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Digital Comics Rant!

Longbox Graveyard #60

I’ve been a comics fan and reader since the early 1970s. I left comics in the 1990s and have only this past year returned, but my interest is confined to nostalgia — today’s books don’t really interest me, which I think is a problem both for me and for publishers, as I am affluent reader with two kids who might pick up the hobby but the current approach at Marvel and DC holds limited appeal for us. I worked briefly as a writer on some non-Marvel/DC books decades ago, and I still have friends in the business, but I don’t think either one of those things gives me any special insight into what’s happening in comics today. However, since 2008 I have been partners in an iOS publisher and developer, and that DOES give me special insight into the digital world, at least in the apps publishing space.

I have two problems with the digital programs now on offer from the “Big Two.” One is editorial, and the other is with the marketplace.

The marketplace issue is the easiest to address. First off, there may not be a marketplace issue. As of March 2012, ComiXology is on record saying they’ve shipped 50M comics through their app, and they make frequent appearances on the iPad Top Grossing lists in the United States. Maybe Marvel and DC have managed to dig a flaming, gasoline-filled trench around their digital IP and will be able to keep their prices artificially high.

Speaking as a publisher who has to work to give away free games that pack hundreds of hours of content … if they can do that, then I say more power to them!

Speaking as a digital entrepreneur, my view is that publishers could be leaving money on the table due to inflexible pricing, a creaky storefront, too many partners (DC and Marvel must share revenue with Apple and ComiXology with their current apps) and cross-platform incompatibility that erects an artificial wall between new books and the catalog offerings of Marvel’s Digital Unlimited service.

Were I running the digital initiative for Marvel or DC I would ween myself from ComiXology as soon as possible in favor of my own publishing platform, built around microtransactions with in-app currency (to allow more flexibility in pricing and bundling), with laser-sharp metrics closely watching reader behaviors to guide future business decisions. I’d also leverage comics as a social platform by opening up the sharing possibilities of digital books and empowering readers to evangelize their passion by migrating the “collecting” experience from the physical act of owning books to virtual achievements built around viewing and sharing digital comics, with an eye toward restoring comic books as the brand leader for superheroes, instead of the trailing appendage they’ve become in this era of better than a billion dollar box office superhero movies (while equivalent books sell in the hundred thousand copies range).

This might already be in the works. A recent report put ComiXology’s “gross merchandise value” for 2011 at nineteen million dollars, with that number projected to jump to $70M in 2012. With that kind of money on the table, Marvel and DC can certainly afford to build and control their own platforms (and in fact they can’t afford not to).

A simpler solution would be for Marvel and/or DC to buy ComiXology outright, and it wouldn’t surprise me at all to see this happen.

The bigger problem is on the editorial side of the business, which is stuck with largely the same playbook they’ve been running for the last three decades. The freemium digital marketplace I’m advocating only make sense if you can reach a mass audience — a truly digital approach to content and monetization will work only when your audience numbers in the tens or hundreds of millions.

Evidence suggests the current system works to some degree for a market where the top print book struggles to sell 200K copies. The question is whether that market can ever be brought back to the levels of prior decades. If they think there is a mass digital audience out there, then it is an inevitability that DC and Marvel will have to stop price protecting their print retail partners and adopt lower prices for their digital offerings. I’m in my fourth year in the iOS business and I have seen the “Race To Zero” first-hand (with my own money on the line). It’s gotten so even .99 is considered a “premium” price, and you have to work to give away free apps.

In truth, even “free” costs too much these days.

The danger for comic publishers is that it may be too late for them. The market may be so damaged and diminished that it is no longer possible to tap into a mass audience by dropping prices to .99 or free. If the worldwide market for superhero comics really has collapsed to a half-million or so hardcores buying DC and Marvel print titles each month then the free market just won’t work — you’d need ten times that many people interested in digital books to make a profitable business off the 5% of your customers that you will monetize through free distribution. There would be some organic lift from getting free books into more people’s hands — and thus spreading your brand to a collateral audience — but I think the editorial problem at Marvel and DC is pathological enough that just getting the books into peoples’ hands won’t be enough. The content has become too dense, self-referential, and fringe to work as mass entertainment. Witness DC’s “New 52” reboot — presented as a means of making DC’s line more friendly to new readers — which after an initial surge of interest appears to have posted only modest readership gains in the long run (though there are encouraging indications the market is coming back).

