CBR: Tilting at Windmills - Aug 25, 2011

[Schnitzy Pretzelpants]

If all this info coming in about LCS and comixology is accurate - and I have no reason to suspect that it isn't - it's a kind of a raw deal, and that is putting it more than mildly.

First off, this is really a referral fee - not a cut of any sale - and I think Brian is right to be concerned.

I have to agree with some of you that point to attitude and business sense (or lack of it) with LCS, and as I said in another thread of the 5 shops in my (more or less) immediate vicinity, while I would be sad to see any of them go, if 3 of those 5 closed tomorrow, I wouldn't be surprised given their business practices/acumen. But of the 5 shops there is only 1 shop that I feel any true loyalty to. Frankly, that's because he's been the only one that seems to behave like my business is important.

When the economy took a dirt-nap it was kind of hilarious seeing some of these retailers at the other shops trying to do what 'my man' Aaron at RX Comics had been doing since day one. For Aaron, it came naturally - in spite of being a pretty shy fellow. These other guys? The politeness and customer service riff, just wasn't a suit that fit.

Added to the above is that few of these shops - again, my guy excepted - treat each other as friends and colleagues. Instead they can be downright cutthroat.

Case in point: we had a comic shop here in Vancouver move after 20 - or more - years in the same location. It stayed on the same street, but moved about 2 miles West. Well shortly after that move, I am in a different comic shop (not Aaron's, but I won't say which) and I hear a customer talking to the manager saying 'You know, I used to go to that place over on Fourth, but they closed - went out of business.'

Now, did the manager of this shop I was in set this guy straight? Did he say 'Actually, they moved about 2 miles West?'

No.

What he said was "Yeah, yeah - it's this economy. It's rough on all of us. Guess he had a good couple of years though."

I actually chimed in, and told him it had merely moved, and where. For my interjection I got a big thanks from the customer, and a look that kill from the manager of the shop we were in.

It's when trades and retailers become cannibalistic to each other that I think their end is near. But, this is just what happened in this case, and doesn't necessarily speak to LCS retailers as a whole, everywhere.

[stk]

Its not the same thing. Music (the product) is all 1s and 0s, so yes a cd or record is no longer needed. Reading and looking and holding a comic cannot be duplicated on a screen.

Winner of the Insupportable Statement of the Day award.

Holding a comic? Okay, sure. But reading? That absolutely can be duplicated.

And with Records, cassettes, CDs, you had not only the physical media, but you had the other elements like cover art and liner notes, which WERE an important part of the music experience and generally are not represented in today's digital download format. So, even leaving aside the record store experience, the music industry analogy absolutely IS relevant. And comics are no less 0s and 1s than music is (or movies or anything else).

[N Caligon]

"Despite hard promises made by DC many months ago that there would continue to be a respectful delay between print and digital release, DC took a hard right turn, and announced that "The New 52" would instead be accompanied by "day and date" release of the digital comics.

That's certainly their right, and I think that I understand why they made that decision, but it absolutely represents a clear "going back on" promises that were made to retailers."

When did DC ever make a "forever and ever" promise like this? "We will never change our business model, and we will not adapt to changes in technology or respond to consumer demand" is not something I would expect a business to say, and if they did, anybody who relied on it would be utterly foolish.

Comics publishers put all their eggs into the DM/LCS basket for years, and have been rewarded, for close to two decades, with declining sales and an eroding customer base. Yet whenever they try to expand the market, whiners like Hibbs cast themselves as betrayed victims.

If you're going to bitch about the 15 cents/sale cut of digital sales, tell us why that's not a fair return on your investment in digital market mechanisms and infrastructure, which looks to me to be zero.

[Brian from Canada]

Its not the same thing. Music (the product) is all 1s and 0s, so yes a cd or record is no longer needed. Reading and looking and holding a comic cannot be duplicated on a screen.

Disagree. Comics (the product) is all 1s and 0s before you get it — inked pages are scanned, and then handled digitally for colouring, text and printing. Printing plates are made direct now, not from negatives shot from the initial artwork.

THAT's why Marvel is so pleased with their digital service. It costs them relatively nothing, since the modern issues are scanned and a lot of the big classics were scanned for recent trade paperbacks. It's pure profit until you hit the oddities, but that's a small expense comparatively.

Fine, I could care less if a 12 year old wants to buy digital, I will read the physical object

Except that the problem is the 12 year old who will one day be the regular comic buyer.

LCSes got their initial business from the common store rack because they had exclusive product and the guarantee of availability if pre-ordered. They got a few bumps later thanks to the speculator boom. But what have they got since the mid-90s?

Mr. Hibbs can complain all he wants about the deal — and it IS unfair to the retailer to give them just 15¢ — but the reality is that the LCS can no longer reach out for new customers. They aren't where the modern consumer is, and if they are they haven't really pushed the idea that it's a cool thing to buy comics and read them openly like they should be doing. Instead, it's become a niche market where the stores are (for the most part) unfriendly and better known for other things.

