CBR: Tilting at Windmills - Jun 17, 2010

[CBR News]

Brian Hibbs is back with more on digital comics, this time focusing on the current debate over Day-and-Date releases, what they would mean to the comic book industry as a whole and why slow and cautious is the way to go.


Full article here (http://comicbookresources.com/?page=article&id=26764).

[ben12]

The thing is, there are also costs to distribute digitally. Anything that goes through Apple's App Store means that Apple is taking 30% of the retail price. Further, I have to assume that Comixology, which is facilitating the Apps, isn't doing it for free (that would be...mental), though who knows how much of a cut they're actually taking. Lowballing it, I'll go ahead and guess that the cost to digitally distribute a work is in the range of 33% of the retail price, which would mean that a 99 cent download yields them 66 cents of revenue.

(Sidebar: this also ignores the impact of advertising in the print comics. This may not be a vast revenue stream, but it is a revenue stream that you lose through digital...)

So, to make the same $3.9 million revenue that they do from print comics, at 66 cents per digital download, they'd need to sell 5.9 million copies, or more than twice as many print comics as they currently do!It's almost like you intentionally chose numbers that supported your position. If selling at $0.99 means they have to sell twice as many comics, then they should price them at $1.99!

Plus they'd now be able to sell back issues directly to the consumer, which they could not do before except in TPBs and reprints. Those could be priced more cheaply than new issues, and they'd still be making money where they never could before.

I think you're absolutely right that Marvel (and DC if they bothered to try) has to worry about capsizing their main market right now. We're in a transition period. It seems clear that at the end of this tunnel is a world where it's all digitally distributed. Print copies make less and less sense every day (for all the reasons you mention plus they're a huge waste of paper).

The publishers have to find a way to balance the interests of all their outlets until such point that the digital audience is ready to pick up the reins.

And longterm, publishers are going to have to think outside the box in how they distribute this stuff. It would be a mistake to just create digital analogues of what's available for print. So for example, they sell a monthly 22-page comic, so they should put a 22-page digital comic online for a little less than the same price. Much like how Scott McCloud talks about digital comics not being limited by a "page," digitally distributed comics are not necessarily limited by things like "issues."

Thanks for the interesting column! It should spark a lot of great discussion! We definitely live in interesting times.

[Brian Garside]

While it's true that digital comics don't CURRENTLY have ads in them, there are no technical reasons why they can't, and moreover, why those ads can't be rich media ads which command a premium. Imagine a movie trailer instead of a static picture, or an actual crossword puzzle you could do to find a clue for a prize.

Metrics work much better digitally as one can see how many ads were viewed, and what actions users did with those ads.

With Apple committing resources to their own Ad platform, this is an eventuality.

You can see this in action on Wired Magazine's digital version on the iPad.

Another thing that will be key to the success of a digital strategy is some sort of subscription process so that a user can just select a series they like and get them automatically.

[Nik]

Great article.

I can tell you one thing. Marvel and DC better sell these digital comics cheap and ad free because there is already a HUGE pirated market on comics. I think folks might pay .99 for an ad free comic but they are less likely pay 1.99 for a comic with ads.

[heroesmask]

The only thing I really question in the article is Brian's comments regarding three weeks on app approval after submission. If Comixology has a Marvel app then I would imagine new content can be added at will. A individual issue wouldn't need to be approved since the issue is not an app but content on an app.

[AvengerG]

Brian is right in that as of now, Marvel and DC need the comic shops. If they go to day and date with digital right now, it would kill everybody. Shops losing around 15-25% of their customers would cause most of them to fold and there aren't enough digital reading devices in the hands of the public to replace those lost outlets.

However, 5 years from now, comics will be released day and date on your reader and most comic stores will be gone. Marvel and DC both know this. The last thing they can tell retailers is that they know they're going the way of the dinosaur. Marvel and DC have to make retailers think they're indispensible because right now, they are. After the proliferation of digital reading devices, they can drop the rhetoric and say goodbye to the direct market which they will do happily. The last thing they want right now is retailers thinking about how they're going to support their families 5 years down the line. They need the direct market dedicated and believing in a future for themselves right up until they're no longer needed.

They lucky ones in all of this are the independent comic companies. Their sales aren't keeping the stores open so they can immediately go day and date and get an online foothold while Marvel and DC play their balancing act. Marvel and DC do have a huge inventory of back issues that will help them get their own foothold but neither has utilized them to their full potential. Those older comics will be gold for them when digital hits big and will help them offset any losses from the demise of the direct market.

