Digital Is The New Direct Market

.

If all you do is read the headline and the excerpt, I want you to remember this phrase:

“Digital is the new Direct Market.”

Not “digital is the new newsstand”.  Direct Market.

Let me explain with some history.

Since the creation of comic books in the early 1930s, comic books have been distributed via newsstands and news agents.  Comic books are magazines, and generally were only found where magazines were sold.  There might be a specialized spinner rack, but until 1972, the only way to buy new comics was to either visit a newsstand (which included comics shops) or subscribe by mail.

Publishers printed the comics, shipped the comics to distributors, who sent them to the various outlets.  Newsstands would sell the comics (if they wanted, sometimes they would be marginalized or never unpacked).  When the next issue was published, the newsstand would take any unsold copies, strip off the cover and send it back for credit, and toss the rest of the comicbook in the trash.  This system still exists, although now, because of ecological pressure, the entire magazine is returned to the distributor and usually recycled.

This was not the best system for publishers.  Generally, a publisher expected to sell one copy of every three copies published.  Publishers generally did not get sales figures until three months later (which is why it took Marvel six months to print Amazing Spider-Man #1 after the success of Amazing Fantasy #15).  Exact data, such as which titles sold best in certain markets, was almost non-existent.

This changed in 1972, when Phil Seuling created the business model known as the Direct Market.  In this model, comics shops and other businesses order product from a distributor.  The items are bought on a non-returnable basis at a discount higher than that offered by newsstand distributors.  Orders are placed before the titles are published, allowing publishers to print quantities to known orders, not estimates.  There are no returns, so there is no risk to the publisher, so long as a profit is made.

Of course, the risk is placed on the comics shops.  As with any business, unsold merchandise must be moved to make space for new merchandise.  In the past, stores could sell older unsold comics via the back-issue bins, as publishers rarely collected or reprinted stories.  Many stores also had “quarter bins”, where less popular older issues would be sold for $0.25, or even cheaper.  However, with graphic novel collections, online warehouse retailers, and digital copies available on the Internet, the back-issue market is not as successful as it once was.  Many comics shops have replaced their bins with shelving that sells more lucrative product.  Where once shops ordered copies for the back-issue market, now many are more conservative, as that one unsold copy could negate the profit made from the sales of three or four copies.

So, now we’ve got the Internet.  It’s always open, and just around the corner (from whatever room you’re in).  The cost is usually cheaper, either in digital or paper editions.  Paper copies can take as little as one to two days for delivery (and a week at worst).  The reading experience of a digital comics is close enough to paper that a reader is not inconvenienced.  (Much like watching a Hollywood blockbuster on a 12-inch analog television set.)  With cheap (or free) comics available online, how do comics shops compete, and avoid the Trail of Tears already created by music stores and independent book shops?

Diamond Digital has announced a new initiative for comics shops.  Stores can sell the comic book for cover price.  Or they can sell the digital copy for $1.99.  Or they can sell both as a bundle, with the digital copy costing $0.99 extra.  The stores also get a 30-day exclusive; the digital comics will not be on sale anywhere else for thirty days.

With the widespread influence of the Internet, publishers and retailers salivate at the opportunity to sell to the general public which is unaware of comics shops.  Many in the comics industry consider the Internet to be the “new newsstand”, a marketplace which replicates the ubiquity of news agents in postwar America.

Unfortunately, I see a different possibility:

Digital comics are the new Direct Market.

1981 was when the Direct Market matured.  That year, Marvel Comics released Dazzler #1 only to comics shops, selling an estimated 400,000 copies.  Looking at circulation figures, Marvel realized that Ka-Zar, Moon Knight, and Micronauts were not selling well via newsstands, but could be viable if sold exclusively via subscriptions and the Direct Market of comics shops.  By the end of the decade, Marvel, DC, and most publishers distributed more titles via the more lucrative Direct Market than to newsstands.

Now, let’s picture a comics shop in 2012, after the Diamond Digital initiative has become common-place.  A customer walks into a comics shop.  He looks at the new titles on the shelf, and sees a few titles which look interesting.  He then takes these comics to the cashier, and purchases the cheaper digital file, not the paper copy.  Maybe he has a tight budget.  Maybe he doesn’t want to clutter his apartment with paper copies.  Maybe he’ll buy the trade paperback later if he really enjoys it.  Whatever the reason, that paper copy on the shelf does not get sold.

Now, the comics retailer will notice this when processing the next month’s orders.  Looking at sales data, she’ll make note of what is selling, and what is not, and order accordingly.  Perhaps some titles aren’t worth an order.  So she’ll print a copy of the cover from the Diamond website, tag it with the digital reference number, laminate it, place it on the shelf, and perhaps offer to sell that issue at the $0.99 price point.  Why?

  • no unsold inventory
  • less product shipped and thus lower shipping costs
  • fewer man-hours required to unpack that shipment, rack those titles, and shift older copies to the back-issue bins

Lots of savings for the retailer, and a better profit margin for the store.  The digital copy stays in print forever, reorders are instantaneous, and require only a computer and desk to sell the copies.  Diamond Digital becomes a de facto back issue bin

So stores order fewer copies of already marginal titles.  Publishers notice this, as well as the number of digital copies sold (as well as subscriptions, which can be lucrative for children’s titles).  So, like Marvel in 1981, they realize that printing paper copies is no longer profitable, and only distribute the issue as a digital file.  Perhaps the publisher charges $2.99.  Perhaps $1.99.  Maybe these “Digital Direct” titles feature journeymen talent which work at lower rates.  Or maybe the publisher sells a cheap version with ads, and a more expensive edition without.  Maybe later they collect the digital copies into a trade paperback.  (Quite possibly as a print-on-demand edition!)

