published May 13 2013

Financing the Magazine

by Peter Biľak

When you buy a copy of any magazine at a newsstand, your financial contribution to the magazine itself is generally very small. WTW is different.

When you buy a copy of any magazine at a newsstand, your financial contribution to the magazine itself is generally very, very small; the lion’s share of the cover price actually goes to the distributor. Generally speaking, the primary source of funding for magazine publishing is not sales, but advertising. And while in 1970 the ratio of advertising to content was 46% to 54%, today those numbers have been reversed¹, a trend that devalues magazines in two ways. First there is the obvious and unpleasant fact that editorial content (the stuff you pay money to read!) is getting less and less space in the average magazine. Second, and less obviously, there is also the very real tendency to choose content that suits the magazine’s advertisers, rather than its readers.

When we announced WTW, we introduced a different operating philosophy. Our readers made the magazine happen. They helped eliminate the influence of external investors, because they became the investors. They helped eliminate the need for traditional distribution by becoming distributors. Now we are in a position to complete the process by reducing advertising with the goal of eventually being an ad-free, reader-supported publication.

A few days ago, we announced our new patron programme to help reduce advertising. Since then we have also received some good questions:

This is very compelling to me, as I have enjoyed the initial issue immensely.

Do you mind sharing a rough production cost of the magazine? I am just curious as to how best to level-set a recurring contribution.

Benjamin Listwon

Readers raised €29,321 during our crowd-funding campaign. We’ve spent roughly 13k on design, printing, lithography and binding, 7k on authors’ honorariums, 4k on shipping costs, and a significant 25k on website development. Everyone in the process — designers, writers, photographers, researchers, editors, proofreaders — gets paid (except for myself, that is). At present the development cost is very high as it includes creating our own publishing platform that allows us to generate and edit digital content, export texts to InDesign, etc. (More about our collaborative online editing environment in a future blog post.)

Web development is an ongoing cost, but if we spread it across 2 years (4 issues), then the cost of magazine production comes to about 30k per issue. This is good news: it means that we are breaking even, and if the number of subscribers grows, maybe in the future I will get paid for my time too. The print run for the first issue was 3100 copies (plus the digital version), so the cost per copy is fairly high, which explains WTW’s cover price.

In the first issue, advertising contributed about €8k. We’ve decided that the second issue will carry only the two adverts that we have already committed to, which creates a gap in our financing. We hope to cover it by involving you, the readers, again. 3