Net revenue is defined as gross revenue from subscriptions excluding any transactional taxes (such as VAT, GST, sales tax), and after deducting any refunds, chargebacks, affiliate fees, 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, affiliate fees and payment processing fees compared to overall gross revenue. This percentage is reviewed periodically.
As an illustrative example, if a subscriber generates $49 gross revenue in a month (excluding transactional taxes) and the cost of refunds and chargebacks in aggregate across all subscribers was say 1% of gross revenue, and the affiliate commissions were say 4%, then net revenue from that subscriber would be $49 x (100% - 1% - 4%) = $49 x 95% = $46.55. We then allocate 50% of this net revenue to authors using subscriber share.
NB: The actual percentages will be set in the first month after we launch, once the real data on refunds, chargebacks and affiliate commissions starts flowing through.