The Free Circulation Model goes to the Internet

With the birth of the Internet, and its inherent leveling of the distribution market, came the rise of the 'free' philosophy. Anybody could write articles and essays, and put them on the web for free. This was followed by the growth of the pirated music industry, and as broadband use spread this even extended into the movie market. As a consequence, the 'free philosophy' of the Internet, and the tools used to do so, have become negative topics. However, the intelligent publisher will find much of use if they are prepared to think outside the box.

In the past, magazine publishing has generally been via one of two circulation models (or a hybrid of both): paid and unpaid. Paid circulation is when a magazine is just that - paid for by subscribers and news-stand sales, which provide a significant portion (or all) of the total revenue of the magazine. On the other hand, unpaid circulation works on the principle that the publisher builds a large readership by giving the magazine away to a certain target audience, and raising revenue from advertisers wishing to reach that particular audience. The essence of unpaid circulation is that the higher number of readers, the more you can charge per page of advertising (because each ad is reaching more people), while as the number of copies increases, your print costs (per copy) decrease because of the economies of scale.

In the past, the break-even point for unpaid circulation was relatively high, as enough advertising was needed to cover the costs of printing and distributing the magazine. However, the advent of the Internet provides a unique watershed for the unpaid circulation model, with electronic versions (eg. via PDF requiring no print costs, and extremely low overheads on the distribution front. The only requirement for the publisher - considering they are offering something for free - is that they are able to reach enough people to let them know about their offering. If they can do that, then they have a product which may be of interest to advertisers. The key, obviously, to pursuing the unpaid circulation model, is being involved with a subject - and audience - which lends itself to advertising.

So how does a publisher build the audience for his magazine? To begin with, things are in their favour, as they have something free to offer. The most important thing then is to make sure this free magazine is something that people want - so make it quality, make it informative, and make it something that the audience will want. Whether that's the best recipes for a cooking magazine, or the exclusive insider interview with the hot whiz-kid entrepreneur for a financial magazine, then make it happen. Additionally, whatever the magazine, it has to contain something that will create a buzz in the community. Ideally, the publisher of a free Internet magazine needs to get an exclusive or controversial news story out of one of their features - for example, getting the whiz-kid to point out his investment tips for the next year. Once the publisher has gold, it's then up to them to sell it to the community, by spreading word through blogs, mailing lists and news sites.

Distribution of the magazine is quite simple and economical compared to a print version. It's just a matter of having somewhere to store the files and be able to link to them. The server considerations are parallel to your expected audience. For example, each issue of our electronic magazine Sub Rosa is downloaded by approximately 10,000 people. Each issue is around 10mb in size. Therefore, we need a server that has at least 100Gb of transfer allowed (probably a fair bit more, to give us wriggle room in the case of a 'best-seller'). The cost for that setup is under $US100 per month, something that we can recoup through advertising (plus we host numerous other sites on the same server).

In the case of a magazine that is looking at 100,000 copies and upwards, there are other options, particularly those currently used for distribution of pirated material. Despite their negative perception, much of the peer-to-peer software offers a cost-effective way of distributing completely legitimate files, and the 'free' philosophy of many in that community can also be leveraged to increase your download numbers. Bitorrent is a system whereby each user downloads the file from each other, which negates the need for a server with large bandwidth. Additionally, many websites allow you to submit your downloadable file to their directory, ready to be snapped up by eager torrenters interested in the topics you are covering. There is so much untapped potential in this area, I'm surprised more use hasn't been made of it by magazines pursuing unpaid circulation.

Perhaps the one difficulty that might face a publisher using the unpaid circulation model on the Internet, is in convincing advertisers that an ad in an online ad is worth a similar amount to one in a print magazine. Certainly, there are drawbacks. The coveted back page ad, so often seen when a print magazine is put down on a coffee table or elsewhere, doesn't hold the same attraction online. However, the wily publisher can also use the differences in their favour. PDF files these days can have embedded links, so readers can click on them and be taken straight to a website. Furthermore, audio and video can also be embedded into PDFs (and of course into websites) - so, for example, a movie could be advertised with a full-page ad, and readers can click on a button to also view the trailer for the movie! Again, there are potentials here that just haven't been pursued at this time.

The unpaid circulation model of magazine publishing has found its home with the Internet. Get into it now, and establish yourself before everyone else sees the potential.