I’ve become a big fan of the Comixology app on my iPhone. They launch their new products on Wednesdays just like a direct market store, so it’s become something of a Wednesday ritual for me to fire up the Comixology app and wait 3-4 minutes while it updates over the 3G connection. It’s always fun to see what “new” old stuff the publishers are adding and also see what NEW new stuff is showing up.
This week, something caught my eye: Atomic Robo: Deadly Art of Science #4. I write my pull list down on piece of notebook paper every week and quickly pulled that out of my pocket. Sure enough, I had that same issue on my hard copy pull list.
So, Atomic Robo has gone “day-and-date” (as the kids like to say…I prefer the term Same Day Digital), meaning that they are offering the same product digitally as soon as the physical copies are available in direct market comic shops. A few comics have done this. DC’s JLA: Generation Lost has been same-day-digital since it launched last summer. The Invincible Iron Man Annual was same-day-digital (although split across 3 separate downloads…Ugh!). The Walking Dead and Invincible have been same-day-digital for a few months. Archie is same-day-digital.
What was eye-catching was the price: 99 cents! Ever since we first started seeing comics on smartphones and tablet computers, fanboys have extolled the virtues of the 99-cent price point. 99 cents seems to be a magic number with apps. Fanboys have claimed that at 99 cents, we might be able to get some new readers who balk at paying $2.99 or $3.99 for a comic book.
And, they probably had a point. A comic needs to grow its readership and that isn’t going to happen with $3.99 digital comics. You can buy Angry Birds and get HOURS of fun for 99 cents, but a comic that you read in 15 minutes will cost 4 times as much? WTF? The general public just isn’t seeing the value and won’t pay that much for a digital comic.
So, why the reluctance from publishers to just release all of their new issues same-day-digital at 99 cents? Well, we have to consider what that would do to the direct market. For those who don’t know, the comics marketplace in the U.S. is weird. Pretty much all comics sold in the U.S. are sold in specialty comic shops that are collectively called: The Direct Market. The DM buys pretty much all of their books from Diamond Comic Distributors. They buy comics from Diamond for ~50% of the retail price, but they have to order ~3 months in advance and the comics are not returnable. Every book you see sitting on the retailer’s shelf cost them ~$1.50 – $2.00 and if they have to put it in a dollar bin, they are losing money.
So, you can imagine a retailer’s reaction to a publisher selling comics to the final customer for 99 cents. Not only is that cheaper than the cover price of the paper copy of Atomic Robo ($3.50), it is cheaper than the retailer was able to buy copies of Atomic Robo at wholesale!
Publishers have an interesting relationship with the retailers. On one hand, the current DM is on life-support. Sales have been terrible over the last year to the point where a lot of local comic shops are going to go out of business. Not all of them will die, but many will. Eventually, there will be a robust market for digital comics, but it isn’t there yet. The digital sales simply aren’t that significant yet. So, the publishers have to manage this transition from the DM-only business model to a new world that also includes digital sales in such a way that doesn’t kill the DM.
If Marvel and DC suddenly went same-day-digital with all of their titles, it would hurt business at the DM retailers in the short-term. Even though there is some evidence that DM customers and digital customers are different sets of people, there is enough overlap that at least some DM retailers would probably go out of business if they lost even a few percent of their customers to digital. Like I said, the DM has some thriving stores, but many are on the ragged edge right now.
If the DM were to wholly collapse, then the publishers (especially Marvel/DC) are in deep shit.
And that brings us back to Atomic Robo published by Red 5 comics. This is EXACTLY the type of comic and publisher that should be doing same-day-digital at 99 cents. Atomic Robo is a great comic, but is an afterthought in today’s DM shops. Your shop will pre-order you a copy, but they are unlikely to pre-order a copy to sit on the shelf that might lure in a new reader. So, it is hard to say that the DM has been “supportive” of Atomic Robo. It is also hard to see how the DM is going to be crippled by Red 5’s actions. In December, Atomic Robo barely made the top 300 sales chart (checking in at #299) with sales of 3880. I don’t have a current estimate of the number of comic shops in the US, but that works out to around 1 issue per shop and those probably 99% preordered by a customer with a pull list (i.e. not shelf copies). Even if all of Atomic Robo’s readers “defect” to the 99 cent digital copy, they just have to tell their shop to not order Atomic Robo for them next month and all the retailer “loses” is $1.75 in profit (assuming they bought the comic from Diamond for 50% off retail).
The situation would be very different if Marvel or DC suddenly embraced this practice. Some customers would “defect” and copies of X-Men, Avengers and Green Lantern (that each cost the retailer $1.50 – $2.00) would just sit unsold on the shelf. The next month the retailer would order fewer copies or (more ominously) go out of business and then order ZERO comics.
For the health of comics as an industry, it is important to have a robust digital distribution model, but there is no reason to kill the DM shops that are such an important part of the industry. The future for the DM shops is going to be rough and a lot of them probably won’t survive this transition, but strong shops in good markets will make it. The important thing is that the transition be managed carefully.
That is why publishers like Red 5 and titles like Atomic Robo are where this transition SHOULD start. They are small and unlikely to kill the DM. In a few months, a few more small publishers will probably follow suit. The smart DM shops will watch these titles carefully: How many customers really switch to digital? That way, WHEN the Big 2 make the switch, an LCS owner will know by about what percentage he/she should reduce the shop’s preorders of a particular title. Meanwhile, the presence of more same-day-digital titles at a reasonable price will grow the digital marketplace to the point where the Big 2 can consider making such a change. Hopefully, new readers will discover that telling stories with pretty pictures isn’t just for kids and 30-45 year olds with nostalgia issues and some of these new customers might actually want to buy a paper copy of comics someday.
Let’s all just hope that the transition is as smooth and painless as possible.
-Dean Stell
Follow Dean on Twitter.
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