And for those of you posting you'll never read comics digitally, in 5 years, you won't have a choice. Enough people are willing to switch to digital that print will die. It won't be worth printing 5000 copies of X-Men to satisfy those that won't switch. I've been reading paper for over 30 years and I'll be the first to jump to digital and leave paper behind when day and date hits. The collectors mostly left in the 90's and now all that's left are the readers. We don't care about the bag and boarded copy in our spare room. We just want to be able to read it. Most of us will be happy to see those 10-50 long boxes condensed to a 2 terabyte hard drive I can plug into my pad/tablet. The direct market isn't dead yet, but make no mistake, it is going to die.

[Daniel Veltre]

There's at least couple of other things to consider regarding digital distribution.

All of this discussion doesn't consider all the add-on sales that take place in a comic shop. When a customer comes into my store they usually (but not always) purchase more than one comic. They look at the racks, check out the covers, flip through the books, talk a little bit about the hobby and often make additional buying decisions on the spot. I think a think a lot of those add on sales will be lost. Publishers will have a very difficult time attracting readers to other titles via digital distribution. Not everyone is as plugged in to the net as many here and online would like to believe.

And don’t be fooled by the numbers of illegal FREE downloads. I don’t believe that the actual numbers of dedicated regular fans that are willing to PAY for a digital download are anywhere nears the numbers many folks believe they are.

The top selling book each month generally sells about 100K. And remember – that’s sales to retailers not readers. Of that 100k how many books actually go to readers? Lets be generous and say 80% (I doubt it, that 100k book is often an event or special book supported by variants and such so many retailers order additional copies to reach that 100k) leaving total actual retail sales at 80k. Would paid digital distribution double that? Triple that number? What about the lower tier books (of which there are many)? What if due to digital distribution the number of comic shops decreased to such an extent that the direct market was no longer funding the production costs of a title, and those costs had to be absorbed by digital? How long do you think digital prices will remain at about $2-$3?

Remember, comic publishing itself is barely profitable for most publishers. Publishers, especially the major publishers receive much of their income not from comic sales from licensing and movie sale. And many of the smaller publishers are only publishing material in an attempt to sell movie rights.

Whoever said somewhere here that comic publishers were in the business of selling to readers is wrong. Comic publishers are in the business of selling to us, to retailers. That’s why most of their marketing is directed at retailers and not fans. It’s retailers who are in the business of selling to readers.

I’m sick and tired of retailers being the bad guys in this industry. There would be no comic industry if not for the -3000 or so retailers out there willing to put their money where their mouth is. Most retailers I know are good folks who work harder than they should, work more hours than they should, and make less money than they should for all the effort they put in. Yet it often seems to me we get blamed for all the evils of the industry. “Prices are too high.” “There are too many company crossovers.” “Why is company x putting out so many titles for character y?” It’s a lot of bull**** to put up with for this industry so many of us enjoy.

I have a couple of proposals to make as we move toward the eventual digital/paper distribution system. I sent this note to ICV2 yesterday (I have no idea if they’re planning to run it) and I’d like to share a couple of points here and see if they make sense to others …

“As a retailer I’m not afraid of digital distribution, simultaneous or not – it’s simply one more form of competition and I accept that and I’m willing to deal with it. It’s no different to me than competition with Amazon, mailing order websites or book store distribution.

What I’m not willing to accept is statements from publishers that one of the reasons for simultaneous digital release is to bring consumers into retail stores. It’s not. The reason for digital release is to bypass retail stores and sell product directly to consumers with no middle man. It’s plain and simple competition. The simple truth is I HAVE noticed a negative, although slight at this time, impact on sales of titles that have had some form of additional digital release.

Because of that, I think it’s only fair that a company that is planning to release certain material digitally as well as in print provide that information up front to retailers in the ordering process so that we can order their product appropriately.

I’ll go a step further – I think items that are released simultaneously should be made fully returnable for retailers. The company that is simultaneously releasing material digitally is putting retailers in an unfair competitive advantage by usually releasing material (this most recent Marvel experiment aside) at a lower price than at regular retail price. Altering the price is akin to altering the creative team on a book, and that is generally a reason for returning product to Diamond. Pricing is an important factor for retailers when ordering a book.

I would like to see the powers that be at Diamond get behind such a proposal and require that all the publishers for whom they provide distribution agree to make these changes and provide retailers with this information. “

And as I added in my note to ICV2, I’d also like it to be sunny and bright every day, temps in the mid-70s with a cool breeze, and for it to never snow on a Wednesday here in the north east. Good luck with that.

