JeffHaas
Friday, August 20, 2010, 02:27 PM
The world is ever spinning, inevitably disposing innovations as antiques and progress into history. We must only observe the trends of the past thirty plus years to watch the rapid evolution of technology unfold before us. Within that timeframe of history we saw the creation of VCRs, only to have them replaced by DVDs which in turn is now fading in the shadow of the Blu-ray disc. Vinyl to cassettes and then CDs, and now digital files. And now many who prognosticate the future of printed media are also divining their eventual fall. If the Kindle continues to prove wildly successful, these prophets of doom may prove correct. But how about the medium of comic books? Can they survive the onslaught of time? Will the digital revolution overcome them as it has so many other products? This article will discuss the progress of digital comics as an outlet, and potential replacement, for their printed brethren. The article will also attempt to gauge the current popularity of digital comics. Finally, it will attempt to discern the long term viability of printed comics.
First, let us examine an important stat as stated by Aaron Watanabe, a columnist for the KPBS' website, that, "Revenue from digital comics is estimated at $1 million a year," (Watanabe). While a million dollars of annual revenue is not a small number, it is important to realize that Mr. Watanabe quotes that the total annual revenue of comic books in the U.S reaches "$680 million a year." In other words the total revenue of digital comic sales represents less then one fifth of one percent of the comic book market currently. Basically, this means that the generated sales of digital comics is barely a blip on the comic book sales radar at the present time. So why all the fuss and fear that digital comics will be the death knell for the printed variety? Well, as stated by Mr. Watanabe, within the very same paragraph, "...the sector is growing rapidly," (Watanabe).
It seems that every company is trying to take advantage and get an early foothold on the potential Digital Age of comics. Perhaps the single greatest stride in forwading the digital revolution was the utilization of the Ipad as a means to read one's digital comic applications. Why the Ipad? At the moment the folks at Apple have ideally positioned themselves in this new medium by not only associating themselves with the comic book ordering website known as Comixology, but have also partnered with Marvel, DC and IDW, who are three of the largest publishers of comics in the country. "[Marvel and DC] offer free reader apps and encourage their followers to buy issues of their favorite titles at US$1.99 a pop," (Mello). Reviewers such as Charlie Sorrel of the website Wired have commented that, "The iPad is almost perfect for viewing comic-books," (Sorrel). Reviewers seem to favor,"The large screen, the swipe gestures and the pinch-to-zoom [that] all make digital comics that much better than it has before," (Chen). Companies like Developica, Comixology, Comic Zeal and Comic Reader Mobi, among others, have all made apps for reading comic books on the Ipad. This, of course, does not speak as much to the success of digital comics, as much as it does to the expectations surrounding them.
Not to be undone, a digital comic book program has also been launched for the PSP. The PSP is a handheld portable gaming device that launched its comics service in December of 2009. One of the perks made available to the Playstation Network Digital Comics Service, is exclusive content made available by DC comics. More on this later when we discuss the individual publishers. Other benefits made available for the PSP is its ability to read manga comics right to left, an important feature for the form. The titles you download, "automatically are categorized in multiple genres. All titles in your collection, old or new, will benefit from this change," and "You can now choose to browse any titles in your collection by publisher," (Playstationcomics.com).
The publishers themselves have fully entrenched for the potential digital push by offering subscriptions on their homepages and also by signing exclusive deals with digital comic service providers. For instance, Marvel has on their homepage a fully pimped out subscription service that touts that inclusion of "an ever-growing collection of over 5,000 comics," (Marvel). This extensive collection of digital comics includes favorite runs of classic comics like Stan Lee's early Amazing Spiderman run and content that has been made exclusive for the electronic format. The subscrption service that Marvel is offering will cost subscribers about sixty dollars annually, or put another way the approximate cost of just under twenty printed comics by the same publisher. If you choose to only subscribe monthly, the charge is $9.99. Marvel has also signed on with both the PSP and Itunes to offer their content through their providers. A few of the better features that Marvel is offering through both their Itunes and PSP service, and their own subscription service is the availability of motion comics. These comics, specifically tailored for the digital medium, features both moving panels and dialogue that is performed by actors. So what is the benefit to this? I believe that this is a three tiered attempt to increase the viability of these type of comics. First, by making these comics behave more like movies or cartoons, it is an attempt to draw in younger fans who may enjoy these bells and whistles. Many of these younger fans, may have not yet been drawn to reading, and this is another way for Marvel to reach out to the next generation. The second benefit for Marvel is that the moving images and sound uniquely separates the digital comics from their printed counterparts. This may encourage purchasers of printed comics to go ahead and buy the digital versions of those same printed comics they have bought so they can re-experience them in the different format. Lastly, the animated comics can act as a gateway for readers to become comfortable with the new digital services. By offering exclusive content, in the form of animated comics, it encourages fans of specific characters to seek out their further adventures offered exclusively online. To do this, fans will have to either subscribe to the service or download the Marvel app onto their Ipad/pod/phone or PSP. Over time, these readers will become comfortable with reading comics online which may turn them into long term subscribers. I would expect to see crossovers between regular printed issues and their exclusive digital comic counterparts shortly.
