Except niche paper magazine have to run through printing and distribution costs. For small digital magazines the traditional way to finance is through advertisement and most of them are vanishing and surviving on the kindness of the contributors or turning into something that resembles a blog.
Marco did something interesting: stick to one platform, play by Apple rules and see what you can build with that scheme. Id say that him being a developer was a huge advantage. Finding a developer for a small project these days is costly. But starting from zero he avoided the trap a lot of magazines fall into, like trying to create a enriched PDF that use the design guidelines we use on paper (multicolumn, etc..).
I read somewhere that his contributors get paid the standard going rate in most big magazines (Time, New Yorker,...) Not a lot of small magazines can say the same. The Magazine did not have ads, so he didn't need to manage/outsource that part of the business.
By no means is this the only way of doing things, of course, and it might not work for everybody but I found it inspiring. It was (is) a tight, lean and simple product.