not for story length (try up to 4K, rather than 10K flat)

nor for per word rate (try a range, 5-7 cents a word)

nor for publication schedule (hint: does F&SF come out every month?)

nor for salaries. I have no idea why, for example, you seem to think the editors of the print mags make “middle class wages”—they often pursue other opportunities such as teaching at Clarion and other places, editing anthologies, working as literary agents, etc. because the magazines are essentially part-time jobs (or small businesses from which one would not draw a large salary while trying to develop equity via sweat).

So why, exactly, would online mags have to meet a higher standard than the print mags?

Your thought experiment also leaves aside other revenue streams: direct donation, affiliate programs with online retailers, licensing the brand for anthologies, direct sale of a related product (including print books), convention/party development etc. a la Horrorfind back in the early 2000s, sale of stories via Fictionwise and other such channels, the creation of a reprint section which can increase the number of stories while reducing the price of stories, etc.

In other news, if I pay the person who walks my dog $200 an hour, I lose money even if I have seven dogs! But so what?

A lot of people in publishing don’t make $50K a year either.

Yeah, if you spend a lot of money publishing novelettes and paying people a full-time wage to…edit two 10K word a month(?) you’ll lose a lot of money.

That’s why nobody is doing that. Not the print mags either.

Or a large publishing company (or publishing group) using the site as a marketing effort, instead of expecting it to be a profit maker right off the bat.

Like Tor.com, in fact.

The more I thnk about this, the more I think that online fiction sites that are not run by volunteers or a wealthy patron, i.e. sites that pay their staff reasonable wages, are doomed. Absent a significant uptick in ad rates or market acceptance of subscription fees, the figures just don’t work. I’m sure my fictional band of friends could get a site to break even and even to a slight profit but even paying 2 people fulltime wages of, say $50k would quickly sink it.

Well no, technically it isn’t your story. It’s Scalzi’s story. He retains the rights to it. What you get is the right to print it in your magazine, probably exclusively, either for the first time (first serial) or as a reprint (second serial.) You might also get a few other ancillary rights such as the right to include the story in an anthology from the magazine, though an additional fee would be paid to Scalzi or a royalty on the anthology. Beyond that, though, Scalzi has the right to reprint his story later on in some other publication, anthology, a short story collection, turn it into a novel, put it online for free, etc. Meanwhile, other Scalzi stories, such as the ones at Tor.com, are available for free online.

Which is totally fair — it’s his work. But again, this does cause magazines to have to figure out how else to draw readers when it’s not that hard to get ahold of the authors’ short fiction. And as you note, the advertising situation isn’t pretty. But yes, friends can get together and start a magazine and give it a go, and some do, print and online.

Josh – Yeah, I know that ad inventory never fully sells out. But for the rough what if, I just posited 4 ad units that did. Here’s the disturbing part, and where I think Gordon is right and the web positivists are wrong (from a publisher’s point of view) – at the current ad rates no online venue will ever turn $1m in revenues. Getting 500,000 page views/month at the $8/page CPM (each pageview generating $8 ) yields $48k per year. Now, 500k view isn’t much, but it’s not trivial either. You’ll probably need 25-50,000 real people looking at your site every month. You can, of course, try to drive engagement up a lot by getting them to visit more often, but unless you get a lot more people or each one views a lot more pages, you’re not making much from ads.

Now, for that group of friends investing ~$15k/year, a $50k/year income is a nice hobby. But it’s not the kind of revenue that let’s you pay a staff or expand. The bottomline is that we’ve raised a generation that wants everything for free yet the ad revenue model that worked to give people free radio and free TV doesn’t work anymore because the ads are valued so little by the advertisers. And the advertisers can track effectiveness now, so that value is a pretty accurate reflection of what the ad is really worth to them – if ad effectiveness were higher, an advertiser would swoop in, outbid the cheapskates, own inventory and cleanup.

We simply aren’t going to see successful online fiction sites unless they drive a LOT of traffic, get sponsors who will routinely pay high CPMs for the specific audience that visits the sites (and if that happens competitors will open) or unless people start paying for the content. To be clear, I mean successful in the sense of paid staff that earns middle class wages, professional rates being paid for stories and at least as many words of fiction as you have seen historically in the print magazines.

Now obviously Strange Horizons has managed this. But many other online magazines, very well-funded, have crashed and burned, as Van Gelder points out. Now maybe they were just bad at it. But advertisers have very little interest in SFFH fiction magazines. It’s an uphill battle. It may not cost a lot at first, and a lot of print semi-pro mags have been started up by fans, but it’s the keeping it going thing that’s a lot harder.