DC’s New Royalty Program – Let’s Do The Math On Single Issue Sales

You probably heard that DC has revamped their royalties program, adding colorists to the payout mix and lumping digital in with print.  We should talk about what’s going on with the single issue sales and royalties.  Here’s the gist of it as DC put it in their media release:

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. 

 DCs New Royalty Program   Lets Do The Math On Single Issue Sales

You can get Batman in pretty much every format.

That was perfectly clear, right?  Yeah… DC has more than a little work they need to do explaining how all this works, especially to their own freelancers.  It was discovered yesterday that the threshold for royalties on a single issue was raised to 60K across all channels.  I gather that the direct market threshold for royalties used to be about 35K.  I haven’t heard what the newsstand threshold was or how subscriptions factored into this.  The reorganization does bring digital into the mix, however.  That’s significant, especially moving forward.

I think my favorite reaction to this changes, which nobody apparently saw coming was on Facebook.  One comics pro (though I think he spends a lot less of his time in comics, these days) thought this was a sign that people should get out of the business.

Let’s all take a deep breath and run through the math on this.  It’s probably not as drastic as it sounds at first blush.

Biggest take-away, from what DC has said, it looks to me like your digital single issue sales are now a form of backlist.  If they keep selling, you keep accruing sales on that issue and can eventually earn out or get a trickle of royalties like with a trade paperback.  It would be nice if DC would clarify their intentions, but that’s my reading of the situation.  Creators might learn to love those $1.99/$0.99 back issue sales.

But for now, lets focus on the immediate new issue sales.  We’re looking at Direct Market + Direct Market/UK + Newsstand + subscription + digital.

  • Direct Market, we have estimates on.  Pick your poison – Comichron or ICV2.
  • Direct Market/UK is roughly 10-15% of the U.S. Direct Market from the above estimates.
  • Digital is a bit of a black box.  I’ve heard anywhere from 10%-25% of print sales.  DC has said in the past that the digital sales tend to line up proportionally with their Direct Market sales, though this may or may not still be the case.

That’s what we can estimate with some degree of ballpark certainty.  For estimation purposes, let’s say both the DM/UK and digital editions are 15% of print.

If the DM estimate was 40K, you’d have 6K coming in from the UK sales, so 46K in total print and then 6900 digital copies (15% of total print) for a total of 52.9K units in net sales.  Which means you’d need to get another 7.1K from newsstand and subscriptions to hit the royalty threshold.  An issue with a DM estimate of 45K, using that UK + digital formula lands at 59.5K and needs a bit less than 500 issues from newsstand and subscriptions to pass the barrier.

So what kind of numbers do the newsstand and subscriptions do?  An excellent question for which I can only provide some general guidelines.

DC’s circulation audit for the second half of 2012 doesn’t break things down to Direct Market vs. newsstand, but it does list the number of subscription copies per month, and that ranges from a low of 55,381  to a high of 70,626.  That should be spread across 22 issues.  It is likely that it’s not an even distribution and quite possible the kids comics on the list, like Looney Tunes, are taking up a large chunk of those sales.  I’d put typical month at about 66K.

We do have a little more specificity with Marvel… but it’s dated.  Marvel _used_ to have breakouts for individual newsstand titles and subscriptions, back in ’09.  So we have some guidance for what DC’s numbers might look like.  With the newsstand figures, this is while Borders was still around, but I’m also under the impression DC might have wider newsstand distribution than Marvel did, so perhaps they’re not as far off.  Probably we should chop 30% to account for no more Borders.

In the second half of ’09, for the sample month,  the subscription range was

1. Marvel Adventures Spider-Man 30,652
2. Amazing Spider-Man 9,090 (27,270 copies/3 issues)
3. New Avengers 8,570
4. Ultimate Spider-Man 6,919
5. Uncanny X-Men 6,739
6. Marvel Adventures The Avengers 6,345
7. Marvel Adventures Fantastic Four 6,129
8. X-Men Legacy 5,512
9. Hulk 5,493
10. Astonishing X-Men 4,876
11. Captain America 4,266
12. Fantastic Four 4,181
13. Amazing Spider-Girl 4,115
14. Thor 3,876
Iron Man: Director of SHIELD 3,769

and the newsstand range was

1. Hulk Chronicles: World War Hulk

8,098
2. Secret Invasion “Yu Variant” 6,895
3. Iron Man: Golden Avenger 5,208
4. Amazing Spider-Man 4,104 (12,313 copies / 3 issues)
5. Marvel Adventures Two-In-One 4,098
6. X-Men: Legacy 3,856
7. Marvel Two-In-One 3,741
8. Uncanny X-Men 3,597
9. Skaar: Son of Hulk Presents – Savage World Of Sakaar 3,538
10. Ultimate Spider-Man 3,272
11. Nova 2,897
12. Captain America 2,808
13. Wolverine: Origins 2,748
14. Venom: Dark Origin 2,620
15. Invincible Iron Man 2,617

And if we go back to the audit for the first half of 2008

Top 10 Subscription Comics for Marvel in May (March) 2008

  1. Marvel Adventures Spider-Man: 31,479
  2. Amazing Spider-Man: 11,936 (average/3 issues)
  3. Ultimate Spider-Man: 7,875
  4. Marvel Adventures Fantastic Four 6,761
  5. New Avengers: 6,739
  6. X-Men: Legacy 6,561
  7. Uncanny X-Men 6,358
  8. Marvel Adventures Avengers 5,332
  9. Wolverine 5,183
  10. Hulk 4,834

Top 10 Newsstand Comics for Marvel in May (March) 2008

  • Civil War Chronicles: 7,824
  • X-Men:Legacy: 5,094
  • Franklin Richards: Spring Break 4,987
  • Marvel Adventures Two-In-One: 4,819
  • Uncanny X-Men: 4,683
  • Marvel Two-In-One: 4,630
  • Amazing Spider-Man: 4,621 (average/ 3 issues)
  • Nova: 3,937
  • Ultimate Fantastic Four: 3,922
  • Ultimate Spider-Man: 3,848

What can we learn for this?  First off, subscriptions and newsstand sales are their own beast and don’t have all that much to do with Direct Market sales.  Kids titles do better.  Nova was a top 10 title!  And that’s pre-Annihilation.  In the sample month for ’08, the low end of subscriptions (and not every title had one) was 556 and the low end of newsstand sales was 845.

