Economics of Digital Comics Economics of Digital Comics

By

Todd Allen

Introduction by

Mark Waid

Copyright ©2014 Todd Allen

Introduction Copyright ©2014 Mark Waid

ISBN #: 0-9749598-4-7

All rights reserved. No part of this book may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording or by any information storage and retrieval system, without permission in writing form the copyright owner.

THIS BOOK WAS MADE

POSSIBLE, IN PART, BY

CROWDFUNDING FROM:

Robert Jacobi

Olaf Moriarty Solstrand

Eowyn S. Peacock

Micah Baldwin

Juliet Travis

Table of Contents

• Introduction by Mark Waid
• Chapter 1: What This Book Is and Isn’t
• Chapter 2: An Introduction to Print Comic Books, Their Economics, and Their Fall and Rise and Fall from Circulation Grace
• Chapter 3: The Economics of Print Comic Books
• Chapter 4: The Economics of Newspaper Comic Strips
• Chapter 5: Digital Comics and Their Flavors
• Chapter 6: A Short History of Webcomics
• Chapter 7: The Economics of Webcomics
• Chapter 8: A Short History of Digital Downloads
• Chapter 9: The Economics of Digital Downloads and ebooks
• Chapter 10: Comparing the Finances of Print, Webcomics and eBooks
• Appendix – Crowdfunding

  Introduction by Mark Waid

The more I learn, the less I know.

This year, I celebrate my 30th anniversary as a comics industry professional. Over the course of my career, I’ve worked for every major publisher and most minor ones. I’ve been a writer, a publisher, an editor, a colorist, and more. I learned the nuts and bolts of for-print production back when we were using stats and X-Acto knives, and I’ve since become moderately proficient with their modern-day equivalents, Photoshop and Illustrator. I’ve been a PR copywriter and a retailer who owns his own comic book stores. There is literally no facet of this business I haven’t blundered my way through with some varying degree of skill…so when I decided to move my creative focus from print to the emerging digital medium a few years ago, I figured I already knew most of what I needed to know and that the transition would be cake for a man of my experience.

Ah, hubris.

In 2012, with my business partners John (Leverage, The Librarians) Rogers and Lori Matsumoto, I launched Thrillbent.com as a built-from-scratch digital comics web portal. “How hard could this be?”, I asked no one who could have set me straight. Immediately, my modest dream of simply taking standard comics pages and cutting them in half on the horizontal to fill a portrait-shaped screen expanded as we began experimenting with impossible-in-print storytelling techniques like having dialogue and captions on a static image shift and change at the turn of a page, or playing with cinematic rack-focus transitions, or leading the eye back and forth across a screen to convey moments that couldn’t be conveyed on paper. Immediately, we were all taken with this new storytelling language we were helping to invent. I truly thought we were going to conquer the world.

I still think that’s a possibility…but it’s not happening overnight, because the playing field isn’t nearly as static as print’s was. The changing dynamic of print versus digital has turned out, to my surprise, to be more volatile and erratic than I’d counted on. For instance, four years ago, I honestly thought print comics would be on their last legs by now, but they’ve bucked the publishing-industry trends and are, as I write this, holding steady as a business (or, at worst, declining in near-invisible increments). That radically changes the mission statement of digital comics; they’re not “at war” with print, they’re not the next evolution–they’re a potential gateway to print. Moreover, their outreach is expanding meteorically in the internet age, but (as we’re learning) outreach and monetization are far from synonymous. What seemed to me at the birth of Thrillbent a clear-cut route to finding a thriving, paying audience to rival print at its height has proved to be a constant zig-zag across a terrain filled with ever-changing platforms and their ever-changing requirements, complicated by an ever-widening signal-to-noise ratio when it comes to using social media as a marketing tool. Every forward-thinking question we answer births two new harder-to-answer questions about tomorrow. My head spins a lot.

Don’t get me wrong; that’s not the trumpet of surrender I’m sounding. We and other digital pioneers like us have enjoyed enough success to keep pushing forward. The overall state of digital comics is far more optimistic and exciting than I’d dreamed it could be. I’m simply admitting that I set out in that world bereft of a map and–my hand to God–I would be lost without Todd Allen. The book you’re (literally or figuratively) holding in your hands at this moment is testament to that. With painstaking research and by asking all the right questions of all the right players, Allen has created the single most useful document I can imagine having at this point in time. You can’t possibly come away from reading it without learning a great deal about the current state of comics publishing across all media. Hell, I couldn’t get three pages without discovering new insights or reframing my point-of-view. I personally feel as if I have a much stronger sense of direction having read Allen’s analyses, and it benefits my work and my business.

The more I learn, the less I know. Luckily, Todd Allen is here to help me bridge that gap.

Mark Waid has written a wider variety of well-known characters than any other American comics author, from Superman to the Justice League to Spider-Man to Archie and hundreds of others. His award-winning graphic novel with artist Alex Ross, KINGDOM COME, is one of the best-selling comics of all time.

Chapter 1: What This Book Is and Isn’t

This book is a look at the business models involved in the digital comics industry and how they relate to the original print business models. It will examine both how the business works for publishers and how independent creators fit in and can potentially earn a living as their own publisher.

We’ll briefly look at the history of the mediums, but with an emphasis on how the businesses have developed. The histories of the individual webcomics and the multitude of apps that have come and gone are their own topics. Our goal is to use history to illustrate what forces and conflicts have shaped business decisions and the market.

We’ll look primarily at the Direct Market, webcomics and eBooks/Digital Downloads. The bookstore market will be touched on, but it stands a bit apart from the access that the Direct Market has historically offered the individual creator. Manga will intersect with the discussion at certain points, but Manga really has its own market and culture. Manga sometimes co-exists with other comics and many of its fans would argue it should be kept separate, even though it’s really just a different flavor of comics with a strong identity.

Sales estimates for comics are just that: estimates. The Direct Market estimates have been shown to be accurate for U.S./North American sales, but the unreported U.K. sales add roughly 10-15% to the print total. It isn’t a perfectly documented situation, but the proportion of sales from one title to the next is accurate from month to month, and the total sales are usually within the prescribed range for the overseas sales bump. Digital sales totals are very rarely discussed in public.

This book is not about how to write and draw comics or how to put them online from a technical perspective. There are plenty of other books about that. The goal here is to instill knowledge of the revenue-generating methods available and the menu of options that can be used to monetize a com

This book should not be read before constructing a comic – it should be read afterward. The audience can smell insincerity and it’s better to adapt the revenue model to fit the content, rather than the other way around. One size does not fit all, but most models are variations on a basic set of tools.

We’ll end the book with a comparison of what the models require to hit a professional creative budget and an entry-level salary. Then we’ll take a closer look at crowdfunding, which has emerged as a tool to aid merchandising and donations, but is really an entity unto itself.

Chapter 2: An Introduction to Print Comic Books, Their Economics, and Their Fall and Rise and Fall from Circulation Grace

Comic books initially began as a subset of magazines in the 1930s, enjoying the same newsstand distribution channels as publications like Time or Life utilized over the years. Starting in the 1970s an alternative market emerged that was aimed more at collectors. Referred to as the “Direct Market,” this distribution channel offered its own unique set of economics. Whereas most magazines displayed at newsstands are returnable if they do not sell, products in the Direct Market are offered at a higher discount (60% is commonly offered to the distributor and between 35% and 57% to the retailer, dependent on volume) and are not returnable. This lack of returns made the Direct Market extremely efficient from an economic perspective and has allowed new and smaller publishers to enter into the market.

Starting in the mid-1980s, in addition to being the primary distribution outlet for these new or “independent” publishers, the Direct Market began to take on a greater over-all percentage of comic book sales for the traditional publishers, who were seeing a decline in the number of newsstands carrying their product. By the mid-90s, this Direct Market had become the primary channel of distribution for all comics, with many titles from even the traditional publishers having no editions carried in the traditional magazine distribution system.

Traditional publishers that originated on the newsstands and grew a Direct Market presence include Archie Comics, DC Comics and Marvel Comics. Independent publishers who originated in the Direct Market would include Dark Horse Comics, IDW and Image Comics, all of whom eventually ascended to the first tiers of the remnants of the industry. Independent publishers still publishing today, while not being defined as “premiere” by Diamond, the current main distributor for the market, include Dynamite Entertainment, BOOM! Studios, Oni Press, Avatar Press and a new incarnation of Valiant Comics. Some notable independent publishers that sprouted in the 1980s and 1990s, but eventually went out of business after some initial notoriety, include Eclipse Comics, First Comics, Comico, Chaos Comics, Crossgen and the original version of Valiant.

The comics industry has frequently operated under boom and bust conditions. Sales are generally rising or falling, seldom staying levelled out for very long. The first great boom and bust cycle of the modern era was the “Black & White Boom” of the mid-1980s. With the Direct Market coming into its own, it was relatively simple for small press publishers and individual creators to cheaply print black & white comics and sell them into the newly organized fan market. Several of these titles took off and saw even recent back issues soar in price, leading to overproduction and market speculation. The most famous comic to come out of this period was Teenage Mutant Ninja Turtles, with the slightly older titles Cerebus and Elfquest being other examples that are still well-known today. A few years later, the over-production flooded the market, back issues lost value and the “Black & White Glut” faded into clearance bins. Trollords, Fish Police and Boris the Bear are all titles that were once hot and have been all but forgotten.

