Digital Download Codes Inside Books Are a Great Idea

Walking Dead on iPhoneWith the release of Avenging Spider-Man #1 in November, Marvel Comics instituted an interesting program: with every print copy of the book, readers also get a digital code allowing them to download a free electronic copy to their Comixology account. So you can get the book on your phone, tablet device, or computer if you so choose.

Having two copies of the book (one printed and one digital) enhances the overall reading experience for many people. You can leave the print copy at home to read at night before bed and keep pristine if you want in a bag and board stored in a longbox, and then take the digital copy with you on your phone, which you can easily carry everywhere.

There’s also the sharing factor, which is important. If you happen to have the book with you everywhere you go, rather than saying, “Oh man, you have to check out Chew, it’s awesome…” You can whip out your cell phone, and hand it to your friend, and show it to him right there. It’s the comics equivalent of handing your friend your iPod so they can listen to a song from the album you just bought. Giving them a sample, so they’ll go out and buy it for themselves. That’s good for everyone, from the retailer, to the publisher, to the fans.

However, I can’t afford to buy two copies of the same book and why should I have to? Once I buy a book, I own it, right? So why can't I own it digitally, too?

Yes, I realize extra work goes into converting a book from print format to various digital formats, but if I’ve already paid the full retail price, it’s a nice bonus to know I can also access it digitally if I want to. For fans who like traditional printed comics, but also enjoy the convenience of digital books, being able to purchase both for the same price is a godsend.

Plus, it has the added bonus of not really pissing anyone off. The retailers sell their physical copies, Comixology (or similar platform) gets their cut of the pie, and the creators get paid a little something too. Everybody wins.

I’m going to take this one step further. If publishers are going to keep charging the full print price for "day-and-date" digital downloads, they could even allow an option for digital buyers to request a FREE print copy be mailed to them. I know this sounds crazy, but it’s not unprecedented, and it’s not as out of the realm of possibility as you think.

Let’s talk about coupons. The reason coupons work is because not everyone ends up redeeming them. If every person who bought Charmin toilet paper actually mailed in their, “Get one roll of toilet paper free!” coupon, Charmin would take a big financial hit and lose money. But statistically that doesn’t happen. The coupons expire after a period of time, people forget to send them in, or they just don’t think it’s worth the extra effort. Some cheapskates do redeem the coupon and want their freebie, but not enough people that it’s to the detriment of the company.

It would be the same with print copies of a comic book offered with digital purchases. The publisher would have to add a few hoops for consumers to jump through, such as fill out a form each time, but sending out print copies of digital comics they've bought wouldn’t hurt enough to make a big difference, and in fact, could probably be used to inflate sales figures (never a bad marketing strategy).

A publisher could do something like what GetGlue does where they allow users to get a bundle of physical stickers (like Foursquare’s badges) after they’ve gotten 20 in a row. Yes, stickers are less expensive than a 32-page comic book, but the idea is potentially the same: once you buy, say, five comics from a publisher, they’ll send you a pack of your purchased titles as a bonus -- if you request it.

Giving people a bonus – either from print to digital, or digital to print – will go a long way to making it feel like its “worth it” to buy the book. Over time, I think you’ll see an increase of legal sharing (which is called “promotion” in some circles) as well as a more pleasurable reading experience all around.

In my opinion, we need to have these digital coupon codes in every single printed comic book and graphic novel on store shelves. As an industry, let’s make it happen! Don't be shortsighted. Don't be a stubborn dinosaur that's afraid to make changes to traditional business models. Try to see the bigger picture. Give your customers more bang for the buck!

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Comic Book Publishing - The Status Quo

Marvel ComicsFor the last 25 years, the competitive environment of the American comic book industry as remained essentially the same. Two publishers, Marvel and DC Comics, continue to dominate the playing field. These giants control roughly 70% of the market share. They have been around for decades and have the most widely known characters. Marvel owns Spider-Man and The Avengers. DC has Batman and Superman.

DC Comics is the oldest company, with a continuous publishing history that spans over 60 years. They are one of the industry's most prolific publishers, producing more than 80 titles every month and close to 1000 books per year. DC owns and operates several other distinct publisher labels. Vertigo is their mature readers line, devoted to more literary themes and subject matter that does not fit in with the traditional superhero comics DC is famous for.