Dan Veltre
Dewey’s Comic City
Madison, NJ

[nova64]

However, 5 years from now, comics will be released day and date on your reader and most comic stores will be gone.

And for those of you posting you'll never read comics digitally, in 5 years, you won't have a choice. Enough people are willing to switch to digital that print will die. It won't be worth printing 5000 copies of X-Men to satisfy those that won't switch.

Why would the publishers stop printing just because digital is available? I don't see it as an either/or option. That would be the same as saying that movie studios are going to stop releasing movies to theaters and going straight to DVD/Blu Ray. Digital is just another revenue stream just like the HC/TPB option is.

That's a pretty big assumption. You're assuming that current readers are going to switch to digital and are willing to pay the $600 - $700 for an i-Pad in order to read comics.

Given how many readers have said they are dropping titles because of the costs being $3.99 an issue and the current economic environment, how many do you think will be willing to pay $1.99 an issue along with the big upfront cost? My guess is a lot of current readers will drop comics altogether rather than being forced to buy an i-Pad and then still having to buy the comics even if it's at a lower price.

I really enjoyed the article!

Doug

[Brian Hibbs]

And for those of you posting you'll never read comics digitally, in 5 years, you won't have a choice. Enough people are willing to switch to digital that print will die. It won't be worth printing 5000 copies of X-Men to satisfy those that won't switch.

I respectfully submit that we're still a long way from proving that xx,000 people are willing to pay $x for a comic book story that they don't physically own -- AND that they're willing to do so 12x a year. That MAY be the case, but it also may not be.

It may also be that enough people are willing to pay for a Top 10 property for that to be viable, but they may not be interested in paying for a c-list title like, say, Ms. Marvel or something.




The collectors mostly left in the 90's and now all that's left are the readers. We don't care about the bag and boarded copy in our spare room. We just want to be able to read it. Most of us will be happy to see those 10-50 long boxes condensed to a 2 terabyte hard drive I can plug into my pad/tablet.

I have to say, as a guy who runs a comic book store squarely aimed at reading, which doesn't overtly run any real "collectible" side to my business... I really don't think that your individual desire and experiences are at all reflective of the greatest mass of readers.

While I've never formally polled on the subject, my sense of my customer base is that at least 2/3 of them would entirely stop reading comics if they weren't physical objects.

-B

[Daniel Veltre]

B However, 5 years from now, comics will be released day and date on your reader and most comic stores will be gone. Marvel and DC both know this. The last thing they can tell retailers is that they know they're going the way of the dinosaur. Marvel and DC have to make retailers think they're indispensible because right now, they are. After the proliferation of digital reading devices, they can drop the rhetoric and say goodbye to the direct market which they will do happily. The direct market isn't dead yet, but make no mistake, it is going to die.

You know, AvengersG, you really have to be careful making predictions because you can really look foolish when looking back...

I remember when B&N and Borders started carrying comics and trade paperbacks and the guy that worked with me at the store at that time said "Close the store Dan, it was a good run, but we're doomed..."

And Amazon grew their trade and HC business and offered books at big discounts and that same employee said "Close the store Dan, etc..."

And trades paperbacks got big and everyone said that format was the wave future and no one would be buying comic books in 5 years, and guess what same employee said....

There was a lot of uncertainly in some of your predictions. I think you may be off base. Let's wait and see if in 5 years you're right and it's time to "close the store Dan, etc..."

I kind of doubt it myself.

Dan Veltre
Dewey's Comic City
Madison, NJ

[AvengerG]

I respectfully submit that we're still a long way from proving that xx,000 people are willing to pay $x for a comic book story that they don't physically own -- AND that they're willing to do so 12x a year. That MAY be the case, but it also may not be.

I have to say, as a guy who runs a comic book store squarely aimed at reading, which doesn't overtly run any real "collectible" side to my business... I really don't think that your individual desire and experiences are at all reflective of the greatest mass of readers.

While I've never formally polled on the subject, my sense of my customer base is that at least 2/3 of them would entirely stop reading comics if they weren't physical objects.

-B

The thing is, I think Marvel and DC believe they will pay for that digital copy and stop buying the paper. So much so in fact that they're going to try to hold off on doing digital day and date as long as they can. If they don't believe it is going to kill the direct market, what are they waiting for. They should already have the stuff available on the web for download. The technology is there. The first of the new era of digital reading devices have surfaced which most say are perfect for comics yet Marvel is "experimenting" with one annual and is going to charge more than cover price for it. Doesn't make sense if Marvel and DC think digital can coexist with comic shops. The only explanation is they don't believe they can coexist. These are huge companies with the resources to find out what will happen and I think they know exactly how things will go. Right now they are protecting comic shops and will do so until their data says that they can survive without the direct market. I do agree that there will be some readers lost at some point but I think the gains made will make up for it.