The next major boom was in the early ‘90s. The original Valiant and the birth of Image comics drove big numbers to the independent side of things. The X-Men line of titles and Spider-Man were very popular, partially because of the artists who eventually jumped ship to form Image. DC’s “Death of Superman” sequence brought all kinds of mainstream media attention. Sales reached a peak in 1992. What followed was a perfect storm that combined an unpopular management change at Valiant, too many late books from Image, massive over-production and over-emphasis on event comics from Marvel and speculators strangely believing the high print runs of things like the death of Superman, X-Men #1 and Deathmate: Black would yield high returns. When the speculators realized their error and started pulling out, with the core fan retreating from the quality drop related to overproduction, a golden age for sales was over. The market didn’t start to reverse the downward trend until 2002. While the entire market dipped, the market share tilted progressively more towards DC and Marvel and stayed that way until 2012.

It is useful to look at sales levels of popular comic books of a given era, in order to better understand how drastically circulations have fallen in recent times. While hard sales numbers for early comic books are difficult to come by, it is commonly believed that in the 1940s, popular titles like Superman and Captain Marvel routinely sold in the neighborhood of one million copies per issue. Through the use of circulation auditing records, The Standard Catalog of Comic Books lists a circulation peaking at 530,824 for the September 1937 issue of Famous Funnies, the first modern comic book, whose circulation dropped to 319,000 by early 1940.1 In roughly the same time period, Tip Top Comics is shown to range from 269,938 to 441,618 copies per issue2 and Feature Funnies / Comics ranged from 221,982 to 387,914 copies per issue.

While 1940s and 1950s circulation records are not readily available, postal circulation statements indicate that in 1960, Superman averaged 810,000 copies per month3; Batman sold 502,000 copies per month4; and The Flash sold 298,000 copies per month5.

Jumping ahead to 1970, Superman was still a top seller with an average monthly circulation of 446,678 6. A younger comic, The Amazing Spider-Man, averaged 322,1957 and Batman averaged 293,897 copies per month8. In sharp contrast with modern times, Archie topped all superhero books with an average of 482,945 copies per month9.

Moving ahead to 1980, the transition to the Direct Market was slowly beginning, and the newsstand system had begun to wane. The Amazing Spider-Man averaged a monthly circulation of 296,71210; Star Wars, in the wake of the release of the second film in the first trilogy, averaged 255,985 copies11; and Fantastic Four averaged 243,786 copies per month12.

In 1992, the Direct Market was at the height of its prowess. The “X-Men” franchise, which was just starting to gain popularity in the early ‘80s, had strong showings with two titles: X-Men with a staggering 967,808 copies per issue average13 and Uncanny X-Men at a level of 731,425 copies per month14. The Amazing Spider-Man even managed 544,000 copies each month15. Unfortunately, accurate statistics are not available for the launch of Image Comics, a publisher made up of popular artists who broke away from Marvel to start their own company. It is believed that the first issues of several of their titles sold in the general area of 700,000 to one million copies, and these books were exclusive to the Direct Market. In 1992, all was good in the world of comic books, except perhaps with Archie. That publisher, which has never been a large player in the Direct Market system, still relied primarily on traditional magazine distribution methods. Their flagship book, Archie, had dropped to an average monthly circulation of 47,530 in 199216. This was to be a sign of what lay ahead.

The sales started to dip in 1993. Not catastrophically at first, but the growth stopped and the trend started on a nine-year path trending down. Marvel made a brief attempt to distribute its own books to the Direct Market in 1995, which started a chain reaction that would further hurt the industry. By 1996, the result of this major player removing itself from the market was a consolidation of distributors with Diamond Comic Distributors ultimately emerging as the last primary distributor after signing exclusivity deals with the remaining large publishers and purchasing their last major rival, Capital City Distribution17.

Exacerbating the dip in sales was the attrition of Direct Market retail outlets.

“In 1992, there were about 10,000 retail specialty shops that made up what we called The Direct Market,” explains Tony Panaccio, the former Vice President of Product Development for Crossgen Entertainment, which was the fourth-largest Direct Market comic book publisher encountering before financial difficulties in 2003. “[In 2004], that number is dramatically lower and somewhat in dispute. Promoters of the industry claim that there are as many as 3,500 in operation [in 2004]. After three years of continuous canvassing, via phone, Internet and direct in-person contact, my marketing department at CrossGen was able to ascertain the existence of only a little more than 2,000 such Direct Market specialty shops for comics last year (2003)”18.

As the comics industry started its initial recovery in 2003, Bill Jemas, then Chief Marketing Officer and former President of Publishing and New Media for Marvel Comics, reported approximately 3000 retailers doing business with Marvel, but was unsure how many of those retailers had store fronts, which could account for some of the discrepancy between the two figures19.

The year 2003 found the comic book industry locked into a Direct Market that had lost between two-thirds and four-fifths of its peak number of outlets, depending on which estimate is to be believed. Either is a staggering drop-off. At the same time, the traditional newsstand outlets had been largely abandoned.

Examining Business of Performing Audits International’s (BPA) “Circulation Statement for the 6 Month Period Ended June 2003” for Marvel Comics, several interesting things come to light. First, in the breakout for May 2003, the Total Qualified Circulation is 3,095,661 copies. Of that number, only 131,625 are “Single Issue Sales,” or newsstand-distributed copies. If May is representative of Marvel’s circulation, and there is no reason to believe otherwise, then only 4.25% of Marvel’s circulation comes from the traditional newsstand distribution system. Subscriptions, as a percentage of the monthly average circulation, only account for 3.3%. Thus, it becomes obvious that Marvel has moved beyond the traditional magazine distribution system, with less than 10% of its circulation coming through those channels. Going back to the May 2003 breakout, of the 47 titles published that month, only 23 had Single Issue Sales, meaning that slightly over half of the product line was only available through the Direct Market. Allowing for multiple issues published in that same month, as the monthly records account for total issues of a title in a given month, rather than per issue, this gave Marvel six titles over 100,000 in circulation, with the largest circulation being 163,000 copies to the inaugural issue of a re-launching of Wolverine. It should be noted that first issues of a title always get higher sales. It is somewhat difficult to tell the exact monthly circulations from the audit form, given Marvel’s sporadic tendencies to ship multiple issues in random months, but it appears if you remove the Spider-Man movie adaptation’s 2.5 million copies (which was a promotional giveaway with Wal-Mart) and remove two special 25-cent promotional comics, that the May issue of Wolverine was the bestselling issue of that six-month period and the best-selling comic books were clustered around 110,00-123,000 copies per month. A far cry from even where the market dipped in 1980.

The exact opposite of Marvel for the first half of 2003 is Archie Comics, whose “Archie’s Plus Group” BPA circulation report for the same time period reveals 3.5% of their circulation coming from subscriptions, which roughly matches Marvel; however, 88% of their circulation comes from Single Issue Sales. Interestingly, their regular-sized comic books have very low circulations, with only one reaching 25,000 in average sales. Their digests, on the other hand, sell very well with two of them averaging 121,000 copies per month in that period, which would place them in the top ten, if not top five sellers at Marvel. It should be noted that the Archie Digests are usually placed in the checkout lanes of grocery stores, a highly coveted merchandise placement, and this most likely partially accounts for their superlative sales, comparative to the current market.

While the sales of those digests, regardless of the influence of point-of-purchase placement, indicated some possible viability, the standard format comic book was almost an after-thought in the world of the newsstand. With the number of Direct Market outlets also having shrunk, this should be a point of concern.

When Jemas arrived at Marvel in 1999, newsstand sales were at 14%, according to the BPA’s audits for the first half of the year, and the company made a conscious decision to walk away from the newsstand in favor of reprint collections in bookstores, owing to the serialized nature of the stories. “I have a pretty good imagination, but I can’t see a 12-year-old going to a newsstand six months in a row to pick up the right Spider-Man comic to get a complete story. I can see a 12-year-old going to a bookstore and picking up a book with the whole Spider-Man story in it,” was how Jemas explained the decision.

Also factoring in the decision to walk away from the newsstand was the limited ability to audit the returns and verify the return rate; the added expense of returns; and the lack of direct interaction with the newsstands, as opposed to the interaction with Direct Market retailers. Jemas did cite a successful newsstand distribution program in Waldenbooks stores implemented through Ingram (traditionally a distributor of books, not of magazines) where the comics were racked in a spinner near the magazine section and there was greater communication with the retailer, in terms of display and feedback.

On the subject of low subscription numbers, Jemas described subscriptions as a function of customer loyalty and as a lifestyle decision. By this definition, the majority of loyal customers would journey to a Direct Market retail outlet to buy comics. Marvel felt the Direct Market channel was more beneficial to them than subscriptions since it stressed loyalty in the form of a weekly pilgrimage to purchase the product. Jemas stated that one of the reasons behind Marvel’s then-policy of not over-printing comic books for potential retailer re-orders was to reinforce the habit of weekly purchases by the end consumer20.

