Tilting at Windmills - Nov 15, 2012

[mathew101281]

Vibe, Really? their has to be characters out there with more potential then Vibe.

[Derrick Richardson]

The clear reality of the matter is this. The digital market is a new market. There won't be any major cannibalization of the DM, for
the simple fact that the people who frequent comic book shops, will continue to do so.

Pundits in the field can continue to safely talk about the superiority of print to digital, because the DM numbers won't change
by any meaningful degree immediately. There are no new customers coming into comic book shops in any significant numbers.
If there were, we'd see numbers go up, both on monthlies and trades. Looking at numbers from the usual suspects
(Comichron, ICV2, etc.), they aren't. It's basically the same 200,000 to 250,000 people buying everything, in a nation
of 300 million people.

Now they will change in the next 5 years. Because the circulation figures, as people stop reading print comics (from frustration,
anger, apathy, mortality), won't be sustainable. And what it would take to save printed comics, the mainstream aren't prepared
to do, either from a financial, or editorial viewpoint.

Stores that focus exclusively on selling printed content will continue to be around as a niche market, which is what it's been for
quite some time. Trades will eventually be the primary mainstay. Anything above $3.99 an issue will officially kill the American
monthly comic book, especially in the current economy.

Digital is the future, specifically mobile. This truth will be borne out over the next 5 years. According to Cisco in its
Global Mobile Data Traffic Forecast Update, released in February of this year, "There will be over 10 billion mobile-connected
devices in 2016... exceeding the world's population at that time (7.3 billion)."

"The numbers include not just phones but tablets, laptops, handheld gaming consoles, e-readers, in-car entertainment systems,
digital photo frames, cameras, and "machine-to-machine modules."

"Global mobile data traffic doubled for the fourth year in a row in 2011, and will grow 18-fold by 2016, hitting 130 exabytes a year
(the equivalent of 33 billion DVDs, 4.3 quadrillion MP3 files, or 813 quadrillion text messages)", Cisco said.

I love comics. Have read them for over 40 years, and written and drawn them for half as long. But the current mainstream direct
market is not a sustainable business model.

[mythmaster]

Marvel makes a profit on a large majority of the titles they publish.

"The publishing division strived to make a profit on each title in its portfolio. Describing his
division’s performance over 2003, Karyo said: “There were only three books that lost some money at
the end of their stint. But more or less, everything we print is profitable.” He added: “We generally
don’t publish anything that has less than a 30% margin.” However, there was sufficient room for trial
and error, according to Jemas: “We can try new characters at almost no risk. We can put it out, watch
it for a couple of months, and if it doesn’t seem to take off, cancel it. We might lose $10,000, but that’s
nothing compared to the revenues from the winners among our 60 titles each month.”

-Marvel Enterprises, Inc. Harvard Business School Publishing, 2004

This was before the bookstore or digital markets picked up too.

[Derrick Richardson]

Those are eight year old numbers.

More recent numbers and data can be gleaned from Disney's 2011 Annual Report:

Quotes:

"Marvel businesses are reported primarily in our Studio Entertainment and Consumer Products segments"

Consumer Products
Operating results for the Consumer Products segment are as follows:

Year Ended - October 1, 2011

(in millions)
Licensing and publishing $ 1,933 (that's 1 Billion 933 million dollars)

This is an aggregate of licensing and publishing. No separate figures on publishing for Marvel in the report.
The primary emphasis is on the film division, and revenues generated from "Thor, and Captain America",
along with anticipation for the as yet to be released "Avengers". And we all know how that turned out for them :)

This is the primary paragraph in the AR about Marvel publishing:

"Marvel Publishing creates and publishes comic books, and graphic novel collections of comic books, principally in North
America. Marvel Publishing also licenses the right to publish translated versions of our comic books, principally in Europe and
Latin America. Titles include X-Men, Spider-man, Captain America, Iron Man, Thor, The Avengers and the Incredible
Hulk. Marvel Publishing also generates revenues from the digital distribution of its comic books."

Mainstream comics publishing is still making a profit, and will continue to make a profit. The question is for how long will most
of that profit be from printed product?

As Disney itself states in the risk factors section of it's AR:

Changes in technology and in consumer consumption patterns may affect demand for our entertainment products or the
cost of producing or distributing products.

