Wednesday, August 10, 2011

On the latest threat to the survival of the Comics Industry. Not.

The folks at Newsarama posted an article today with the provocative title, "Will digital comics KILL Comic stores?"

This is a question that had gotten a lot of talk over the last few weeks, since both DC and Marvel have announced that their books (Some of Marvel's, all of DCs) would go digital on the same day as print.  And after some thought, and some actual research, I am prepared to give my answer.

No. next question.

The only thing that will kill the comic store is the dwindling number of comic readers.  Explain to me how adding new customers will cause an industry to diminish.

You can't buy trade paperbacks digitally. Nor T-shirts, nor action figures or any of the other things you can buy at a comic shop, save for the monthly books themselves.

Bob Wayne had it exactly right - if a store is experiencing diminished sales as a result of either the lame duck session until September, or due to the New 52, they're not doing ther jobs right as a retail outlet.  The same holds tru for digital.

The savvy store will embrace digital, link up with the comixology site, offer special discounts and deals on items for digital customers, and very possibly do better than ever.  The short-sighted store will curse the darkness, shake its fist, get caught up on all those issues that have been piling up, and wait for the next death issue to get spoiled in USA Today a day early so they can jack up the prices on the book for the first-timers who come in to get one.

Record stores, at least the ones that went away, only had one product. Records stores now sell records (Yes, I still call them records; shut up, I'm old), movies on DVD, videogames, interesting coffee-table books about said records and movies, t-shirts, and...whaddaya know...comic books.  Plus, they're in places that are accessible to the walk-by trade, and have attractive window displays, and sales, and in short, actively COURT customers.

And in honesty, this is all a moot point until the prices drop.

Paying the same price for a physical object you can hold, put on a shelf and use to keep your beer from making a ring on the coffee table, and for a digital copy, one that can barely be said to exist at all save for your memory of being enraged at some plot point or another after reading it, is sheer lunacy.  It is a pure cash grab, eliminating both the cost of physically printing the book, and an entire level of the sales process. 

A $1.99 comic book is profitable; it must be, because DC already plans to drop the prices on their titles by that dollar six weeks after the street date.  So functionally, if you want your digital titles on the day of release, you're being penalized a dollar.  But even at that "discounted" price, DC is making FAR more on a digital title that a physical one. 

Under confidence, a local comic shop confirmed that they get a 56% discount on DC titles, which means that for a $2.99 DC book, they're paying $1.31.  As I assured him when he told me this, I have no problem with this.  The monthly books are their biggest seller, they have to pay for most of the rest of the stock and the monthly nut of the store, so a good profit margin is perfectly reasonable.
But it still means that Diamond is getting $1.31 per title. (Yes, other stores may have different discounts, but it's a solid, verified number and one we can use as a base of discussion.)  It is not unreasonable to assume that Diamond's profit margin on said books is near to this.  If we assume that Diamond's profit margin is HALF of that, or 28%, they're paying 94 cents a book to DC.  If it's 50% (not impossible), they're paying 66 cents a copy.

So this means that at somewhere between 94 and 66 cents a copy, a DC title is profitable, presuming a sufficient number of them are sold.

So let's look at the cost of printing the book.  Now, the further up the chain this goes, the less hard data we have on prices, so we're making reasonable guesses.  One comic book printing company online advertises a price of $9,730 for a 32-page comic book, slightly less than 50 cents a copy, on a print run of 20,000, the level commonly considered to be the line of demarcation for cancellation.  Now DC has does a LOT of printing, and many larger print runs than that, so it's not unreasonable to assume they're paying easily half that, possibly less.  So let's stay cautious and say it's 25 cents to print a DC title.  take that off the top, and we have anywhere from 41 to 69 cents a copy of a $2.99 comic book that DC is pulling in. That's enough, presuming the book sells well enough, to cover payments to the creators, editors, art staff, etc, and still make the company money.

I refuse to believe the 99-cent comic book isn't possible, especially if it sells well.  Because again, the best and safest way to make money is not to charge a lot of money to a small group of people, but to charge a small amount of money to a LOT of people.  This is made even easier when you don't actually have to make anything.  Once the cost of creating the book is done, expenses cease, save for the cost of creating and keeping current the website that you're selling the comics from, a relatively small amount, amoritzed over the time the site is in use.