Also, whether or not my "individual desire and experiences are at all reflective of the greatest mass of readers" is really irrelevant. It only needs to be reflective of about 15-25% of readers to destroy the direct market. Maybe only 10%. I don't think that is much of a stretch at all. Marvel and DC don't think it is. Especially as tech gets better and the prices of the readers drop. It wouldn't be surprising if in 5 years you'll be able to get a nice reader for around $250 or less.

[Brian Hibbs]

Also, whether or not my "individual desire and experiences are at all reflective of the greatest mass of readers" is really irrelevant. It only needs to be reflective of about 15-25% of readers to destroy the direct market. Maybe only 10%. I don't think that is much of a stretch at all.

I agree with the second part of that statement, but I think that you could be overestimating the number of people interested in comics-without-paper.

In fact, this is, in essence, exactly what the article is about: you suggest that (let's say, for rounding) 20% of the current paper-reading audience who would switch immediately to digital.

However, if there isn't a NEW audience out there that's more than FOUR TIMES that segment of the current market, AND (and this is very important) has roughly the same buying habits of the current customer base, then Marvel and DC will be in a WORSE place then they are currently now....and they wouldn't have the DM to "fall back upon".

-B

[DownInAHole]

Speaking as an "old" reader I will not be switching to digital at the $1.99 price nor do I think a lot of other "old" readers will. For people like me who already read comics the main attraction of digital comics is that they are (or should be) significantly cheaper than paper comics. Admittedly I don't know the exact costs but when you compare the two formats digital has got to be much cheaper for Marvel to sell than paper. Right now from mail order services I can get a $2.99 book for $1.79 (sometimes as little as $0.74) and a $3.99 book for $2.39 (sometimes as little as $0.99). Why would I ever pay more than that for a digital copy? For me, and I think for most people, digital has got to offer significant savings over paper. $1.99 is just not a good value for what you are getting.

[davebaxter]

However, if there isn't a NEW audience out there that's more than FOUR TIMES that segment of the current market, AND (and this is very important) has roughly the same buying habits of the current customer base, then Marvel and DC will be in a WORSE place then they are currently now....and they wouldn't have the DM to "fall back upon".

-B

A couple of things, though:

First off, there's a huge error with the math that changes everything, the Top 300 TPB's were included in the $24.86 million figure you started with, and they comprise 22% of that 24.86 million, or in other words TPB's comprise 2.45 million of Marvel's 11.16 million share. And each TPB = AT LEAST 4-6 $0.99 or $1.99 digital comics, or else the TPB is offered digitally for $9.99 or $12.99 like they already are on ComiXology and Panelfly. Right there that dramatically decreases the number of unit sales needed to equal the 3.9 million in profits.

In fact, it decreases it a shit-ton:
You say 5.9 million units would need to be sold at only $0.99 to make the same 3.90M profit = 22% of those 5.9M units will be TPB, or 1.30 million units, and 4.6 million will then be individual issues. Let's say an average TBP collects 6 issues, so 6 $0.99 units per TPB. 4.6M units of single issues profiting $0.66 each = $3.09 million. 1.30 TPB units profiting $3.96 per unit (6 x $0.66) = $5.14 million!!! So if Marvel actually sold twice the number of TPB and single issue units as they do now, they would in fact earn 8.18 million or MORE THAN TWICE WHAT THEY'RE EARNING NOW. Meaning at only $0.99 per issue, Marvel is making a profit. At $1.99? Boo-effin'-yah. For Marvel, at least, not for readers :P

Secondly, if comics moved entirely to digital, they wouldn't be digital versions of their print editions. Right now, digital is limited and more of a novelty than a medium because print is still the meat of the market, and so digital editions are simply cleverly coded little ditties of the same print reading experience, which isn't worth much more than $0.99 or $1.99 (which is pushing it). If comic book movies or video games were cinematic or interactive versions OF THE PRINT COMIC ITSELF, you'd never pay effing $20 or $50 for them respectively, either. The value of a digital comic won't be accepted or even guessed at until it becomes an actual medium that can stand alone and isn't seen as a copy of another medium. And that's still, in tech terms, a long way away, at least a few years.

But steady migration over to digital will happen consistently over time. Is there another, broader audience? Does there need to be? What's a price people will pay? What will the actual business model be? We don't even know what the technology or the platform will be 2 years from now, but publishers are pretty agreed that the time to experiment and start taking all this seriously is already here, and without the experimentation, none of these questions can be answered.