So if there is no reaching new readers, then it is actually best for Marvel and DC to do what they’re doing — circle the wagons, hold the price line as long as they can, and fight a delaying action until the publishers as we know them are closed down and their properties are licensed out to smaller shops. Paramount and Hasbro both have comic books without being in the comic book business — might Marvel and DC ultimately elect to go the same route? Marvel and to a lesser extent DC have already realized they are in the “superhero” business rather than the “comics” business and are reorganizing their operations accordingly. I have friends who will lose jobs when this happens and it gives me little joy to say it, but markets are never wrong — the music, publishing, and software businesses have already been disrupted, and there’s no reason to expect comics will be any different. The collapse of Borders and Blockbuster are just two of the earliest and most visible casualties in the digital disruption of entertainment. There will be a pile of bodies on the field before this shakes out.

The indie side of digital offers some opportunities but will be hamstrung by the absence of meaningful brands. There will be successes here and there — particularly for small shops who can keep their costs in line and put a LOT of effort into fan outreach via social media — but for that mass North American moviegoing audience we should be trying to tap, “comic books” = “superheroes,” and “superheroes” = Batman, Spider-Man, and Superman (and now also a host of lesser Marvel characters as well, thanks to a stellar effort from Marvel’s movie studio). Mark Waid has made news by shifting his creator-owned work to digital and I think he is smart to set up his own channel to distribute and monetize his work. He is definitely biting the hand that feeds him but the tide is inevitable and irresistible (and I have enjoyed his digital effort, “Insufferable”).

The problem Mr. Waid will face is that there’s only a fraction of this already-small audience interested in reading his original books than there are people who want to read his Daredevil books. The power of the superhero brands is substantial (which is why the movie business is roaring, for the most part), and with seventy-five years of brand equity built up around their superhero rosters there’s no way any small indie operation is going to challenge Marvel and DC with superheroes for the mass audience. It’s a risk for Mark (because he is making a living off this business) but he’s wise to know the end is near and to make the jump too soon instead of too late. The disruption is real and no one will escape. The guys still standing at the end will be the ones who disrupted themselves and changed into new and profitable forms.

So there you have my view — the major publishers afraid to take the leap, knowing there likely isn’t a far side of the ravine out there in the dark, while indie guys have the tools but don’t have the networks or the superhero properties the market cares about. In the next three years I expect you will see a few digital indie studios take root, clutch and grab to break even, and then be positioned to pick up the licenses to the big superhero brands when the monthly paper publishing arms of DC and Marvel inevitably collapse. The brick and mortar comics market will continue to struggle and is probably doomed. Fans will vote with their wallets and pirate digital books rather than pay inflated prices to placate direct market retailers. Publishers and retailers will remain chained to each other at the ankles, until the last second when the publishers will sever the chain and give retailers a shove over the side. Then the publishers better hope they still have an audience. Digital consumer habits for the next hundred years are being established RIGHT NOW and Marvel and DC are flirting with extinction because they aren’t at the center of it.

Time is critical and there may not be a second chance to get this right.

Note: This column original appeared at the We Talk Podcasts site, to support my appearance on the We Talk Comics podcast. This revised version of my Digital Comics Rant has been updated to reflect new information, and is reprinted here to support next week’s review of the Legends of the Dark Knight digital comic, as well as the pending release of the next Longbox Graveyard Podcast, which will cover digital comics. Thanks to We Talk Podcasts for providing a forum for the original version of this article.

NEXT WEDNESDAY: #61 Legends of the (Digital) Dark Knight

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About Longbox Graveyard

Revelations and retro-reviews from a world where it is always 1978. There's a new blog every odd Wednesday at www.longboxgraveyard.com!