The above circulation numbers indicate what the shrinking market had done to the top publishers, but they do not show what had become of the independent publishers. In 2003, Diamond Comics Distributors had five “Premiere Partners” whose products ran in expanded listings in the front of the catalog. These “partners” were four comic book publishers: DC, Marvel, Image and Dark Horse; as well as Wizard, a popular magazine about comic books that occasionally published comic books under the “Black Bull” imprint. (By 2014, Wizard had stopped publishing and IDW was granted premiere status.) All other publishers were placed in the back of the catalog, which as Panaccio described at the time “[is]cluttered, disorganized, and lacks any kind of organization. That’s not by accident. It’s by design.”

“It is my belief - and I am not alone in this belief, but I am sure that many of my colleagues feel it is not in their best interests to voice their opinions on this matter - that the Department of Justice blew it when they initially investigated Diamond to examine its compliance with the anti-trust laws on the books right now,” Panaccio said. “While many analysts within the DOJ could see the argument for technical compliance, especially when it is presented solely by Diamond’s lawyers, I believe that any sitting judge would have seen through Diamond’s definitions of ‘broker’ and ‘distributor’ in relation to their vendors, and ruled that Diamond was indeed in violation of anti-trust laws. In my mind, Diamond is one of the worst-case scenarios of monopoly in American publishing, and the resulting power and influence wielded by Diamond in the marketplace is unfair and illegal. It is fundamentally unjust that this criminal conduct is allowed to continue while thousands of retailers, thousands of creators and dozens of publishers locked outside the premier vendor club suffer under a system that was constructed solely for the purpose of entrenching and rewarding a select minority.”

“Let’s look at exactly what Diamond does for a moment,” Panaccio explained. “1) They print a catalog, which they make outrageous money on. That catalog costs them about $1 per unit to make. They sell it to consumers for $5 per unit, and make an average of $5,000 per display ad, with more than 150 pages of display ads per issue. 2) They take big boxes and make them into little boxes and ship them, via UPS, which costs them very little. That’s it – there are, perhaps, four field sales reps, a few sales executives in Baltimore, and that’s it. For an entire industry.

“Now - if your main business is boxing and shipping, your margins are reduced with each new publisher that enters the market, and with each new store that opens. If 75 percent of all your product comes from five vendors, and the other 25 percent comes from a combination of 40 vendors, your margins actually rise when some of those other 40 vendors go bye-bye. If 75 percent of all the product you ship goes to 750 locations, and the other 25 percent goes to the remaining 2,400 locations, then your margins actually rise when those bottom feeder stores go bye-bye. Fewer vendors and fewer shipping points equals a higher margin of the product you are guaranteed to place no matter what, because you are a monopoly and have no competition.

“Diamond’s primary business model is to shrink the comics industry down to its lowest common denominators and squeeze out any potential competition for its premier publishers”21.

This view may be an extreme one, but keeping it in mind while viewing the Diamond sales chart indicates there is at least circumstantial evidence to take this viewpoint seriously.

ICV2 is a website for Direct Market and pop culture retailers run by the former owners of Capital City Distribution. Each month they issue estimated sales figures for the comic books Diamond distributes. While these numbers are estimates, they are commonly accepted in the industry as such, and can likely be considered accurate within 10-20%. Looking at the estimates for December 200322, the bestselling independent comic (that is to say, from a company not listed in the front of the catalog) was Dreamwave’s TRANSFORMERS GENERATION ONE VOL 3 #0 at number 29 with an estimated 53,081 copies ordered. (It may be slightly misleading to think of this as an independent comic, as Dreamwave was formerly a studio distributed by Image Comics, the Transformers franchise was initially published through Image Comics, and the company was in the midst of a cross-over event with the “G.I. Joe” franchise, which was also being published by Image.)

The next highest-selling independent comic book was MICHAEL TURNER PRESENTS ASPEN #3, at number 71 with 27,864 estimated copies ordered. Again, Turner was a popular artist who had recently left Image Comics and that comic featured his “Fathom” character, who had headlined a popular comic for Image.

The highest-selling independent comic not strongly associated with Image by either creative team and characters or a possible ownership arrangement with Diamond was DARK DAYS #6 from IDW (not yet a Premiere Partner) at 116 and with an estimated 18,536 copies ordered. So a truly independent book did not rank within the top 100 comic books ordered. El Cazador, the most popular title from Crossgen, was estimated at just under 18,000 copies, and more independent books started to show up after this.

Still, these were color books, and the independent publishers, particularly the self-publishers that popularized the Direct Market in the 1980s and 1990s, used to publish in black and white (which is the format from which the now famous “Teenage Mutant Ninja Turtles” came). The highest-selling independent black and white comic book was Knights of the Dinner Table #86, the 201st most-ordered comic book for December 2003 with an estimated 6,304 copies requested. Other top selling black and white independents included Cerebus #297, estimated at 6,194, and Queen & Country #22 estimated at 6,139 copies.

Perhaps a better demonstration of this phenomenon was the sales drop of G.I. Joe. G.I. Joe was licensed by the art studio, “Devil’s Due,” and published through Diamond premiere partner Image Comics. The orders for the title in October 2003, as estimated by ICV2, were 36,662 copies, 38,849 in November, and 36,300 in December, all under the Image banner. In January 2004, Devil’s Due withdrew from their relationship with Image and published the book under its own name. January sales were estimated at 31,417, a 13.45% drop off from numbers that had been somewhat consistent over the previous quarter, despite continuous numbering on the title. That drop appeared to be a direct result of moving from the front of the catalog to the back of the catalog – even with an established front of the catalog title.

In fairness, two major publishers, Image and Dark Horse, did have some black and white titles with more of an independent flair, but these, on the whole, still tended to sell better than the pure independents. Be it brand equity or catalog placement, there was a demonstrable reality that an independent publisher in the Direct Market was at a disadvantage.

Panaccio, again, had an apocalyptic anecdote about independent status and the Diamond system: “[At one point Crossgen was outselling premiere partner Dark Horse in both unit and dollar share.] We were doing with 15 titles what they couldn’t do with 24 (mini-series included). Now, Crossgen expanded too fast, and cannibalized its own product line unit sales, which led to a greater market share but lower per-title unit sales. The imaginary golden calf was supposed to be that at five-percent market share, Diamond would award CG premier status. That never came to be, for a number of reasons. The arbitrary limits are imposed by Diamond at Diamond’s sole discretion. Keep in mind, Diamond acts on the behalf of their premier publishers. If a small publisher starts cutting into market share for the big five, it’s usually not long after that the new publisher hits a wall, and has to retreat or reorganize.”

While not citing Diamond as a problem, Jemas agreed that the Direct Market was no place for a new publisher to be successful. “It’s not a business,” was how Jemas phrased the proposition, citing the history of failed companies and poor margins on a print run of 10,000, the most he could imagine a newcomer to be able to sell. Jemas felt that while the newcomer might not necessarily lose money, not enough profit margin would be available to consider publishing as more than a hobby, if implemented on a small scale. Estimates of Direct Market sales from ICV2 and Comics Chronicles in 2003 would back up his assessment of sales potential, as well.

When examining overall comics sales in the era of Diamond as the primary, nearly sole, comics distributor it’s useful to look at the total copies sold by the top 300 titles. This eliminates price fluctuations, which may be used to compensate for sales declines. While not a measure of the entire market, it’s a fairly complete one through 2013. Starting in late 2013 and 2014, the market expands a bit more past 300 titles.

The comics market continued to improve, hitting its monthly peak in November of 2006 and continuing strong sales through most of 2007 and an annual peak of 85.27 million copies sold in that year before heading back into decline.23

January 2011 showed a sales drop drastic enough for everyone to notice. How far had comics sales fallen? In 2010, the top 300 monthly titles totaled 69.2 million copies sold, their lowest point since 2001.24 That’s a monthly average of 5.77 million. January 2011 had 4.4 million copies sold. That was the low point and set the table for big changes in the second half of 2011 as DC Comics, in particular, was losing readers rapidly.

By 2011, the number of Direct Market stores was estimated by independent publishers to be 1800, down from roughly 2,000 in 2003. Some media accounts still put the number at 2,000, but this most likely included Diamond accounts without storefronts, which were counted at roughly 3500 in 2003.

What was to blame for the downturn? Some were very quick to blame Internet piracy. Some blamed the economy. Some blamed an overabundance of multi-title crossover events (where nearly an entire line of titles play into one large story) for driving off all but the readers interested in such things. Some blamed quality of content. Some blamed the attempt to raise the price of single-issue comics to $3.99. Most likely it was a combination of all of the above, but many retailers questioned the wisdom of raising the price of a comic book from $2.99 to $3.99 in a bad economy.

The $3.99 price point is an interesting story. Many, if not most independent comics had (and still have) a $3.99 cover price for reasons of cost that we’ll examine in the next chapter. Marvel initially started pricing certain mini-series at $3.99, and then started launching new series at the higher price until the vast majority of their titles were $3.99. An analysis of increased price versus circulation drops indicated that in most cases, Marvel was coming out cash-flow positive from the policy.25 Marvel did, however, later opt to launch selected titles at $2.99, citing a consumer reluctance to spend higher prices on less popular properties.