[boberto]

Hi all. This is my first post, but I've been intrigued by the whole digital sales thing for a while and, as somebody who has been reading for around 16 years or so, thought I'd contribute. I started out reading individual issues, mainly X-Men, for several years, fell out of it and then picked up again during college after X2 came out. I kept it up, shifted more towards Avengers and Iron Man and began to get trade paperbacks and hardcovers: That's how I've been getting everything since around Civil War. It's less expensive, I get them delivered to my place and I rather enjoy reading an entire story arc at a time.

I don't care about day-and-date distribution. I suspect that the new audiences that Marvel hopes to gain through digital downloads don't care about it either because they're not current readers, so as Brian Hibbs noted, anything will seem new to them.

Rather than have a fixed delay, I think a tidier compromise would be for the digital downloads to be timed with trades. They come out around 3 months after the last story is published, right? When the next Iron Man hardcover comes out, Marvel should put the digital downloads of all the issues online, presented as a packaged story, which can be bought as individual issues or as a set. That hardcover will retail for $20; Amazon's selling it for $13.49. The issues individually should add up to somewhat less than that, with some discount for buying all of them.

Maybe eventually day-and-date distribution would happen, but treating digital like the trades (which I kind of see as akin to DVDs collecting TV shows) seems like a good way to start. Nobody's going to switch from the direct market, but you might have people going from trades. And you might have new readers that you otherwise wouldn't have.

Bob

[AvengerG]

I agree with the second part of that statement, but I think that you could be overestimating the number of people interested in comics-without-paper.

-B

If I am, then so is Marvel and DC. If they didn't think a signifigant amount of people would immediately switch, they'd go day and date tomorrow. My bet is that they've done the research to know which of us is right and by their actions, I'm guessing I'm right.


In fact, this is, in essence, exactly what the article is about: you suggest that (let's say, for rounding) 20% of the current paper-reading audience who would switch immediately to digital.

However, if there isn't a NEW audience out there that's more than FOUR TIMES that segment of the current market, AND (and this is very important) has roughly the same buying habits of the current customer base, then Marvel and DC will be in a WORSE place then they are currently now....and they wouldn't have the DM to "fall back upon".

-B

The thing is, your numbers are wrong because of one fact. Marvel isn't going to pay Apple one red cent. Apple gets money from music downloads only if they are bought through the Apple owned iTunes. Apple only gets money from people buying things directly from them. Right now, the Marvel iPad app is free and not an Apple product. Apple provides access to it but doesn't get one dime from it.

Look at it this way, say I play the City of Heroes game on my digital device. I use my digital device to access the application to play the game but I don't pay my monthly fee to Apple or Microsoft or Dell or HP or IBM, I pay it to the company that makes City of Heroes. I just use an Apple (etc.) product to access the game because Apple (etc.) is just supplying the hardware for me to access the game.

Marvel and DC will do the same thing. They don't need to pay Apple (etc.) to supply you comics to read on your pad/tablet. They can do it through their website and completely cut out the middleman. They will get the whole 99 cents (Well, at least most of it. Running the website will cost something but it will be a pittance compared to what they pay to distribute paper right now.)

While Apple is controlling of what programs are run on their devices, applications already exist that display .cbr and .cbz files on the iPad and it's free. Marvel doesn't have to pay anyone to sell their comics digitally. They can and will do it themselves.

[Arvandor]

Speaking as an "old" reader I will not be switching to digital at the $1.99 price nor do I think a lot of other "old" readers will. For people like me who already read comics the main attraction of digital comics is that they are (or should be) significantly cheaper than paper comics. Admittedly I don't know the exact costs but when you compare the two formats digital has got to be much cheaper for Marvel to sell than paper. Right now from mail order services I can get a $2.99 book for $1.79 (sometimes as little as $0.74) and a $3.99 book for $2.39 (sometimes as little as $0.99). Why would I ever pay more than that for a digital copy? For me, and I think for most people, digital has got to offer significant savings over paper. $1.99 is just not a good value for what you are getting.

Does that include the delivery charge? The savings is not the comic itself. Its in not having to pay for delivery.

[CapeMonkey]

The thing is, your numbers are wrong because of one fact. Marvel isn't going to pay Apple one red cent. Apple gets money from music downloads only if they are bought through the Apple owned iTunes. Apple only gets money from people buying things directly from them. Right now, the Marvel iPad app is free and not an Apple product. Apple provides access to it but doesn't get one dime from it.