But Marvel is not the lone publisher of the big two, making a digital push, DC has recently joined the fray in full force. This past June, DC launched a new, "multi-platform digital program that will include much of its back catalog and, surprisingly, one brand new bi-weekly title," (Rogers). The mentioned Bi-weekly title is called Justice League: Generation Lost, which has been simultaneously released with its printed counterpart starting with its fourth issue that was also released in June. This groundbreaking move on the part of DC will be the canary in the coal mine that will help us foresee how digital comics will affect the long term viability of printed comics. Its important to note that both the digital and print versions of Generation Lost will retail for $2.99, while most digital comics across the publishing spectrum are currently priced between $0.99 and $1.99. We will return to this issue later. Another important innovation within the digital medium by DC is its decision to make, "comics purchased now through the DC Comics and ComiXology apps [capable of being] integrated into the [future] DCComics.com website store, so consumers can read their digital comics on both platforms," (Rogers). By allowing consumers to transfer comics downloaded from other platforms to their, eventual, DC subscription service, they can more easily keep their collections together. This will not only be esthetically pleasing for a fan base that is used to a well organized long box, but it will allow for more ease of use.
Perhaps DC's most interesting innovation is their attempt to include the retailers in the profits generated by the purchasing of digital comics by consumers. This is an obvious, but potentially essential step, in soothing the fears of retailers who may be rightfully concerned by the simultaneous launching of Generation Lost, which may lead to more such offerings if it proves successful. So how will DC help retailers? When Comic Book Resources interviewed John Rood, the EVP of Sales, Marketing and Business Development at DC, with this very question he answered, "It's really going to be a mixed economy, from a return of royalties directly, to the stores to advertising and consumer marketing programs that touch the stores individually, to measurable incentives that get the consumers to act upon what we've promoted online," (Phegley). From what I have gathered about this program, it is basically retailer appeasement. DC will advertise upcoming titles via their digital applications with the idea that this will bolster consumer purchases when they venture to the retail outlets. These would, presumeably, be exclusive free content offered in available platforms. Now what Rood means by, "return of royalties," so far has not been extrapolated upon to any website or interviewer at the present time. What I have read so far suggests that DC is still constructing the details with no definite plans, as yet, set-up for tangible usage. My best guess it that the program may compensate retailers for comics they purchase, that are also simultaneously offered online. Either offering any retailer within their program a share of profits made on the online copy, probably based on the number of issues they bought in printed form. This would have to dramatically affect DC's ability to profit successfully on their digital endeavors. Perhaps, DC is banking on retailers pushing their customers to check-out the digital service, because of the share of profits they would receive. Again, I cannot imagine that the share of profits that retailers would gain on the digital services would come anywhere close to the potential loss of that customer to the digital format. It will be very interesting to see how this story enfolds in the coming months.
Given that digital comics only represent less than a percent of overall profits in the comic industry, why are all these companies furiously angling for their share of it? To figure this out, it is important to take a look at the trends in online purchasing of digital comics. Important figures to gather would be the percentages of downloads of digital comics, per issue, of free comics and then of the comics at each price point. Another significant figure would be assessing the distribution of these downloads between publishers and new versus old content. And it would be interesting to analyze this numbers, except for one detail...no one's talking about them. I have asked for estimates and ranges of digital comics from Comixology, Marvel, Itunes and various websites and the responses have been either non-existent or negative. For instance, Comixology responded with, "Sorry, we love to talk about the app, but we don't share that information." While Marvel answered with, "I can’t comment beyond that we’re not able to provide this info for public consumption—we don’t release sales numbers for any of our comics." When I pointed out that Diamond regularly releases their sales information about printed comics I received the reply, "They don't release sales numbers-just estimates." When pressed for their estimates then, I received the reply, "We don't release sales numbers for anything." Further questions garnered no reply. When Itunes was called, I was forwarded to an answering machine specifically set-up for columnists on a deadline. I gave Friday the 13th as my deadline and so far I have yet to hear from them. So, with all this excitement that publishers are seemingly feeling surrounding digital comics, why is no one talking about them?
There are really only two reasons why a publisher or online service would not want to reveal the actual estimates of their downloads if business is going well. Either the individual publisher does not want to reveal their success because they want to deter further competition from other publishers and outlets, or because the publishers are concerned with alienating the comic shop owners. Neither possibility seems plausible. If you are either DC or Marvel, then your only true primary competition is the other major publisher. In the comic world DC and Marvel represent, on average, about 78 percent of the printed market. Basically, its these two and everyone else. The big two are also, already, fully entrenched in the digital comic market. They have also made, as mentioned already, recent giant strides to further their business goals in the new medium. Neither one can really back down at this point. One publisher is intrinsically forced into further pursuing digital comics, as a consquence of their competition doing the same. A business version of the Cold War arms race exists between the two, and there is no disuading either side. If their silence is an attempt to soften the rift that may be forming between store owner and publisher, whatever sales lost due to fans interest shifting to digital will be felt, and resented by the store owner, no matter what is the perceived number of downloads. As their sales drop, they will point their finger at the most likely culprit- the digital comics.
