CBR: Pipeline - Jun 29, 2010

[CBR News]

Just what is the deal with Marvel and DC's royalty programs? Why were last week's war of royalty words ironic and semantic? Are retailers really to blame? And, finally, Augie surmises that competition is good!


Full article here.

[gwangung]

Hm. My impression is that DC is doing some puffery on the help to brick and mortar retailers, as Comicology is already channeling support to them. At best, it's going to be a split between the two (as I would guess any dealer incentive has been).

That said, you're exactly right on digital being the new newstand--only with no costs for returnables. Digital might see some pressure for more done-in-ones and shorter arcs as it gets larger.

[uthor]

RE: Royalties.

I listened to a panel with Michael Choi and he mentioned that royalties are such a small portion of his income compared to an up front page rate that it doesn't come into consideration he he's choosing which books to work on. This was while he was working on X-Force, which is a pretty middle of the road book. I don't think that there are many creators who sell enough for royalties to be an issue worth thinking about

[Kolymar]

You see, DC claimed to have their plan in place first. ("…we are the first to announce a participation plan for talent, thereby setting the industry standard in that regard.") Some at Marvel disagreed, pointing out that they had planned on doing so for years now, and just the other day actually sent out a letter. So, in legal terms, their paperwork was filed a week before DC's, and they win.

They're not lying, either. Right after Marvel's Digital Comics Unlimited launched in the fall of 2007, Dan Buckley gave an interview to CBR. Here's the relevant quote:



Digital comics will become a part of our incentives package in the near future. We are at present discussing the calculations and implementation of this package. It may take several months to implement. However, the first thing we need to do is make sure that the offering is profitable.



Here's the funny thing, though. Marvel's letter to exclusive talent, which went out last Monday, includes this sentence at the very end:



The incentive plan for digital comics available in subscription services – the Marvel Digital Comics Unlimited service on marvel.com – is more complicated, since consumers are granted access to a great number of issues for one flat fee. Our goal is to finalize a plan by the end of this year to pay subscription-based digital comic incentives.



The end of this year will be three years since Marvel's Digital Comics Unlimited initiative went live. I hope that when their plan is finalized, it includes the statistics for the three years prior to it in their totals.

Excellent points. As a matter of fact, I can't see anything I can flat out disagree with. Damn...

[dancj]

Do royalties kick in after a certain amount of sales in dollars or units? Either way, if digital comics are also paying royalties, do the digital sales get added to the physical copies when calculating royalties or do they each have their own royalty threshold?

If it's the latter then digital comics could really hurt the royalties that creators get.

[mistergoodman]

RE: Royalties.

I listened to a panel with Michael Choi and he mentioned that royalties are such a small portion of his income compared to an up front page rate that it doesn't come into consideration he he's choosing which books to work on. This was while he was working on X-Force, which is a pretty middle of the road book. I don't think that there are many creators who sell enough for royalties to be an issue worth thinking about

Perhaps not for Marvel, and not if you're working steady. But royalties often keep food on the table later on, when times are tough. Hence the widely reposted comments by Christine Valada (wife of Len Wein):

Marvel has reproduced works in various electronic formats for years, and I can assure you that my husband hasn’t seen a goddamned dime for any such use of Giant-sized X-men #1 or anything else he ever created for Marvel. Meanwhile, royalties from DC for a relatively minor character got us through the worst of our past 15 months of hell. Until Marvel takes the steps that DC has to compensate the creators who made the company great, all it is doing is blowing smoke. Anyone who thinks Marvel is the better place to work is just deluding themselves.

[Kick-Ass]

Augie, excellent article as always. I have to bring up 2 points though:

1. Matt Fraction on Word Balloon recently said he receives foreign royalties. So your info may be incorrect on that point.

2. Digital is not the new newstand. A newstand comic costs $3.99. An iPad comic costs $3.99+$600.00iPad+Satellite Internet monthly fee. The theoretical newstand should be where anyone can sample a cheap comic. Comics are cheap. iPad's are not.

Truth is, most grade schoolers don't have iPads. (Parents won't pay it, or can't afford it) And that's the audience comics should be targeting, the audience that consumes entertainment in the 10s of millions. You're asking for an adult audience to buy up comics in large numbers. This is an audience that left their comics in grade school as well. I see potential for 1,000s of adults, but not numbers that can revolutionize the industry.

Ages 8-20 will buy millions of cheap dvds, cds, movie tickets, comics, and tune in to tv shows. Comics are cheap. iPad comics however, are not cheap. It's not a "Theoretcial newstand" when the newstand costs $600.00+ to shop at.

[mistergoodman]

2. Digital is not the new newstand. A newstand comic costs $3.99. An iPad comic costs $3.99+$600.00iPad+Satellite Internet monthly fee. The theoretical newstand should be where anyone can sample a cheap comic. Comics are cheap. iPad's are not.

The newstand is any place where one can discover and sample new comics for sale while looking for other stuff.