What DC (and Marvel, I know) is trying to do right now is charge a lot of money to a lot of people, and that doesn't go over well.

Digital comics will not, in the long run, be profitable via a higher profit margin, but by the increased sales that a larger potential readership provides.  Make the books good, make them cheap, and make nigh-effortless to obtain.  1 and 3 are handled.

Get to 2.

There's another facet to digital comics, as they're being sold now, that I still have a problem with, that of portability.  They've made strides - I can read digital comics from Comixology from my phone, PC, iDevice, and even my PSP.  That's good, but it's not 100% good. They're still tied to the internet, and cannot (to the best my knowledge) be backed up to a cd or other media and archived, nor can they be read from such media.  Bit-torrent files are perfectly portable - they can be tossed onto a CD and saved, and there's nary a device that doesn't have a CBR reader for it.  That's not an argument for torrenting, it's to show the target that digital comics must strive for. An iDevice has a limited storage space, they don't have SD cards or other hot-swappable media - if I want to swap out books, it's a time-consuming process, and, I hasten to add, there's no way for me to read the files on anything but the iDevice. I can't take the files and view them through iTunes or any other local reader. 

Marvel's original digital offering, only a few short years ago, now seems almost archaic.  They offered the ability to read copies of their book, on their website, for a monthly fee.  You didn't own the books, you didn't even have a guarantee they'd be there tomorrow, as it was supposed to be a rotating library.  Shortly afterwards, companies were offering entire runs  of titles on DVD for not unreasonable prices.  But they were PDFs, which didn't scale well, and the interface took up valuable screen space.  So that dropped away, sadly.

A proprietary data format runs the risk of becoming unusable.  As long as there are digital devices, there will be MP3 players.  I want, nay I require, the ability to download my purchases and use them as I see fit, with the reasonable exception of making copies and distributing them.  Show me that, and drop the price to that magic number of purchase without throught that has made so many ridiculous apps so ridiculously popular, and I can't imagine things not improving.

We're in a much better place than we were.  A year ago the argument was "Will pirating comics kill comic stores?" They didn't.  Now wer're worrying that similar files, now available legally, will do the same.  They won't.  There's a dedicated core that want books they can hold, bag, board and box in the basement. 

They're just not a large enough number to keep the industry alive. 


  1. I can't see comics companies striving to make digital comics collectible. All current indications point on the opposite direction - away from personal storage of ANYthing and towards "the cloud." It's frustrating to people like me who collect things like books, DVDs, comics, whatever, but it seems to be the way things are trending.

  2. I don't want them "collectible", per se, I want them _controllable_. I want to know that if the Internet breaks, or so do any number of my electronic devices, I will still have access to my stuff, and can play them on any reasonably compatible device.

    The whole Cloud thing still draws my suspicion. I don't even like to check my bag at a store, let alone place all my personal stuff out on some quasi-extant "Someplace" that I have no control over.

    I'm not even worried about having it looked over by unseen and unpermitted bodies; I'm just not convinced the, indeed ANY technology is so foolproof that it be so utterly trusted.

    Fine for backups, surely, but stuff I'm actively using? I dunno.

  3. Great article VBTusky! I have gone mainly digital for many reasons but with a (slightly) lower price point I can squeeze in a few more issues.

    Here's what I think needs to happen for online comics to take off;

    1.) Drop the damn price down to .99 an issue!
    2.) Have them available on Wednesday midnight (or at least before the store opens). I had to wait until 2pm to get the digital release of Justice League #1.
    3.) Find a standard format for the files (like MP3's). CBR & CBZ both can work here. That way you can pick your own comic reader like people pick there own MP3 player
    4.) If they feel a need to DRM the books, put out a public API that said comic book readers can use.

    iTunes once DRM's their music but are now DRM free just like Amazon MP3's. I think once the digital comics start to take off, and they will, hopefully they will wise up and follow that same pattern.

  4. Thanks for the comment, but I'm not that Vinnie. I've met Tusky a couple of times, and and can confirm our difference. He spends most of his time at the Aquaman Shrine.