How Much Will it Cost to Launch My Magazine?
by Cheryl Woodard, Posted December 2008
In my experience, you can find a way to publish on almost any budget. That’s why it is so hard to give a simple answer when people ask me, “How much does it cost to launch a magazine?” Coming up with a budget requires that you first define exactly what kind of magazine you plan to publish.
I am bound by confidentiality agreements that prevent me from sharing precise information about what my clients are spending on their magazines. But I hope that these general observations, which are based on public documents, will help to answer the cost question.
High Cost Publishing
The most expensive type of publication that I work with as a consultant are popular magazines with paid subscriptions and also retail bookstore or newsstand distribution. Generally, these publishers employ at least a dozen people full-time and spend $6 million to $9 million per year, depending on the number of print issues produced every year, and the number of pages in each issue. Here are some factors that drive the costs for these publishers:
- Retail distributors generally require that each issue contain 80 to 100 pages or more.
- The minimum frequency is quarterly.
- Design must be at par with other newsstand magazines.
- Publishers generally must have a website that is updated at least weekly, with features comparable to other publication websites.
- At least a few of the writers and editors must have nationally recognized names and professional journalism skills; content must meet the standards in this category.
Recently, these publishers are finding that online advertising is as important to them as print. And some are even earning more from online ads than from their print magazines.
I picked Mother Jones as an example because you can go out and buy a copy to see what the magazine's production value looks like - and visit the MotherJones.com website to see how much content is provided there. Mother Jones magazine is not my client – I have no inside information about them – but this is a good example of the magazines in this category: Published six times a year, the magazine issues typically run about 100 pages. Roughly 300,000 copies were sold to subscribers and retail buyers in 2004. Based on the Form 990 filed by Mother Jones that same year, the publishing expenses were about $7 million dollars:
$1,900,000 for staff salaries, taxes, benefits; $800,000 for articles and artwork from
outside contributors; just over $1.2 million for Paper, printing, postage; about $2.2 million for Circulation marketing and fulfillment; and $900,000 for overhead expenses.
In the same year, the magazine reported total subscription and advertising revenues of $4,600,000, which means there was a deficit in 2004 of about $2,400,000 that was paid from grants, donations, and other resources of the nonprofit organization.
Nonprofit magazines going to members or donors – that is, publications that forgo paid subscriptions and retail copies - are generally held to a completely different standard than newsstand or paid subscription magazines. Consequently, they usually spend significantly less in every budget category. Issues have fewer pages, for example, and writer fees are much lower. Commonly, the accompanying website is updated once a month (or less often). These publishers spend somewhere in the range of $2 million to $4 million per year. Some of them break even or make a small profit, but a great many of them depend on subsidies from a parent company or organization.
Besides saving money on the issues themselves, publishers in this category eliminate the subscription marketing, fulfillment and newsstand promotion expenses that amounted to about $2 million for Mother Jones. These publishers generally own their own database of members, donors, or clients. And the cost of growing the database or maintaining it usually falls under a fundraising department, or membership services.
I can speak generally about one association magazine client, who spends about $2 million annually to produce six issues with generally comparable circulation to Mother Jones. Staff is limited to four people, instead of the dozens employed at Mother Jones. The website is much less comprehensive, issues have fewer than 60 pages apiece, and most of the writing is produced by staff rather than outside contributors. This magazine brings in about $400,000 in advertising revenue per year, which helps to offset publishing costs. Not counting any income from membership dues, the net magazine publishing loss is around $500,000 per year for this association.
I know only a few examples of stable, successful publishers who are spending less than $2 million per year on a magazine. None of them have paid subscriptions or single copy sales. All of them are designed to communicate with the publishers’ clients, donors, members or customers.
In this spending range, publishers generally produce issues with 24 pages (at the most). Editorial staff usually writes and edits all stories. In some cases, the editors also shoot their own digital photographs, and in one or two cases that I know of, the editors also handle page layouts and other design or production functions. There is rarely any sort of meaningful website content in this spending category. At best, the magazine issues are loaded up in PDF format for users to download, and there is no original website content (besides the print magazine pages).
Some of my clients in this category do generate some advertising revenues by selling ads to companies closely aligned with their editorial mission. For example, I have a client in the home health care field who sells several thousand dollars worth of ads for diabetes testing products and other self-care devices in every issue, even though the magazine reaches less than 20,000 people.
Figuring Your Costs to Launch
The fast way to estimate your own publishing costs for a new magazine launch is to pick a role model magazine and study what they’re spending. Look for publications with a similar editorial mission that reach roughly the same number of people, with comparable issue pages per year. Then study what that magazine is doing online and in print, how many people seem to be working on it, and what kind of revenues it appears to be producing.
Before you start, gather enough money to produce two years’ worth of issues – even if there are zero advertisers in that period – because it can take that long before advertisers will enthusiastically support a new magazine.
Another trick: resist the temptation to hire a lot of people as staff. Instead, keep as many people on freelance contracts as long as you can. And use outside services to handle as much of the work as possible.
We help publishers write business plans and launch new print and online magazines of every size. Feel free to email me if you need help. And you can find our services for startups listed here.