This is incorrect. Most apps use the iTunes infrastructure for in-app sales and content delivery, including the Comixology family of apps (including the Marvel app). If it is through iTunes, Apple gets their cut.

You do not have to use iTunes (see Amazon's Kindle app), but it is the easiest method for the consumer and most developers as well.

[Tori Pagac]

I respectfully submit that we're still a long way from proving that xx,000 people are willing to pay $x for a comic book story that they don't physically own -- AND that they're willing to do so 12x a year. That MAY be the case, but it also may not be.

It may also be that enough people are willing to pay for a Top 10 property for that to be viable, but they may not be interested in paying for a c-list title like, say, Ms. Marvel or something.





I have to say, as a guy who runs a comic book store squarely aimed at reading, which doesn't overtly run any real "collectible" side to my business... I really don't think that your individual desire and experiences are at all reflective of the greatest mass of readers.

While I've never formally polled on the subject, my sense of my customer base is that at least 2/3 of them would entirely stop reading comics if they weren't physical objects.

-B

add me to that poll number i have a hard time reading comics on a screen due to my disabilty and real books too for that matter

[mistergoodman]

For people like me who already read comics the main attraction of digital comics is that they are (or should be) significantly cheaper than paper comics. Admittedly I don't know the exact costs but when you compare the two formats digital has got to be much cheaper for Marvel to sell than paper.

Not necessarily. Apple gets a 30% cut on iPad/iPhone comic book sales. Comixology and iVerse get cuts for creating and hosting the digital comics stores. There's currently no ad revenue. And there's marketing costs, so that people know these options even exist.

But for some of us (even older readers like me) the attraction isn't just the price- it's the convenience of comics that arrive instantly at the press of a button, and don't require storage or organizing.

And the warm glow of the iPad screen, which I'll take over the smell of newsprint any day of the week.

[davebaxter]

This is incorrect. Most apps use the iTunes infrastructure for in-app sales and content delivery, including the Comixology family of apps (including the Marvel app). If it is through iTunes, Apple gets their cut.

You do not have to use iTunes (see Amazon's Kindle app), but it is the easiest method for the consumer and most developers as well.

CapeMOnkey is correct - Marvel and ComiXology operate under what are called "in-app purchases" which are still iTunes sales. No app on iTunes is allowed to sell anything without Apple taking a cut, period. It's not allowed and Apple, if they are allowing anything of the sort for the time being for a company as big as Marvel, won't allow it for beyond a promotional timeline, so it's not something publishers can bank on in the long run.

[mistergoodman]

CapeMOnkey is correct - Marvel and ComiXology operate under what are called "in-app purchases" which are still iTunes sales. No app on iTunes is allowed to sell anything without Apple taking a cut, period. It's not allowed and Apple, if they are allowing anything of the sort for the time being for a company as big as Marvel, won't allow it for beyond a promotional timeline, so it's not something publishers can bank on in the long run.
I don't think any exception has been made. There's been no hint of such. Apple is definitely getting their 30% cut. And ComiXology is getting their cut too.

[BoozerX]

What a scaredy cat article.
The market is not going anywhere but the tablets are a market changer so you better adapt or are gonna be in problem.There are always gonna be readers of print.
Asking that the publishers dont release the files digitally is hilarious is a market economy after all. I understand you want to be a slow and delicate dance.
People are lazy.So if you give them the same product at a minor price instantly you know what is gonna happen. Check Itunes.

[MikeCr]

If I am, then so is Marvel and DC. If they didn't think a signifigant amount of people would immediately switch, they'd go day and date tomorrow. My bet is that they've done the research to know which of us is right and by their actions, I'm guessing I'm right.
You might be right or you might be wrong - and I think your statement is backwards actually: if they DID think a significant amount would switch imeadiately they'd go day and date tomorrow - but if you're using the actions of Marvel and DC as an appeal to authority you've got a lot to learn about the comic industry... or ANY industry. Big corporations make just as many dumb mistakes, sometimes more, than everyone else. The big two comic companies are about as good at predicting the future and acting with longterm plans as the United States Congress.

[Paul McEnery]

I think the real issue here is that, for publishers, we're in the same place as we were when newsstand sales were dying and LCS's sprang up; and they'd have to be crazy not to sell to the Amazon and iPad market as their top customers now.

But equally, there's no disincentive for the Big Two to sell content directly from their own site, bypassing Amazon and iPad completely. Why not? That's an extra 30% right there for very little outlay in constructing an inhouse store. (Or for Comixology to do the same thing; I can't see why anyone would want to pay Apple and Amazon 30% for a convenience fee when there's no added convenience.)