[That's how it is here. Out of seven stores, only one has decent parking and friendly staff, but they have 50% of floor space dedicated to anime, 25% to toys, 15% to board games and other peripherals — not much for comics.]

The comics will still be around. Even with all the gloom and doom, Jim Lee notes how they are the cornerstone of the multimedia empire built from those characters. If the LCS wants to share in that they join with retailers to find some way to get readers into their stores and onto their products; they've done such a good job so far that DC is looking to someone else to market their product.

[Brian from Canada]

It's when trades and retailers become cannibalistic to each other that I think their end is near. But, this is just what happened in this case, and doesn't necessarily speak to LCS retailers as a whole, everywhere.

I've seen it happen here in Ottawa. One business actually banned a customer for saying the competition had the latest issue of Dragon three weeks earlier; the worst part was that customer was head of the gaming club for the campus the store was on. Their competition refuses resumes from employees who work at other stores because the ones who come in are waaaay too bitter.

The bottom line is that most people get into selling comics because they have a passion for the medium, but not a passion for business and retailing as well. You have to be a good retailer to stay in business and for a lot of them, being cannibalistic to stay alive is their only option now. They've killed whatever goodwill they start with in the community and need to find some way to keep the bills paid.

[Pardoz]

The word you're looking for to describe former retailers who essentially become commissioned sales reps for somebody else is "agent"; the model is known as the "agency model", and you can thank Steve Jobs for coming up with it as a response to the Apple ebookstore's inability to compete with Amazon and B&N.

Unfortunately even if the various anti-trust investigations and class-action lawsuits around the introduction of agency pricing in ebooks bear fruit the precedent probably won't carry over to comics (unless Comixology gets Marvel and some of the bigger second-tier publishers on board).

[Brian Hibbs]

I really really try not to respond to most of the Nattering Nabobs of Negativity who post in these threads, but this one really got me, so let's answer some of this one.

When did DC ever make a "forever and ever" promise like this? "We will never change our business model, and we will not adapt to changes in technology or respond to consumer demand" is not something I would expect a business to say, and if they did, anybody who relied on it would be utterly foolish.

One of the publishers of DC comics did EXTENSIVE consulting with a very small group of retailers, of which I was one. I wrote up, at the request of this person, long detailed analysis of how the best way to integrate the DM into digital plans might go. Such consultations included late-into-the-night phone calls, out of business hours, as we discussed many specific details.

We were absolutely assured in these private conversations, that day-and-date was a limited test, and we have been assured, both privately and publicly, that we are DC's primary channel and that our concerns are absolutely essential to them.

This isn't some "Wah, some guy who doesn't know what he's talking about" whine -- this is straight from someone with direct promises made by people at the ABSOLUTE HIGHEST level of the company, who went back on promises that were made to our face.

Comics publishers put all their eggs into the DM/LCS basket for years, and have been rewarded, for close to two decades, with declining sales and an eroding customer base. Yet whenever they try to expand the market, whiners like Hibbs cast themselves as betrayed victims.

Anyone with a bare lick of sense can see that the largest single reason for declining sales in PUBLISHER BEHAVIOR, putting out material that is too expensive, to unfriendly to casual consumers, and too tied-in to other products to stand alone.

Day-and-date digital will do exceedingly little to "expand the market" -- that's done by stores like mine being visible in our communities and exposing hundreds of "civilians" new to comics each and every week why this medium is so stellar.

If you're going to bitch about the 15 cents/sale cut of digital sales, tell us why that's not a fair return on your investment in digital market mechanisms and infrastructure, which looks to me to be zero.

No one is "bitching" about 15 cents/sale -- what we're "bitching" about is a contract that says (effectively): we have the right to harvest your customer data, unilaterally kick you off our service, then market directly to those customers.

Do I expect that's what comiXology will do this week or next? No, I do not, but the contract says they have the legal right to do so. Why would I want to sign such a contract?

-B

[heiro5]

This simply isn't true. Comic art is digitized as well, before printing...

In short, it IS the same thing. It's EXACTLY the same thing. You're just used to digital music already. One day you'll be probably used to digital comics.

Nope. Totally different.

Whether you listen to a cd or an mp3, chances are you are listening via the same medium, and if that medium happens to be speakers, then it is the same going back to vinyl.

Reading off of a paper print and reading on some digital "reader," whatever that ends up being, a phone, a pad, whatever... vastly different experiences.

Add to that the current state of digital comics licensing rights to access a digital copy versus selling the thing itself (which could become the model, where they to sell you a dl'able pdf or some equivalent), and the difference becomes even more significant.

Anyway, as far as the piece goes, yeah, it's a bad direction for comics publishers. I don't know if DC appreciates the damage they will inflict on themselves if they erode the direct market, LCS ecosystem. But that short-sighted corporate approach to this-quarter profits really IS the corporate way.