"The media entertainment and internet businesses in which we participate depend significantly on our ability to acquire, develop,
adopt and exploit new technologies to distinguish our products and services from those of our competitors. In addition, new
technologies affect the demand for our products, the time and manner in which consumers acquire and view some of our
entertainment products and the options available to advertisers for reaching their desired markets. For example, the success of our
offerings in the home entertainment market depends in part on consumer preferences with respect to home entertainment formats,
including DVD players and personal video recorders, as well as the availability of alternative home entertainment offerings and
technologies, including web-based delivery of entertainment offerings. In addition, technological developments offer consumers an
expanding array of entertainment options and delivery vehicles which may include options we have not yet fully developed, or
options we have developed but which entail a smaller return than we realize on traditional options. As a result, the income from our
entertainment offerings may decline or increase at slower rates than our historical experience or our expectations when we make
investments in products."

Disney, of which Marvel is now a subsidiary of, is fully cognizant of the fact that digital as a primary mode of content distribution, is here,
and will only get bigger. What they have to figure out now is how to take advantage of it, while maximizing profits to deal with the massive
amounts of overhead that a multinational corporation entails in it's daily operations.

Their own numbers show that the publishing division is more valuable to them as an IP farm for theatrical releases, and licensing. If they
can make the books more accessible, their digital publishing will generate even more profits over the long run than print ever will, which
will increase the division's profile, and ensure it's continued existence within Disney at large.

[Brian Hibbs]

There are no new customers coming into comic book shops in any significant numbers. If there were, we'd see numbers go up, both on monthlies and trades. Looking at numbers from the usual suspects (Comichron, ICV2, etc.), they aren't.

So... I'm dreamed the headline "Graphic Novels up 53.9% in October; Over-all Up 19.5%"?

I certainly know that this last Saturday in my store, of the 48 transactions I did, only about 9 of them were from "regulars"

Trades will eventually be the primary mainstay.

Unlikely, in the extreme -- serialization + collection uniformly yields more cash flow that "OGN" book-format only

Digital is the future, specifically mobile.

Mobile digital may be "the future", but it absolutely sucks for delivering comics content heavier than four-panel strips.

-B

[Jason A. Quest]

DC is launching a Vibe series because someone at Warner hopes that they can turn it into a TV series or movie. It used to be that the anthology series were market research for DC and Marvel's publishing plans... now DC and Marvel's publishing divisions are market research for the TV and film divisions of Warner and Disney.

[ZiggyFakeMcCoy]

DC is launching a Vibe series because someone at Warner hopes that they can turn it into a TV series or movie.

Ok, here is why I don't buy this, no matter how many times people love to bring it up:

What is it about Vibe that would make someone at WB, who we know is no expert about comics since then he would no doubt hate Vibe just as much as the rest of us, say "Hey, this Vibe guy would be perfect for a movie. Someone get on the horn with DC and tell them to make Vibe popular." Why would he say that, and how would he even KNOW who Vibe is? This idea that the respective parent companies have a direct hand in the attempts to raise the profile of lesser known characters to groom them for the big or small screen implies that any of these people have a fucking clue who any of these character are AND have reason to believe they could be popular.

No one who actually knows Vibe has ANY reason to believe he could be popular. Even if WB pushed them to raise the profile of a Hispanic character, only through unnatural actual affection for the character would Geoff Johns choose to go with Vibe. Any sane person would tell them they're better off trying with a brand new character than going with Vibe. But for whatever reason Johns wants to do Vibe, and that kind of dedication to turd does not come from a parent company's desire to make movies. It's done in spite of the fact that it will NEVER be a movie.

[Derrick Richardson]

So... I'm dreamed the headline "Graphic Novels up 53.9% in October; Over-all Up 19.5%"?

I certainly know that this last Saturday in my store, of the 48 transactions I did, only about 9 of them were from "regulars"

Thanks. you actually proved my point with the icv2 article. Quoting from the article:

Graphic novels led the market in comic stores in October, with a whopping 53.9% increase over sales in October 2011. Comics were up 7.4%, bringing an over-all 19.5% increase in the comics and graphic novel market in comic stores in October.

So in other words, more people are buying graphic novels than comics.