DC decided to raise its prices to $3.99, but to add back-up features (which were referred to by the euphemism of “co-features”) and extra pages to the comics. When this did not go over well, the company dropped all of its titles back to $2.99, but cut the page count down to 20 pages from 22. Any gains from the price drop were minimal and this was mostly viewed as “slowing the bleeding” by retailers. In September 2011, DC relaunched its entire line with new #1 issues and re-booting the majority of titles.

How bad had it gotten for DC? Some quotes from Co-Publisher Dan DiDio:

“The walk-in, casual fans have gotten away from us. We are down to just the die-hard buyers.”

“The truth is people are leaving anyway, they’re just doing it quietly, and we have been papering it over with increased prices. We didn’t want to wake up one day and find we had a bunch of $20 books that 10,000 people are buying.”26

DC’s relaunch was a great success, though as December rolled around, some of the new titles were already experiencing significant sales drop-offs , but the line as a whole was strengthened. This relaunch bought the Direct Market some breathing room and reversed the downward trend. Had this not happened, the Direct Market was on course for the lowest sales volume since the 2001 trough. The long term effects of this relaunch were better for the independent publishers than for DC and Marvel, but that wouldn’t become apparent until closer to 2013.

By October of 2012, 13 months since the launch of the New 52 promotion, DC had already cancelled or announced the cancellation of 13 of the relaunched title: 25% of the line. Saleswise, DC regained sales on their top tier of books, but the bottom tier quickly fell back to the general vicinity of pre-launch. Overall, the publishing line-up was healthier, but DC was frequently doing batches of cancellations and launching new titles in an attempt to stay ahead of the normal attrition in the market. Still, attrition was slowly catching up.

As DC’s fortunes rose, Marvel’s fortunes fell. Despite the record-breaking box office receipts of the Avengers movie, Marvel found itself hard-pressed to sell 70,000 copies of a title without some sort of crossover or special event. Marvel had huge success with its Avengers Vs. X-Men mini-series and the sundry titles it crossed over to, but for the titles not effected by that event, 50K-60K was top of the line for Marvel, according to Direct Market estimates. This culminated in Marvel relaunching much of its line under the “Marvel NOW!” banner, giving long-running titles like Captain America and Iron Man new #1 issues. This late 2012 relaunch wass punctuated by multiple covers, enticing retailers to order extra to be eligible to buy limited editions. (A common tactic, but one taken to a new level by this promotion.) While the initial order activity was impressive, by late-2014 19 of the 28 original Marvel NOW! titles were either cancelled, relaunched with yet another new #1 issue or announced as a cancellation and relaunch.27

The year 2013 saw sales declines for DC and Marvel with the shine quickly wearing off their respective relaunches, with DC’s median-selling issue dipping to around 28K28 and Marvel’s median-selling issue dipping to around 35K29. The bulk of the comics published by comics’ “Big 2” sold under 40K copies per issue. Marvel could still launch #1 issues to large numbers, only to watch them quickly come back down to earth. DC was having trouble launching news titles in general.

In 2014 DC started an aggressive cancellation program, cutting the lowest-selling titles and gradually replacing them with what would become three weekly comics, a plan that has had some success through the first half of the year. Marvel initiated “All-New Marvel NOW!” in a new wave of its new formula of #1 issues, including a few relaunches from its initial Marvel NOW! wave. As of June 2014, only Amazing Spider-Man and Marvel’s Event titles sold over 60K.30

This is the status quo of DC and Marvel. Relaunch, cancel, relaunch. Gain sales with the relaunch’s new #1 issues and variant covers offered with them. Ship more than one issue of your better-selling titles each month. Watch sales slowly dwindle with time. Kill off a character (for a year) and watch the sales spike for a few months. The thinking seems geared towards short term sales goals and, as DiDio said about price increases, papering over your losses.

While DC and Marvel have been caught in a spiral of diminishing returns, independent comics have been on the rise. While it was DC’s New 52 that brought readers back into stores, it was Image Comics that experienced dramatic and sustained growth. When Image’s founders split from Marvel in 1992, they were serious competition for DC and Marvel. Their market share dwindled over the years, including six straight years of decline from 2004 through 2009, bottoming out 3.25% of the Direct Market by copies sold in 2009. Image bounced back and was back up at 8.49% of the market by copies sold in 2013, their highest market share in over a decade. Following their lead, IDW went from 0.5% in 2003 to 5.1% of the market.

Previously, the Direct Market’s climb has been based on DC and Marvel selling more comics. As their sales increased, so did the market share. In 2012 and 2013, however, the overall market increased, but DC and Marvel saw their share drop and the independent comics share increase. Not just Image and IDW. Most of the smaller publishers saw gains. This is a significant development.

With this sales surge spinning out of the New 52 launch, there was also a badly needed increase in the number of Direct Market retail stores. In September 2013, Diamond reporteed 2,638 accounts.31

Does this mean things are on the upswing for the Direct Market and monthly comics? That picture isn’t as clear. There’s a long-held belief that independent comics hold a poition similar to that of independent music in the pre-Internet world. There just aren’t a lot of comic stores that stock them, outside of major cities and college towns, just like you didn’t find independent records in record stores very often outside of major cities and college towns. There is also a long-held belief that 300 stores order the bulk of independent and small press comics. “In the US/UK direct market, 75% of all indie books are sold by around 300 stores,” said author Antony Johnston. “Hell, the top 100 of those stores make up 50% of all sales.”32

Johnston gave very specific examples of the ordering patterns for the first issue of Umbral a comic he wrote for Image that was published in November 2013 and had estimated sales of 14,536.33

“For UMBRAL #1, 70% of our orders came from less than 30% of Diamond accounts. That’s every store that ordered 10 or more copies.

“If you move that threshold up to 20 copies, you’re then accounting for fully 50% of our orders; and that came from just 10% of Diamond accounts.

“And those numbers don’t even include stores that ordered zero copies. It may surprise you to learn that some stores literally only order Marvel + DC books, nothing else.

“So think on that. More than 70% of Diamond accounts didn’t even order 10 copies of a brand new Image #1.

“You know what the most amazing part is? Ten years ago, that number would have been more like 80%.”34

It should be reiterated, this is the first issue from the third-largest publisher in comics. Johnston talks about stores ordering 10 copies, because it’s a benchmark level where a store can afford to have an extra copy or two for the shelf and not lose money on the comic as an individual title if the shelf copies don’t sell. In 2013, 10 copies per store would be 26,380 copies of a given issue. That means 792 out of 2,638 ordered 10 copies and that 50% of Johnston’s circulation came from only 264 stores – very close to the 300-store figure commonly referred to for independents.

And this is for one of Diamond’s premiere publishers in the front of the catalog. We’ll talk a bit more about the power of the publishing brand and the front of the catalog versus the back of the catalog in the next chapter, but this is an excellent illustration of the struggles even a strong independent publisher can have in the Direct Market, even with an author who says the situation is improving.

Interestingly, in 2003, Jemas noted that the top 500 retailers made up the majority of Marvel’s sales, so while this is more of an issue for independent comics and small press, the sales of monthly comics have never been particularly evenly distributed.35

While the overall Direct Market sales were flat in the first half of 2014, that independent comics surge continued, but in an unusual way. An overall very successful July 2014 had a total of 530 different issues released.36 In keeping with Johnston’s thoughts, that means, at most, 108 titles were ordered in a quantity of 10 copies per store. If you take it down to 5 copies per store (13,190 copies total), that’s 186 comics. The #300 selling comic was 6,620 copies. The number #461 title was 2,495 copies.37

This raises some questions about sales patterns. Some stores will naturally stock certain titles higher than others. The common denominator has previously been that a comic retailer starts out with DC and Marvel orders and then adds titles after that. Where are these 530 titles being sold? Are there 300 shops that have physical room display 530 comics in a month? How many of the 2,638 Direct Market retailers are partaking in this independent comics surge? How many are trying to keep up with the surge by getting one to three copies of various titles, which could have profit/loss consequences if the books don’t sell out? With DC and Marvel’s average line sales decreasing are the stores that don’t order many independent books keeping their revenues stable?

There is definitely a market shift towards more independent titles, the majority of which sell less than 10,000 copies an issue. It isn’t clear yet what this will do to the overall market.

The Direct Market is not the only outlet for monthly comics though. There’s still a newsstand market, which ICV2 estimated at $25 million for 2013.38 Marvel pulled out of the newsstand channels entirely in 2012.39 DC and Archie remain the primary newsstand publishers. If you go to bookstore chain stores like Barnes & Noble or Books-A-Million, you will find some Dark Horse media license titles (although it isn’t clear how much presence Dark Horse will continue to have once their Star Wars license has moved to Marvel) and Titan Comics with Doctor Who comics

While this isn’t an outlet for most independent comics, DC, Marvel and Archie all have subscription by mail for at least some of their titles. Marvel’s average number of subscriptions per month started at 140,663 for the first half of 2009 and then dropped almost every half year until somewhat evening out with 78,644 subscriptions per month for the second half of 2013. DC’s subscriptions more closely followed the ups and downs of the company’s overall circulation, starting with 37,615 subscriptions per month in the first half of 2009, peaking with 70,074 copies per month in the first half of 2012 with the New 52 reboot having launched at the end of 2011 and then dipping back to 64,860 copies per month in the second half of 2012. (BPA Audits)

Over the years 2009-2014, audit documents show subscriptions as between 1.4% and 2.2% of total circulation for DC and between 2.2% and 3.9% for Marvel. It’s not a very large percentage of the business and tends to be skewed toward titles aimed at younger readers and characters with more mainstream recognition like Spider-Man.