Posted on August 8, 2012, in Other Media and tagged , , , , , . Bookmark the permalink. 23 Comments.

  1. It’s still pretty early in the digital age for Comics but based on what is happening in other fields this is definitely where things are going to go.

    A long time ago I was at a Video Convention in Las Vegas (quick, anyone remember Mom and Pop Video Stores?) and one of the speakers was talking about the upcoming 5″ video discs and how much of a game changer they were going to be. To hammer home the point he compared a DVD (or CD Video, I forget) to a disassembled VHS cassette. You only had to take one look at the gallon sized plastic bag of VHS parts to realize a change was going to happen in the distribution of movies. And eventually it did. But over a very long time as those things go.

    It took Netflix and Redbox to create the delivery models that eventually forced Blockbuster into Bankruptcy and irrelevancy and that wasn’t until 2010, nearly 20 years after DVDs started showing up. And that was for an industry of around $10 billion. Comics are nowhere near that. Far more people saw Avengers, the movie, than bought the comic over the last 20 years and probably longer.

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    • But the change-wave accelerates in a hockey-stick shape. Compare the transition time from the introduction of VHS to the intro of DVD with the transition time between DVD and Blu-Ray, or the time between Blu-Ray and the Cloud.

      Comics may be in their early days in terms of digital but they are LATE in terms of the overall landscape, and I believe there is going to be a whipsnap-fast transition once digital gets a little bit of traction. Amazon already sells more digital books than paper and I expect comics to shortly follow. The problem is that the comics business is being dragged kicking and screaming into digital and is missing the opportunities afforded by this new form and means of distribution. The field will require a thorough shaking-out (just as was the case when the business transitioned from newsstand distribution to the direct market, but there is going to be a lot more blood on the walls).

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      • I prefer the chemistry analogy to the hockey stick (turn the stick around and that model works too) but I get your point.

        The main question is whether enough ingredients are in place or if we still need a catalyst to cause the graph to start shooting up to the right. The iPad is a great vehicle for viewing comics but it’s very expensive relative to the audience. The color Nook and Kindle Fire are much cheaper but I wonder if the smaller screen is large enough to make the reading experience worthwhile? It wouldn’t be for me but I note that Apple is feeling pressure to produce a more commuter friendly 7″ tablet – largely from the Asian market – and Manga sales dwarf comics. Maybe the parts are already in place?

        Especially if you consider Apple TV. At only $100 and using AirPlay, even your iPhone produces an impressive display on a hi-def TV. It’s only a matter of time before Apple has something similar to work with the Kindle Fire.

        As for DC and or Marvel figuring things out in time, the Movie and Record Studios don’t have a great track record in this area. Both Marvel and DC are owned by the same groups that fought the Phillips audio cassette and Video Cassette even though those products ended up helping their respective industries greatly. The thing that will help those two is they hold the copyrights and people are still interested in the characters. That may buy them enough time to figure it out.

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        • Apple should shortly be announcing a “mini-tablet” to more directly compete in that Kindle/e-reader space, and earlier generations of the iPad are already available for competitive prices on the used and refurbished market. The next 18 months will see enormous tablet penetration. Christmas is going to be huge for Apple.

          As copyright holders, DC and Marvel do have some immunity to the shock of the market change, but they would still be wise to disrupt themselves before someone does it to them. Plus being proactive in digital gives them a chance to start teaching a new audience … something they have largely failed to do through the direct market these past twenty years, which have come to cater more and more to a diminishing market of hardcore fans.

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  2. Great rant Paul. I don’t have much personal experience with digital comics yet as I only read trades myself, (although I do follow what Waid’s up to with Insufferable).

    I consider myself a book lover first and cannot imagine not buying actual physical books for as long as I am able. Do you see digital becoming a loss leading first release that is then collected up into a printed version? I would happily buy up big thick volumes that collected say a years worth of stories, (Elephantmen already do something like this with their fantastic, huge paperbacks).