Here’s where the Direct Market becomes the Newsstand:  digital files can just as easily be sold online by comics shops.  Just as a comics fan can order comics from Direct Market mail order comics shops, so too can they order them online.  Some comics shops have robust e-commerce sites, offering a warehouse of merchandise, usually at discounted prices.

In the past, fans had to journey miles from newsstand to newsstand to find all of the comics they enjoyed.  Later, they could find everything under one roof at a comics shop.  Now, instead of driving miles (and sometimes hours) to a comics shop, a fan can sit in front of a computer and purchase a Diamond Digital comic online.  They do not have to set foot in a comics shop.

Don’t think that’s likely?  Look at the e-book market.  Amazon reports that e-books outsell hardcover and trade paperbacks.  Amazon is an online retailer.  It has no physical storefronts.  And yet, of everything their bookstore offers, e-books outsell regular books.

Think a store can still be successful if a customer visits?  Consider this scenario, one which happened daily when I worked at the Barnes & Noble near Lincoln Center.  (This store had five storeys; expert staff selling books, DVDs, and CDs; a packed cafe; and author events which attracted national press.)  A customer comes in with a vague request.  (“I saw it on a table a few weeks ago… It had a blue cover, and was about vampires.”)  An employee accesses databases and product knowledge, and after five minutes of exhaustive searching, successfully finds the book for the customer!  The customer is happy, but finds the book too expensive.  “Thanks.  I’ll get it online.”  The bookseller offers to order the book from the company’s website, charging the online price, even waving the shipping.  It just takes a few minutes at a nearby computer.  Again, the customer declines, leaving the store without purchasing anything.  (If you don’t think that would affect a store located in a high-tourist high-income neighborhood, owned by a big corporation, read this.)

So print comics seemed doomed, marginalized like vinyl LPs.  What can comics shops do to remain successful?  Read my next post for suggestions.

Comments

  1. Charles Knight says:

    “Think a store can still be successful if a customer visits? Consider this scenario, one which happened daily when I worked at the Barnes & Noble near Lincoln Center. (This store had five storeys; expert staff selling books, DVDs, and CDs; a packed cafe; and author events which attracted national press.) A customer comes in with a vague request. (“I saw it on a table a few weeks ago… It had a blue cover, and was about vampires.”) An employee accesses databases and product knowledge, and after five minutes of exhaustive searching, successfully finds the book for the customer! The customer is happy, but finds the book too expensive. “Thanks. I’ll get it online.” The bookseller offers to order the book from the company’s website, charging the online price, even waving the shipping. It just takes a few minutes at a nearby computer. Again, the customer declines, leaving the store without purchasing anything. (If you don’t think that would affect a store located in a high-tourist high-income neighborhood, owned by a big corporation, read this.)”

    Or what’s happening in lots of bookstores, they browse, they see a book they like, they scan the barcode with their phone, it searches for the cheapest edition, it’s ordered before they’ve left the store.

  2. Good analysis, Torsten. I like the thought process you’ve got going there.

  3. The possibility of outselling physical media does the opposite, making digital comics the new newsstand in the metaphor, as stated by most of the folks working on digital options for comics distribution.

    I think you’re getting hung up on the fact that yeah, this is bad for shops. But it is a return to the ubiquity and availability of comics, which is what we had under the newsstand system that lured most of us into the funnybook business. Anyone with an internet connection and a color screen on whatever device should be able to buy any comic they want, digitally.

    Digital is cheaper than printed comics and offers us REAL sales figures, without the 3 month delay of the old newsstand system, the loss of numbers from illegal digital sales from folks who’d pay 99 cents an issue, or the middleman funnel of comics retailers being the only actual purchasers of comics. Personally, I can’t wait to see what the real sales numbers of comics look like. One day soon, I hope.

    I love physical comics and I love (good) local shops, but digital is the future of everything, even comics, and we’re already late to the game. Printed collections will be around for quite a while, but the monthly comic is as anachronistic as television commercials, since nearly all comics stories are written with the trade (or hardcover) in mind rather than the single issue they first appear in. (Even DC’s brave roll-back of their prices to a more inviting $2.99 doesn’t change that fact, and since most of the savings seem to have been cut not from printing pages, but from paying creators to generate original pages, as every DC issue out this month has the same filler promo material in the back, the victory of “holding the line” feels a bit hollow to this DC fan.)

    Anyway, I sometimes worry about the future of comic shops, but not about the future of comics. It’s the best medium for storytelling and happens to be the birthplace of the best heroes mankind has dreamed up.

  4. Torsten Adair says:

    My metaphor is, what the Direct Market did to newsstand distribution (which in the 70s and 80s was already starting to atrophy), digital comics will do to the Direct Market (which in the Millennium is already starting to wither).

    I look forward to more comics readers. I’m a Seducer of the Innocent. I’m just an interior decorator, pointing out the elephant (stores lack e-commerce websites, and thus face competition from a store six states away which does have an online store) and the rotting giant squid (digital comics sales will quicken the demise of print comics dominance).

  5. >> newsstand distribution (which in the 70s and 80s was already starting to atrophy) >>

    Starting?

    Newsstand distribution started to atrophy in the late 1940s. By the 1970s, it was so atrophied that people were talking about it being more profitable to turn the DC offices into a parking lot.

