COMIXOLOGY Quietly Solidifies Its DIGITAL Market Lead

Will DIGITAL Kill the Comic Book Store?

With a few surprisingly quiet announcements last week, comiXology made two moves that give the company a significant advantage in the digital comics marketplace.

And the company made a huge impact in September. Four Wednesdays in a row, "Comics by comiXology" was the top-grossing iPad app in the entire App Store.

On October 11th, the company revealed that Marvel was finally signing up with comiXology to deliver its digital comics to Android devices. The move means customers who by a Marvel comic on comiXology's apps elsewhere can finally view those comics across all their platforms.

It also removes the last bit of resistance that Marvel appeared to still have in its relationship with comiXology.

The next day, the digital distributor announced an expanded partnership with IDW, offering the publisher's entire digital comics library across all platforms.

The comiXology deal with IDW is significant for two reasons: First, it finally gives comiXology the fourth largest publisher's digital archives -- a former gaping hole in its significant list of participating publishers. IDW recently bragged that it had more than 4 million downloads and 900 digital titles.

Second, IDW formerly had an exclusive partnership with iVerse Media, one of comiXology's competitors. All of the IDW apps, powered by iVerse, remain available in addition to the new distribution through comiXology.

The relationship with IDW began in June when the publisher tried out comiXology's apps for its Transformers comics. Apparently, the partnership worked well enough that IDW ended up adding comiXology as a full-fledged distributor.

It's also impressive that, earlier this month, the distributor revealed that almost half the comics that come out each week in print are also available digitally on comiXology -- on the same day.

As the company grows and continues to add partners, including their current relationship with the "big two" in DC and Marvel, it's not hard to imagine a majority of the comics offered in print might soon be available on comiXology apps.

Newsarama caught up with comiXology CEO David Steinberger at the company's booth in New York Comic Con this weekend, and we talked about these quiet yet significant announcements.

Newsarama: David, you've had a lot of announcements during the last couple weeks, including the addition of IDW to your publishers and Marvel to all your device apps. Those are two pretty big publishers, but what exactly did those moves mean?

David Steinberger: Between Marvel and IDW, what you saw was a consolidation of our platform across all channels.

With Marvel, we first had a deal for just iOS, and two months ago, we added web.

So our idea of "buy once, read anywhere" was failing with Marvel.

Finally, now, we're powering the Marvel app for Android and all of their content's also available on the Comics by comiXology app.

We now get to fulfill our promise, and there's no asterisk that says "except Marvel." That's gone.

People can now look at us as a safe channel where they can buy and view their comics in multiple platforms. They can buy an Android tablet and an iPhone and read the same comics on both with only one purchase.

The IDW announcement means we have the Top 5 publishers doing work with us. Of course, Dark Horse doesn't have all their comics with us. But looking at the Top 5 publishers, we have a ton of content.

We also revealed that we had 40 percent of the "same-day-as-print" titles that went to stores.

So all these things have really added up to a terrific couple weeks.

Nrama: Let's talk about September, which saw the same-day-as-print release of all DC's "New 52" comics. What did that milestone mean for comiXology and for digital comics in general?

Steinberger: I think what's significant is that not only did we have a great September, but retailers also had a great September. We don't look like we're killing the retailers, you know? Fear is dropping. All this uncertainty is starting to fade away. It's just a pleasure for us to finally have it all come together in such a big way.

Nrama: I spoke with DC executives, and they insinuated that while print sales were much higher than they anticipated, digital sales were about what they expected. Was that what you saw?

Steinberger: For us, September far exceeded our expectations.

For four Wednesdays in a row, we had the top-grossing iPad app in the entire App store.

Not just books. Everything.

So we had a month where, every time we had new comic releases, we were No. 1 in the entire App Store. And DC's app climbed into the Top 10 as well a couple of times.

September was also great for us because we introduced our 3.0 app. And then we also rolled out the retailer program, with the digital storefronts[, which allowed retailers to profit from sales of digital comics on their websites].

So for us, it was a really amazing month.

Nrama: We heard some rumblings about retailers being dissatisfied with the storefronts?

Steinberger: We had some controversy about the terms. We're going to be updating the retailer contracts because we got a lot of great feedback. We'll be making some great adjustments.

We have 100 retailers selling now. Some of them promote it. Some of them bury it. So it's been interesting to see some retailers really succeeding in a big way and some people just letting it alone.

We have one retailer who does nearly a third of all the sales of all the retailers. He has a podcast where he promotes it, and he feels like he's getting people who aren't buying at the shop to get their comics digitally.

It is a different kind of market. It's very low overhead for the retailers, and it doesn't cost them anything to do, but you have to actually put some attention toward it if you want to make some money.