The other type of comic popular in the print world is the graphic novel. Sometimes it’s called a graphic album. Often it’s just referred to as a trade paperback or hard cover. These are comics in a book format instead of a magazine. Sometimes they’re original material, but more often they’re reprints of monthly comics or comic strips.

There are arguments over what was the first graphic novel, but there have been comic strip reprints since at least the 1920s. For our purposes, the modern graphic novel started in early 1980s. First, The Donning Company’s Starblaze imprint started doing color reprints of Elfquest in book form in 1981. In 1982, Marvel started publishing its “Marvel Graphic Novel” line of original work in a format closer to that associated with European graphic albums. It was the mid-to-late 80s when Warner Publishing entered the market with Frank Miller’s Ronin and Batman: The Dark Knight Returns, as well as Watchmen. Another influential graphic novel in this mid-80s period was Art Spiegelman’s Maus. The early wave of graphic novels, while not totally ignoring the Direct Market, were more forays into the world of bookstores. They were filed in the science fiction section or the humor section and some of those previously mentioned did quite well in that world.

Graphic novels did exist in the 1990s, but they weren’t a particularly common thing until 2001 or 2002, when publishers started to realize there was a book market for current storylines and not just “best of” collections or particularly notable storylines.

When we look at the modern graphic novels, there are some factors that need to be taken into consideration:

• The “alternative” or “art house” style of comic has switched to graphic novels for the most part and the Direct Market is not necessarily the primary market, as it was in the days of magazine-format serialization. Gary Groth, publisher of Fantagraphics, recently stated that the Direct Market only accounts for 35-40% of his sales and that “Amazon is either the first or second largest seller of our books.”40
• The bookstore distributor Baker & Taylor is increasing its role in distributing graphic novels to Direct Market stores. This means some of the Direct Market graphic novels sales are invisible. They won’t be on the Diamond sales chart, and if you look for them on the Bookscan charts, comic stores don’t typically report sales to Bookscan. This also allows these graphic novels to be returnable, something only allowed by Diamond in special circumstances. This is typically used for books that Diamond doesn’t keep a deep stock of: alternative/”art house” comics, mainstream young adult graphic novels published by traditional book publishers and children’s comics. (Also manga, which this book doesn’t specifically address, but many Direct Market stores don’t feel sufficiently knowledgeable about manga to order much of it on a non-returnable basis.)
• A number of graphic novels that fall into young adult or children’s categories, including some Direct Market-centric licensed comics that will sell very large amounts in school book clubs. This is another sales channel invisible to sales estimates.
• Whereas monthly comics are primarily sold in the month they are published, with large reorders mildly unusual, graphic novels have a much longer ordering life. It has become common for Direct Market retailers to order what they anticipate will sell through in a month or two and then reorder as needed if/when a graphic novel sells out. A less popular title may see the bulk of its sales in the month it’s published. A more popular title will sell for months or years, but may not always appear on the top 300 sales chart used for Direct Market estimates. Extremely popular titles like the The Walking Dead will show up every month and for those books, the Direct Market estimates are more accurate, but moderate and mildly popular titles can theoretically get 300 reorders or so each month, sell 3600 copies annually and be invisible to the top 300 sales chart.
  Graphic novels overtook monthly comic books for totals dollars in 2005.41 Total sales of graphic novels was $390M in 2011, $400M in 2012 and $415M in 2013. Bookstore sales (including online bookstores like Amazon) tend to exceed Direct Market sales of graphic novels. In 2013, the split was $245M in bookstores and $170 in comic stores.42

While the Direct Market has traditionally been focused on the monthly comic books, graphic novels are a growing concern. They initially peaked in 2007 when Watchmen become a mainstream topic with the movie adaption, but as the market recovered in 2011, graphic novels charged ahead to new highs.

The following chart shows the growth in the top graphic novels sold through Diamond. Please note that in late 2008, the sales chart from graphic novels was expanded from 100 entries to 300 entries.43

There’s one final market for comics and it’s a special sub-set of the graphic novel market: libraries. Comics in libraries has been a real growth area in the past decade both in the Young Adult and Adult sections. Strangely, no one in the library world keeps track of how much money this represents. Josh Elder, founder of Reading with Pictures, estimates the market for public, scholastic and academic libraries at $60M annually and growing.

ICV2 and The Comics Chronicles estimated the 2013 comics market at $870M:

• Direct Market monthly comic books: $340M
• Direct Market graphic novels: $170M
• Bookstore graphic novels: $245M
• Newsstand monthly comic books: $25M
• Digital sales: $90M44
  To this, we can now add $60M for library sales and estimate $4M for subscriptions, bringing the total estimated market for comics in 2013 up to $934M.

The question that has haunted comics since the decline of the mid-to-late-90s is “how stable is the market?” The answer to that is “not as stable as you’d expect.” The comics market does not have a lot of redundant systems. Risk abounds.

Distribution Risk

Much of the comic book market flows through a single point of failure: Diamond Comics Distributors. We’ve discussed how Diamond maintains a near-monopoly on the Direct Market. While DC, Archie and select titles from Dark Horse and Titan Comics have at least some form of newsstand/bookstore distribution, Marvel does not, and neither do most of the rest of the independent publishers. Were Diamond to suffer a work stoppage or disaster at its main facility or go out of business, the Direct Market would grind to a halt. Larger publishers like DC and Marvel could likely arrange for distribution via drop shipping from printers using UPS or Fed Ex, but it remains unknown how far down the publishing food chain that sort of distribution would maintain its viability. The other distributor for the Direct Market, Haven Distributors, went out of business in 2011, leaving Diamond very much the only game in town for comics in periodical format. And that isn’t just the case for monthly comic books, either. Many independent publishers use Diamond as their distributor for graphic novels in the bookstore channels.

Retail Risk

The Direct Market/comic store side of the business is primarily run by small-business owners. Many, if not most, do not have deep pockets to withstand extended market downturns or large errors ordering non-returnable goods. This has been proven in the past, though the 90s may have weeded out many of the less business savvy retailers. The Direct Market has a disproportionate amount of its commerce tied up in two publishers, DC and Marvel, who are currently using every trick and stunt in their arsenal (excessive variant covers, crossover events, incentive discounts, shipping two issues/month whenever possible) just to try and keep their sales levels even. The Direct Market’s fortunes are tightly tied to these two companies and to the superhero content genre. Interestingly, the rise of superhero films and television doesn’t seem to have created the boom in superhero comics sales you might expect. With the possibility of oversaturation in the film and television markets, there’s an increased risk that superhero material might fall out of fashion, as westerns did in the 80s and 90s. While superheroes have never particularly been in-fashion before, it’s another risk to the predominant retail format. On the bookstore side of the business, things have been looking worrisome for a few years. When Borders went out of business, comics took a hit. Borders was a major distribution channel for manga. It was one of the few remaining newsstands for monthly comics. The bookstore market is down to two major chains: Barnes & Noble and Books-A-Million, with Barnes & Noble’s future being a source of constant speculation. Both of them stock monthly comics and graphic novels. Independent bookstores have stepped up their profile a bit in the post-Borders bookselling world, but the extent to which they carry graphic novels varies greatly from store to store and monthly comics are not common. While the mainstream publishers with graphic novel lines are equipped to court the independent bookseller, it’s been less of a focus for traditional comics publishers and returns are a major financial risk for small publishers. The most stable retailer has been Amazon. Amazon has the widest reach, but also the most contentious relationship with publishers. Most publishers fear Amazon’s ability and inclination to try and dictate discounts and pricing, as evidenced by their 2014 negotiations with book publisher Hachette. Amazon is the most universal source for graphic novels that have bookstore distribution and is not limited by shelfspace, putting it in an interesting position.

Walmart is the retail wildcard. Marvel has made repeated attempts to crack this market that has 4,300 U.S. locations and another 6,100 international locations, many of which are in areas not served by a Direct Market retailer or even a bookstore. The most recent effort has been with extremely low priced trade paperbacks. This could be a huge market if Marvel can crack the code, although Walmart is even more notorious than Amazon for extracting deep discounts and leaving vendors with razor-thin margins.45

Newsstand Risks

There just aren’t many newsstands around anymore and comics have a much lower price point than other magazines on the shelf. As a result, you don’t seem them in grocery stores and drugs stores where they used to be very common. Marvel has withdrawn from this market entirely. Some attempts to repackage comics in more newsstand-friendly way – as a normal magazine size, as opposed to the smaller comic book dimensions; larger page count; higher cover price – have been made over the years, but nothing has been a sustained success. Part of this is because formats that would fit in at the newsstand are at odds with the Direct Market channels.; the wrong size to fit their shelves, a much higher price point than the other comic, content that’s frequently reprinted. It’s a bit of a catch-22 and the newsstands are an endangered species even without comics entering the picture.