    I don’t think the DM killed the newsstand. For one thing, the newsstand was dying before the DM and continued dying once the DM existed. It’s also been dying for magazines that don’t have a DM, so the existence of the DM doesn’t seem to be necessary to the process.

    Online shopping’s rise, for American consumers, doesn’t seem to be that direct a parallel to the DM. The DM seems to have been built on the idea of giving dedicated hobbyists efficiency at the cost of ubiquity (you may have to go to a destination store for your comics, but you’ll get everything you’re looking for) while online shopping, like catalog shopping before it, is about ubiquity and casual convenience (don’t have time to spend shopping for clothes? Do it all without leaving your house). You don’t have to be a dedicated shopper to buy from Coldwater Creek or L.L. Bean or Amazon; they’re not selling “we have what you already want,” but rather “we’ll come to you; look at our selection.”

    Or so it seems to me.

  6. Every comics person who I’ve talked to who’s been in the business since the 70s or so echoes Mr. Busiek above. Comics didn’t jump from the newsstand to the DM: they were pushed.

    And I only wish that I could drive to a comic store that would give me everything I was looking for without having to drive 100 miles. If I wanted to pre-order and know what I wanted to read or what looked good in three months (or more, realistically) I suppose my local store could be as good as anything in San Francisco, only that’s not exactly true, even if I spent all the time and fuss on pre-ordering that I just don’t have the energy/desire to do.

    The real challenge of digital comics is to get people who aren’t reading comics normally to take a look and find something they want to read. Which has been the challenge all along.

  7. Matthew Southworth says:

    It’s funny–I sort of feel like the prevailing attitude about this is to bemoan the loss of the comic shop. And I really like my comic shop and am good friends with the guys who work there.

    I’ve gone shopping virtually every Wednesday for the past 13 years or so, and that’s after a break, before which I went for 13 years or so. So it’s a big ritual with me.

    But this is an opportunity, a good thing for everyone in the comics business. Dean’s really on to something here–that we’re replacing the impulse buy market wherein you could go get a candy bar and also pick up a comic book at the gas station.

    Our first issue of STUMPTOWN came out a little over a year ago. It sold out very quickly, like in a week. Great! Except a lot of stores didn’t even order it, and the ones that wanted to reorder it couldn’t–we didn’t reprint the first issue right away.

    I met a LOT of people at conventions and other places who’d say “I want to read your book”, and my answer essentially was “you can’t”. Digital solves THAT problem.

    Also–let’s say a 42-year old housewife hears there’s a great new comic about something she’s interested in–let’s say it’s about vampires or cancer or the 60s or whatever. But she doesn’t go to comic stores, she doesn’t even know where one is, and that’s if she happens to live in a city where one could find one.

    Digital solves THAT problem, too.

    This is an extremely positive situation. The glass is half-full.

  8. One difference between the newsstand-to-direct market comparison and what you’re describing is that the two were selling the exact same products, at least in the beginning. Thor #300 was regarded by all buyers as the same regardless of whether it had the Curtis Circulation seal on it — even by the collectors, who cared most.

    The digital delivery of a comic book is the same product in some ways; some would argue, in the only ways that matter. But a lot of other people would disagree, seeing a digitally delivered file as a service — but inherently not the same product, interchangeable in desirability.

    Which group is right is an idle question, I believe — customers will demand the format they prefer, and as long as they’re willing to pay, publishers will seek to find some way to serve them. The only relevant question to me, then, is whether the combination of revenue streams from print (now, 99% of industry revenue) and digital (the rest, but growing) will be enough for publishers to keep producing for both sets of consumers. This period is about figuring out that math.

    I’m reluctant to play the dueling analogies game — it’s all we seem to do sometimes. But my instinct has continued to be that digital is another iteration of the trade paperback. The TPB delivery system is preferred by many of our customers, and brought in many new ones — but it is not preferred by all the existing customers, some percentage of whom would continue to buy individual issues even if the collected editions were instantly available. (And not a trivial number, either — take a look at many of the comics movie adaptations, which were released as periodicals and trades simultaneously; the numbers show a decent split, with some people likely buying both versions.)

    It’s all about having enough people — people with dollars to spend — left to make a market for a format. Since the print periodical people are currently laying down close to half the money spent in the business, I’m hopeful we’re working from a large enough base to still make that market. For all those years trade paperbacks were expanding in sales, after all, comic book sales were hanging in there — and going up, in some years.

  9. The crucial idea here, and it’s gradually becoming more significant, is that of value.

    That’s why the price increases currently stop working on a lot of periodical comic books: Simply put, they’re not valuable enough to merit a $ 3.99 price tag. They’re hard to store, even if the quality of the content is there. Do we want to pay four bucks for a flimsy book that, even in a BEST-case scenario, offers 15 minutes of grand entertainment? Increasingly, no we don’t.

    Then you’ve got the collections. People can put those on their Ikea shelves easy enough, and they’re meatier reads, so that’s two things in their favor, explaining their rise to prominence in the last 10 years or so. But even here, we’ve hit a point where there’s just too much damn product. Look at what registers on those Bookscan charts. Not a lot of the endless monthly-grind type of books — just Moore, Millar, Kirkman, Morrison, etc. Stand-out titles, almost exclusively. So are collections the future for comics that lose their value to the reader once they know “what happens next”? Probably not. That’s a few tons of paper that people can increasingly live without, no matter what format it’s in.