You're probably going to hear from retailers, who just got their checks, that they didn't sell very much. But this is just starting. And it's directly in proportion to how much effort you put into it, and where you have it on your site, and how much traffic your site gets. And that's fine.

It's OK for us to have partners who put up the storefront and say, "You know what? It's OK if I only make a couple bucks, because I'm just not going to worry about it." And that's the ease of doing our digital storefront program. It's not a ton of work.

But at the same time, if you can figure out how to reach your audience and say, "OK, I ran out of Batman #1 or Detective Comics #1... but you can grab it on the site." They have the opportunity to expand out, take a little less risk as they buy stuff, and make a little extra money. I mean, that's what it's all about.

Nrama: You used to indicate that indie comics did well for you, particularly if they were attached to a TV series or movie. But with the launch of the New 52, were those superhero comics the dominating successes?

Steinberger: The New 52 did really, really, incredibly well for us. But at the same time, we continued to do, percentage-wise, even better on titles like Walking Dead. I don't mean better in terms of units. I mean better as a percentage.

That indicates to me that we're reaching people who are aware of pop culture, and into TV and movies and videos, and they're on the iTunes store and they're like, "Oh, cool, comics! Let me check this out! Hey look! Walking Dead!" It's a signal that they know what that is.

It's always been an indication to me that we're reaching a new audience.

Nrama: Can you give any indication of how much bigger September was for you?

Steinberger: You know, one of the reasons we've succeeded and come this far is that we're very publisher friendly. We sign deals that have non-disclosure agreements. If I revealed that kind of number, it might be seen as me revealing a certain publisher's number.

The best way I can describe our success is to point to the significance of being the top-grossing iPad app in the App Store. That didn't happen before September. So that's one indication of the success we had that month.

But it was definitely a tide that lifted all boats for us. I think that's true for retailers as well.

I don't know if Marvel would say this, but I would assume they benefitted in retail stores from the attention and the foot traffic that was driven into these stores. And hopefully, retailers upped their numbers for all their books when they knew they'd get new customers for the New 52.

And I can also say that, for us, everybody did better in September. All our publishers did better in September. In some ways, they can thank DC for that. But they can also thank our 3.0 app.

We actually rolled out the 3.0 app six days before DC started its initiative. So I have six days of data that actually tells me we were doing really great, just from that.

Nrama: The recent death of Steve Jobs got a lot of people talking about his accomplishments. Do you think he had an effect on digital comics?

Steinberger: Well, yeah. The fact is that this digital part of the comics industry wouldn't have happened as fast as it did without him, without his inventions and without his products.

But one of the things his actions taught me, or the actions of Apple taught me, is that they were willing to put out a product and discontinue their best-selling product at the same time. Everybody thought they were crazy. But they don't hesitate to make themselves obsolete by doing the next thing. And I think that's really smart, and it's something we keep in mind.

With 3.0, we just got rid of the entire original platform. It's gone. We rebuilt it from scratch to be a little more modern. And we reap the benefits of that. And so do the customers.

Nrama: It's so much faster on my iPhone.

Steinberger: Yeah. Android thankfully is already that fast. But now, in terms of searching and browsing, we hope to make it even better.

Nrama: Is that what's next for you? An improved app for Android?

Steinberger: Yes, the next step for us is to get the 3.0 version of the app to Android, and to make the shopping experience great everywhere. We got it running on iOS, and now it's time to turn our attention to Android. And if we get bigger, we'll be able to do simultaneous releases with that kind of product.

Nrama: Are you guys looking at any other platforms?

Steinberger: Well, what others are there right now? You have iOS, you have Android, you have the web. And we're there.

I mean, if you call Facebook a platform, or maybe Flipbook.

Nrama: There's another digital comics company offering previews on Facebook. Is that something you'll be doing?

Steinberger: Right now, I'm not convinced people want to read comics on Facebook. But I think sharing in Facebook is a big, big deal and needs to be paid attention to. So I think it's a great way to share stuff. Comic’s people love to share stuff. Twitter is the same way. You want to be able to share stuff on Twitter.

So we'll have some announcements about that type of thing in the next couple of months.

But now is kind of a moment to gather up and say, "What's next in digital comics? What's next for comics in general? What's next for comiXology?" And we've got some good things in store over the next five or six months.

Of course, we can't sit still. You just can't. There's too much going on. There's a lot of competition out there. I mean, we feel like we're leading the charge. You can see that in the iTunes charts and just paying attention to the top-grossing lists. And of course, we have Marvel and DC, so that's a huge deal as well.

It's a really great moment in digital comics.

When we made the business plan, we were going to be retailer friendly, and yet we were going to be in digital... and September was a culmination of all of that.

So we took, like, one second to say, "This is a culmination of everything we planned to do from the very start. We did it!"

And yet, there's just miles to go. We think there are tons more people who want to read comics and don't even know it.

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