Marvel has a proprietary library of over 5000 characters. Marvel now generates over 80% of its income from licensing its characters for use in a wide variety of products and media, including movies, TV shows, video games, toys, and clothing. They use comic book publishing as a foundation to support consumer awareness of the Marvel brand. Like DC Comics, their strategy is centered around superheroes and kid-friendly content. Marvel is now owned by Disney.

Established publishers like Marvel and DC are primarily interested in grooming and promoting their existing bread and butter superhero brands, with their profits now mainly coming from movie and licensing deals. For decades, nobody has seriously challenged Marvel and DC’s market supremacy. These companies generate millions in revenue, but they remain stuck in the proverbial “comfort zone.” They have so much invested in their well-oiled business model that they are reluctant to initiate the deep change needed to expand their product lines beyond superhero properties. In reaction to the Japanese manga phenomenon, they have made only minimal changes that barely touch their traditional business culture.

Second-tier publishers such as Dark Horse, IDW and Image have carved out a strong presence and although they make up a relatively small slice of the market, they are continuing to grow and become a greater part of the landscape. These companies have helped push the boundaries of comic book content. They don’t offer as many titles as Marvel or DC, but they have managed to survive and thrive in their respective market niches.

Dark Horse has seen a lot of success in creating comics based on popular movie and TV properties like Star Wars and Buffy The Vampire Slayer. Image first became famous back in the mid 90's when seven top artists broke away from Marvel to launch their own creator-owned line, meaning the creators would own the rights to the characters they created. These new comic book series included Spawn, Savage Dragon, Youngblood, WildC.A.T.S, and Witchblade, among others. The move was hyped by the media and the first comics they published outsold many Marvel and DC titles. Lately, Image has continued to prosper, bringing new artistic talent into the limelight.

Many small publishers have come and gone over the years. Most of these companies are owned by the artists and writers who create the comic books. They are attracted to self-publishing because it affords them much greater creative control over the stories and characters than when they work for the big companies on corporate-owned properties. Independent creators like Harvey Pekar, Jeff Smith, and Alan Moore have all found success at different levels with self-publishing.

Foreign Publishers

Starting in 2002, two Japanese manga publishers, Viz and TokyoPop, took the American comics market by storm. While American publishers were focused on their own little kingdoms, Viz and TokyoPop snuck in and quickly took over the bookstore market, pulled in a new audience from thin air, and became the top publishers in total dollar sales. TokyoPop popularized an entirely new format and $9.99 price point that bookstores learned to love.

Distribution and Marketing

There are two primary retail channels of distribution for comic books in North America -- comic book specialty shops and bookstores.

For over 40 years, the newsstand was the primary retail outlet for comic books, which were distributed and displayed in much the same way as magazines. That all changed in the mid-1970s when comic book shops began to spring up throughout the country and eventually replaced the newsstand as the chief place to buy monthly comics. These comic book shops, known as the “direct market,” now account for about 90% of the industry’s sales. Today, newsstands in convenience stores and drugstores generally no longer carry comic books. Many feel that taking comic books away from the exposure of mainstream locations and into specialty shops has hurt the comics industry as a whole by not encouraging new readers.

Diamond Comic Distributors is the nation’s largest wholesaler of comic books. Every month, publishers provide Diamond with a list of titles they want to solicit to stores. The solicitation includes information such as the names of the artists, a description of the story, the expected release date, and the cover art. Diamond then combines this information with all the other publisher submissions into a big catalog called Previews, which is mailed out every month to all the retail comic shops. From this catalog, each retailer pre-orders the quantity of new books that they believe they will be able to sell to customers.

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The Death of Comic Books

Comic Book StoreThe United States generated about $700 million in sales of comic books and graphic novels last year, according to numbers compiled by ICv2 from release lists provided by Diamond Comic Distributors.

Due to a recent string of popular Hollywood blockbusters that were based on comic books, the market for comics and graphic novels has maintained respectable sales numbers for certain well-known superhero titles. According to Nielsen BookScan, which tracks retail book sales, graphic novel sales in U.S. bookstores have grown in recent years. Eager to latch onto anything hot or new that will sell, mainstream bookstores have devoted more and more shelf space to graphic novels, bound collections, and manga. Marvel's trade paperback division has tripled sales over the past year, while DC Comics' trade paperback unit is the fastest growing in its publishing group.