    I don’t really want to pay for things twice however so the digital version would have to be cheap to convince me to do it.

    Thanks for your thoughts and for inspiring a few of my own.

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    • I think you hit on the heart of the issue when you define yourself as a “book lover.” While people love their technology I’ve yet to meet anyone who defines themselves as a “digital lover” in the sense you intend. Ultimately these are luxury and emotional purchases and for that reason comics will adhere more strongly to print than have other genres that have more quickly switched to digital.

      I do think the tide is inevitable and irreversible, though, and while it may take journals and text books to break the digital wedge for some users, comics will inevitably follow. In the last eighteen months I’ve migrated from a guy with a garage full of old comics to a platform-agnostic fan reading original books, digitals, and graphic novels, and of the three forms I’ve come to prefer digital for convenience. Original comics have their own tactile charms, plus much of the Longbox Graveyard isn’t yet available on digital (and even if it was I wouldn’t fancy paying for it again), so I expect that side of my collection has some life in it yet, though I doubt I will every buy a new “floppy” again.

      It is graphic novels that are getting squeezed in my world, as I find them less convenient than digital and packing none of the nostalgic value of the original books. I’ve picked up a few DC New 52 collections out of curiosity, and a title or two from DC’s backlist, but if DC’s catalog titles were available in a digital subscription service like Marvel’s Digital Comics Unlimited then I doubt I’d be buying graphic novels at all.

      I don’t know as there is a market for reprinted digital as a prestige print item. So many comics are disposable and not worth collecting in permanent form. Then, too, those collections are bound to be expensive, and it seems to me the Bud Plant high-end art book crowd doesn’t completely overlap with the guys who just want Wonder Woman every month. I know many publishers are playing it safe with an eye toward eventual print republication of digital books but I think the form is going to burst those bounds. Certainly Waid’s Insufferable or the Operation Ajax iPad app would defy a second life in print.

      The old models don’t directly apply. This isn’t a vinyl-to-CD transition, it isn’t even a VHS-to-DVD transition. It may be starting that way — the same content in a new and presumably more convenient form — but I think it is going to morph in unexpected ways because when we hit critical mass for digital comics I think comics themselves will change, just as they did when transitioning from newspaper strips to comic book form, or from newsstand distribution to direct market books (and a look at how technology and commerce are so uniquely intertwined with the creative side of comics will be a subject of a future Longbox Graveyard podcast).

      Nice to hear from you, as always, Joe, thanks for reading and commenting.

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      • I recently have been getting more and more digital comics…I’ll be that guy who actually likes the medium and it’s leaning more and more towards the digital. In fact, right now, at this moment, I prefer the digital comic.

        I’m not a kid either, I’m a comic reader since the 80s. I have amassed (about) 12 long boxes of comics. I know that’s not amazing, but it’s a lot of print. They are heavy. I have to transport them. I’m worried about the storage area being too moist and whatnot. Time will destroy them, Not in my lifetime, unless like we have a flood. But still.

        I could have all those comics and fit them on one device. I can purchase them without making a trip to town. I don’t have to miss any that I collect, which has happened a few times. I cannot read comics on something like an iphone because that’s just to small. I can do tablet, and it feels right. The tablet’s are coming down in price but I can even read them on my laptop.

        Though the price of digital is much too high. The digital price should not be the same as print, the overhead in cost is not there.

        Will comics go 100% digital? Most likely, but it will be a while.

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  3. I am not a reader of digital comics — a few web-comics, but those don’t count. I am not convinced that anyone has “cracked the code” on matching the content to the medium — which is a concept we’ve touched on more than once throughout these posts. There would certainly be advantages (storage mostly) to having my comics digital, but I’m not ready to jump. Not by a long shot. And, frankly, price is still a barrier to me; your comments about 99-cent apps are instructive.

