Last week, the comic-book-o-sphere was abuzz with speculation that the Invincible Iron Man Annual #1 would cost more in its digital format when it goes Day and Date release. Yesterday, Marvel CCO Joe Quesada confirmed that those who decide to buy the annual via the Marvel iPad App would indeed pay an extra buck.
“The Iron Man comic is over 60 pages, and in print it’s priced at $4.99, but on average for that kind of page count, we would have priced it at $5.99 or broken it up into three $2.99 issues. Our comics on the Marvel App are priced at $1.99 and the way the annual is written it breaks up nicely into three chapters perfectly, so that’s how we’ll break It up in the app. So, when you do the math on this one, the direct market comic shop has the advantage in price on this one, and we’ve already received word from retailers that they feel this is the best way to set this test up.” – Comic Book Resources
A test, or a brilliant master plan for regular method of operation?
In the past, “tests” for price increases have resulted in company wide changes, and I expect that increased digital day and date release costs to become the norm for Marvel. While I understand Quesada’s reasoning for increasing the cover price so as not to anger or upset the local comic shop owners, if you really think about it, upping the price for this annual (and presumably all future day and date releases) is a huge profit margin maker for Marvel.
DO THE MATH
Consider this; digital distribution cuts out the printer and all associated costs completely. No paper, no ink, no shipping, no print and set up fees. Nothing. Nada. Zilch. Since most print costs are a closely guarded secret at the big publishers, let’s use 30% for that number. Apple takes 30% of the sale price of all app sales, so one could argue the cost is the same, but remember iTunes=Apple=Pixar=Disney=Marvel. There are no comic shop reductions going on, nor are their Diamond Distributor issues – those discounts vary depending on Diamond and the local comic shop, so it is safe to say that digital costs less than print.
Even if Marvel is paying Apple a $1.80 for the Invincible Iron Man Annual #1 digital copy, the difference between the actual production cost of the book and the sale price is huge, comparatively speaking. Potentially, Marvel could be making a $2.60 profit per digital issue.
Of course this is all speculation at the moment, but we can push our guesstimates even further, by calculating how many people might actually buy this book via the Marvel App on the iPad. Two months after the release of the iPad, Apple has announced it has sold 2 million units. Following the first couple weeks of release, Apple noted that the Marvel App was one of the highest grossing apps delivered through the iPad Apps store. Because of the buzz surrounding the App, we could safely estimate that 1.5 million people downloaded, installed the app, and grabbed a handful of free comics. If only 10-percent of those people became hooked on the digital comic reading experience, that equates to a potential 150,000 people who might buy Invincible Iron Man Annual #1 on the day of release. That number is not too far away from the top selling comics as released to the direct market, and essentially doubles the number of units sold. Do the math – that’s $390,000 profit off of one digital book. And that, dear reader is huge.
From the business perspective, Marvel is making a very wise move by charging more for the digital edition of this book. In one fell swoop, the company has kept the local comic shop happy by creating a price incentive for people to buy the physical copy of the book, while setting themselves up to raise their bottom line for those who don’t give a flip about physical copies, and just want to read comics, regardless of format. For the younger generation, who are more concerned with instant gratification regardless of format, I really foresee Marvel’s little experiment going wide if the company promotes the digital day and date release correctly (Here’s a Hint Marvel: Press Release on Slow News Day. It’s worked for you more than it has failed).
A BRILLIANT MASTER PLAN
The interesting challenge for Marvel will be single issues. To date, the company has released its back catalogue of issues at $1.99. Fair enough, but if day and date release goes for regular titles, I half expect Marvel to increase the price there as well. The question becomes how high that price might be. Will Marvel continue to price the simultaneous digital release a buck higher than the print copy? Joe Quesada made an interesting observation that might point in that direction.
“One would have to assume that because of the overwhelming popularity of the iPad Marvel App, there are people who have it who may never have ventured into a comic shop or perhaps lost interest in comics many years ago and are curious as to what’s been happening in our fantastic universe. The hope is that we capitalize on that and the high profile of Iron Man, get readers interested in this single story and from there, if they want to purchase more or purchase that issue, they are directed to comic shops.”
I think capitalize is the key word in that entire statement. Will we see a $3.99 digital cost to a $2.99 print sale? Will Marvel come out and announce it is reducing the price point for print from the now $3.99/$4.99 back to the good ol’ days of $2.99 across the board to potentially drive more people to brick-and-mortar? If digital comic sales are successful, it just might happen using digital comic sales to subsidize print editions. Considering DC has yet to venture into the world of digital distribution, Marvel could sock it to their rival by creating a cover price war on the print side, while still reaping profits from digital sales – something DC can’t do at the moment.
I will continue to bemoan the fact that the digital version shouldn’t cost more than the print copy, and there are many others out there who agree with me, but at this point I can only tip my hat to Marvel and say, “Kudos to you for coming up with a resolution to the digital comics transition that alleviates concerns for those that rely on the print edition.” Here’s hoping you make a crap ton of money in the process.