2011's Hot Button Topics Part 2: The DIGITAL FUTURE(?)

2011 Hot Button: DIGITAL FUTURE

Digital comics may still be a fledgling market, but its potential became a lot more substantial in 2010.

Most of that potential was driven by Apple's launch of the iPad and a high-impact launch of a Marvel app on the same day. But other moves in the digital comics industry also got a lot of attention in 2010, including DC's aggressive entry into the digital market, the growth of ComiXology as a distribution leader, and the more common release of digital comics on the same "day and date" as their print versions.

In Part 2 of our "Hot-Button Topics" series (click here for Part One: New Readers), we examine how the digital market impacted 2010, how major publishers are approaching it in 2011, and whether digital comics are a threat to print -- or a benefit.

iPad Poised to Change Comic Books
iPad Poised to Change Comic Books
 

iPad Revolution

While e-books were already a growing industry at the beginning of 2010, most e-readers were black and white, giving comic publishers few options in the e-book market. But Apple's launch of its affordable, touch-screen tablet provided a mass-produced, color e-reader that was ideal for comic books.

"This has mass-market appeal all of the sudden," ComiXology CEO David Steinberger said when the news broke. "When we were thinking it was $800 or $1000, the market didn't seem to be as big. But now we've got a potential for a real market on the iPad for comic books."

But the real surprise for the comics industry came when Marvel released an iPad app on the same day the iPad came out -- complete with attention from Steve Jobs himself -- emphasizing the comics reading capabilities of the new device.

"The launch of the Marvel app with the launch of the iPad was the key

event for digital comics last year," Ira Rubenstein, executive vice president of Marvel's Global Digital Media Group, told Newsarama for this article. "According to Apple, the Marvel app is the No. 2 book app on all of iTunes for 2010 and the No. 1 comic book app."

ComiXology also released its iPad app immediately, featuring Marvel and other publishers -- then soon added DC to its available comics. Now, Marvel, DC and just about every other major publisher is on the iPad -- even smaller publishers like IDW, Boom! and Archie.

ComiXology's Dominance

comixology-01  

While there is more than one way to read a comic digitally, ComiXology has emerged as the leading digital comics distributor. Its "guided-view" format and availability on multiple devices has attracted leading publishers to its store.

"I think one of the key elements of our digital strategy is one of convergence," DC co-publisher Jim Lee told Newsarama this week. "The people at ComiXology have put a lot of work into it."

A leading digital comics format is something the comics business needs to succeed in digital, according to technology pundit Andy Ihnatko. A tech writer for Chicago Sun-Times and other media outlets, Ihnatko told Newsarama in 2009 that "someone just has to write an application that will support this mutually agreed upon comic book format, and then things will start to take off."

As Newsarama detailed back in June, ComiXology was started in 2006, but its presence in the digital world exploded in 2010. ComiXology is now working with both comics industry giants, Marvel and DC, and more than 30 other publishers via its ComiXology website and the Comics by ComiXology app on iPhone, iPad and iPod Touch. It also maintains a web-based storefront for DC Comics and runs the dedicated iOS apps for Marvel, DC and other publishers.

And just last month, the company launched a beta version of an app for Android.

CEO Steinberger points toward its relationship with retailers as one of the key elements of the company's success, and he always stresses that every digital comic sold on a ComiXology-driven app has a retailer locator at the end, encouraging digital customers to buy the comic in print.

"We're in a unique position where we're friends with publishers, and we have a great consumer service, and we sell services to retailers on top of that," Steinberger explained to Newsarama. "And our retailers, when they work with ComiXology, when their customers purchase a digital comic book, our plan is for the retailers to actually make revenue from the sale of that comic."

Digital and Print: Enemies or Allies?

While some fans wonder if digital will replace print, publishers emphasize the benefits of this new outlet: Attracting new readers, providing an opportunity for sampling, and giving small publishers an easier, more national distribution.

"We have said in the past that we believe digital is today's newsstand," Marvel's Rubenstein told Newsarama. "Digital increases sampling of our comic book product and drives traditional print sales. We believe it will continue to grow and continue to help grow the overall comic book business."

Flying Colors

Joe Field, president of the retailing organization ComicsPRO and owner of Flying Color Comics in Concord, Calif., said he's had customers come into the store after reading a free comic digitally, then asking to buy the rest of the story. "We know there are some publishers at some of the digital companies that are making attempts to work with retailers to turn it into as much of a promotional tool for selling print as possible -- and those are all good things," Field said. "And we know it's another revenue stream for publishers.

"But I also am not seeing people ready to give up their comic books yet. And I still think there are some issues remaining with the differences in the presentation of the medium between print and digital that still gives print definitely a leg up," he said.

One concern retailers have voiced is the growing trend toward digital comics being released at the same time as their print versions. DC is releasing the bi-weekly series Justice League: Generation Lost as a same-day digital title, and just announced they'll do the same with the new ongoing Batman Beyond. Marvel has also released same-day titles, though sporadically, and only with mini-series or one-off issues thus far, and the Image title Walking Dead is currently available digitally as a same-day release.