Publisher Risks

Overreliance on the Direct Market retail system is a risk for all publishers. The lack of fallback options on distribution is dangerous. There are relatively few chains in comics retail, which means more retail buyers. If anything happens to further shrink the number of Direct Market retail stores, there could be serious consequences to publishers. Ironically, depending on which stores were to disappear, the independent publishers might be better equipped to weather a contraction than the larger ones. If there are 300 stores that sell the bulk of small press work and 1,000 other stores that almost entirely limit themselves to DC/Marvel (and yes, there are more stores like this than people realize) cease operations, DC and Marvel would feel the pinch, but the small press players could have minimal losses, if any. That’s the nature of the Direct Market and the power of publishing brands in comics.

Bookstores are also something that represents a risk for publishers. How much of a risk varies from publisher to publisher. DC sells more graphic novels in the bookstore world than Marvel does, for example. Not all independent publishers have a book store presence, but Image does very well with Walking Dead in that channel. The mainstream publishing imprints like First Second have bookstores as one of the first priorities and would suffer the most if there were another contraction. The future of the bookstore just isn’t clear. On the other side of the bookstore equation is Amazon. While the model of stability, it is not clear what Amazon’s intentions toward print comics are after its purchase of Comixology and whether any comics publishers will find their print editions held hostage during digital negotiations.

Issues Facing the Print Industry

The previous implosions in the Direct Market were attributed to overproduction, speculators and a dip in quality. There were 530 monthly comics distributed through Diamond in July 2014. There were also 312 new graphic novels released. The question of how many retailers have the shelf space required to display that many comics and books seems valid. There doesn’t appear to be a great deal of speculation buying going on, however. Possibly, there’s a small amount of speculation present with the rarer variant covers that are popular with the publishers, but that seems to be mostly collectors. The only speculator activity occurs around the copious superhero death issues and doesn’t seem to drive retail orders past those specific issues. Finally, in terms of quality, the art is as high a quality as it’s ever been. In the mid-’90s, there were several series, particularly at Marvel, where the art was not up to mainstream standards. On the writing side, there are opinions on both sides. DC’s New 52 and Marvel’s Marvel NOW! have both alienated a number of long time readers, though both cases might just as easily be attributable to editorial direction as to the actual writing. On the independent side there have been no complaints and no hot back issues of dubious artistic quality.

This doesn’t feel like an implosion so much as growth in some directions that haven’t been seen recently:

2. An explosion in licensed books from independent publishers. Sure, Dark Horse had early hits with the Alien and Predator film licenses, but licensed books weren’t that big outside of Star Wars, Transformers and GI Joe. The current market also includes ongoing adaptions of My Little Pony, Adventure Time, Big Trouble in Little China, Army of Darkness, X-Files, Twilight Zone, Godzilla, Flash Gordon and Robocop. Most of these adaptions would be considered poor seller at DC or Marvel, but work out quite well for independent publishers. It’s almost like long forgotten publishers Dell/Gold Key and Charlton have been reincarnated.
3. The smaller publishers have found a way to make selling a lot of low-circulation books work for them. There have always been low-circulation comics, but never this many of them.
4. Either there’s a new influx of readers who are looking for something different than what the traditional publishers are giving them or when 10K readers stop buying X-Men or Superman, ten independent titles pick up 1K new readers. Probably a combination of the two.
5. More women are buying comics, particularly in the Direct Market, than in the past.
6. Children’s comics are the most popular they’ve been in decades, though this is more of a bookstore phenomenon.
   Change is in the air for monthly comics, but it isn’t clear how that’s going to affect long-term sales patterns.

With graphic novel sales still on the rise, but without any of the relaunched #1 issues and variant cover tricks used by the monthly comics industry to bolster sales numbers, the question arises of whether or not more emphasis should be put on the graphic novel? After all, while newsstands are in decline, there are still plenty of places outside the Direct Market to sell a graphic novel.

Most monthly comics are collected in book form. In the case of DC and Marvel, their propensity for having titles crossover with Event mini-series and other titles sometimes makes for awkward book collections, but the comics are still collected. Many independent creators point to the graphic novel collections as where they make real profit if the book collections become popular

Original graphic novels are a different category though. The traditional book publishers go this route when they or their imprints do comics. DC has done this with some success on properties like Superman, Batman, Sandman and Fables. Marvel has been experimenting with it. It’s somewhat less popular among Direct Market independent publishers. The most common argument against it is that you can sell the same material twice if it’s serialized and then collected. It also is a larger financial burden during production. A graphic novel, depending on the page count, can easily take from six to more than twelve months to produce. That’s a sunk cost that can’t be recouped until the book comes out. If it’s an independent publication where the creators are working for royalties on the backend, it could mean waiting a year or more to get paid. It can be quite a gamble for the creators, especially the artists.

There is definitely an audience that prefers reading comics in book form to serialized periodical. There are also an increasing number of creators who write their comics with the book edition in mind more than the serial format, hoping for long term sales. The graphic novel format may also be an easier way to introduce new readers to the comics format.

With so many low-circulation comics out, graphic novels collecting them could be an important way to make the finances work for the publishers and creators. What direction graphic novels go in is something to keep an eye on moving forward.

Looking Forward

The next big trend that hasn’t quite hit comics in a big way yet is Print On Demand (POD). POD has been used by the prose industry for over a decade, but color technology was lagging behind until late 2012. The basic idea behind POD is that books can be saved as a datafile and sent over to a POD printer, sort of a large photocopy machine that prints books. With this technology, instead of having to print a run of 10,000 books on a printing press and store them, when an order comes in a book can be printed on the spot and sent to whoever ordered it.

The major players in POD are LightningSource/Ingram Content, a subsidiary of the book wholesaler Ingram and Amazon’s CreateSpace unit. Previously, color POD was prohibitively expensive. Lightning Source introduced new pricing in August 201246 that can make it viable – barely. The current pricing works better if a publisher or creator is selling directly to the public and not giving up discounts, and the paper may be thinner than is optimal, but change has started. Prices will go down and quality of paper will go up as the technology and usage improves. Amazon is very likely to integrate POD printing with Comixology’s submit program, too.

What can POD do for comics? Simply put, nothing needs to go out of print. If there’s a large demand for a book, it makes much better fiscal sense to do an offset print run and put it out through normal channels, but if there’s only a 100 copy per year demand, just print them as they’re ordered. Lightning Source puts its books directly into Ingram’s distribution system, which means any bookstore can order them and they show up in online bookstores. CreateSpace puts its books directly into Amazon and offers a program (usually farmed out to Lightning Source) for distribution to the normal bookstore system. The pricing may or may not allow for the usual discounts Diamond requires for Direct Market distribution, but this does open up an alternate distribution system to the Direct Market that smaller publishers and creators acting independent of publishers would not otherwise have access to. Really, it’s similar in principle to how digital comics are always available.

The other possible trend comes from the current level of overproduction. There seem to be more comics and graphic novels being produced than one store could possibly display. This potentially creates opportunities. It’s possible we start to see some more clearly delineated niches of stores, similar to themed bookstores. Comic stores that specialize in independent comics versus comic stores that specialize in superheroes. More comic stores that emphasize the graphic novel over the monthly periodical comic. The selection of titles may start to vary from comic store to comic store more than it did in the past.

This also opens up more opportunities for a comprehensive online store, which doesn’t have to worry about running out of shelf space. On the graphic novel side of things, Amazon is already there, but there isn’t a comics e-commerce site that’s universally acknowledged as the “Amazon of comics” for the monthly print market. As the amount of product released each month grows, the opportunity for such a site grows, too. And who knows, perhaps Amazon will decide they want to deal in monthly periodical comics once Comixology is integrated. Amazon’s Jet City imprint does publish print comics in the monthly format through Cryptozoic, so the groundwork is potentially being laid.

Chapter 3: The Economics of Print Comic Books

The Direct Market is simple, elegant, and economically efficient. Barring an extremely late shipping date, there are no returns of product. Diamond Comic Distributors takes the orders. The publisher prints the book and ships it to Diamond. Diamond pays net 30 (within 30 days of receipt of product). The publisher will know whether or not the books will break even before the order to print is made. The only variable is whether or not the publisher wishes to print extra copies for potential re-orders.

Monthly Periodical Comics

There are two perspectives from which to evaluate the revenues from a print comic: publisher and cartoonist. Publisher is rather straightforward: revenue minus materials. Cartoonists can evaluate it three different ways. Should the cartoonist be a self-publisher, the formula is still appropriate. Scott McCloud, a champion of creator’s rights when the self-publishing scene was in its heyday in the 1980s, objects to this as an effective measure, citing the small number of self-published comics currently still in existence. He feels a more appropriate measure would be a 10% royalty off retail.47 As 10% might not include the total creative budget (writer, artist, letterer and occasionally colorist), 20% royalty will also be assessed here for comparative purposes.