Unlikely, in the extreme -- serialization + collection uniformly yields more cash flow that "OGN" book-format only

You're absolutely right. Doesn't stop the fact that people are fed up with paying $3.99 for 15 minutes of entertainment. as you yourself
say:

...in a world where up to half of the comics Marvel and DC publish have reported orders (not even sales) of under 30k, I find it hard to conclude that we've done anything but break that testing lab, perhaps irreparably.

Mobile digital may be "the future", but it absolutely sucks for delivering comics content heavier than four-panel strips. -B

Mobile isn't just phones. It's tablets, and "phablets", like the Galaxy Note. Besides, comics have gone through many form factors in it's long history.
They're about due for a new one.

As always, you make good points, as long as it's kept in a direct market paradigm. But the paradigm shift content producers are experiencing now is global.
And we're just at the beginning of it. As Amazon's Jeff Bezos put it "We're in day one " of the digital revolution.

Things are going to look very different five years from now.


We can agree to disagree, and leave it at that. Thank you for an engaging discussion. I look forward to your future articles.

[Chiasm]

That's the most insanely stupid thing I've ever heard.

Yeah because pirating of music, movies, and comics never happens.

[Chiasm]

Milton Griepp's digital sales estimates. The growth is huge even accounting for DC only moving to same day release when the new 52 launched.

2009 - $1 million
2010 - $6-8 million
2011 - $25 million
2012 - $75 million

http://www.comicbookresources.com:80...ticle&id=41559

DC's John Cunningham, also reckon's DC's digital sales have tripled compared to 2011.

http://www.comicbookresources.com/?p...ticle&id=42153

Before anyone gets too excited consider what happened in 2011 that created the bump that year and even bigger bump in 2012. DC released many of their top graphic novels to Amazon and other companies for digital download. So many like me bought and downloaded things like Watchmen and Dark Knight Returns. Great for DC but realize why the bump probably happened and why it will likely drop off since those aren't going to be ongoing purchases.

[Chiasm]

I live in Sweden there is one comics shop in town and i support it loyally because they are good at their shop. Giving me discounts sometimes so he can sell old comics i could get cheaper online. If there was no comics shop i use comixology. The owner in my shop knows sometimes i catch to series buying them from comixology. He knows he cant overprice me to keep me.

Im loyal to good comics and not comics shop for no reason. Its like bookstores the good smaller ones survive by dealing with customers well.

Torrent thing is BS, i could download all new comics but i feel i own the money to creators. If you are torrenting you would from the start. It has nothing to do with normal readers who respect the creators like me. The customer decides which comics DC/Marvel and co realese and they decide when if the real comics shops die out with their wallet.

Some of us don't like digital. I bought a few graphic novels off of Amazon for my Kindle Fire but the experience pales compared to the real thing. I've got ZERO interest in buying digital monthlies and I can't imagine I'm alone. So I'll keep buying dead tree versions but if the day comes when those aren't available I'll just torrent or I'll quit. Its just not worth the money for me to pay for a digital version. Again I'm not advocating piracy as I've never pirated a comic, I pay for dead tree versions, but it is reality that many do pirate and many more will pirate the more we get pushed to digital.

[ZiggyFakeMcCoy]

Yeah because pirating of music, movies, and comics never happens.

Sure it does. It's the idea that someone choosing buy their media digitally causing them to decide to just steal that is insanely stupid.

[mythmaster]

Derrick,

I brought up that case study because I wanted to show that comic book publishing is a profitable business and not just an "IP farm" for toys and movies like many commenters like to point out. Whether digital greatly increases sales or not, a comic book from the one of the big is most likely to make a profit. The overhead costs are not that high and even an issue that only sells 15,000 copies a month is still likely to make $10,000 dollars in net profit.

[Brian Hibbs]

So in other words, more people are buying graphic novels than comics.

If that's what you think the article says... well, man, I don't know what to say. Yessss, GNs are up, as a percentage a much larger percentage than comics *this particular reporting period*, but they're still a tiny fraction of comics, in both quantity and dollars -- comics were about $27m in Oct, books were about $9m.

And, of course, about 7% (SEVEN PERCENT!) of books sales in October came from a *single* book: the 2nd TWD Compendium. That's a once-every-four-years $60-each hit that isn't going to be repeated any time soon. NEXT October's book sales are going to be DOWN pretty significantly since that one single book is like a quarter of the growth all by itself.

