Piton, hope you don’t mind if I jump in here and give you my take on Pixelmags’ revenue model.
What you seem to be missing is that Pixel has two revenue streams related to digital magazine publishing. The first is related to their branded apps. This is where they take a publisher’s hard copy magazine, digitize it, and distribute it via a unique iPhone/iPad/Android app. For this Pixel takes a flat fee on a per magazine, per month basis.
The second revenue stream is via their Readr app, which is where the subscription model comes into play. For the Readr app, subscribers pay $9.99 per month to read any magazine(s) available via the app. The revenue from all subscriptions is shared with the publishers (40%) based on how much time subscribers spend reading their magazines, and with Apple (30%) for hosting the app, leaving 30% for Pixel.
I believe that Pixel may also make some revenue thru advertising done through both distribution methods above, but exactly how that revenue is earned has never been made clear.
Hope this helps.
