Guest Post: Andrew Bayer on Digital Comics Pricing

April 12th, 2010 Posted by david brothers

Andrew Bayer is a friend of mine, and he had a few things to say about digital comics pricing, specifically with regard to Marvel’s iPad app. I thought it was interesting, maybe you will, too.

With Marvel’s iPad/iPhone app coming out and receiving gobs of acclaim for its presentation and usability, we seem to have finally gotten to the point where digital comics distribution looks like a viable business. There’s a distribution mechanism, a gorgeous UI, and most importantly, the buy-in of one of the Big Two. There are still big questions to be answered, the same sorts of questions that had to be answered for digital music and still need to be answered for digital books – how do we get the ability to buy a comic and read it in another app, on another platform, etc? How do we get to a standard file format for digital comics? How do we get rid of DRM? Of course, that last one plays into all the others, but the simplest answer there is that we, the consumers, need to prove to the publishers that there’s a strong enough market for digital comics, and a strong enough demand for portability, that they can see that DRM is not needed in order for digital comics to be a money-making endeavor for them. And that brings up the biggest question of all – how should digital comics be priced?

My initial reaction to Marvel pricing single issues of digital comics at $2 was that they were setting too high a price point – that’s been the general reaction I’ve seen pretty much everywhere, in fact. After all, Marvel’s already paid for creative, editors, legal, etc, and while there’s still production/distribution overhead for digital comics, that’s definitely going to be a lot less per issue than it is for physical floppies. So digital comics should be really cheap, you’d think. But if a publisher sets up digital comics pricing with the assumption that all the costs involved in producing the comic other than those specific to the digital edition are already covered by the print edition, they’re doomed. If the digital edition is significantly cheaper than the print edition, you’ll start seeing sales moving from print to digital – the eternal fear of the content companies that the digital version of something will cannibalize sales from the physical version. And if Marvel’s making less revenue for each digital issue than they are for the same comic in print form, then they’re going to lose revenue for every sale that switches from print to digital.

For that reason, the lowest possible price for Marvel to charge for a digital issue is one that nets them the same revenue as they’d get from a print sale of that comic. That’s the only way that digital comics can be a viable distribution stream for the publishers. They have to work under the assumption of a worst-case scenario – what if every print sale turned into a digital sale instead, with no increase in the number of copies sold? If the publisher makes less on each digital sale, well, then that worst-case scenario destroys the publisher, and they can’t take that risk. I’m working on the assumption that $2 hits that sweet spot for Marvel, where they’re taking in as much per digital issue sold as they would from a print sale. That seems about right to me – cut out the printing and shipping-to-Diamond costs, and then strip out Diamond’s cut, and finally the retailer’s cut, with the addition of Comixology’s cut, and $2 is probably the closest round number. Marvel’s not charging that because they’re trying to gouge the digital comics consumer – they’re charging that because they have to or the business model falls apart.

David brought up the question of old back issue pricing on Twitter – right now, Amazing Spider-Man #1 is at the same price in Marvel’s app as the latest issue. Admittedly, that doesn’t feel quite right – shouldn’t prices be different for issues from the ’60s than those from today? But I’d argue that Marvel again has no choice – single issue pricing must be consistent. What business case is there for selling the old issues for less? Yeah, the cover price is a lot lower than it is on a new comic now, but it’s not like you can go buy a new copy of a book published in the ’60s for lower prices than a book published a couple years ago (assuming the older book is still in print, of course). Why should digital comics be any different? Now, Marvel is missing a key feature in their store – the ability to buy an “album” of comics. Say, the first 50 issues of ASM for $30 – just as it’s cheaper to buy an album of mp3s on Amazon than it is to buy each song individually, it definitely would make sense to have similar bundling with digital comics. But Marvel can not budge from the $2 price for single issues, no matter how old the actual comic is – if they make ’60s comics a buck a piece, they’re setting a new floor for digital comic prices. If people can buy a Marvel comic for $1, why do they have to pay $2 for a different one? Marvel would end up facing pressure to drop prices on new single issues as well – and that’s just not viable as a business. There can be flexibility in pricing bundles – $30 could buy you the first 50 issues of ASM, but the same $30 might only buy you the first 25 issues of Brand New Day-era ASM – but I don’t see how Marvel could have the same sort of flexibility in single issues. Whatever you set as the lowest price for single issues, you’re going to end up having as the price for any single issue.

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Quotable 04/05/10

April 5th, 2010 Posted by david brothers

Kiel Phegley: How significant an impact does Marvel feel the iPad and similar devices will have on Marvel’s bottom line? Any predictions as to when – if ever – comics go completely digital?

Joe Quesada: Are you kidding, the significance could be…well, significant. The iPad could be the new feeder system for brick and mortar stores. Ever since the newsstand really died for comics, that element has been missing in many ways. Trades in bookstores picked up some of the slack, but the newsstand used to be huge. I think the iPad will be that and more and will improve the sales of comics in all areas, especially at comic shops. That’s why we have the comic shop locator built into the app.

Joe Quesada, Cup o’ Joe 04/02/10

I don’t know that I agree with Joe Q’s answer. When I stopped buying CDs, getting an iPod didn’t send me back to Best Buy. It sent me to AmazonMP3. What’s much, much more likely is that mainstream digital comics and comic shop comics will split into two separate, but complementary, revenue streams. I try to minimize the floppies I buy because I vastly prefer trades. I buy mp3s and ebooks at a wholly irresponsible pace due in large part to the fact that I don’t have to worry about storage. If I start buying comics on the iPad, I’m not going to click the little “Go to a comic shop!” button to start filling up my house. I’m going to click the “Buy digital comics” button to fill up my iPad with every issue Hypno Hustler ever appeared in.

While it’s nice that Marvel is attempting to maintain favor with the retailers, and stressing that in their press releases to an almost absurd degree, but I can’t see any iPad revolution sending people to comic shops without Marvel self-sabotaging their digital sales. Remember when DC Comics announced that there’d be no trade of Identity Crisis until at least a year after the series ended?

Yeah, that’s self-sabotage. It’s stupid. You’re leaving money in wallets. It’s nice that retailers make bank off floppies, but there’s a large subset of readers who don’t care to buy a 32 page pamphlet. Manga used to come out over here in floppies, remember that? Now it comes out in fat little trades. The market adjusted to the demand.

I hope Marvel goes all in. I’m talking simultaneous releases on Wednesdays, fat packs of classic stories, freebie issues to get people caught up on characters… go big or go home. DC is asleep at the wheel, as anyone who attended the terrible DC Nation panel this past weekend knows. They have vague platitudes about how stuff is on the way, we’re looking into it, really, and asinine anecdotes about how digital comics can’t replicate the experience of folding out pages in Blackest Night #8 and wah wah wah plastic doesn’t feel like paper.

Pop quiz, hot shot: who cares? You aren’t trying to sell digital comics to people who already buy your books and care about whether or not you use crappy paper that smells bad. You’re trying to sell digital comics to people who don’t already buy your books. If some fanboy loves paper so much, let him buy the physical product. Shoot, push a variant out there and let him buy two. You’ve got us, all two hundred thousand of us. We’re there, hook, line, and sinker. Now, go get them. Get my mom, get my grandparents, get my cousins. Get people who have never, and will never, step foot in a comic shop, whether that’s because they can’t find them or because they don’t exist in their area.

Marvel is big enough to force a change in the industry, for good or for ill. Coming hot out of the gates on the iPad is great. Now keep it up and break out of the crap complacency and one-upsmanship that defines both companies and start throwing some weight around. Put the boot in.

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