DC resets royalty system; colorists and digital now eligible

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I’ve been hearing a lot of conspiracy theories of late about DC, and some of them involve their participation/royalties system. In addition for quite a while, people have been complaining about the fact that colorists aren’t eligible for royalties—and neither are digital-first comics.

But that is changing. I understand a letter has just gone out to DC creative folks announcing a complete overhaul of the DC royalty system. For the first time colorists will be eligible for royalties and will get cover credit. And digital first will also be eligible for royalties. Little things like direct deposit and electronic vouchering will also be available.

However, as I understand it, the main feature of the new system is that all formats—digital, periodical, collected edition—will all go towards a common sales threshold. Royalties will be based on DC’s revenue on a project NOT sales in one format or another. When a comic goes over a sales threshold in any format, sales in other formats will go towards the royalty.

Some knowledgeable sources at DC told me this was all put in place because the old systems didn’t take the realities of modern distribution into account. They were developed when there was only a direct sales market, the source told me, not a world where people download ebooks from Kindle and choose whether to buy popular series in paper, deluxe, Omnibus or Absolute editions.

Here’s the text of the letter that went out to talent:


We have news to share regarding a project we have been working on for some time. We will be rolling out a new, modernized participations payment plan effective July 1, 2014. 
 
DCE’s current participation plan dates back over 30 years and was created for a simpler and very different marketplace.  The current plan no longer reflects today’s business landscape where comics are sold in a variety of formats and through a myriad of sales channels.  Ultimately we made the decision that the best path forward was to create an entirely new plan that covers new work going forward.  Great care and consideration went into building this new participations structure and we feel that it provides both us and all of you with a fair, competitive, and versatile plan for the future.
 
There are a few significant differences between this new plan and what DCE has offered in the past.  Perhaps the biggest difference is that all participations will now be calculated based upon DCE’s net revenue from a book’s sale rather than on the cover price.   This change gives us more flexibility to sell our material in new distribution channels that have different pricing models.
 
In addition, physical and digital sales will no longer be treated separately.  Digital sales will now be added to print sales and the sum will count towards achieving the sales threshold which triggers participation payments. 
 
We’ve also standardized sales thresholds for all periodicals.  There are no longer separate thresholds and percentages by channel (direct market vs. digital vs. newsstand).  We’ve also added a threshold for collected editions.  The new thresholds and percentages are designed to generously reward high sales performance. 
 
We are pleased to announce the very welcome addition of Color Artists to the participations pool.  Color Artists will receive moving forward cover credit for their work alongside Writers, Pencilers and Inkers.  In addition, Digital First talent will now be eligible to receive additional compensation and share financially in the success of their books. 
 
In addition, DCE is modernizing our systems for both reporting participations and making payments.  Beginning July 1st, all reporting under the new structure will be sent electronically.  Also, those of you who live in the United States will now be able to receive your payments via direct deposit. Information on how to sign up for direct deposit payments will be sent to you shortly from the Talent Relations department. International talent will continue to receive payment via wire.  We’re very happy to offer these upgrades, which will result in getting paid faster.
 
And last, beginning on July 1st, DCE will begin transitioning to the use of electronic service agreements.  The work-for-hire service agreements that historically have been transacted on paper will now be handled electronically and sent to and from your editor via email.  We are confident this will make the process quicker and more efficient for everyone.  
 
We recognize this is a lot of information to take in, and we anticipate you may have questions.  The DCE Talent Relations team is well-informed in the new participations plan and looks forward to discussing with you any inquiry you may have.  Feel free to reach out to the team at TalentRelations@dcentertainment.com.
 
DCE is committed to being the publisher of choice for top talent in the industry and to further strengthening our relationship with our talent ensuring that together we continue to create the comics we can all be proud of.  Thank you and we look forward to working with you throughout the year.
 
Sincerely,
Dan & Jim
DC Entertainment Co-Publishers


According to people with knowledge of the new system, it will give greater flexibility for creators to share revenue from every channel. For instance if a digital first book sells 20,000 copies, those will go towards the sales threshold, and when it is collected into a printed periodical, sales of that format will be included in the SAME threshold. (However digital first stories will count as 1/3rd of a “copy” since typically three of them make up one issue of a comic.) Digital copies that are purchased “on sale” will still count as a single copy.

Periodical, collected editions and original graphic novels will all be a different “channel” however, with their own thresholds. However, if that digital first Prez story is reprinted in a paperback, sales of that will be counted in different formats as long as there isn’t a significant amount of new content in the reprint.

While this announcement is sure to ignite some of the conspiracy theories going around, and set off a million questions among DC talent, it seems, at least for now, like a significant update on a system set up in a different era. As I’ve said many times here, although you can criticize DC Comics/Entertainment for many things, they have a very sizable investment in the participation/royalties system that’s been in place for about 30 years. While a lot of people who set the original royalties system are no longer at DC, it’s still an important part of the creative process. Hopefully this continues that tradition.

I’ve reached out to some talent to find out how they feel about the announcement, and soon will hear the other side.

Comments

  1. Most of this really should be considered common sense and overdue. Colorists today are as important to the look of the finished art – and the success of the book as a product – as inkers are (and in some cases probably moreso). And the rest of the changes simply reflect the way the market is becoming structured: digitally-distributed comics are just as “real” as paper ones. But it’s always easier (for a while) to stick with what you’ve been doing, so give DC credit for making the changes.

  2. Justin Jordan says:

    We’ll see.
    The colorist and digital things are good, in least in principle. The rest of it could go either way, but I can see the potential to give us less in it, and I don’t remotely trust any business to not screw anyone it feels like it can get away with.
    So we’ll see.

  3. Interesting news certainly, and great for colorists. Lots to unpack obviously. The move to a net accounting strategy (similar to the move made by book publishers a few years back), but does it change the rate of the payment? Wasn’t the reason Sandman Overture didn’t happen until recently is for years DC wouldn’t move up from the 4% (I recall) royalty they’d paid Gaiman for the original series.

  4. jacob lyon goddard says:

    what about letterers?
    bad lettering will ruin a book faster for me than bad coloring, and comics dont need color.

  5. SAIPAman says:

    Do not underestimate the power of direct deposit.

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