But so far, none of the new same-day digital titles are priced any lower than the $2.99 price point found on print versions, which is a relief to many retailers, but little consolation to others, because most digital comics are cheaper than print versions.

"The only digital books we have at $2.99 are day-and-date comics. Our typical digital book is either $1.99 or $.99," Lee told Newsarama this week.

Marvel, however, has announced that digital sales may actually lower the price of print comics. "We’re going to be able to do more things at the $2.99 price point as a result of the success of digital comics," Tom Brevoort said recently.

Whatever the effect on sales, there's no doubt the digital market has had an effect on publishing overall, as companies begin to consider its role in their overall printing strategy. "Right now, we’re taking [digital] into account with everything we do – should this book go day-and-date? When should this issue be posted digitally in relation to the print release? Stuff like that," said Archie Comics CEO Jon Goldwater.

But Field's biggest concern is all the attention that digital comics are given. "It's disproportionate to what it deserves," Field explained. "From any of the numbers I've seen, digital is far less than 1 percent of the market. For the amount of time and effort that was expended on talking about digital in 2010, my only concern is, does it take the focus off the other 99+ percent?"

Just How Big Is the Digital Market?

C2E2: Comics4Kids, Archie to iTunes
C2E2: Comics4Kids, Archie to iTunes
 

There's little information on just how big digital sales are, but publishers have been touting downloads in the millions. By the end of 2010, Archie Comics reached 2 million, Comics by ComiXology hit 1 million, and it's anybody's guess how many millions have downloaded the popular Marvel and DC apps.

But Field pointed out that "sampling" is the big goal of most publishers, so many comics on their apps are free. "A million downloads is still quite a ways away from saying they've reached a million sales," he said. "It's entirely possible they have, but those aren't numbers they're going to want to let out.

"What it really means is that there are a lot of people out there who are willing to stick a toe in the water, but knowing that better than 80 percent of the people who look at the digital sites that have paid comics are not buying anything, it does tell you that there is still a lot of life in the print medium," Field said.

Some websites are reporting the industry has experienced sales of nearly $6 million digitally in 2010, but Field said that number was high. "I thought I had heard [Milton Griepp of ICV2] say that digital sales approached $6 million, but that is actually far away from what he's saying now," Field said. "Digital sales are estimated to be somewhere between $600,000 and $1 million for 2010."

As Newsarama pointed out yesterday, that's still an increase from previous years -- while sales of print comics sold through Diamond Comics Distributors were down by 5.79 percent in 2010.

"Saying [print] comics were down by a percentage number while using a dollar number for digital is fun with numbers, but really makes no sense," Field said. "The total size of the print comics market, both mass and specialty markets, is between $650 million and $700 million, meaning the print market is about 700 times the size of the digital market."

What Comics Next?

Whatever its size, publishers are clearly concentrating on growing the market in 2011. For Marvel and DC, information on where they're going next is scarce, but the publishers both indicate they're always looking for new digital avenues and formats.

"We continue to explore all the different formats for digital content and will continue to try new things," Marvel's Rubenstein said.

And even Field knows that digital comics will become more and more popular over the years. "What we've seen is, in 2010, if you're looking at the pie chart, almost the entire pie is talk about digital, where a tiny, tiny little sliver is the actual sales for digital," Field said. "I think, as we go year by year, you're going to see the talk lessen to a degree while the sales increase. That's just a natural progression for any business."

But retailers like the news, obviously, that they might be able to somehow receive incentives from digital -- which is something ComiXology, DC, Dark Horse and other publishers are promising.

"Knowing that the ComicsPRO annual meeting is February 10-12 in Dallas, I think that's going to be a time when we're going to hear some announcements from different publishers," Field said. "I know Dark Horse has a program they're wanting to roll out that has some retailer affiliation. I know DC has been working quite a long time on trying to put together a program that is going to be attractive to retailers. And to a degree, Jim and I have talked about some of that.

"But I wouldn't really expect any major announcements to happen on that stuff until the ComicsPRO meeting in Dallas, which kind of makes it an important meeting for retailers to be at."

When Newsarama asked Lee about the program, he said, "It's not forgotten. It's not dead. It's still being crafted. And we'll have some major news in that regard in the near future."

But the real question for 2011 is, how do publishers make sure digital grows in a way that doesn't negatively affect the print market? And what's the next big thing in digital that can benefit the industry?

"I think the big thing to talk about for 2011 is, how will publishers balance the two different delivery systems?" Field said. "I think, if you look at 2010, it's what happens before the horses get up to the gate. And 2011 is more about the horses turning loose so they can go around the first turn."

But Field couldn't help representing print retailers by pointing out: "Meanwhile, the print business has already been around the track a thousand times at least!"

Check back for our next installment in "Hot Button Topics" as we examine diversity in comics.

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