CBR: Tilting at Windmills - Jun 17, 2010

[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/20...al-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