Friday, May 01, 2009

Digital Comics / Ready or Not Here it Comes Part 2 of 2

As I stated before and warned you that I would come back to this subject I’m going to attempt to look at the phenomenon that will be e-comics or digital comics from a different viewpoint (see my first column here). Personally I think they are inevitable and once they hit what will publishers be doing and how will this after the retailers. I have some perspective having been a retailer a decade ago and while not super successful, I made money at it. I have never been a publisher, but I have an IQ over room temperature and can extrapolate enough from what I know to make at least a SWAG (sophisticated wild ass guess) at how they might approach it. Finally this assumes a viable device exists that allows us to read comics on a portable screen along the lines as the Kindle 2 does for books. In my imaginary world the ITablet is the size of a modern comic book page.

From a publishers perspective the idea of e-comics has to have them salivating. I have said for a while that the direct market is now a dead end for comics and the idea that you could have access to 100 million customers as opposed to 150,000 would make any business person’s eyes glaze over and salivate. The digital comic stuff is becoming a bigger and bigger deal and all you have to do to see that it is true is look to the number one marketer of comic books Marvel. Marvel has run full page adds in their comics pushing their digital subscription and is producing material that is exclusively for their on-line market. Marvel understands that the paper publishing end of comics, while still viable is yesterday and digital is tomorrow. All you have to do is look at other magazines and their have been rumors that some major publications are thinking of going all digital. As an aside I think this is wrong way to go at this point and a better solution is delivering on both fronts and reduce the print side. It is impossible to not see the see the handwriting on the wall as CD sales have changed to Itunes, e-books sales are a growing market and more and more people get their newspaper over a screen and get to feel good about saving a tree at the same time.

From the publishers perspective the savings are huge. For a $4 comic the retailer makes $2. It cost at least 50 cents to get the book printed and pay the distributor. I think that cost could be higher, but let’s leave it at 50 cents. So the publishers makes $1.25 on every $4 comic sold (I’m shaving a quarter for overprint expense and spoilage and other miscellaneous costs). Of the $1.25 the publisher has to pay the writer, the pencil artist, the inker, the colorist and the letterer and editorial staff. Let’s be conservative and assume it cost $500 a page to get the talent to produce the page, so at $11,000 you have to sell 8,800 books to break even. So instead let’s say the publisher goes 100% digital and charges $2 for a comic, they only have to sell 5,500 downloads to break even. The amount of issues you have to sell actually becomes lower to make the same amount of money.

Let’s look at the other advantages going to e-comics allows you as a publisher. If an issue is popular you never have to worry about under printing a book again. It is available for order on your website as long as you want it to be available. Also you can cross promote the heck out of your books by offering them to Amazon to sell them for you and cut them in for a piece of the profit. Now that part gets tricky as you want to sell direct yourself, but also offer multiple outlets for your books, so you may end up competing with your new distributors or you could just work through your new distributors. Bottom line every book that you publish would be available forever if you wanted it to be. Someone discovers the new series about Jack Daniels Man and they read an e-comic of their friends and they come on your website and buy the last 10 issues in one fell swoop.

Publishers have been learning about the evergreen concept with comics for a long time now and when sale of Watchmen topped a million units for one year, the idea of what a single issue of a comic is worth versus what it is worth as a trade was suddenly very, very clear. A trade or hardcover that sells for 20 years earns big bucks versus the issue published monthly. Digital comics can be evergreen products for companies also and the amount they have to pay (if any) on royalties for old books is almost criminal as I’m sure those rights were never contemplated back in the old days. Hopefully today's creators have stronger contracts for generating royalties on any form of their work that is sold by the companies, but the older work can just be an enticing catalog to offer people to get them to sign up.

Doing this does not prevent publishers from doing direct sales on monthly comics, it would eliminate their desire to do any print overruns on “hot” books, instead the hot book would just be a bigger incentive for a fan who is reluctant to try an e-comic.

I should state also that I envision the e-comic to build in lots of bells and whistles to make it a more enticing product. The imaginary Itablet will not be made for comics, but it will be a platform comics can use. With the advent of that platform, writers can use the new format to do different things, companies can have easy links inside a book to refer to other stories, the user can expand or reduce the size of the art and the panels. Heck the scripts could be attached for free if a publisher would like to do so.

From a publisher’s perspective this becomes a win/win scenario. The print side of the equation can be done to order, the e-comic side can be done forever. Heck the publisher could even release preview pages to someone who subscribes to a comic and on its release date (if your Itablet is hooked up to the internet) you wake up Wednesday with all your new books waiting for you and Marvel/DC/BOOM/ Dark Horse whomever has given you a free preview of a new series you had not even thought about.

The person who gets killed in all of this is the retailer and ultimately I think the distributor of paper, but they can scale down as time moves forward, the retailer has to change or die. I do not envision companies having the specialty retailers being a distributor of their e-comics and if they do, a sale of an e-comic would generate maybe a quarter versus $2 for a comic. Cut a store’s revenue stream by 7/8 and it is pretty easy to see them turning over the closed sign forever.

There will be a print market and there will be retailer’s who survive, just a lot less of them. I also think to survive the retailer will have to be both a brick and mortar and an online store. The retailer will also have to learn how to add additional products to his array of what he sells which will in effect destroy the specialty retailer that I believe most of us love. None of this is happening in one year, but it is happening in five years or less and planning ahead is the smart thing to do.

Of course playing Future Shock and guessing what tomorrow looks like is dicey at best, but I believe that e-comics are coming (better hide you heart girl, oh that’s Eli’s coming) and I also have this Pollyanna idea that it could be one hell of a boon to the comic book market place as it would open up the world to checking out comics.

Finally from the fan’s perspective again how cool would it be to be reading your favorite book and then deciding you want to try out a companion series to the book you are looking at and then just downloading that issue as you are reading another comic. And remember what happen in the issue from four months ago, I don’t either, but it is in the hard driver and a few clicks on the menu have that issue pulled up so I can glance through it to recall exactly what happened. You can bet I’ll be getting an Itablet (after the price comes down a little).

1 comment:

  1. Um, you know room temperature is about 65-75, right? Saying your IQ is above room temperature still leaves you in the mentally deficient range of sub 100, with 100 being average. Now saying your IQ is above celsius boiling point, that would be better.

    As to the merits of your argument, I kind of tuned out part way through, but for me, I really do not like reading for my own enjoyment on a screen. I get more than enough screen time with work, day in and day out. The last thing I want to do is stare at it, with its anti-blinking properties, any more than I already have to. (This and a couple other blogs on comics being the rare exceptions.)

    Besides, if a comics producer is to make any money on on-line comics, and not go the idiot road of newspapers, publishers will have to charge some kind of access fee to see the comic on line. Well, if they want to survive as a business, they will. So I'm supposed to pay to read it on-line, then pay again to buy a paper copy if I really like it? Thank you, no. I'm not one to buy the singles and then the trades, hard covers, whatever. I buy one or the other. If I liked it as a single, then I keep it. If I find out about something being good but missed it in singles, I'll buy the trade(s). Money's not free, you know.