Net revenue is defined as gross revenue from subscriptions less:
- taxes (including VAT, GST and other transactional taxes paid by us or the buyer),
- affiliate costs,
- costs we incur in relation to services offered as part of the PoweredTemplate subscription (including, without limitation, amounts we agree to pay to third party service providers and other costs we incur in making those services available to subscribers),
- costs we incur in commissioning or directly licensing content for PoweredTemplate from non-authors,
- discounts and promotional offers,
- and payment processing fees.
For revenue share calculations, we adjust the subscription revenue received from each subscriber by a set percentage (%) to factor in the overall cost for refunds, chargebacks, referral and affiliate fees, tuts creation, coupons and payment processing fees compared to overall gross revenue. This percentage is reviewed periodically.
As an illustrative example, given the following:
- A subscriber generates $19 gross revenue in a month (excluding transactional taxes),
- The cost of refunds and chargebacks in aggregate across all subscribers was 1% of gross revenue,
- The tuts creation, coupons, referral and affiliate commissions was 5%,
Then net revenue from that subscriber would be $19 x (100% – 1% – 5%) = $19 x 94% = $17.86 We then allocate 50% of this net revenue to authors using pay per item share.