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It sounds like you've still got your heart set on a print magazine so I'd try that to start with. Don't be put off by sweeping statements like 'print is dead'. People say a lot of things are dead because of the internet, including newspapers, books, live music and TV. When you look around you see they're actually quite healthy. Mike C has a point. Unless you've the time and expertise for a serious online marketing campaign, any webzine (if that's what they're called) is likely to disappear without trace.
Whereas you can make a small distribution print magazine relatively cheaply. Surely you'd just need decent printers, paper, graphic design programs and something to bind the pages together (don't fully know what but there must be a gizmo). If you're still at college, you could just try selling copies on campus to start with and see how it goes. Any money you make can be put back into the magazine and, hopefully, things will gradually grow. As for paying writers, try finding young and ambitious people like yourself and offering them a percentage of profits. You never know, it might work. Failing that, if you're really stuck for money at the start, do what the 1980's football fanzines in Britain did: write most of it yourself.
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