    Which brings us to digital. It’s the perfect format for the kind of serial, disposable thrills that make up 90% of the direct market. Let’s be honest: A lot of the comics we like to read, we probably only read once. So why not read them digitally, click to the next page, and save us the hassle. The stuff that’s going to be collected, going forward, is going to be the books that we recognize VALUE in — the ones that we want to save and put on our shelves because we want to read them AGAIN and we think their value justifies a solid, physical format.

    So where I see things heading, in the long term, is digital comics — slowly but steadily — replacing the expensive, unwieldy periodical print comics. Print comics, in turn, will be increasingly synonymous with thicker paperback and hardcover books, and — not least because production and distribution costs continue to increase — those will increasingly be reserved to the material that people consciously decide is valuable enough for them to not just consume digitally, but go through the expenses and the hassle of having a physical copy of on the shelf for posterity.

  10. Before announcing the demise of the direct market, you may want to read some of the reports that will come out of the ComicsPRO meeting this week. Turns out it was the largest gathering of DM retailers, publishers, distributors and other vendors to date. Incredibly productive and successful.

    Digital is not replacing print comics because the existing customer base has not embraced it the way music consumers embraced the convenience of MP3s.

    Currently, digital comics are a small part of the market. At the ComicsPRO meeting, Jim Lee held up a sheet of paper and a string of dental floss: the paper represented the print market, the floss digital.

    I want digital comics to succeed. I want Amazing Spider-Man to have as many readers on digital as in print. But the only way that is a success is if digital comics generate new readers. Simply shifting print customers to digital will result in less business for everyone.

  11. We were very excited to get an ipad to read comics and very pissed when we learned that no, we couldn’t read the weekly stack on them, only a few titles here and there.

    Digital comics will succeed when we see time and date releases. It seems silly to say “well it’s only this small of a percentage of sales so digital isn’t all that viable” when the numbers are being skewed by publishers throttling availability.

  12. Wraith (AKA Blade X) says:

    There are 4 things that supporters of digital comics tend to forget.

    1. Not everyone owns or even want to own an Ipad,cell phone,or a computer.

    2. Not everyone wants to read a comic on their cell phone,Ipad,or computer.

    3. Piracy. Despite all music being available digitally, there are lots of people who pirate and/or download music illegally. Why pay for a comic that you can’t physically own when you can get the same comic online for free.

    4. Digital comics have no after market value. People can’t sell a digit comic that they brought a few years ago to someone else for a hire price since those comics are all available online either for sell or for free.

  13. There are 4 things that supporters of digital comics tend to forget.

    1. Not everyone owns or even want to own an Ipad,cell phone,or a computer.

    2. Not everyone wants to read a comic on their cell phone,Ipad,or computer.

    3. Piracy. Despite all music being available digitally, there are lots of people who pirate and/or download music illegally. Why pay for a comic that you can’t physically own when you can get the same comic online for free.

    4. Digital comics have no after market value. People can’t sell a digit comic that they brought a few years ago to someone else for a hire price since those comics are all available online either for sell or for free.

    1. Yet even more people don’t want to go hunt down a comic shop so they can have a box full of rotting paper taking up space for the next couple of decades.

    2. Yet even more people do. If you’re a smart business owner, you go where the readers are. They’re the ones with the money.

    Mind you… They’re also the ones less likely to fall for the current bullshit that passes as marketing in comics. The real threat to the current way of things is that everyone from artists to management will have to learn how to make comics for people who aren’t superhero fanboys.

    I’m doubtful most can transition.

    3. Piracy is only a threat to companies that have made “Selling them shit that they don’t know about until we have their money” their business plan. This is why Hollywood focuses on the opening weekend so much. Otherwise it’s little more than a convenient scapegoat for their failure.

    4. The speculators market is, and always has been, a scam designed to suck money out of idiots. This is not a concern with digital, and thus a vast improvement.

  14. Dave Elliott says:

    “Consider this scenario, one which happened daily when I worked at the Barnes & Noble near Lincoln Center.”

    Torsten, you wrote this in the past tense… ?

  15. One of the things that’s sometimes missed is that there’s a large portion of the comics buying audience for which storage is not a hassle at all — but part of the fun of being into comics. They don’t have collections, but libraries — which they care for, literally and figuratively. They’re caring for emotional investments, not financial ones: they’ve read everything they own and want to make sure they can keep reading. For many, a physical book also connects them to where and who they were when they first read the story. A large part of memory is tactile.

    The discussions of e-books and their effect on prose are even more heated, but I haven’t really seen disdain cast toward the true bibliophiles. I think it may come from the understanding that books — and book-lovers — will always be with us, even if all the presses stop running tomorrow.

    I calculate there are between 30-40 billion comic books still in existence — and while some people have replaced their copies with trades and others will do so with digital versions, there will continue to be households where printed periodical comics have a home for a very long time. Since we know there are provably people who will pay for physical copies — again, half our current market — we probably ought to figure them somewhere into this future of ours, whatever it looks like.

  16. “However, with graphic novel collections, online warehouse retailers, and digital copies available on the Internet, the back-issue market is not as successful as it once was.”

    Unfortunately, I don’t think this is the case. These days, everyone uses “internet” as the generic reason/excuse for everything.