Despite this recent growth spurt in graphic novels, the American comic book industry as a whole is still a fraction of Japan’s huge manga market, which is estimated at about $6 billion. Why the huge difference in unit sales? In short, the Japanese culture has embraced visual storytelling in print. Anime and manga includes stories from all walks of life, from school kids to romance to sports, while in America, the only enduring characters coming out of the big American publishers are traditional superheroes. In fact, 80% of the domestic direct market sales are still superhero books.

Couple that with the fact that many young people in America today don’t read as much as they did in previous generations. They are not familiar with the comic book format. The American comics industry does not use mass-market forms of advertising to promote its products like movie studios and video game companies do. You will never see a new comic book title advertised on TV, or on billboards along a city street. That is why comic books have remained an insular small niche market.

Another key factor limiting growth is the relative difficulty for the average would-be consumer in finding a convenient comic book retail store in the local community. With less than 1500 viable comic shops nationwide, it's hard for your average person to just stumble across a comic book these days while out shopping.

Comic books also have a lot of leisure activities to compete with now. Call it progress, or evolution, but with video games and the Internet assuming more of a role in today's entertainment market, books have taken a back seat on the entertainment bus.

Nowadays, comic books have evolved into a development springboard for other, more lucrative avenues of future income, primarily from licensing the movie rights. Creators and publishers who embrace this new reality can prosper. Those still locked in the era of nostalgia, where printed comic book sales alone could keep you in business, will wither away.

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New Opportunities

The American comic book industry has a tremendous amount of untapped potential. There is room in the market for many more styles of comics. The industry needs to advertise its products better and reach out to people who are not already buying comic books. For example, one key demographic group who has been chronically under-served is the female audience.

Very few American comic book publishers have made a serious effort at reaching out to girls or women. Traditionally, comic books have been considered a male hobby. Men collect comic books; women don’t. That has been the prevailing attitude in the male dominated industry for decades. The stories and artwork are not designed to appeal to your average female. The industry as a whole has basically shunned half the population.

The only way to attract more female readers into comics is to offer a wider variety of subject matter, including dramas and comedies. The average comic book store also needs to be more attractive to women. Most shops today are dirty, disorganized, and have horrible customer service. Reaching out to new audiences will require some major re-thinking and re-structuring of the current distribution channels.

For years, many American comic book professionals have complained about the dwindling specialty market they have religiously served. While these guys continued to fight over the same fanboy audience, the Japanese just pitched their tent down the road and invited in the general public, including females. The phenomenal rise of manga in the bookstore market has proven the industry naysayers very wrong. There are all kinds of markets out there for smart businessmen who are willing to go grab them. The new audiences that Viz and TokyoPop are reaching are, for the most part, not customers that have the remotest interest in superhero comics like X-Men.

The challenge for publishers today will be to develop and aggressively promote new properties and formats that appeal to consumers outside of the traditional target demographic. "Business as usual" just won’t cut it anymore. If someone doesn’t start figuring out ways to market the comic book medium as a whole to a broader mainstream audience, the industry may soon begin a slow decline to the point of obscurity. The industry can limp along like this until it goes the way of vinyl records and drive-in movie theaters, or it can innovate and reinvent itself and offer new experiences.

Some publishers believe the future of comic books is the graphic novel format. We, as a society, are just too impatient today to have to wait one month for the next installment to our favorite storyline. A graphic novel allows you to read the entire story in one shot. Instant gratification. From a business standpoint, graphic novels have a much longer shelf life, and can be sold at conventional bookstores as well as comic specialty shops. Some critically acclaimed books, such as Watchmen or The Walking Dead, can be "evergreen," selling strongly for many years after its initial release.

International markets are another potential source of significant future income. In the next decade, China and India will become one of the largest consumers of books and entertainment products. In the past ten years, China's book industry has quadrupled in size. Given that the market for books has not yet matured, it is fair to say that the industry's rapid growth is likely to continue. As China transitions into a free market economy, book sales may in time be second only to those in the United States.

Another growth area is digital comic books. Twenty years from now, people will be reading on a portable wireless HD device instead of a book. Thus far, American book publishers have been slow to embrace Internet distribution, fearing that until secure technologies and pricing models are in place, their copyright works will be freely disseminated, as online music has been. Once issues of piracy have been resolved, this e-book format will grow like crazy. Like music and movies, comic books will eventually have to adapt to the online media revolution.

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