People buy iPads for all sorts of reasons (surfing the web, watching videos, playing games, reading ebooks, etc) and some of those users will discover digital comics, if they're properly publicized and marketed. Thus the internet is the new newstand- a new entry point for non-fans.

And your numbers are bogus. Most digital comics cost 99 cents to $2, and iPads start at $500 and can use your existing internet connection via wifi. They'll just come down in price over the years as competing products reach the market, just as computers did. Most importantly, while tablets do a great job of displaying comics, they are not dedicated e-readers. They are cool multi-purpose devices through which some people will discover comics. And for someone who is already enjoying an iPad, comics are a very cheap form of entertainment. First issues are often free. Many, many comics in multiple genres are sold for 99 cents.

Truth is, most grade schoolers don't have iPads. (Parents won't pay it, or can't afford it) And that's the audience comics should be targeting, the audience that consumes entertainment in the 10s of millions. You're asking for an adult audience to buy up comics in large numbers. This is an audience that left their comics in grade school as well. I see potential for 1,000s of adults, but not numbers that can revolutionize the industry.

Comics haven't been aimed at grade schoolers for a long, long time. There are some aimed at that market, but comics have been most successful in countries where comics were available in all genres for all ages (like Japan).

[Kick-Ass]

iPads start at $500

Comics haven't been aimed at grade schoolers for a long, long time. There are some aimed at that market, but comics have been most successful in countries where comics were available in all genres for all ages (like Japan).

Amazon says the price is $645.00 to $1,018.00. That's starting at the cheapest price, from the cheapest website.

And if they comics marketed to kids, you can't expect big numbers. Comics in Japan sell largest numbers to kids. One look at One Piece, Naruto, and Dragonball will show you why. They're clearly aimed at grade school audiences.

My point is $645+ is not newstand price. It does not replicate the newstand at all. iPads can't revolutionize this industry.

(FYI I prefer digital comics, because they're larger and the art looks better. And they're easier/faster to read and take up less space. I'll stick with Marvel Digital Comics Unlimited though, where the prices are much cheaper )

[uthor]

Amazon says the price is $645.00 to $1,018.00. That's starting at the cheapest price, from the cheapest website.

Apple will seel you three different models for under $645 direct:
http://store.apple.com/us/browse/hom...CONFIGURE-IPAD

The price isn't the argument, though. It's that the device will already be ther for other reasons and will thus be available for comic reading.

I don't think that's too valid of an argument as long as comics are tied to one device. I'm not talking about DRM (though I don't like DRM). I'm talking about not having comprable software available on Windows, Linux, and Android OSes. We need to see some competition in the tablet market to get apps to more people. Then you can finally say that digital is the new newstand.

[mistergoodman]

Amazon says the price is $645.00 to $1,018.00. That's starting at the cheapest price, from the cheapest website.

No. iPads start at $500 purchased from Apple or Best Buy. Amazon is not an official Apple reseller, but there are third party sellers who offer the iPad through Amazon's web site- at a markup.

My point is $645+ is not newstand price. It does not replicate the newstand at all. iPads can't revolutionize this industry.

The Apple Lisa (the first computer sold commericially with a graphic user interface and mouse) went for $10,000. The first Macintosh Portable sold for $7,300 with hard drive.

Soon, as competing products with the Android operating system hit the market, tablet computers will drop in price, just as the Amazon Kindle has dropped from $400 to $189. But even at $500 it's in reach of a lot of people, and Apple is struggling to keep them in stock. Few buyers will purchase an iPad specifically to read comics. But just as kids who went to a 7-11 to get a soda discovered the comics rack, many iPad owners will notice the comics apps that often appear on Apple's App Store lists of featured programs.

I don't think that's too valid of an argument as long as comics are tied to one device. I'm not talking about DRM (though I don't like DRM). I'm talking about not having comprable software available on Windows, Linux, and Android OSes. We need to see some competition in the tablet market to get apps to more people. Then you can finally say that digital is the new newstand.

Mass market Android tablets are inevitable. And ComiXology is already working on a web interface for their comics ( https://comics.comixology.com/ ) that will allow people to buy and read comics on Windows, Macs and Linux.

[Kick-Ass]

Until a digital comic is priced at $3.99, no other fees attached, it is not a newstand. No arguing that.

[mistergoodman]

Until a digital comic is priced at $3.99, no other fees attached, it is not a newstand. No arguing that.

It's like you're arguing that 99 cent music downloads are more expensive than compact disks because you have to factor in the cost of a computer and an Internet provider.

[Kick-Ass]

It's like you're arguing that 99 cent music downloads are more expensive than compact disks because you have to factor in the cost of a computer and an Internet provider.

Which is why music downloads only account for 30% of sales while CDs still account for 70% of sales in 2010?

[dancj]

Here in Blighty, songs are 79p and albums are £7.99 on iTunes. Generally if I'm a bit patient and buy online then CDs cost about the same. Why on earth would I pay the same amount to not have the box and sleeve?