So what am thinking about the potential for newsstand sales and subscriptions?  They’re probably about even and and depending on the title in question, you’re probably looking at maybe 1K-4K for each.  So with the way this cascades, I’d expect a comic with 45K  in the DM estimates to cross the royalty threshold and a comic with 40K in the DM estimates MIGHT have a chance, if it has the right popularity outside the DM.  I could be a little high or low with the newsstand and subscription data, but that should get you into the ballpark.  Please note, this is not to say a book in the 40K-45K estimate range is going to be earning a large amount of royalties.  Royalties _start_ at the aggregated 60K.

This could also effect the cashflow a little.  I’m not entirely sure how long it takes for the newsstand numbers to get integrated.  They’re probably a little more important to the big picture than they were last month, if you need those to cross into royalties, there could be a delay.

What’s actually on the newsstand these days?  I swung by the now Marvel-less Books A Million and saw:

  • Batgirl
  • Detective Comics
  • Batman and… (Robin, assuming he comes back to life)
  • Batman
  • Beware the Batman
  • Batman Superman
  • Justice League
  • Flash
  • Green Lantern Corps
  • Green Lantern New Guardians
  • Green Lantern
  • Looney Tunes
  • Justice League United
  • Nightwing
  • Scooby Doo
  • Scooby Doo Team-Up
  • Supergirl
  • Superman
  • Action Comics
  • Teen Titans Go
  • Teen Titans

And the I strolled over to Barnes & Noble to find:

  • Batman and…
  • Nightwing
  • Batgirl
  • Green Arrow
  • Green Lantern
  • Superman Wonder Woman
  • Wonder Woman
  • Catwoman
  • Justice League of America
  • Justice League
  • Superman
  • Batman
  • Detective Comics
  • Aquaman
  • Aquaman and the Others

Quite a bit of variation between the two newsstands and perhaps there’s a bit more that was there that sold out, but I wouldn’t think there was space for more than an extra 3 titles at either place.  If newsstand is now part of the royalty minimum and the book isn’t on the newsstand or all the newsstand outlets, I’m not sure what to tell you.  I did notice that aside from the children’s targeted comics like Looney Toons, all the DC newsstand titles are now $3.99.

Incidentally, if you like numbers and comics business material, I’m writing a new book on that topic.

Comments

  1. I haven’t seen any pros saying this means getting out of the comics business completely, but I have seen them saying it means that working for DC just got a lot less rewarding than doing creator-owned work instead.

    The thresholds aren’t just a problem of cash flow (freelancers are used to waiting ages to get paid): even with digital “backlist” available, the shelf-half-life of a random issue of a mid-list title is pretty short, and it could take until the sun goes nova for it to finally reach a sales threshold of 60K and pay out. Under the old system a TPB that sold poorly (because the character doesn’t have bookshelf appeal) would at least pay something, but now it won’t pay at all. And that has to be by design.

  2. Torsten Adair says:

    Given the Post Office statements, can you guesstimate newsstand sales by taking the number distributed and subtracting the Direct Market estimate from Diamond/ICV2?

    Keep in mind that those newsstand sales… the rule of thumb is “Print three, sell one”. The two copies which don’t sell? Those get trashed/recycled, and aren’t reported as sales, but as returns. (Which, I believe, is noted in the Statement of Ownership.)

  3. DC’s plan has changed any number of times since it was first launched in 1981, with a threshold of 100k (which only a handful of their books at the time reached on a regular basis). I’m not sure if that 35k direct market only threshold is right, I know it used to be 40k for the longest time, and the newsstand threshold was 75k (though for at least a while chain bookstores like B&N and Borders (RIP) weren’t considered newsstand for these purposes, even though they were returnable, so I don’t know how many newsstand books DC has left), so the threshold might have just dropped for them. The overall theme of the change does seem to be “the rich get richer” (or as DC puts it, “designed to generously reward high sales performance”), We’ll probably never know because creators don’t generally talk in public about it, but I’d guess fewer creators will get royalties, but those who do will get more than before.

  4. DC hasn’t run postal statements since the 1980s, and Marvel stopped running them a few years ago. I think only Archie and a few magazines like MAD and HEAVY METAL still carry them.

  5. Christian says:

    Not an industry analyst by any means but could this further the paradigm shift going on where we no longer see people breaking big in indies and making their way over to DC/Marvel? In my (admittedly) small group of creators that I pal around with – I’ve definitely seen a diminished interest in ever working for DC. It just seems like a big soul-crushing waste. At least from an outsider’s point of view.

    I’d be neat if DC started taking more risks and employing lesser known artists/writers and allowing them to make their name there instead of relying on the indie farm team but I don’t think that’ll ever happen. We’ll probably just see more of an influx of TV/video game writers and a few one-off indie guys looking to supplement their income.

  6. Penny Dreadful says:

    DC hired indie artists and writers for the new 52. These creators were driven out of DC by editorial.

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