Moreover, it's been painfully obvious for a long time that the Big Two have been screwing the LCS market over with ludicrous price increases. A simple example: The new hyper-inflated Batman and Robin hardcover retails at 16 and change at Amazon -- a savings of eight and a half bucks ($9 and change once you factor in the tax). Where does the brokeass customer go, then?

Clearly the same is true with the digital comic. The price has been artificially inflated to four bucks precisely to inflate the cost of the digital edition (and the trade edition).

But that's just looking at the Big Two. If we look at, say, a two person team like Ellis and Duffield, banging out 24 pages of comix a month -- how much money do they need to charge, if they go independent, to rake in the same amount for themselves? A two dollar comic for ten thousand readers -- even if coughing up 30% for convenience fee -- lands them 14 grand to split between them for the month. That's pretty decent cash.

That logic also applies within the Big Two. In digital format, it could cost them no more than six grand to launch a new title (with all other costs being eaten by the established infrastructure), and recouping those costs at two bucks a pop isn't that much of a stretch. NextWave suddenly looks a whole lot more viable.

Obviously the publishers/creators are still holding their breath a bit; the iPad is the killer device, but the great leap forward will have to wait until it (and the competitors) achieve a big chunk of market saturation. Then again, the new big screens people are getting for their computers will also suffice.

While Brian's right that the Big Two are going to have to be delicate in the transition, that transition has already started (and not as delicately as all that, really). And here's the painful clarity on it: once you've gone digital, you're not going to be buying both the floppy and the trade.

The real meat and potatoes will have to become the comic book as art object -- a digital-plus model with extras for the trade edition, solely as a lifeline for the LCS while that still proves to be necessary for the publishers' interests. Which means the LCS is going to have to evolve into a rather more full service model that gives people a reason to show up at the destination.

[AvengerG]

You might be right or you might be wrong - and I think your statement is backwards actually: if they DID think a significant amount would switch imeadiately they'd go day and date tomorrow - but if you're using the actions of Marvel and DC as an appeal to authority you've got a lot to learn about the comic industry... or ANY industry. Big corporations make just as many dumb mistakes, sometimes more, than everyone else. The big two comic companies are about as good at predicting the future and acting with longterm plans as the United States Congress.

I probably give them more credit than you do but I spent several years on both the distribution and retail end of things so I know how stupid the comic industry can be. I witnessed the Heroes World debacle first hand. However, I think the people running Marvel right now are way smarter than those back then and I'm sure they're researching all of this. They aren't going to go day and date right now because they know it there is a strong possibility it will put a ton of stores out of business over night.

As far as the digital distribution thing goes, if Marvel and DC set themselves up to pay 30% or more of their selling price to a digital distributor of their products (especially Apple) it would be the stupidest move they could make. I could understand selling through those markets in the short term, but long term they need to do it themselves and keep the profits for themselves. Marvel is already on its way with their DCU website. Not to great a step to start selling their own downloads. They could still sell through Apple by just raising the price up 30-50% to those who want to buy through an Apple devices. Apple has the fisrt device out but it won't be the last or the best. I still say in 5 years these readers will be very common. Maybe as common as your cell phone. Hell, it may even be your cell phone. I could see one of those ear clips running through your digital pad being your new cell phone. The tech is coming and Marvel will have no need to rely on a middle man to sell it's comics. Bank on it.


Just read Paul's post. I think he's right on the money. Ditto Paul!

[mistergoodman]

... there's no disincentive for the Big Two to sell content directly from their own site, bypassing Amazon and iPad completely. Why not? That's an extra 30% right there for very little outlay in constructing an inhouse store. (Or for Comixology to do the same thing; I can't see why anyone would want to pay Apple and Amazon 30% for a convenience fee when there's no added convenience.)

There really is a lot of added convenience though. The ComiXology experience is insanely simple. View the comics on sale from within the app. Purchase and download a comic in seconds at the push of a button and start reading. By contast, with the iPad Kindle app you can't purchase books from within the app, you have to exit it and go to Amazon's web site. Perhaps no big deal for a company like Amazon with ample resources and loyal customers, but putting together and maintaining a rock solid storefront and luring customers there is a big deal for smaller shops.

The thing to remember is, before the iPhone, any company selling apps for, say, Windows Mobile, could sell them directly to the customer from their own web site. But even with Apple taking 30%, the App Store has proven to be far more profitable for developers.