It makes sense then that their reasoning, in keeping the numbers hidden, is that their numbers are not as strong as they were expecting. It is hard to create a buzz around something if the data points in the other direction, and publishers are definitely attempting to create the notion that digital comics are the wave of the future. There might also be the concern that, while your numbers may be poor, that a reveal of the numbers will show their your competition is actually doing very well in the digital format. In that case, it is like a poker game, with each opponent trying to psyche the other one out. But if the numbers are that bad, and the one million dollar figure seems to indicate it is, then why would they pursue it at all? The first reason, is the one I already mentioned, if one side does it, then the other must follow suit. Another reason is that they are viewing digital comics as something whose demand must be gradually grown. Like any new product, people need to develop a comfort factor to it, which takes time and experience. Their view would then be that over time, word of mouth will spread enough that eventually non-fans of comics may be attracted in sufficient enough numbers, to compensate for the loss of printed sales, and the inevitable closing of comic book stores that would then result. Once again these companies are attracted by the potential of the new medium.
So what is the potential that digital comics will develop a demand sufficient enough to eclispe the popularity of printed comics? Without the actual estimates, this question is almost impossible to answer. But let's give it a shot. Again we will start off with the figure of one million dollars annually. Since it is impossible to determine the number of free downloads without the actual figures, we will stick with paid downloads. Since the average cost of digital comics range from $0.99 to $2.99, I will use $1.99 as the average. So that means that there were approximately 500,000 downloads over the passed year. That averages out to 41, 666 downloads a month and just over 10,000 a week. Since each printed title seems to come out once a month, let's do a comparison. If this number was for one single title, it would be equal to the 39th ranked printed title in the month of June of this year (Comichron). However, it is not, and instead it is the average figure for EVERY paid download, of EVERY comic for any given month. Another potential window into the downloading trends of digital, has been offered by Rob McClellan of The Comics Bulletin who, in a conversation with, "some folks at Boom!" (McClellan), who said that their, "digital [copy] of Hexed set a record for the most downloads to Android systems (some crazy number like 10,000 downloads in 24 hours) – it was a free issue. I asked them how the second (not free) issue sold. They said it was incredibly small – on the order of 200 (but, their print sales did well!)," (McClellan). One way to read this is that the large number of free downloads means that consumers have the apps in place to download them, are experiencing, and thus growing comfortable with the format, but yet when it comes to paying money to read the issue, they still prefer printed over digital by a wide margin.
But the important factor is profits. Perhaps the greatest attribute in favor of digital comics, from the standpoint of profits, is that they forgo the expense of being printed. Anyone who has read the Issues article, "Why Does My Comic Cost So Much", will know that printing costs is, normally, the largest expenditure for publishing a printed comic. Also, when a printed comic is sold through a retail outlet, the profits of those sales are divvied up between the publisher and also the distribution company, Diamond, and the store owner. Assuming the cover price of the printed comic is $4, the publisher will receive $1.60 from Diamond. Keep that number in mind. Let's look again at digital comics using $1.99 as the average price. A download of digital comic through either Itunes or the PSP does NOT mean that the publishing company has received $1.99. According to Brian Hibbs of CBR, "Apple is taking 30% of the retail price," (Hibbs). This leaves the publisher with about $1.42. Or about 18 cents less than its printed counterpart. Let's look at some further number crunching by Brian Hibbs in that selfsame article. Using numbers provided to him by The Comic Chronicles, he has determined that the total number of comics and trades in April of 2010 brought in $24.6 million. "Marvel has a 44.87% share of those dollars, or what would be $11.16 million.... That is from, roughly, 2.67 million comic books sold," (Hibbs). Brian Hibbs then estimates that after everyone receives their cut of the profits, Marvel ends up with about $3.9 million. Now, as Hibbs points out, for digital comics to generate the same amount of revenue ($3.9 million), there would have to be 2.9 million downloads at an average of $1.99.
Now, it is very possible, that because digital comics have the potential to reach more consumers, that eventually they can make up the approximate 200,000 purchases needed to reach that same revenue. But we are missing yet another piece of the puzzle. Take a moment to flip through the closest comic book you have and you will notice that it is loaded with pages of advertisements. The publisher is being paid for each ad you see. It is also likely that the publisher is making more money on the ads then they are from the readers/store owners. So while digital comics have the advantage in ease of access and not having the expenditure of being printed, they lose out on profiting from ad space....at least for now. To make up for this profit gap, it is possible that as digital comics become more popular that we will witness the addition of ads to them. This could seriously hinder the enjoyment of these digital comics because, like some Blu-rays and DVDs do now, they may not allow for forwarding passed until the ad is complete. This is just conjecture on my part however.
