Red Ink Blues...

Publishing a limited-circulation magazine is one of life's more idiotic pursuits. By its very nature, publishing is geared towards high-volume, mass-production operation. Allow us to explain. As with any manufacturing enterprise, publishing incurs both fixed costs and variable costs. Fixed costs are those that accrue regardless of how many units are produced. Variable costs are those that accrue in direct proportion to the number of units produced.

For example, a company that manufactures furniture might lease factory space in an industrial park. This would constitute a fixed cost. Regardless of how many (or how few) chairs it produces in a given month, its leasing costs remain the same. Conversely, the quantity of chairs produced would have a direct and obvious effect on how much wood the company bought each month. Such expenses are variable costs, as they fluctuate with the number of chairs manufactured.

In printing a magazine, the expenditures on paper, ink, press time and binding are all variable costs. Everything else involved in the production of a magazine is a fixed cost. Whether you print 5000 copies or 500,000, the fixed costs are essentially the same. The writing of the reviews and articles, the photography, the work on graphic design and layout, the making of color separations and film negatives, the stripping up of these negatives, the burning of plates for the printing press—all of this costs the same regardless of how many copies are printed.

The implications of this should be obvious. A large magazine can amortize (spread out) these costs over a huge number of units, making its fixed costs per copy quite minimal. A tiny magazine, however, has to spread these costs over a much smaller print run, making its fixed costs per copy astronomical.

That's why so many publishers are turning to the Web as an alternative means of distribution. Fixed costs are lower (no separations, negatives, printing plates), as are variable costs (no paper, ink, binding, postage).

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