[poneley]

One of the publishers of DC comics did EXTENSIVE consulting with a very small group of retailers, of which I was one. I wrote up, at the request of this person, long detailed analysis of how the best way to integrate the DM into digital plans might go. Such consultations included late-into-the-night phone calls, out of business hours, as we discussed many specific details.

We were absolutely assured in these private conversations, that day-and-date was a limited test, and we have been assured, both privately and publicly, that we are DC's primary channel and that our concerns are absolutely essential to them.

This isn't some "Wah, some guy who doesn't know what he's talking about" whine -- this is straight from someone with direct promises made by people at the ABSOLUTE HIGHEST level of the company, who went back on promises that were made to our face.

But Brian, it makes NO SENSE AT ALL for DC or Marvel to not do digital day and date. Getting upset about this is like getting upset that Marvel wants to sell books through amazon or some other channel that is not the LCS. It's criminally stupid for publishers to ignore a sales channel for the sake of a different sales channel. And as much as I love and adore my LCS and I want them to succeed forever and ever (and I say those words genuinely), you basically have to "deal with it." At the end of the day, digital is your competitor and that's it.

Folks want digital day and date. I'll repeat it's criminally stupid for publishers to ignore a sales channel for the sake of a different sales channel.

[ComicWorthy]

I also want my movies released digitally and on DVD on opening day. Why won't the studios do that. Some movies do better on DVD anyway, so why not release them at the same time as the theater release.

[greatmetropolitan]

Perhaps I'm just being a little slow, but I'm not understanding quite what's going on. Could someone clear this up for me?

Are ComiXology wanting to install a digital download service in comic book stores, and giving the comic book store 15 cents per customer who DLs from it? And that customer can then go and DL directly from ComiXology themselves if they so choose?

[db105]

I also want my movies released digitally and on DVD on opening day. Why won't the studios do that.

Because the studios expect to make more money that way, not because they want to support theaters. The world is changing and just like brick & mortar book stores are suffering, LCS's will suffer. I'm sorry for them, but the internet exists, and the means to read digitally exist and they are just more convenient. Sure, sentimental value counts for something, but it's not enough. LCS's will have to adapt or disappear.

Now, the complaint about the details of the contract seems reasonable, but in the long run, the bottom line is that publishing companies will not share a significant part of their digital sales profits with LCS's because they do not truly need them to sell digital copies.

I don't like it, because there's something special about a good LCS, but I believe that's the way it is.

[db105]

Are ComiXology wanting to install a digital download service in comic book stores, and giving the comic book store 15 cents per customer who DLs from it? And that customer can then go and DL directly from ComiXology themselves if they so choose?

Something like that, if I understood it correctly. Probably they don't want to install a digital download service in comic book stores, but they want stores to encourage their clients who might be interested in buying digital comics to do so through a web portal created by ComiXology for the store. They problem for the LCS is that ComiXology will then have the contact details for the customer and may advertise directly to them, without going through the LCS.

[rpi]

Its not the same thing. Music (the product) is all 1s and 0s, so yes a cd or record is no longer needed. Reading and looking and holding a comic cannot be duplicated on a screen.

Fine, I could care less if a 12 year old wants to buy digital, I will read the physical object

As a music fan, that is not true at all from my point of view. Music comes with liner notes and album art that is very important to the overall vibe and message of the album, at least if it's done well. Music is primarily an audio experience, but the album is a mixture of audio, tactile, and visual experiences. If anything, comics are more adaptable to the digital format than music as you still have something to hold and flip through, but it's on a glass screen rather than a paper sheet.

[rpi]

Comixology is pretty good, but has a LOT of room for improvement. I would prefer to have the individual issues purchased be on my computer/iPad/phone rather than viewed by my device, but retained on their website. If a LCS could manage that, I think a lot of people would shift where they purchase their digital comics.

Also, LCS have access to TPBs. Another thing Comixology can't do (as of yet) is to offer a discount on the TPB of comics purchased digitally. I'm thinking give a higher discount for the more issues purchased - so if the customer purchases only the first issue to see if he or she WANTS the trade, give them a 5% discount, but if they purchased every issue in the trade, give 'em a 20% discount - and in either case, have an offer at the end of the digital comic asking if they'd like to be reminded when the TPB comes out (and what kind of discount they could get for each level of comic purchased.)

Comixology does have a lot of room for improvement for sure, but any comic you buy does actually download to your device. You don't view it through a remote app. The only problem is that at the moment they have copy protection.
Also, DC's digital titles will all be $2.99 for the first month and then drop down to $1.99 after that. That's a 33% discount, much better than a 5% discount, if you can just wait a few weeks for the issue. Also, they don't offer trades yet (although I suspect they will), but they did just offer their first omnibus: the entire series of Planetary for $25. If that's their answer to the TPB, I'm happy to have a bunch of individual issues. I probably would never have read Planetary if not for that offer.