So through a basic cost/benefit analysis, from the standpoint of the publisher, we can determine if digital comics are a worthwhile replacement for printed comics. One cost would be the loss of advertisers as was previously discussed. Another cost would be the loss of investers. Even with the invester bubble having been burst, it is still clear that plenty of investers are buying comics. After all, just because the housing bubble burst, it does not mean that people have stopped buying houses, just not as many or at the same price points. Keep in mind that comic shop owners are investers as well. Printed comics, by their nature, are something tangible that people feel a need to possess. Files can be downloaded, but there is something very different in having files on a screen and the ability to see a whole long box in your room. Besides, a file, normally, can be downloaded an infinite number of times, thus there is no great demand to pay extra to do so. While there are only a small number of copies of any first print run of a particular issue. In other words, switch to digital and lose a noticeable percentage of your audience. Also, you need to entice more consumers to buy your product to make the same amount of money. Another cost is to the creator of the digital comics, which in turn affect which ones may choose to sign contracts with a particular publisher which affects the quality of the work. The simple point is that fans will not want a digital file signed. Of course the creators can sell other things to their fans to in turn have them sign, but that will cost more money to the fans, who may not be interested in buying the item, and then paying for the signature on top of the fee to go to the convention. And I cannot imagine that whatever they do buy to sign will be as enjoyable to see signed as the comic book that they bought. Other costs is a lack of communal feel that occurs within the comic shop. Websites are fun, but many fans like visiting their comic store to talk shop about their favorite titles. Comic book buyers also, probably, trust the store owner and are more willing to try out a book he/she recommends moreso then someone online. The final cost is an unknown variable with no way of knowing or gauging its impact- illegal file sharing and bootlegging. File sharing has already had an impact on music and movies online, with the turn to digital, comics may find themselves in a similar situation where many of their fans are simply getting their files for free. Comic fans are an intelligent bunch and finding ways to circumvent the online services may be an interesting challenge for them, if nothing else. This could seriously affect not only profits, but how we determine the popularity of any one character.
Now the benefits. One major benefit, as mentioned earlier is the lack of printing costs. Another previously mentioned benefit is that the publisher does not split profits with a distributor AND a store owner. The demands of having a third party wanting profits, is yet another stresser on the costs of the comic. The cover price has to be adjusted to ensure that all parties profit adequately. Another benefit, is that due to lower costs of producing a digital comic, the price tag to the consumer can be less, which means that more people can, theoretically buy them, or at least buy more of them. By having more purchases made, it increases the word of mouth on any particular title which can then produce more readers of said comic. But also psychologically, it is easier to convince someone to spend $1.99 on something then it is $3.99. Even if the person's total purchases add up to greater than $3.99, the consumer can more easily convince themselves that they are only spending another buck or two for another title. One reason Itunes is so successful is that people will buy individual songs at $1.29, that eventually add up to more than the album they all appear in would cost, but because they are buying is small increments, it does not feel that expensive. There is also the benefit of reaching readers who either do not live near a comic book store, or perhaps do not feel comfortable entering one. The comfort issue may be more important in regard to women, or men who feel too embarrassed to go. Perhaps the final benefit is only wishful thinking on the part of the publishers, but there is a possibility that the digital medium, and its potential bells and whistles, could be a great boon in bringing in younger readers. The moving animation and voice acting, will basically make the digital comics into a cartoon. Since younger readers could be the key to the sustainability of the medium, it is a real plus to bring them aboard.
In conclusion, the benefits are more idealistic, then the costs are realistic. I think digital comics offer some real benefits, but I feel it is a mistake to invest too entirely in it, at the risk of alienating too many fans and supporters. But even if the publishers do intend on indefinitely backing the digital form, the printed comics are completely safe. Fans are compulsive in nature and want to own, catalog and see their entire series runs. And I cannot help but think there is more pride generated in showing someone your entire collection of such and such title, then there is in showing a list of files on the screen. Don't get me wrong, the Digital Revolution IS happening, but its victory will never be complete.
Works Cited
Hibbs, Brian. "More On Day and Date". http://www.comicbookresources.com/?id=26764&page=article, 6-17-2010.
Comic Book Resources. 1995-2010
Marvel. "Marvel Digital Comics Unlimited". http://marvel.com/digitalcomics/. Marvel 2010.
McClellan, Rob. "Past and Future." The Digital Reality. http://www.comicsbulletin.com/digital/126359710961278.htm. The Comics Bulletin. 2000-2010.
