With his usual mordant pen and Eeyorishness, Kevin Michael Grace runs the numbers on a Canadian Right online magazine:
Myles Wilson and others have suggested a fund to facilitate a Canadian Internet publication like Lew Rockwell’s. For several months, I have argued in favour of a for-profit Web magazine priced at C$19.95 year. Fifty thousand subscribers would mean just under a million in annual revenues, which would leave enough after expenses to pay two editors and buy about C$400,000 in freelance contributions. But everyone responds, why buy the cow when the milk is free? Look at Slate. Look (if you dare) at Salon. My answer to that is that the "added value" in Report subscriptions was about C$50 a year, and that I could offer readers a timelier, better publication for C$30 a year less than that. But, as I say, I have not been persuasive. It is my strong belief that text-based, dead-tree magazines will be extinct by 2010. Someone has to lead the vanguard. Why not me?
The flat rate subscription makes sense - the question being are there 50,000 people willing to pay it? I forget uberblogger Andrew Sullivan's numbers but his pledge drive netted around $60,000. He does this twice a year. But he is running nearly 100,000 hits a day some days.
My sense is that Grace is still thinking in dead tree terms when he does his expenses.
First, what expenses? If you really worked at it and larded in an office and a business internet connection You might break $50,000. But that way lies madness. The key thing about the net is that there is no need at all for an office. If you have the equipment to blog you have the equipment to edit an online publication, naked, in the comfort of your own home.
Now, there might be a marketing expense; but that should be very carefully scrutinized. Likely a webpublication would be better off running blogads and very small banners on key sites in Canada and the US rather than spending money on dead tree media.
As for freelance: for sake of argument - and having cut expenses radically - let's say you arrive with $520.000 for a year of freelance articles. 10k a week.That is either not nearly enough or five times that it should be costing. Not nearly enough if you want to hire Mark Steyn, Andrew Coyne and a couple of other stars plus pay a decent word rate for reporting. Way too much if you look at what the competition pays. The starting go for a 700 word article at TechCentral is 150 USD and they have more good material than they can use.
If your weekly news budget is 20,000 words - which would be more than enough on the net - $5000.00 Canadian would be lavish by web standards. But, and this may be the critical fact, there is an awful lot of excellent material which could be got for less than that at the outset provided that the authors felt a part of it.
Grace is absolutely right that the day of the dead tree magazine is ending - but the economics of the treeless publication are not going to make much sense until advertising in large chunks is available. Until then running on a shoestring is both possible and desirable on the net. (The elephant's graveyard of online publishers is filled with people who thought "burn rate" was a business concept.)