But that's just looking at the Big Two. If we look at, say, a two person team like Ellis and Duffield, banging out 24 pages of comix a month -- how much money do they need to charge, if they go independent, to rake in the same amount for themselves? A two dollar comic for ten thousand readers -- even if coughing up 30% for convenience fee -- lands them 14 grand to split between them for the month. That's pretty decent cash.

That logic also applies within the Big Two. In digital format, it could cost them no more than six grand to launch a new title (with all other costs being eaten by the established infrastructure), and recouping those costs at two bucks a pop isn't that much of a stretch. NextWave suddenly looks a whole lot more viable.


Remember, ComiXology also gets a cut on top of Apple's 30%, unless Ellis and Duffield wish to go through the hassle of creating their own app for their content and then spending money to market the heck out of it so that people know it exists.

I'd love to know how well comics are selling on the iPad. Certainly they're making some money, as more and more publishers are getting on board. But right now it's all gravy-- a little extra cash on top of the print comics that pay the bills. I think it'll be a few years before tablets are ubiquitous enough to warrant a lot of exclusive content. But that day will come, before the end of the coming decade.

[Brian Hibbs]

The real meat and potatoes will have to become the comic book as art object -- a digital-plus model with extras for the trade edition, solely as a lifeline for the LCS while that still proves to be necessary for the publishers' interests. Which means the LCS is going to have to evolve into a rather more full service model that gives people a reason to show up at the destination.

I was a little surprised to find out that physical CDs are still SEVENTY PERCENT of revenues for the sales of music.

http://www.reuters.com/article/idUSTRE65K32E20100621

-B

[Paul McEnery]

I was a little surprised to find out that physical CDs are still SEVENTY PERCENT of revenues for the sales of music.

http://www.reuters.com/article/idUSTRE65K32E20100621

-B

Even if we allow for music industry hype, and the possibility they're only talking about major labels, and that that might make a difference, that's kind of staggering. I mean, are there even any record stores still out there?

The only reason I can think of is that iTunes prices are still so overinflated that it's more cost-effective to buy the hardcopy, rip it, and sell the hardcopy on. Either that, or the only people who've got the disposable cash for music are old folks who can't get iTunes to work.

EDIT: IFPI offers different stats. The 70% is a global number, reflecting the lack of market penetration by computers and iPods. The US number is 50% (http://arstechnica.com/media/news/2009/08/global-digital-music-sales-to-overtake-physical-by-2016.ars).

In both cases, the numbers for digital are on a linear increase of roughly 5% a year. Ars Technica's projections show a 50-50 split globally by 2016, by which time the US will be at a 90-10 split if the projections hold true (although what the tipping point is for abandoning physical CDs completely is, I don't know).

So yes, the industry flack is lying so as to increase government pressure on the freeloading market.

[Brian Hibbs]

The only reason I can think of is that iTunes prices are still so overinflated that it's more cost-effective to buy the hardcopy, rip it, and sell the hardcopy on. Either that, or the only people who've got the disposable cash for music are old folks who can't get iTunes to work.

...or that more people want to steal, than pay money.

-B

[MikeCr]

Which means the LCS is going to have to evolve into a rather more full service model that gives people a reason to show up at the destination.
Nothing wrong with that.

And here's the thing: as lazy as we get people still like to shop. They like going to stores, browsing, and spending money. If the LCS keeps making it worth their while I'm sure there'll still be a niche for them.

Brian's fear of an extinction level event? Maybe the magazine format will be just an even more specialty item and marginal revenue stream compared to digital but it's hard to see it disappearing completely. Nostalgia's got a lot of pull.


I witnessed the Heroes World debacle first hand.
Fair enough.

[Paul McEnery]

...or that more people want to steal, than pay money.

-B

As we see, that's not really the case; and the music biz people were trying to create that impression by massaging the numbers.

Actually, 50% of music sales in the US is digital; that's half the market share in seven years, and a big chunk of change that people are more than willing to drop.

I'm thinking that would be even larger if it weren't for the fact that rights issues keep a lot of Euro and American stuff out of the American and Euro markets (ECM records, for example, are available in European emusic, but not in America).

The recent problems Humanoids have found selling their product (again) also show that the right way to go for many companies has to be the digital market. For Humanoids, the outlay is minimal, and every sale past the first thousand is gravy, I should think.

[mistergoodman]

I was a little surprised to find out that physical CDs are still SEVENTY PERCENT of revenues for the sales of music.

http://www.reuters.com/article/idUSTRE65K32E20100621

-BThat may be a global number. I've usually heard lower numbers for the US.

http://www.npd.com/press/releases/press_100526.html