Mello, John P. Jr. "Marvel Stands Truimphant In Epic Battle of Ipad Comics Apps". http://www.macnewsworld.com/story/Marvel-Stands-Triumphant-in-Epic-Battle-of-iPad-Comic-Apps-70572.html?wlc=1281581054. MacNewsWorld. 8-9-2010. ECT News Network. 1998-2010.
Miller, John Jackson. "The Comic Chronicles". http://www.comichron.com/. 2010.
Phegley, Kiel. "Lee and Rood Talk Digital". http://www.comicbookresources.com/?page=article&id=26831. Comic Book Resources. 6-23-2010. 1995-2010
PlaystationComics. "Download the New Digital Reader Now". http://uk.playstationcomics.com/main/blog/reader-version-2.html. Playstation. 6-22-2010. Sony Computer Entertainment Europe. 2009.
Rogers, Vaneta. "Updated: Comics Creators Respond to DC Digital Comics Plans". http://www.newsarama.com/comics/comics-creators-respond-dc-digital-100623.html. Newsarama. 6-23-2010. TechmediaNetwork.com 2010
Sorrel, Charlie. "Hands-On With ComicBookPad For Ipad". http://www.wired.com/gadgetlab/tag/ipad/page/2/. Wired. 8-9-2010. Wired.com. 2010.
Watanabe, Aaron. "The Future of Comics in the Digital Age". http://www.kpbs.org/news/2010/jul/27/future-comics-digital-age/. KPBS. 7-27-2010. San Diego State University. 2010
First, let us examine an important stat as stated by Aaron Watanabe, a columnist for the KPBS' website, that, "Revenue from digital comics is estimated at $1 million a year," (Watanabe). While a million dollars of annual revenue is not a small number, it is important to realize that Mr. Watanabe quotes that the total annual revenue of comic books in the U.S reaches "$680 million a year." In other words the total revenue of digital comic sales represents less then one fifth of one percent of the comic book market currently. Basically, this means that the generated sales of digital comics is barely a blip on the comic book sales radar at the present time. So why all the fuss and fear that digital comics will be the death knell for the printed variety? Well, as stated by Mr. Watanabe, within the very same paragraph, "...the sector is growing rapidly," (Watanabe).
It seems that every company is trying to take advantage and get an early foothold on the potential Digital Age of comics. Perhaps the single greatest stride in forwading the digital revolution was the utilization of the Ipad as a means to read one's digital comic applications. Why the Ipad? At the moment the folks at Apple have ideally positioned themselves in this new medium by not only associating themselves with the comic book ordering website known as Comixology, but have also partnered with Marvel, DC and IDW, who are three of the largest publishers of comics in the country. "[Marvel and DC] offer free reader apps and encourage their followers to buy issues of their favorite titles at US$1.99 a pop," (Mello). Reviewers such as Charlie Sorrel of the website Wired have commented that, "The iPad is almost perfect for viewing comic-books," (Sorrel). Reviewers seem to favor,"The large screen, the swipe gestures and the pinch-to-zoom [that] all make digital comics that much better than it has before," (Chen). Companies like Developica, Comixology, Comic Zeal and Comic Reader Mobi, among others, have all made apps for reading comic books on the Ipad. This, of course, does not speak as much to the success of digital comics, as much as it does to the expectations surrounding them.
Not to be undone, a digital comic book program has also been launched for the PSP. The PSP is a handheld portable gaming device that launched its comics service in December of 2009. One of the perks made available to the Playstation Network Digital Comics Service, is exclusive content made available by DC comics. More on this later when we discuss the individual publishers. Other benefits made available for the PSP is its ability to read manga comics right to left, an important feature for the form. The titles you download, "automatically are categorized in multiple genres. All titles in your collection, old or new, will benefit from this change," and "You can now choose to browse any titles in your collection by publisher," (Playstationcomics.com).
The publishers themselves have fully entrenched for the potential digital push by offering subscriptions on their homepages and also by signing exclusive deals with digital comic service providers. For instance, Marvel has on their homepage a fully pimped out subscription service that touts that inclusion of "an ever-growing collection of over 5,000 comics," (Marvel). This extensive collection of digital comics includes favorite runs of classic comics like Stan Lee's early Amazing Spiderman run and content that has been made exclusive for the electronic format. The subscrption service that Marvel is offering will cost subscribers about sixty dollars annually, or put another way the approximate cost of just under twenty printed comics by the same publisher. If you choose to only subscribe monthly, the charge is $9.99. Marvel has also signed on with both the PSP and Itunes to offer their content through their providers. A few of the better features that Marvel is offering through both their Itunes and PSP service, and their own subscription service is the availability of motion comics. These comics, specifically tailored for the digital medium, features both moving panels and dialogue that is performed by actors. So what is the benefit to this? I believe that this is a three tiered attempt to increase the viability of these type of comics. First, by making these comics behave more like movies or cartoons, it is an attempt to draw in younger fans who may enjoy these bells and whistles. Many of these younger fans, may have not yet been drawn to reading, and this is another way for Marvel to reach out to the next generation. The second benefit for Marvel is that the moving images and sound uniquely separates the digital comics from their printed counterparts. This may encourage purchasers of printed comics to go ahead and buy the digital versions of those same printed comics they have bought so they can re-experience them in the different format. Lastly, the animated comics can act as a gateway for readers to become comfortable with the new digital services. By offering exclusive content, in the form of animated comics, it encourages fans of specific characters to seek out their further adventures offered exclusively online. To do this, fans will have to either subscribe to the service or download the Marvel app onto their Ipad/pod/phone or PSP. Over time, these readers will become comfortable with reading comics online which may turn them into long term subscribers. I would expect to see crossovers between regular printed issues and their exclusive digital comic counterparts shortly.
