OPINION: Marvel publishing moves may signal something better – Part 2

by

“Marvel is canceling titles left and right! What has happened to the House of Ideas!? THE SKY IS FALLING! THE SKY IS FALLING!” Yes, it may indeed be a time to duck and cover if your favorite series is getting axed in February, but it may also be time to look at another option for companies like Marvel.

While the limited series model doesn’t force a company to conform to a monthly release schedule, and encourages creators to develop solid stories instead of rushed half-assed ones, it doesn’t really address the bigger issue, namely the dwindling number of people going to the comic book shop week after week. Yes, I do realize that DC’s New 52 did wonders for sagging sales, but even at 180,709 copies sold in October for the number one comic, that only slightly better than the number one selling comic from October 2008.

What is the more interesting number to track – if you can actually track it – is the number of comics sold in the digital market. While everyone is keeping actual numbers close to the chest, percentage ranges from small publishers who hint that 3-percent of sales come from digital, all the way up to 30-percent from the bigger companies. That is a huge range to be sure, but if we are looking at a company like Marvel, 30-percent of 100,000 comics is still 30,000 comics. While we’ll never know how many issues a title like The Destroyers might have brought in, 30-percent of X-23 #15 is still over 7,000 potential issues sold in the digital market.

I can already see the argument forming in your mind, “Why would I buy the digital copy and the physical copy of a title that I am only reading sometimes?” It’s legit comment, but it also is shortsighted when looking at the bigger picture. Publishers aren’t looking to increase profits simply by getting the current market to buy the same comic twice. Instead, they are looking for new and lapsed readers to jump on board the digital train and make more money that way.

Consider this; ComiXology has announced, albeit quietly, that the number of titles released digital day and date is now at 50-percent. Marvel has announced plans to increase the number of digital day and date titles by March 2012 to include most of the titles being printed. While DC and Marvel have both experimented digital first releases, DC quietly announced this week that serialized versions of Batman Beyond Unlimited and Justice League Beyond will be released digitally in 2012 for 99-cents per “chapter” which will then be collected in a print edition later. Keep in mind previous digital first releases were single issue or limited runs, making the Batman Beyond Unlimited the first ongoing series to be released in a digital format before seeing a print run.

It’s no secret that Marvel is looking for ways to increase the profit margin, and I’ve talked before about how much money that can be had from a digital release, but what if a comic was only released in digital form, and then later released as a trade, skipping the monthly print model completely? Instead of bringing in only new readers in the digital world, the company would also get a large number of print reader who make the switch.

It’s been estimated that a single issue of a comic costs around $500 per page for talent costs alone. Those who follow the number of pages in weekly books have noticed that the 22-page book is now averaging around 20 pages, and there have been hints that we’ll see 18-page books released in 2012. At 20 pages, that’s $10,000 per issue, and it doesn’t include print costs. But what if you could dump the print cost completely by taking the book directly to digital? It’s clear right now that publishers love the same as print price point for digital day and date releases, as they claim it is a model that prevents fans from leaving the brick and mortar in droves. It’s a brilliant move to assuage the fears of the shop owner, and make a lot more money from a single title.

Now do the math – X-23 #15 had a $2.99 cover price. If that same cost model were applied to a digital edition of the book, Marvel might have easily made $5,000 from that issue if it were released on the comiXology App. (30% of print times cover price minus talent cost minus estimated Apple and ComiXology fees = ((7,000*$2.99)-$10,000-$6,279)=$4,651). Sure, it doesn’t seem like a lot, and might be considered not worth the effort to go through the motions if you were only picking up a small number of readers.

But what if Marvel decides to shift its publishing model more toward digital than print? While there may be a bigger push to focus on core characters, reduce the number of titles released in 2012, and deal with “budgetary mandates,” a digital first/only model may be an option to keep fans of Ghost Rider, Iron Man 2.0, and The Destroyers happy. Marvel and DC currently seem to be trying to one-up themselves with their digital storefronts appearing exclusively on the Nook, Kindle Fire, and lesser known mobile devices. The price point of these new readers are significantly less than the Apple iPad, and with the holiday season coming up, it doesn’t take a genius to figure out what is going to be a big seller this holiday season.

And interestingly, a new job has just appeared on the Disney employment website – Manager, Digital Customer Acquisitions. According to posting, the job requires the person to

• Manage consumer model for subscription and single issue sales of digital comics
• Leverage digital customer acquisition and customer interaction models to optimize earned revenue.
• Support digital space strategy and planning and while leading digital program execution based on digital business knowledge, digital customer acquisition expertise and partnership with the digital publishing team.

The job is based in Marvel’s home town of New York City.

Continuing to use the X-23 numbers from October, if the title went to a digital only release, and 100% of the print readers, and the number of digital only readers are able to get their fix of Wolverine’s daughter on any number of digital readers, that $4,651 suddenly balloons to $40,322 of solid profit. And that is only for a book that made it to 104th place in October. For a book that was released 12 times a year that’s $483,864. Heck, even combining a digital only with a limited series option would still make a pretty penny. Now imagine the money to be made for a bigger selling title like Iron Man or Captain America. I realize that 100% switch to digital would be hard to do, as there will still be those that want a print copy of their book, but half a million dollars might just be worth the risk for a single book.

For those that still want a print edition, a trade could easily be released at some point down the road to satisfy those that refuse to go digital, or want a physical copy of their favorite series should their hard drive or device go belly-up down the road. Interestingly, Marvel recently altered their royalty payment agreement with creators to include digital sales, but also included a 7-percent decrease in trade paperback sales.

I’m not privy to all the financial goings on at any company, and certainly don’t know how much creators are getting paid or what secret deals the publishers, digital distributors, and App store vendors have in place. The numbers presented above are my estimates only and don’t represent any real exchange of funds that I know of. From 30,000 feet this is the information I have in my hand, and how it plays out in my mind. As much as people don’t want to embrace digital, those who really want to read the adventures of their favorite characters and read them before anyone else, the digital first model is certainly a way to make everyone happy.

Will a digital only/first release be the model for titles that routinely sell outside of the Top 100 each month? If rising print costs, profit margins, and keeping fans happy are important, it just may be.

Faithful Spoilerite Question of the Day: If you could only read the adventures of your favorite character in digital form, would you make the switch, or ditch the title completely?