Finally, as more appropriate when dealing with DC and Marvel, there is the simple measure of creative budget. Bill Jemas listed Marvel’s standard creative budget for a comic book at $14,000 in 2003, although the split between creators will vary (Private Interview). In 2010, Glenn Haumann of ComixMix, Heidi MacDonald of The Beat and creators Kurt Busiek, Stuart Moore and Jimmy Palmiotti agreed48 on a standard comic book budget of:

Writer: $100/page Penciller: $150/page Inker: $130/page Colorist: $90/page Letterer: $30/page

For a total of $500/page. That would come to $10,000 for a 20 page comic like DC currently publishes or $11,000 for the 22-page format normally used by Marvel, plus cover art costs. Higher profile writers and artists would command higher rates and it is possible that Jemas was quoting a budget that allowed for at least one higher profile writer or artist, more pages or that rates have gone down a bit.

A printing quote was obtained under condition of anonymity from a printer used to producing comic books on 8/29/11.49 These numbers would be used as a ballpark estimate and a point of reference. Prices fluctuate over time and if you’re printing several comics at once, that will also lower your price, vis-à-vis the bulk purchase of paper and perhaps a bit on labor. The set-up time on the press is a consideration and your per-unit price will always be lower as the size of the print run increases.

These quotes are for a 32-page comic with full color covers. One with color interior, the other with a black and white interior.

Color

Quantity

1,000

3,000

5,000

10,000

Price

$ 2,662

$ 2,895

$ 3,139

$ 4,945

Price/copy

$2.662

$0.965

$0.6278

$0.4945

Black and White

Quantity

1,000

3,000

5,000

10,000

Price

$ 1,222

$ 1,455

$ 1,699

$ 2,675

Price/copy

$1.222

$0.485

$0.3398

$0.2675

In addition to the cost of printing, there is also a shipping charge to move the comic books to the distributor’s warehouse. 2000 comic books would weigh very close to 250 pounds and that UPS was often used to ship the books. Quotes were run on the UPS web site to ship 1,000, 5,000 and 10,000 books. Costs break down to slightly less than 11 cents per book. Being conservative and adding 11 cents to the cost of a comic and rounding to the nearest cent changes the cost tables to:

Color

Quantity

1,000

3,000

5,000

10,000

Price/copy

$2.77

$1.08

$0.74

$0.60

Black and White

Quantity

1,000

3,000

5,000

10,000

Price/copy

$1.33

$0.60

$0.45

$0.39

Diamond requires a 60% discount. We’ll add 1% for misc. expenses that always crop up and estimate the publisher’s take home at 39%. The revenue received from Diamond is as follows for the following common price points:

Cover Price

$ Received

$2.99

$1.16

$3.50

$1.365

$3.99

$1.5561

With current print costs, you’re not likely to be breaking even with a print run of 1,000. Perhaps with 2,000 if you’re making a black and white comic, but not likely if it’s in color. Or, to quote a favorite joke of Scott McCloud, “What’s the difference between a comic book artist and a pizza? A pizza can feed a family of four.”

Color

Quantity

1,000

3,000

5,000

10,000

Price/copy

$2.77

$1.08

$0.74

$0.60

Total Revenue @ $2.95 ($1.16 net)

($1610)

$240

$2,100

$5,600

Total Revenue @ $3.50 ($1.365 net)

($1361)

$855

$3,125

$7,650

Total Revenue @ $3.99 ($1.556 net)

($1214)

$1,428

$4,080

$9,560

Black and White

Quantity

1,000

3,000

5,000

10,000

Price/copy

$1.33

$0.60

$0.45

$0.39

Total Revenue @ $2.99 ($1.16 net)

($170)

$1,680

$3,550

$7700

Total Revenue @ $3.50 ($1.365 net)

$35

$2,295

$4,575

$9750

Total Revenue @ $3.99 ($1.556 net)

$266

$2,868

$5,530

$11,660

Going back and looking at historical Diamond sales charts (reminder, you should add 10-15% to the estimates), this is how many independent, non-licensed comics chart in the following sales categories. The numbers fall in the following sales brackets from July of each year. Please note the estimated sales in the #300 slot in the final row of the chart. While there is some limited sales information about titles that fall lower than #300 in the more recent years, the Diamond sales chart traditionally cuts off at #300, so there may well be a higher number of books at levels below the cutoffs than are shown.

0-3K

3K-5K

5K-10K

10K-20K

20K-30K

30K+

#300

2002

48

12

25

23

8

1

1156

2003

13

18

21

22

2

1

1825

2004

30

18

17

13

0

1

1187

2005

28

21

13

10

4

0

1126

2006

17

25

17

7

2

1

1681

2007

13

14

25

14

3

0

2085

2008

?

4

34

12

3

2

4255

2009

?

8

21

16

5

0

4059

2010

?

22

17

7

4

0

3675

2011

?

17

36

11

1

1

3531

2012

11

16

41

14

1

4

4187

2013

?

16

46

22

4

4

5317

2014

3

13

47

21

8

4

6620

50

DC and Marvel offer a flat rate and then commission above a certain sales level. As stated earlier, Marvel’s standard creative budget was previously established at $14,000 for an issue with name talent involved. A more generic DC/Marvel creative budget would be $10,000-$11,000. There are royalty payments available, usually around 10% split among the creators, if an issue sells well enough – but fewer books have been selling well enough for royalties in recent months.

If you look at $10,000 as a professional budget for a comic book, you’re going to need to be selling 10K+ copies at a $3.99 cover price to get it. The number of books selling in the 5K – 10K range is at the highest level in over a decade and has been up for three years straight. This is a sales level where the income might be part-time or a more modest full-time, but the income will generally be small than DC’s or Marvel’s base rate.

Image Comics is a wild card in this area. Image charges a flat fee and the creators of the comic book take all revenues past cost and that fee. New Image creator and long-time journalist Mike San Giacomo revealed that flat fee to be $2500 in his weekly column documenting his attempts to publish a comic book.51

The number of titles selling over 10K is also at the highest point in over a decade. It should also be pointed out that almost all of the truly creator-owned independent comics selling over 10K have at least one creator who has done regular work for DC and Marvel. Image was founded by artists leaving Marvel and much of the current upswing comes from Marvel writers like Ed Brubaker, Matt Fraction, Rick Remender and Greg Rucka moving some or all of their writing output to Image. Few new creators are selling in the 10K+ range, and while the independents are on the rise, it is not a normal occurrence in mid-2014.

Prior to the advent of the digital channel, a well-known comics creator, speaking under terms of anonymity said “15K was roughly a ‘break-even’ number with Image, whereas you really started making money at Image when you cracked the 20K circulation barrier.”52

More recently, Brandon Montclare, the co-writer of Image’s Rocket Girl said, “Every creative team has different needs. At 12,000 copies we can pay ourselves 100% of our Big Two rate with the profits of single issue sales plus an extremely conservative estimate of what we’ll make on digital, collected editions, merchandise, convention sales &c. Slightly less sales means we need slightly better revenue coming from everything that’s not single issues.”53

Now, Montclare’s co-writer and artist is Amy Reader, who was coming off an exclusive contract with DC. She likely had a higher page rate than the base level. Likewise, the well-known creator likely had a higher rate. And with Image, roughly 2-3000 copies (depending on the print run) will be earmarked to cover the $2500 listing fee.

It cannot be stressed strongly enough how much emphasis is put on the publisher in monthly print comics. Who’s cracking that 20K barrier in creator-owned comics? In July 2014, it’s all at Image and it’s highlighted by writers who have spent their time at Marvel and DC. Robert Kirkman (who did spend some time at Marvel writing Ultimate X-Men and Ant-Man, among other titles), Brian K. Vaughan, Warren Ellis. Rick Remender, Kieron Gillen, Jonathan Hickman, Jason Aaron and Justin Jordan.

Interestingly, if you look at Image from a mainstream publishing perspective, it’s more of a co-op than a traditional publisher and their policy of not providing editorial services and charging a publishing fee is very close to the definition of a vanity press. But in comics publishing this is the third strongest brand, even if it’s a loose collection of creators doing their own projects. Image + a DC/Marvel creator seems to mean more sales than a smaller publisher + a DC/Marvel creator. That’s the power of branding in comics.

Publisher branding was always important, but the consolidation of distribution to Diamond made it more important. Since buying out rival distributor Capital City in 1996 and becoming a near monopoly, Diamond has trained retailers to look in the Premiere section of the catalog first. The customers have been, in turn, trained to follow these patterns. Many fans pre-order out of the Diamond catalog, which is sold to consumers. Diamond has also instituted minimum sales levels which further weed out smaller publishers and smaller books.

Self-publishing was once a mainstay of independent comics. How many self-publishers were in the top 300 for July 2014? One. At #234, Tuki Save The Humans from Jeff Smith’s Cartoon Books imprint is estimated at 9,425. At #330, Tarot, Witch of the Black Rose #87 from Jim Balent’s Broadsword Comics is estimated at 5,900 copies.

There are three self-publishers that still chart on a regular basis: Smith, Balent and Terry Moore with his Abstract Studios imprint. Smith and Moore were self-publishing before Diamond took over the bulk of distribution. Balent started in 1999 before the new ordering habits were completely in place. It might be fair to say these three men have been grandfathered into the distribution system.

It is extremely rare for someone new to successfully self-publish through Diamond in the current era.

A publisher setting print runs for multiple books at once will naturally get better pricing than the above estimates for single titles. Estimates of the cost to print an issue by a large publisher range from $0.25 to as low as $0.13 for a particularly high print run. What can a larger publisher make off a single issue?