But Marvel is not the lone publisher of the big two, making a digital push, DC has recently joined the fray in full force. This past June, DC launched a new, "multi-platform digital program that will include much of its back catalog and, surprisingly, one brand new bi-weekly title," (Rogers). The mentioned Bi-weekly title is called Justice League: Generation Lost, which has been simultaneously released with its printed counterpart starting with its fourth issue that was also released in June. This groundbreaking move on the part of DC will be the canary in the coal mine that will help us foresee how digital comics will affect the long term viability of printed comics. Its important to note that both the digital and print versions of Generation Lost will retail for $2.99, while most digital comics across the publishing spectrum are currently priced between $0.99 and $1.99. We will return to this issue later. Another important innovation within the digital medium by DC is its decision to make, "comics purchased now through the DC Comics and ComiXology apps [capable of being] integrated into the [future] DCComics.com website store, so consumers can read their digital comics on both platforms," (Rogers). By allowing consumers to transfer comics downloaded from other platforms to their, eventual, DC subscription service, they can more easily keep their collections together. This will not only be esthetically pleasing for a fan base that is used to a well organized long box, but it will allow for more ease of use.
Perhaps DC's most interesting innovation is their attempt to include the retailers in the profits generated by the purchasing of digital comics by consumers. This is an obvious, but potentially essential step, in soothing the fears of retailers who may be rightfully concerned by the simultaneous launching of Generation Lost, which may lead to more such offerings if it proves successful. So how will DC help retailers? When Comic Book Resources interviewed John Rood, the EVP of Sales, Marketing and Business Development at DC, with this very question he answered, "It's really going to be a mixed economy, from a return of royalties directly, to the stores to advertising and consumer marketing programs that touch the stores individually, to measurable incentives that get the consumers to act upon what we've promoted online," (Phegley). From what I have gathered about this program, it is basically retailer appeasement. DC will advertise upcoming titles via their digital applications with the idea that this will bolster consumer purchases when they venture to the retail outlets. These would, presumeably, be exclusive free content offered in available platforms. Now what Rood means by, "return of royalties," so far has not been extrapolated upon to any website or interviewer at the present time. What I have read so far suggests that DC is still constructing the details with no definite plans, as yet, set-up for tangible usage. My best guess it that the program may compensate retailers for comics they purchase, that are also simultaneously offered online. Either offering any retailer within their program a share of profits made on the online copy, probably based on the number of issues they bought in printed form. This would have to dramatically affect DC's ability to profit successfully on their digital endeavors. Perhaps, DC is banking on retailers pushing their customers to check-out the digital service, because of the share of profits they would receive. Again, I cannot imagine that the share of profits that retailers would gain on the digital services would come anywhere close to the potential loss of that customer to the digital format. It will be very interesting to see how this story enfolds in the coming months.
Given that digital comics only represent less than a percent of overall profits in the comic industry, why are all these companies furiously angling for their share of it? To figure this out, it is important to take a look at the trends in online purchasing of digital comics. Important figures to gather would be the percentages of downloads of digital comics, per issue, of free comics and then of the comics at each price point. Another significant figure would be assessing the distribution of these downloads between publishers and new versus old content. And it would be interesting to analyze this numbers, except for one detail...no one's talking about them. I have asked for estimates and ranges of digital comics from Comixology, Marvel, Itunes and various websites and the responses have been either non-existent or negative. For instance, Comixology responded with, "Sorry, we love to talk about the app, but we don't share that information." While Marvel answered with, "I can’t comment beyond that we’re not able to provide this info for public consumption—we don’t release sales numbers for any of our comics." When I pointed out that Diamond regularly releases their sales information about printed comics I received the reply, "They don't release sales numbers-just estimates." When pressed for their estimates then, I received the reply, "We don't release sales numbers for anything." Further questions garnered no reply. When Itunes was called, I was forwarded to an answering machine specifically set-up for columnists on a deadline. I gave Friday the 13th as my deadline and so far I have yet to hear from them. So, with all this excitement that publishers are seemingly feeling surrounding digital comics, why is no one talking about them?