    I am mostly a DC guy mostly, but I trust Marvel/Disney to make the transition to digital more succcessfully than DC/Warners. Warners is the epitome of old-media, and their inability to leverage properties coherently across their corporate family is legendary. Comics, movies, publishing, TV, licensing … these are all separate divisions and their compensation policies do not encourage collaboration, so an integratred digital strategy is unlikely for DC. Yanking DC Nation of Cartoon Networkrecently is an example. But Marvel has a shot at pulling it off.

    The first thing that needs to change is distribution — the direct market, comic books shops, Diamond catalog, etc … that is a model that worked for only a brief period of comics history, and has not worked since the mid-nineties, at least. I wonder if Amazon has ever been approached by DC or Marvel as an alternative distribution method of physical comics.

    I am a business/finance professor, and give you an A+ for your comment that “the market is right.” Customers are speaking to comic book companies, but they don’t seem to be listening. The number of brick-and-mortar bookstores is dropping,the number of brick-and-mortar video stores is dropping, the number of brick-and-mortar music stores is approaching zero. As much as I have fond memories of comic book stores, it’s a model that is not long for the world., and propping them up at the expense of customers is wrong-headed and short-sighted.

    It is not the job of DC & Marvel (and Image and Boom and Oni, etc …) to keep Diamond in business, or keep my local comic shop in business. Their job is to satisfy their readers, and based on the steady decline in comic sales for 15+ years, they aren’t doing that very well.

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    • It has been my experience that after companies reach a certain scale they focus as much or more one competing with themselves as they do other companies, and Warners may very well fit that profile. In my secret civilian identity I’ve recently met with multiple companies that suffer the same disorder, where individuals will occasionally attempt to course correct for the future only to be forcibly conformed back to the norm by a structure that can’t help but do the same things, the same way, time and time again.

      As a megalomaniac, myself, I assume the ambition of every company should be to grow and try to conquer the world, but many of these companies are staffed by people content to cash their checks and maintain the status quo. Actually, they’re incentivised to do so, and I suppose I can’t blame them.

      If markets are never wrong then we’ll learn soon enough the wisdom of this approach.

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  4. Assuming that people who pirate things are lost sales because they pirate it. (More likely case is that people just stop reading all together) Marvel comics go on sale on comiXology around 9 am CST. DC go on sale around 1 pm CST.

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    • I don’t think piracy necessarily represents lost sales, but I do think high digital prices serve as a barrier to entry for readers who might otherwise be inclined to pay. It’s crazy that comics are wedded to .99 price tiers while a virtual goods industry generating billions of dollars in revenue has proven the value of more granular pricing.

      The Big Two are moving into digital — they’re just moving slowly, as befits a monopoly making a transition. If not for the power of their character libraries they would have been dusted by now. It is illuminating that being digital day-and-date is considered no big deal now, whereas some retailers thought it the end of the world when it was announced. I expect variable pricing will follow a similar arc.

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  5. comicbookreaderguy

    A very enlightening and thoughtful rant that I thoroughly agree with. I can probably guess, but what are your thoughts on the subscription model? As someone on the inside of a business with this model, it was very educational (and was not the silver bullet the industry needed, but it still tries to make it work). It made slide into your economic evolution chart somewhere after variable pricing.

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    • I think subscriptions are great … for publishers. They are a vast help with retention and can make your income a little easier to predict.

      For consumers, maybe not so much. If you are committed to a product it is more convenient to have it arrive daily or weekly without any additional effort required, but too often it seems that subscriptions prop up gym memberships you never use, cable stations you never watch, and magazines you never get around to reading. Comic subscriptions are especially risky as creative teams change more often than I change my underwear (make of that what you will!) and you really can’t know from month to month what you’re going to get sometimes.

      I say this from the perspective of the cash-in-hand curmudgeon, of course. I have a vast library of old stuff that I thoroughly enjoy, I am not part of the cult of the new, and I never pre-order anything. Conversely, my partner-in-crime Chris Ulm wants to get everything by subscription (but he is also a guy who paid triple digits in penalty fees when returning a VHS copy of Beastmaster 2 to the video store in the early 1990s).