    I think the back issue market has faltered because not many people are interested in back issues. When Spider-Man’s origin has been retold 1,000 times … when magazines like ULTIMATE SPIDER-MAN are designed to nullify the continuity in the original series, by reshaping it … when readers have become accustomed to the “decompressed storytelling”, as opposed to the “done-in-one” storytelling of the sixties and seventies … When there are more wordless pages and panels today, making the books “cinematic,” as opposed to the more heavily written comics of the 60s and 70s …

    Why would people introduced to comics in the past decade relate to the classic material? It’s the same reason that many people claim they “can’t” watch a black & white movie … different storytelling conventions in different eras result in different audiences.

    For decades, we had a fan-base that was interested in the classic material … and that has gradually eroded. Comics have indeed become mainstream.

  17. Pia:

    “Digital comics will succeed when we see time and date releases.”

    So, by “succeed”, do you mean “will convert print readers to digital”? Given the differences in PROFIT MARGINS between digital and print (hint: print is more per-unit profitible), that would be “failure” to publishers and most talent, as I see it.

    I mean majority of the American public that doesn’t read comics (99.99% of them!) couldn’t care less about D&D, because they couldn’t care less about comics in the first place. They wouldn’t know the difference between a Batman comic from last Wednesday, and last year. Why would they? They’ve never ever ever read a Batman comic in their life!

    (Substitute “Batman” for whatever you like — the point isn’t the property, it’s the process)

    To me this is like saying “Oh, we’d solve the housing and mortgage crisis if only more consumers had access to more bathroom remodeling services!”

    -B

  18. Dave, I moved to a position at the B&N home office in 2008. That store closed January 2 of this year.

    Rich, when I managed the GN section at that store, I found that the Showcase and Essential volumes sold steadily. B&N also worked with Marvel and printed paperback copies of the Marvel Masterworks volumes, which also did well. (Marvel has since started a TP MMW line for everyone.)

    I will browse back issue bins for tha random WHAT THE?! experience. Otherwise, I search online for out-of-print titles, both in comics and graphic novels.

    You give some interesting reasons worth further study.

  19. Mark Clegg says:

    A couple of quick historical corrections: The first (that I know about) comics-only shops started in 1968 (in San Jose and San Francisco, California). Seuling developed the direct market business model (based on the under-ground comix model) in 1973 and the first product shipped in January 1974.

  20. One of the considerations with the back-issue market as well, Rich, is that in a decade-plus, eBay and the rest of the internet have functioned as a massive collating machine, putting books into the hands of those who want them and joining up runs. Want lists are generally shorter as a result, and that has an impact on volume.

    (Which is not to speak of sales on the higher-end older material, which continues to churn as demand outstrips ready supply.)

  21. Brian – I’m not arguing, but would you mind posting some numbers on your “per unit profitable” assessment? I’m not sure that’s the case universally, but I’d like to see the data either way.

    It seems to me that if we can remove the Apple cut from the mix and get to downloading 99 cent issues on a day-and-date (or nearly so) basis (especially if we can somehow get to a standard file type), the margins for digital comics against printed copies would have to be far better, given the various costs in printing, shipping, and discounting comics to the hundreds of shops around the country.

    Again, I don’t mind being corrected here. I’d just like to see figures.

  22. I hadn’t yet heard about Jim Lee’s analogy (the floss and the paper), but if that’s in fact true, he was either:

    A) Pandering to his audience OR
    B) Far too myopic to hold the position of Publisher of one of the industry’s big 2

  23. I wouldn’t declare the print market (or Direct Market) dead just yet. I recall these types of arguments a little more than 10 years ago. Comics were selling like shit, GNs were growing like crazy and it was assumed that OGNs would eventually take over monthly print comics.

    A lot of the reasoning was the same to. Monthly superhero comics had become too insular, too event driven and bad. Then Joe Quesada took over Marvel, built on some stuff that Bob Harras had started and made a focus on making comics accessible again. Eventually slow gains were made.

    Dan DiDio started at DC and they decided they wanted to be bad boys/edgy, went the opposite way in doing Identity Crisis – an insular event comic that required knowledge of continuity to fully understand and it sold extremely well. Marvel followed suit with the events peaking with Civil War.

    Much to my surprise periodical monthly comics sales rose significantly. Former comic readers started reading again after hearing about comics in the general news media. Today the events aren’t bringing in the sales anymore and it’s based on continuity changing (things will never be the same again!).

    We’ve come full circle only with Digital Comics taking the place of GNs.

    I think print comics will go their own course, based on content, distribution and marketing. Digital will have an effect yes, as some people will switch format (especially if comics aren’t giving sufficient value for money in the buyers minds). But I doubt that on it’s own will kill them. A long stretch of comics that people just aren’t interested in buying will do more damage than the digital format.

    Plus there are digital day and date pirate comics out there now and have been for many years. If them being out there for free hasn’t killed the Direct Market then I don’t think charging for them will either.

    Digital sales will grow when more e-readers are sold and they are able to better market them to people that buy digital content like MP3s, Movies and TV shows. Say the next Iron Man movie is available for sale online digitally and with it is a free digital Iron Man to hook them. Assuming they are smart enough to have it link back to where they can buy more and other books, then we should see an up-tick in digital sales.

    I think the real “damage” that digital comics does to the Direct Market is more psychological. Retailers having a hard go of it now may consider closing up shop, thinking they should get out now before they end up like a bankrupt music store. New people interested in opening a comic shop are less likely to do so thinking there is no future in it. I strongly suspect this is the reason why Diamond is trying to incorporate digital comics into Direct Market comic shops. It used to be said there were around 3000 comic shops, now they are saying around 2400. It doesn’t benefit anybody to have less places to buy comics.

