It's worth noting that, if the expense data Glenn gave us earlier is correct, PNLK only needs to sign up 411 members per month to break even. I think the operating expenses he outlined added up to $147,863 per month. 411 members x $360/year = $147,960. Remember that the $360 membership fee is paid all at once, up front. (411 members per month is 4,932 members/year, far lower than the projections we have seen thus far.)
I'd bet the expenses will wind up being higher than this. But, still, if we're in the ballpark with these numbers, PNLK will be cash-flow positive in short order. Take 150% of this expense figure to get $221,794.50, and you're still looking at signing just 617 members per month to break even. (617 members/month -> 7,404 members/year, still far below projections.)
Of course, this refers only to subscription revenues -- saying nothing about advertising, value-added services, etc., which will likely ramp up at a gradual pace, too.
(I should note, after reading Keith's reply, that I don't know what accounting procedures they have to follow in recording these revenues. So saying "cash-flow positive" and such could well be misleading, in a technical sense. Nevertheless, I think the figures are useful and encouraging, in the context of the expense structure Glenn has shared with us. Thanks, Keith!) |
