Diamond's Digital Distribution Program: The Actual Details

By Todd Allen

new logo3 Diamond's Digital Distribution Program: The Actual DetailsI just got off the phone with Michael Murphey from iVerse Media, and the real details about Diamond’s digital comics distribution program are a little different from how this was initially portrayed by early accounts from the ComicsPro meeting.  (It probably should be disclosed that ICV2’s Milton Griepp is on comiXology’s Board of Advisors and Directors.)

Moreover, and this will be the first time I’ve said this about a Diamond Digital project, it seems like a very reasonable plan.

This program is a little on the complex side, so let’s break it into to “purchasing” and “reading.”

Purchasing: All purchases for the Diamond Digital program will be made off the retailer’s website.  Yes, there is an app (we’ll get to that in a bit), but the app is _only_ for reading.  The idea is to create a directory off the comics retailer’s existing website (for example: GenericComicShop.com/digital).  The entry level product will be a plug and play template that the retailer can drop into that directory and sell digital comics.  There will be an API available if the retailer wants to integrate the digital offering into their e-commerce package.  That is to say, have a web customer buy a t-shirt, a graphic novel and a digital comic in the same shopping cart.

The retailer will get 33% of a digital comic sale, which will be invoiced through Diamond.  At launch, the retailer will be able to set the prices for digital comics purchased at the store (that whole business about going into the store to purchase a code to go home and THEN download a digital comic), but the prices will be set to list price online.  Murphey tells me they’re working on a software update to allow the retailer some leeway to set their own prices on the web store.  Figure with a 33% discount, you’re unlikely to see many retailers discounting digital much more than 10-20% when this happens and you might not see that much discounting at all.

Reading: This is where the app comes in.  iVerse has stripped the store out of the Comics+ app and turned it into the “Digital Comics Reader,” which will not be branded as a Diamond product, past a Diamond Digital logo in the start up screen.  So it’s a read-only app.  The Reader will initially be available in iOS and Android formats.  You purchase the comics at the retailer’s website (or, theoretically, in the store and get a code for download), then download them to your device.  Now, this means you get to keep the files, which is a sticking point for a lot of people.  Murphey tells me the comic files can be backed up in iTunes and purchase records will be kept, so they can be re-downloaded from the Cloud.

The comics can also be read in a web browser, right on the retailer’s website.

At this point, you’re probably wondering which publishers will be available through this system.  Murphey gave me an initial list of “APE Entertainment, Arcana, Archie, Asylum, Blue Water, Broadsword,  IDW, Image (including Top Cow), Moonstone, Red 5, Top Shelf and Viper.  Murphey further said they expected more announcements in the future and expected a “robust” line-up for launch.

So what does this mean for retailers?

When Murphey talks about giving retailers “the same tools as Amazon or Barnes & Noble,” that really is where he’s coming from.  In this system, Diamond is acting as a distributor of digital books and the retailers are the Amazon (the digital retailer or e-tailer, if you prefer).  It’s not an affiliate program because the retailers are the ones selling the digital comics.  That’s a pretty straightforward deal.  It’s a distribution deal, too.  You may get some people wanting more than 33%.  You _will_ get some people who want more publishers involved, but this is a reasonable model and a good start.  It should also be noted that the onus for digital sales is being put squarely on the retailer.  “Here are your tools.  Go use them.  Go promote them.”  Congratulations local comic book store, you’re a web business now.

What does this mean for the consumer?

This could mean a few different things.  On the positive side, if you’re a shop-local person who wants digital comics, congratulations: your option just materialized (assuming your local store participates).

If you don’t have a local store… well, I guess you’re going to be a free agent and get to pick a store at your whim, should you like the product mix and browser experience.

If you’re the rare breed who wants do buy both a print and digital copy at the same time, well… you could probably do that already if your store was using the old program, but this might offer a few more options and Murphey tells me he working on expanding the “add digital for 99 cents” program and adding more special DVD-style extras like video interviews to the digital comics.

You _might_ be able to get some discounts off the list price for digital comics now (if you get the codes in a retail store — yeah, I know, counter-intuitive and missing the point) or in the near future when the software update hits.

And then we have a few things that are less cut and dried.  The question of exclusivity wars is going to heat up.  Right now, if you want DC, you have to go to comiXology and if you want Dark Horse, you have to go to Dark Horse (with a couple notable exceptions).  You know Diamond is going to try and pull some exclusives in, just like they have exclusives with their print business.

Most consumers just want to use one browser/format to read their comics.  Everyone has their own favorite.  Technically, this isn’t adding a new format to the mix, but if exclusives happen, it will expand the number of browsers people are forced to use.  That’s not necessarily a positive.  And that’s something we’ll just have to watch play out.

In a perfect world, there would be a standard digital format and you could choose your vendor of choice.  Like it exists in music.  Comics are looking more like eBooks, where Amazon owns the Kindle format and tries to lock in exclusive content.  There’s nothing wrong with wanting to lock in exclusive content from a business perspective, but it isn’t the most convenient thing for the consumer.

The consumer needs to sit back, evaluate the options and reward his/her favorite with some business.  Do that and the rest should eventually sort itself out.  On the whole, I can only call this a positive development and a GIANT leap forward for Diamond’s digital ambitions.

Comments

  1. pallas says:

    “Now, this means you get to keep the files, which is a sticking point for a lot of people.”

    Is this any different from how Comixology works?

  2. “there is an app… but the app is _only_ for reading.”

    Bad move. If it’s easier to buy with Comixology, that’s where people will buy it.

  3. If anyone with a Diamond account is eligible for this, then there could be an explosion of ‘retailers’ participating.

  4. Chris Hero says:

    If I can buy KaBoom titles to read with this app, I’m in. I’ll pick different stores to buy them from.

  5. Torsten Adair says:

    Okay… what keeps a store from setting up a work-around the website digital restrictions?

    What if I, as a retailer, decide that a virtual back issue bin is much preferred than having lots of unsold paper back issues lying around. (Especially on titles which that one unsold copy might wipe out the profit of the other sold copies.)

    So, I decide to cut my margin to, say… 10% instead of 33%, since I figure I’ll save money on inventory taxes, man hours spent bagging and tagging the back issues, and by using that real estate for product which sells better.

    So I create a simple bit of code where the customer goes online, buys via the “coupon” set up, and gets emailed the coupon code, at a cheaper price than the DD website set-up.

    Here’s a question I’ll ask, pointing out the elephant in the room who isn’t wearing any clothes… how many comics shops have a retailing website? How many have the equivalent of an Amazon or BN.com website?

    Is Diamond/iVerse offering such retailing tools for comics shops, or is Comixology the only one offering this?

    Finally, can we see a comparison between the Comixology and iVerse/DD programs?

  6. Something to consider in terms of retailers “discounting” digital sales is that PayPal fees (2.9% + .30/transaction) eat up a LOT of margin on single item purchases. Like, over half of your margin on a $1.99 purchase (36 cents of the 66 cents)

    If customers buy big piles of digital at once, that will be one thing, but if the bulk is single-copy purchases there’s not going to be any ROOM to discount, even by pennies!

    -B

  7. John VanGuard says:

    As a retailer that had signed up and then quit the Comixology affiliate program, this program from Diamond and iVerse sounds a lot more reasonable. I didn’t really like Comixology marketing to my customers and that’s exactly what they were doing. So, I’m going to give this new program a try.

  8. I wonder what happens to the digital titles Iverse was selling.

  9. Hi.

    Good information. I have never heard of the digital comics. Thanks for this post.

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