The single best selling (in the DM) graphic novel in October sold 20k copies. (#2 dropped to 15k, #3 dropped all the way down to just 10k) -- the best selling periodical? Well, I'm throwing that one out, because UNCANNY AVENGERS #1's sales are essentially fiction, But #2 comes in at 171k, #3 at 148k, and #43 at 117k.

Or to put it another way: WALKING DEAD #103, the *ninth* best selling periodical comic book, sold more copies (~75k) all by itself that the ENTIRE SUM of the nine best-selling GNs for the month *combined*... (which, not at all coincidentally, is *why* Kirkman *can* collect the work into strong selling collections. "GNs", by and large, don't exist without serialization allowing them in the first place!)

Doesn't stop the fact that people are fed up with paying $3.99 for 15 minutes of entertainment. as you yourself say:

Again, if you think that's what I said.... well, I don't know what to say!

Yes, of course, pricing is ONE factor (of MANY), but it's not the sole reason, by any means.

What I've ALWAYS said (and firmly believe) is that people will pay "virtually anything" for something that they passionately want -- I've sold enough copies of the $8 LEOG: CENTURY #3 to firmly make it a top 10 comic for my store. No one is complaining about the price. No one is complaining about the $4 price of BATMAN, that I hear -- it is worth that much to the readership, with no real problem.

Conversely, people really REALLY don't want to pay $4 for comics they don't like; or that aren't resonating with them for some other reasons (frequency, tie ins, changing creative, etc etc etc) -- but that's not at ALL the same thing.

Things are going to look very different five years from now.

It may be, but none of the underlying data is showing after 14 months of ubiquitous digital, that the print market in comics is declined by many benchmarks -- the industry looks to my eyes at least as healthy as it was 10 years ago, and in several ways much healthier. So, Yeah, I firmly disagree that the market will be "very" different in 5 years (or even 10, for that matter) -- and I'm more than willing to bank my future on that because I can read the trends and the specific in-store reality.

-B

[Derrick Richardson]

Derrick,

I brought up that case study because I wanted to show that comic book publishing is a profitable business and not just an "IP farm" for toys and movies like many commenters like to point out. Whether digital greatly increases sales or not, a comic book from the one of the big is most likely to make a profit. The overhead costs are not that high and even an issue that only sells 15,000 copies a month is still likely to make $10,000 dollars in net profit.

Hi Mythmaster,

Im sure it generates a profit. But relative to what? Video games? Movies? TV? And depending on the book's creative team, 15,000 copies won't cover their fees. You also factor in paper costs(ever rising), administrative costs, etc., I don't think these numbers are viable as a whole for comics' long term survival.

And relative to the movie business, Disney bought Marvel for the IP. It definitely wasn't for the comic books. Download the annual report, and check it out for yourself. Very enlightening. Marvel Comics is part of the Licensing and Publishing division. Their numbers are part of that division, which also includes other printed content. They don't have separate numbers, The comics don't generate enough for that. The comics got a paragraph in the whole report on their own, and they didn't mention separate numbers for them.

All I'm basically saying is that we as an industry need to be more cognizant on what is going on around us. Digital is a freight train that's run over every physical medium it's come in contact with. Why some people think that comics are going to be any different, is amazing to me in the face of the data, and precedent.

Best case scenario (which could happen). Digital brings people to the remaining approx. 2,000 comics only shops, increasing overall sales. For print's sake, I certainly hope this is the case.

But you may want to talk to Tower Records, Borders, and the respective recording and book publishing industries to see how that's working out for them.

I love comics, as I've said previously, I've worked as a professional artist in the industry through a local studio in the '90s -'2000s. I've also managed a comics and video store, and was witness to the speculator implosion, The Marvel Heroes World fiasco, and Blockbuster moving into the mall around the corner from us, which was the final nail that
shut us down.

I have friends that currently own one of the biggest, most well stocked shops in our area (Yo Showcase!). They're going to be fine, regardless of what happens, because they're not just dependent on comics.

I don't want anyone to lose their livelihood, doing what they love. As someone whose been through it, it's not fun. A learning experience, but not fun.

Lesson learned: When a storm is coming, you prepare so you can survive it, and print comics as a whole are not prepared. That's really all I'm saying. Thanks for the dialogue.