There are really only two reasons why a publisher or online service would not want to reveal the actual estimates of their downloads if business is going well. Either the individual publisher does not want to reveal their success because they want to deter further competition from other publishers and outlets, or because the publishers are concerned with alienating the comic shop owners. Neither possibility seems plausible. If you are either DC or Marvel, then your only true primary competition is the other major publisher. In the comic world DC and Marvel represent, on average, about 78 percent of the printed market. Basically, its these two and everyone else. The big two are also, already, fully entrenched in the digital comic market. They have also made, as mentioned already, recent giant strides to further their business goals in the new medium. Neither one can really back down at this point. One publisher is intrinsically forced into further pursuing digital comics, as a consquence of their competition doing the same. A business version of the Cold War arms race exists between the two, and there is no disuading either side. If their silence is an attempt to soften the rift that may be forming between store owner and publisher, whatever sales lost due to fans interest shifting to digital will be felt, and resented by the store owner, no matter what is the perceived number of downloads. As their sales drop, they will point their finger at the most likely culprit- the digital comics.
It makes sense then that their reasoning, in keeping the numbers hidden, is that their numbers are not as strong as they were expecting. It is hard to create a buzz around something if the data points in the other direction, and publishers are definitely attempting to create the notion that digital comics are the wave of the future. There might also be the concern that, while your numbers may be poor, that a reveal of the numbers will show their your competition is actually doing very well in the digital format. In that case, it is like a poker game, with each opponent trying to psyche the other one out. But if the numbers are that bad, and the one million dollar figure seems to indicate it is, then why would they pursue it at all? The first reason, is the one I already mentioned, if one side does it, then the other must follow suit. Another reason is that they are viewing digital comics as something whose demand must be gradually grown. Like any new product, people need to develop a comfort factor to it, which takes time and experience. Their view would then be that over time, word of mouth will spread enough that eventually non-fans of comics may be attracted in sufficient enough numbers, to compensate for the loss of printed sales, and the inevitable closing of comic book stores that would then result. Once again these companies are attracted by the potential of the new medium.
So what is the potential that digital comics will develop a demand sufficient enough to eclispe the popularity of printed comics? Without the actual estimates, this question is almost impossible to answer. But let's give it a shot. Again we will start off with the figure of one million dollars annually. Since it is impossible to determine the number of free downloads without the actual figures, we will stick with paid downloads. Since the average cost of digital comics range from $0.99 to $2.99, I will use $1.99 as the average. So that means that there were approximately 500,000 downloads over the passed year. That averages out to 41, 666 downloads a month and just over 10,000 a week. Since each printed title seems to come out once a month, let's do a comparison. If this number was for one single title, it would be equal to the 39th ranked printed title in the month of June of this year (Comichron). However, it is not, and instead it is the average figure for EVERY paid download, of EVERY comic for any given month. Another potential window into the downloading trends of digital, has been offered by Rob McClellan of The Comics Bulletin who, in a conversation with, "some folks at Boom!" (McClellan), who said that their, "digital [copy] of Hexed set a record for the most downloads to Android systems (some crazy number like 10,000 downloads in 24 hours) – it was a free issue. I asked them how the second (not free) issue sold. They said it was incredibly small – on the order of 200 (but, their print sales did well!)," (McClellan). One way to read this is that the large number of free downloads means that consumers have the apps in place to download them, are experiencing, and thus growing comfortable with the format, but yet when it comes to paying money to read the issue, they still prefer printed over digital by a wide margin.
But the important factor is profits. Perhaps the greatest attribute in favor of digital comics, from the standpoint of profits, is that they forgo the expense of being printed. Anyone who has read the Issues article, "Why Does My Comic Cost So Much", will know that printing costs is, normally, the largest expenditure for publishing a printed comic. Also, when a printed comic is sold through a retail outlet, the profits of those sales are divvied up between the publisher and also the distribution company, Diamond, and the store owner. Assuming the cover price of the printed comic is $4, the publisher will receive $1.60 from Diamond. Keep that number in mind. Let's look again at digital comics using $1.99 as the average price. A download of digital comic through either Itunes or the PSP does NOT mean that the publishing company has received $1.99. According to Brian Hibbs of CBR, "Apple is taking 30% of the retail price," (Hibbs). This leaves the publisher with about $1.42. Or about 18 cents less than its printed counterpart. Let's look at some further number crunching by Brian Hibbs in that selfsame article. Using numbers provided to him by The Comic Chronicles, he has determined that the total number of comics and trades in April of 2010 brought in $24.6 million. "Marvel has a 44.87% share of those dollars, or what would be $11.16 million.... That is from, roughly, 2.67 million comic books sold," (Hibbs). Brian Hibbs then estimates that after everyone receives their cut of the profits, Marvel ends up with about $3.9 million. Now, as Hibbs points out, for digital comics to generate the same amount of revenue ($3.9 million), there would have to be 2.9 million downloads at an average of $1.99.