  24. Dean:

    At the ComicsPRO meeting, there was a lot of detailed and specific conversation about costs and such — but this isn’t information I feel comfortable being specific about in public, because, as an industry conference, all conversations are assumed to be “just between us” unless specifically noted otherwise. Clearly, different operations have exact different percentages, but for at least 90% of the current periodical market, I’ll stand by my statement.

    I think that if the GOAL is national wide distribution then you have to use distribution that the MASS uses — and, at least for the moment, that includes Apple.

    Jason:

    Context is, of course everything, but I think I can safely say your assumptions are entirely off-base. I was actually writing this pretty much at the same time that Carr made his post, but I go a bit more in depth in what Jim was actually saying:

    http://www.savagecritic.com/brian/jim-lees-digital-visual-analogy/

    I’d say that Jim is likely THE most visionary guy in terms of the future of digital.

    -B

  25. Brian – No problem. Thanks for the reply. Having spent a little time working as a retailer and a little time working as a digital comics…um, guy, I know just enough to have a basic grip on this stuff, but obviously haven’t seen the figures you guys talked about this weekend.

  26. Digital sales will grow when more e-readers are sold and they are able to better market them to people that buy digital content like MP3s, Movies and TV shows.

    That won’t be enough. They also have to create content that will sell to people who aren’t forty year old men who have been reading super hero comics since they were nine. History has shown the current content-makers of the direct market wouldn’t know how to do that if they had a gun held to their heads.

    It’s no wonder they’ve been (and will continue to) resisting the culture wide move to digital formats.

  27. Charles Knight says:

    “It’s no wonder they’ve been (and will continue to) resisting the culture wide move to digital formats.”

    Superhero comics are pop culture for people who don’t like pop culture, so that’s no surprise.

  28. John:

    “One of the things that’s sometimes missed is that there’s a large portion of the comics buying audience for which storage is not a hassle at all — but part of the fun of being into comics.”

    How many people is that? 100,000, if we’re lucky? Has that portion of the audience been growing or shrinking?

    I wouldn’t underestimate convenience as a factor. With every bit of technological progress that makes digital reading more convenient, the direct market will become more of a niche phenomenon.

    (Which isn’t to say it will go away tomorrow. The existing generation of readers who sustain it will probably keep it going for another 10, 20 years, as long as Diamond doesn’t implode.)

  29. I really don’t see how printed comics are more profitable to creators AND publishers than digital comics, even including the 20% cut for Apple if it goes through iTunes. And 99c is the lowest price point on iTunes; some comics like Walking Dead are selling huge numbers at $1.99 (of which $1 per unit goes to the creators).
    And I’m not even going to talk about creators selling PDF or CBR files on their own websites…
    Digital is definitely great for creators.

  30. And please why is Jim Lee THE visionary about digital comics? I could be ignorant but I have not seen or read anything from him about the future of Digital Comics. I’d love to have his take on the present situation (and not just limited to DC’s strategy).

  31. Steve Maser says:

    I keep seeing this comment in many places (like the parent article”:

    “The reading experience of a digital comics is close enough to paper that a reader is not inconvenienced”

    Really? “Close Enough”?

    I’ve tried.

    I’ve downloaded PDFs of comics to test this — and it really does not appeal to me.

    iPad — is too small (I don’t like “digest-sized” comics — beyond the simplicity of Archie digests or Little Lulu reprints.) And iPhone-sized devices? Forget about it…

    And I’ve tried PDFs of comics on 27″ iMac monitors — somewhat better because it’s larger — but still not something to curl up with.

    I realize I’m fighting against the tide here (the *only* true advantage is the “storage” point, IMO), but I still feel that for the *end user* — comics as a “digital-only” delivery system will kill a lot of interest more than crappy books or pointless cross-overs will.

    Paper collections will thrive, but if nobody is buying the serial versions, how will companies know what to collect?

  32. I believe the Digital Age of comics has dawned and will become the popular mode of delivery in the next five years. The traditional weekly ["Wednesday"] comic will transition to weekly download [possibly bringing back subscription discounts] as print costs and distribution systems increase in price. Ultimately, digital downloads and webcomics will be the norm while popular story-arc collections, archives, and original graphic novels will be offered in print via special, art directed editions for competitive, albeit, expensive price tags. Kinda of like what Criterion does with cinema via DVD’s. Eventually, your high-tech phone [Jack Kirby's "mother box?"] will become your “long box” of comics. Rather than pick up a cheap paperback of the latest murder mystery at the airport spinner-rack, you’ll be able to purchase/download a book via USB and/or one-time use credit card. So on and so forth.

  33. Marc-Oliver: I’m not sure how we’d begin to figure out a number for the size of the audience that values having a physical comic in their possession — obviously we take the number of current print purchasers and work backwards from that. But as I see it, the question isn’t whether the portion is large enough to build an entire market upon — but whether the portion is large enough to support producers making the additional format available. Given the number of publishers today who appear to be able to make it to the TPB stage with periodical sales in the high four-digits, your 100,000 number, if correct, would seem to allow for that activity — although maybe not from everyone.

    The role of convenience can be overestimated, too. Attendance at many conventions has gone up in the internet years — and yet the internet, presumably, delivers the most positive parts of the convention experience (community, news about comics, interaction with creators, shopping) far more conveniently and inexpensively. Likely there’s something else that’s valued in the experience — and, perhaps, in the accumulation of goods, as well. (Some hunter-gatherer thing? I’ll leave that to the anthropology majors!)