      I was reading DC’s Digital Legends of the Dark Knight book for awhile, but fell of the wagon — I still get push notifications telling me there are new issues available, which is kind of like a subscription, but I haven’t felt compelled to get back into that book. I likewise got out of the habit of reading Mark Waid’s free, web-based Insufferable when his site was hacked or my RSS feed lapsed or whatever. If I was still getting a gentle reminder to read that book every week I probably would have kept up.

      So, my opinion … as a reader I’d like a solid notification system, but as a cheap bastard with ala-carte sensibilities I prefer to pay as I go, and generally avoid subscriptions when I can. As a content creator — hell yes, give me subscriptions! In my secret identity I make iPhone apps and would love to leverage a subscription model to monetize my work. That World of Warcraft empire was built on tip jars, you know.

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      • comicbookreaderguy

        You sound like my brother from another mother… ^_^ (except my golden age is little later than your golden age).

        I agree about the nature of old school mail-order subscribing to a particular title or push notifications. As a consumer it feels all locked in, like giving away my phone number to a car salesman.

        I was burned too much as a consumer by Previews in the 90’s and I can only imagine from a shop owner perspective. That is like futures in the stock market.

        But what I was referring to in my mind was more the Marvel Digital Comics Unlimited product. That is the only subscription product I can see extracting value out of because I do enjoy journeying back and I know their business model will depend on absolutely nothing recent.

        One thing after some years of hardcore going digital is that it is still about the quality and quantity. Its finding those runs and creative synergies or reflecting back on a series that you didn’t catch the first time on the spinner rack. I have not found straight slogging through 600 issues of a series the real reward.

        [Now excuse me while I go relive "Beastmaster" from Netflix streaming...]

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        • My wife worked with Marc “Beastmaster” Singer on a movie years ago and said he was a very nice guy, by the way …

          We reach! Just as I binge on entire seasons of Breaking Bad via Netflix, I also binge on long runs of digital thanks to Marvel’s MDCU, and those runs are from all over the place. I did the 38-issue Lee/Ditko Spider-Man run, and all the Lee/Ditko Doctor Strange stories, but I also snarfed up the long Daredevil run started by Bendis and completed by Brubaker. In neither case was I particularly interested in reading ALL of Spider-Man or Doc Strange or Daredevil — it was all about cherry-picking the best of the best.

          And that Previews business is a mug’s game, a self-fulfilling, regressive system that can’t help but choke the market with endless reboots, variant covers, and marketing stunts, because that’s the only thing that makes a book stand out for pre-orders … but that’s a whole different post.

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  6. Just re-read this and the standout to me is the idea of adding some sort of achievements to your digital library collection. These days I’m pretty much strictly a digital comics hound, loving it and thought that would be a remarkable addition to the apps. At this time, I’m a firm Marvel Zombie so I basically just use their particular app. Once in a while I’ll stroll (scroll?) over to Comixology for a non-Marvel book that crosses my mind.
    If one of the Big Two made a move to offer their stuff exclusively through their own apps, I suppose Comixology would be severely crippled…but then again maybe it would bring out a renaissance of even better indie stuff/non-Big-Two publisher comics.
    I think digital comics is kind of like digital film – physical copies, like photochemical film, has gone basically as far as it can go and, while it still has merit there’s no denying digital has unlimited room to grow. I guess, at the end of the day, I get my news online, read eBooks and watch Netflix so…why not my comics too? I’m really digging my burgeoning digital library and I also like how easy it is to pull up old issues or related stuff, find other works by creators you cotton to and so forth.

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    • The Big 2 need to own their customers. Giving up a third of their profit to Amazon/Comixology and/or Apple is just nuts. That’s the first thing they have to remedy — they have to own their customers.

      After they’ve built their own app (and weathered the inevitable storm of complaint from customers who liked the old way better … and it WILL be a step back at first, Comixology has a very mature platform), then they can start thinking about value adds like building a social platform, and integrating with other arms of their media empire (movies, TV, games).

      But first, they must own their customers. They need their own tech and their own platforms. This is basic.

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