Now, it is very possible, that because digital comics have the potential to reach more consumers, that eventually they can make up the approximate 200,000 purchases needed to reach that same revenue. But we are missing yet another piece of the puzzle. Take a moment to flip through the closest comic book you have and you will notice that it is loaded with pages of advertisements. The publisher is being paid for each ad you see. It is also likely that the publisher is making more money on the ads then they are from the readers/store owners. So while digital comics have the advantage in ease of access and not having the expenditure of being printed, they lose out on profiting from ad space....at least for now. To make up for this profit gap, it is possible that as digital comics become more popular that we will witness the addition of ads to them. This could seriously hinder the enjoyment of these digital comics because, like some Blu-rays and DVDs do now, they may not allow for forwarding passed until the ad is complete. This is just conjecture on my part however.
So through a basic cost/benefit analysis, from the standpoint of the publisher, we can determine if digital comics are a worthwhile replacement for printed comics. One cost would be the loss of advertisers as was previously discussed. Another cost would be the loss of investers. Even with the invester bubble having been burst, it is still clear that plenty of investers are buying comics. After all, just because the housing bubble burst, it does not mean that people have stopped buying houses, just not as many or at the same price points. Keep in mind that comic shop owners are investers as well. Printed comics, by their nature, are something tangible that people feel a need to possess. Files can be downloaded, but there is something very different in having files on a screen and the ability to see a whole long box in your room. Besides, a file, normally, can be downloaded an infinite number of times, thus there is no great demand to pay extra to do so. While there are only a small number of copies of any first print run of a particular issue. In other words, switch to digital and lose a noticeable percentage of your audience. Also, you need to entice more consumers to buy your product to make the same amount of money. Another cost is to the creator of the digital comics, which in turn affect which ones may choose to sign contracts with a particular publisher which affects the quality of the work. The simple point is that fans will not want a digital file signed. Of course the creators can sell other things to their fans to in turn have them sign, but that will cost more money to the fans, who may not be interested in buying the item, and then paying for the signature on top of the fee to go to the convention. And I cannot imagine that whatever they do buy to sign will be as enjoyable to see signed as the comic book that they bought. Other costs is a lack of communal feel that occurs within the comic shop. Websites are fun, but many fans like visiting their comic store to talk shop about their favorite titles. Comic book buyers also, probably, trust the store owner and are more willing to try out a book he/she recommends moreso then someone online. The final cost is an unknown variable with no way of knowing or gauging its impact- illegal file sharing and bootlegging. File sharing has already had an impact on music and movies online, with the turn to digital, comics may find themselves in a similar situation where many of their fans are simply getting their files for free. Comic fans are an intelligent bunch and finding ways to circumvent the online services may be an interesting challenge for them, if nothing else. This could seriously affect not only profits, but how we determine the popularity of any one character.
Now the benefits. One major benefit, as mentioned earlier is the lack of printing costs. Another previously mentioned benefit is that the publisher does not split profits with a distributor AND a store owner. The demands of having a third party wanting profits, is yet another stresser on the costs of the comic. The cover price has to be adjusted to ensure that all parties profit adequately. Another benefit, is that due to lower costs of producing a digital comic, the price tag to the consumer can be less, which means that more people can, theoretically buy them, or at least buy more of them. By having more purchases made, it increases the word of mouth on any particular title which can then produce more readers of said comic. But also psychologically, it is easier to convince someone to spend $1.99 on something then it is $3.99. Even if the person's total purchases add up to greater than $3.99, the consumer can more easily convince themselves that they are only spending another buck or two for another title. One reason Itunes is so successful is that people will buy individual songs at $1.29, that eventually add up to more than the album they all appear in would cost, but because they are buying is small increments, it does not feel that expensive. There is also the benefit of reaching readers who either do not live near a comic book store, or perhaps do not feel comfortable entering one. The comfort issue may be more important in regard to women, or men who feel too embarrassed to go. Perhaps the final benefit is only wishful thinking on the part of the publishers, but there is a possibility that the digital medium, and its potential bells and whistles, could be a great boon in bringing in younger readers. The moving animation and voice acting, will basically make the digital comics into a cartoon. Since younger readers could be the key to the sustainability of the medium, it is a real plus to bring them aboard.
In conclusion, the benefits are more idealistic, then the costs are realistic. I think digital comics offer some real benefits, but I feel it is a mistake to invest too entirely in it, at the risk of alienating too many fans and supporters. But even if the publishers do intend on indefinitely backing the digital form, the printed comics are completely safe. Fans are compulsive in nature and want to own, catalog and see their entire series runs. And I cannot help but think there is more pride generated in showing someone your entire collection of such and such title, then there is in showing a list of files on the screen. Don't get me wrong, the Digital Revolution IS happening, but its victory will never be complete.
Works Cited
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