  34. Jon_in_Austin says:

    Kurt uses the term “hobbyists.” There’s a lot of truth in that as the target market. While I’m sure there’s a core group of fans eagerly looking for new content to consume every week, this medium is different than music or TV in that there’s a set of people who view comics as collectibles. These people view each comic as a scarce commodity, something that will/may increase in value over time. That’s why members of the non-comics-buying public flock to comic shops to buy the latest superhero death issue, and why we have Buyer’s Guides, and why people buy action figures but never take them out of the packaging. But if the content suddenly becomes ubiquitous, the sense of scarcity disappears.

    For me, a 40+ year old fan, I’d much rather see more of DC’s back catalog in digital form (1930s to 1980s) – and I’m easy, it doesn’t have to be in Comixology’s snazzy panel-by-panel formatting – just the pages. And if it’s more affordable than a hardback or paperback, that’s even better.

    Jon

  35. John:

    I broadly agree on all of your points — collectors will always exist, someone’s always going to want to buy their comics in physical form, convention experiences will remain valuable to people for a variety of reasons.

    Still, even taking all of that into account, I doubt the audience for a single, printed, saddle-stitched issue of a monthly comic book will make for anything but a tiny niche in a few years’ time.

    Ten, 15 years ago, you pretty much had to be a collector to be an American mainstream comics fan and follow a given title, unless you were prepared to throw your copies away as soon as you’d read them. But that’s changing. Soon, if it’s not the case already, you’ll be able to follow whatever mainstream comic you want to read without ever bothering with a physical copy in the first place.

    One big change that we’re seeing is that comics become more available and attractive to casual readers, no doubt.

    But the other big change that’s happening is that even hardcore comics fans can now be hardcore comics fans without ever owning a physical copy of a comic book. I don’t think people are realizing yet what a massive change in the whole culture of comics this is.

  36. Marc-Oliver, I guess we’ll find out. I would still advise betting on everything — because as we’ve seen with trades, it’s not a game where only one format can thrive.

    I’m platform-agnostic — my original e-books are on Amazon alongside my physical ones — and I think most of my colleagues in this day and age are, as well. But most of our readers are definitely not platform-agnostic: they do have preferences, and those preferences make for markets to be served.

    As a personal example, I’ve been writing a free e-book series for the past several years for Random House — and the #1 question I’ve received in that time has been “When will I be able buy a print version?” When we recently announced a print anthology, the response was resoundingly positive. Every one of these consumers had all already read the work — they wanted it in a less ethereal form. So that drive exists — just as, certainly, we all hear from people wanting digital versions of the printed matter.

    Readers want choices that are convenient and preferable to them, and I’m sure that ultimately, we’ll see more choices, not less. The thrust of the conversation above, however, was that the availability of the new choice would eliminate the existing choices. I simply see that as unlikely in the near-term, and probably not to our net benefit in any event.

  37. >> Kurt uses the term “hobbyists.” There’s a lot of truth in that as the target market. >>

    Keep in mind that I used it in a historical context — as what the DM was initially built to do. Many retailers have reached out beyond that initial purpose, but I’d say it still informs the structure and general functions of the DM, so it’s worth noting when one is, say, making analogies between the birth of the DM and the birth of the online market.

  38. Andre Z says:

    I always find the retailer mindset interesting when it comes to the future of the DM. They have to be in complete denial at this point to think they’re going to survive when both book and music stores have completely failed to weather the storm. Borders couldn’t figure it out. Virgin records couldn’t figure it out. Tower records couldn’t figure it out. But direct market retailers….they got it all figured out.

    The reality is that the DM has less than 5 years left. As digital readers become more common and affordable, the DM readership will shrink. At some point, there will be a tipping point where retail stores don’t have enough business to survive and they will start disappearing. At that point, the publishers will have to be all-in with digital and the DM will be abandoned. The thing the publishers are trying to figure out is where and when this tipping point will be reached. They all know it’s coming.

    It’s not rocket science. Right now, publishers need the DM to survive and they need their partners, the comic store owners to be all in. They can’t go to the DM and say “Your days are numbered. Start looking for new ways to make a living because this train is coming to the end of the line.” They need retailers to believe they will survive right up until they can’t and I think they’ll tell them just about anything to keep them in the game right up until the end.

    The big question for everyone is what percent of customers can print lose before it collapses and monthly comics go all digital? I would bet it’s somewhere between 15-20%. Think about it. Could your local comic shop which is barely scraping by as is survive if it lost 15-20% of its business. I doubt it. Some could. Some will hang on a long time. But eventually Marvel and DC won’t be able to make enough off of monthlies to continue publishing them. It will happen, it’s just a matter of when and Marvel & DC are investing alot of money right now to try and answer that question.

    As far as cost. The big 2 would be stupid to give a cut of their take away to Apple, Comixology or any other distribution platform when they can cheaply create their own and service their customers directly. Comics are different than music in that alot of the readers support publishers over titles. By this, I mean that everyone buying comics know who Marvel & DC is. The general public is slowly catching on. Best idea for the big 2 is to sell through iTunes and other proprietary apps at a higher price point and sell from their own sites at a .99 price point. They currently take about $1.40 or so for a $2.99 comic. Diamond were getting comics around 60+% off cover at one pint I know. I’d guess the printing is somewhere around .40 per comic or less. Selling through iTunes at $1.49 or so will reach the general public and selling cheaper at their own sites will keep the harcore fans happy. It might be a good idea to sell though iTunes and other Apps at .99 just to grow the market. 99 cents is the magic price point. Pirating will thrive until they get there and they’ll figure that out eventually.

