Organize Magazine and Opportunity Risk Analysis

Part of a freelance writer's business is analyzing a client before you consider working with it. You need to answer questions about the reputation of the people involved in the venture and the company's financial stability and ability to pay. I thought this might be clearer through an example.

The subject of a recent New York Times article was a new publication called Organize. Joyce Dorny, a professional organizer, developed the concept with an investment of about $100,000. No one involved with the venture has ever run a magazine before. According to a second article, the title is selling in some supermarket chains, all 500 Borders stores, and three-quarters of the 800 Barnes & Nobel stores, with the first issue getting orders for 20,000 copies. The bimonthly's first issue has nine pages of advertising.

I did a quick web search and found nothing alarming. If I were actually thinking of taking an assignment, I might do a search on a service that can pull up public records, including criminal and bankruptcy, to see if there are any red flags that might make me uncomfortable about doing business.

Now let's look at the available financial information. In this case we have a significant piece of information: the size of the start-up investment. According to MagazinePublisher.com (site of a custom publisher):

A small niche subscription base magazine can probably be launched for under $50,000 - a full featured newsstand consumer magazine would require into the millions to successfully launch.

Distribution and content help tell you what the magazine's focus is. In this case, according to the Times piece, the focus definitely seems to have a consumer slant:

Marketed to women who work full-time or are full-time mothers, its purpose, Ms. Dorny said, is to help these women find “a sense of order and a feeling of control over the work desk or toy bin.”

If you see a picture of the magazine, it appears to be a glossy with sophisticated design. All this means that the start-up costs are quickly racking up the zeros. This money has to cover printing, design, content, customer acquisition, marketing, and many other expenses. In other words, $100,000 for a title like this is little money. Now factor in that the ad sales of the first issue were only nine pages out of a total of 64 pages. That's 14% ads, which is extremely low in the industry. The question is whether there will be enough cash flow to keep everyone paid in a timely manner without depending on an additional investment.

Of that first 20,000 order, according to experts in the business, traditional magazine distribution typically sells only 3 out of every ten copies it places. Combine that with the $4.99 cover price, and the total brought in could well be just under $30,000, and the publisher sees only some portion of that, with the rest split by the distributor and the store. In other words, newsstand sales aren't going to bring a windfall, and neither will 9 pages of ads.

I don't know the people involved and certainly can't predict whether this venture might hit a consumer nerve or not. But the quick analysis would suggest that the numbers are against them without more investment, meaning that getting paid could be risky. Even if you took an assignment, it would seem prudent to wait for payment before accepting a second.

There may be rare cases where this kind of analysis causes you to turn down what would prove itself a great opportunity, but in the long run you'll avoid far more painful times than paychecks.

Addendum: Ms. Dorny emailed me. I had misread something in an article that made me thing she was an author - she isn't. I suspect the public reports of the numbers were off, as she said the distributor sold 35,000 copies of the first issue and they have about 1,200 subscriptions. The second print run will be at least 110,000, and they're investing more of their own money.

That said, the magazine hasn't paid any writers for submissions. As she wrote:

We have been very blessed with writers who believe in the idea of the magazine so much, and in the long term possibility of it, that they were willing to contribute for the mention of their name, business and/or website. They will be the first to get paid when we begin doing so (we plan to start with the jan/feb issue).

Definitely not a market for a pro writer, as you'd apparently be helping to underwrite the development of the magazine. I don't know if the designers were paid, though I'm pretty sure that printers don't work for nothing.

Update - March 29, 2008

Some writers had asked again if this market was paying, so I emailed owner Joyce Dorny. She responded as following:

We do now pay, but on a limited scale.

We pay $500 for a feature article and $250 for a column. We also pay on the 15th day of the publication month.

So it is a paying market, though limited pay and payment comes after publication.