    Patience is the name of the game right now. Everyone wants day and date release now but the publishers are worried it would kill the direct market before they’re ready to let it go. Day and date will come. DM retailers are scared to death of it no matter what their public face says. Good affordable, readers free of Apple’s control are on the way. They’ll open the door for publishers to spread their wings and free them selves from the shackles of the DM. They won’t have to send possible new customes to dark dirty dungeons to buy their wares anymore. They’ll no longer have to rely on overweight, unshaven fanboys to sell their wares to the public. The comic industry will finally be able to grow up.

  39. John:

    “I would still advise betting on everything — because as we’ve seen with trades, it’s not a game where only one format can thrive.”

    Absolutely, I agree. I’m not advocating any sort of activism that contradicts what works right now, or at any point in the future — my comments are purely speculative.

    It’s clear that print periodicals work for everyone right now, and will continue to work for some time to come. As long as that’s the case, there’s no reason to shun them.

  40. >> The reality is that the DM has less than 5 years left. >>

    To be fair, people have been saying this for over 15 years now.

    How much time the DM has left remains to be seen, but it apparently qualifies as a Challenger of the Unknown at this point.

  41. Randy @ WCG Comics says:

    As I similarly mentioned in another post, even though it’s great that digital comics will make comics more easily accessible to readers, I’m not sure whether that will translate into the kind of “impulse” buys by more casual readers that helped drive comics prior to the direct-sales market where people got to easily browse titles and choose what to buy.

    A casual reader will still need to have to consciously seek out comics online, just as he or she needs to consciously visit a comic-book store to buy comics. Right now I don’t think the online experience is very conducive to the casual reader.

    For the digital experience to be truly successful and revolutionary, I think it will need to show that it is more successful than the present market in bringing in new readers, not just in bringing in (cannibalizing?) the current readership.

  42. Jon_in_Austin says:

    Randy – I agree; people who don’t follow comics are going to really want to seek out the content – not because of collectability, but but because they really want to access the content. With very few exceptions, those readers seem to have been elusive to date!

    Also, people talk about a magic 99-cent price point. But for what? A 22-page story? A new 8-page Frank Miller Metal Men story? A 40-year-old Spider-Man reprint? All of the above?

    Jon

  43. There probably won’t be a complete destruction of the Direct Market due to these advances…but obviously, there’s going to be one hell of a paring down, affecting lower to mid sized stores. Because remember, the stores are not really just comic book stores…but comic related stores.

    In another words, this might be where the successful delineation in the survival characteristics, and differences from the fate of records stores, lies. (It took me 30 seconds to figure out where the commas go in that last sentence.)

    If I may continue, I feel that the stores can still have an advantage and survive if they offer more elements of the comics..such as statues, toys, posters…etc. Because these things can’t be experienced fully online. You just can’t get the same feel for that Wonder Woman statue staring at it online as you can by having your neighborhood comics retailer alowing you to hold it in his store.

    And perhaps I should have used a less suggestive phrase than “feel the Wonder Woman statue”, but you know what I mean.

  44. Just Passing Through says:

    A reporter just mentioned on the opening of “Morning Joe” on MSNBC that “… the internet has comics.” (I believe the subject they were talking about was the Spider-Man musical and the head reporters asked if the reporter read comics which led to him saying his reply.)

  45. Just one more footnote:
    From the O’Reilly Tools of Change for Publishing Conference 2011 in New York City:

    http://www.prweb.com/releases/2011/2/prweb8136925.htm?

    Touch Press offers a $13.99 (fourteen dollars) Apple app which also exists as a $29.95 hardcover (9781579128142). The Apple app has sold some 180,000 units.

  46. I really agree with Andre Z. Very well put.

  47. John B. says:

    It does seem likely in the next 10 years or so that digital distribution could equal or begin to outsell paper copies of comics. However if the two biggest publishers continue to charge $1.99 for dime bin comics the current direct market could successfully fend off this industry cannibalism.

Trackbacks

  1. [...] Meanwhile, over at Comics Beat, Torsten Adair writes a piece on how “Digital Is the New Direct Market.” [...]

  2. [...] on The Beat, writer Torsten Adair has two articles on digital comics: one foretells a future where digital comics make up the direct market, and the other is on digital comics (potential) affect on comic shops. Both have stirred up the ire [...]

  3. [...] Digital Is The New Direct Market Torsten Adair, The Beat So stores order fewer copies of already marginal titles. Publishers notice this, as well as the number of digital copies sold (as well as subscriptions, which can be lucrative for children’s titles). So, like Marvel in 1981, they realize that printing paper copies is no longer profitable, and only distribute the issue as a digital file. Perhaps the publisher charges $2.99. Perhaps $1.99. Maybe these “Digital Direct” titles feature journeymen talent which work at lower rates. Or maybe the publisher sells a cheap version with ads, and a more expensive edition without. Maybe later they collect the digital copies into a trade paperback. (Quite possibly as a print-on-demand edition!) [...]

  4. [...] discussion I see of digital comics online starts off with this being the end of print comics.  Here is an example I read upon returning from Dallas.  And all of the commenters, “Yes, comics [...]

  5. [...] their Diamond Digital initiative, allowing comics shops to sell digital comics to customers, I’ve  been wondering about the future of comics retailing, specifically, How well do comics shops market their stores [...]

Speak Your Mind

*