Price/copy

$0.25

$0.20

$0.13

Total Revenue @ $2.99 ($1.16 net)

$0.91

$0.96

$1.03

Total Revenue @ $3.50 ($1.365 net)

$1.12

$1.17

$1.24

Total Revenue @ $3.99 ($1.556 net)

$1.31

$1.36

$1.42

Diamond “Premiere” partners enjoy a brokerage relationship, rather than a straight discount, so the revenues might be a little higher… but in general a larger publisher will probably be in the $0.90 to $1.42 profit per issue range, depending on the exact print run and cover price.

A smaller publisher will still get some additional savings for bundling their printing. Perhaps $0.30 - $0.40 per issue depending on the individual print run and the total number of books printed. What does a creator make with a small publisher that pays page rates? Artist Scott Shaw was vocal about being offered $100 for a page of completed art to work on Adventure Time, a licensed comic from IDW.54 $100 for a full page is probably not a horrible rate from a small publisher. Writing licensed comics for small publishers can be as little as $20/page and there is a belief among artists that it takes $50/page for a small publisher to be serious. Still if you look at the costs involved, there’s not a lot of revenue to be had, especially if it’s a comic that only sells 5K copies. On top of editorial and office costs for the publisher, there’s also the licensing fee.

Graphic Novels

Graphic novels are a popular format and also a complicated topic. Monthly comics are simple. They’re ordered, shipped and there’s a new one next month. There usually isn’t a huge amount of reorder activity and multiple printings. Some of that, but not overwhelmingly across the board. Graphic novels, on the other hand, are generally ordered with an eye on the retailer selling out and reordering. On the bookstore side, there is the possibility of returns. Both require printing a large inventory and selling it over time.

Starting out with the Direct Market, there isn’t a standard sales range like you see with the monthly comics. In fact, the creator-owned graphic novels collecting the monthly issues are frequently at the top of the charts. On the other, you also don’t see the self-published creators work in the top 300 graphic novels very often.

In the direct market, the bulk of new graphic novels will fall in between 1,000 - 3,000 copies ordered. There’s not necessarily direct correlation between monthly sales and graphic novel sales, although it’s more likely the first volume will be ordered if the monthly sells well. Some successful comics may see readership shift from the monthly to the collected editions while others maintain completely different audiences from the monthly.

The tricky thing with graphic novels is that you’re printing enough to satisfy a demand of 6-12 months. If the graphic novel is successful in the Direct Market, retailers will reorder it, perhaps 1 or 2 copies at a time. It’s completely possible for a graphic novel to get 250-300 reorders each month, stay below the cut-off for Diamond’s top 300 list and sell 3,000 copies in reorders without anyone being any the wiser.

This means the publisher, or the creator in the case of self-publishing, may have to wait a few months to see the expected amount of profit, with much of the initial orders going towards the printing bill and the actual profits trickling in with the reorders. Graphic novels require deeper pockets than monthly comics.

Quotes were obtained for a 160 page full color trade paperback graphic novel (6 issues plus introduction and some bonus material), which came to roughly $6/copy for a 1K print run and $3.50/copy for a 3K print run.

Quantity

1,000

3,000

Price/copy

$6.00

$3.50

Total Revenue @ $12.95 ($5.05 net)

($950)

$4,650

Total Revenue @ $16.99 ($6.63 net)

$630

$9,390

Total Revenue @ $19.99 ($7.80 net)

$1,800

$12,900

A black and white trade paperback of the same page count would drop the printing costs by at least 20% and keep things profitable at the $12.95 price point on a 1K print run.

Many publishers print their graphic novels overseas, particularly in China. This takes roughly 7-8 weeks to print after the proof is approved and ship back to the United States without incurring substantial rush shipping charges. This is usually too tight a time frame for monthly comics – essentially, the comic needs to be approved and the order given as soon as the Diamond numbers come in. No last minute changes would be possible and the work needs to be done far in advance. There’s also the danger of delays in a container clearing customs that could cause problems on a monthly delivery schedule. With graphic novels, these risks are usually lessened, especially when it’s just compiling previously published monthly comics into book form. The only problem is if there’s a quick sellout at the publisher level, it will take 2 months to re-stock.

Here’s what the costs/revenue chart looks like with the same 160 page color trade paperback printed in China, using quotes from the Print Ninja website and using Diamond’s Olive Branch warehouse as the shipping destination.

Quantity

1,000

3,000

Price/copy

$5.44

$2.98

Total Revenue @ $12.95 ($5.05 net)

(-$390)

$6,210

Total Revenue @ $16.99 ($6.63 net)

$1,190

$10,950

Total Revenue @ $19.99 ($7.80 net)

$2,360

$14,460

The graphic novels are where the independent comics can make up some ground with the pay at DC and Marvel. If the collected editions can sell 3K copies twice a year and pull in an extra $10K-$20K, that evens out the monthlies rates. Most independent publishers offer higher royalty percentages than DC and Marvel, and in the case of Image Comics, the creators keep 80% of net revenue on graphic novels. If a series sells well as a book, the creators can do very well. It just may take a little longer for the pay cycle to be established.

The other channel for graphic novels is the bookstore channel. This is a channel that relatively few self-publishers traffic in. Comics publishers generally aren’t large enough to establish direct accounts with book wholesalers like Ingram and Baker & Taylor. This means that publishers need to establish a relationship with a book distributor who will in turn channel the books into the wholesaler. The way the math works, bookstores will get a 40% discount on returnable books and the wholesaler will take 15% off the top, so the base discount at the wholesaler level is 55%. The distributor will need a percentage on top of that, so the total discount is likely to be in the 60-68% range, depending on the distributor. Many small comics publishers use Diamond’s book distributor practice.

When selling into the bookstore market, the threat of returns looms large. Not every book is going to sell through. The trick is to have a high print run to get the cost per copy down and then hope the individual bookstores haven’t over-ordered and return too many books unsold. Returns are extremely dangerous for publishers with limited cash flow and have historically been a problem. Enthusiastic orders and poor sell-through of their Classic Illustrated line was a major factor in the demise of First Comics.

The bookstore channel is also slow to pay. It can easily be 6-12 months before returns are made, sales are reconciled and payments make their way back to the publisher.

Bookstore sales are a bit more than half the graphic novel market, but not for all graphic novels. Young adult graphic novels do well and Raina Telgemeier’s Drama sold 81,843 copies in 2013, according to Bookscan. Bookscan is confirmed sales from outlets that report to it and is generally thought to account for roughly 75% of bookstore sales. Which is to say, no Direct Market sales, no library sales, no book club sales and inconsistent reporting on independent bookstores.55

Also doing well are media tie-ins like The Walking Dead, that rare instance where the original comic is promoted by a hit TV show. Bookscan confirms 95,593 copies of the first Walking Dead Compendium at $59.99 in 2013. Vast amounts of manga are sold through these channels, but DC and Marvel generally do better in the Direct Market. Essentially, a graphic novel either needs to be promoted specifically through bookstore channels or the title needs to have a high enough profile with the general public to get stocked. This also tracks Amazon sales, which is something of a back-up store where graphic novels are concerned.

While bookstore distribution may be a problem for self-publishers, it is possible to list graphic novels on Amazon using their Amazon Advantage program. The self-publisher pays a $29.95 annual fee and gives Amazon a 55% discount, and ships graphic novels to Amazon to sell on consignment. The graphic novels are listed on the site and if one sells, Amazon pays. If they need more copies, they’ll ask for them. It’s remarkably similar to normal bookstore channel returns. It’s also a lower discount than Diamond.

Marketing Print Comics

Marketing comics is a little different than marketing other types of publications because the sell-in and sell-through cycles run together. The real customer for publishers in the Direct Market is the comic store retailer. He orders 3 months in advance and must be convinced to order a given comic. At the same time, there’s a large number of comics consumers who also do advance ordering. “Pull boxes” as the in-store subscriptions are sometimes called, likely account for 20-30% of Direct Market sales and will guide how some retailers order for the shelf. This means a publisher has to market to a cross-section of consumers and retailers at the same time and then circle back 3 months later to remind the wider consumer audience that the comics are on sale. Not everyone remembers to make the second pass when the comics are on sale.

Print comics are supported by a network of news websites, including The Beat, Bleeding Cool, Comic Book Resources, Comics Alliance and Multiversity Comics. Announcements, news items and reviews run regularly on such sites. Comics news will also appear on science fiction and pop culture-related websites with some regularity, depending on the fit between a given comic and the site.

Generally speaking, independent comics news and reviews occurs with less frequency on new sites, partially owing to the traffic patterns of the readership. DC and Marvel have more readers so stories on those topics tend to get more traffic. The cause and effect of the sales environment extends to media.

Mainstream coverage is generally reserved for large DC/Marvel events, frequently the now-regular killing of a main character, or some sort of celebrity creator involvement. Monthly comics reviews are rare to non-existent. Graphic novel reviews do happen, but less frequently for Direct Market-oriented material, since the mainstream media traditionally likes to get review copies 3 months in advance and that’s not the same schedule as the Direct Market operates on.

Social media promotion is also a trend and likely has a hand in some of the recent surge in the small press monthly comics.

Looking Forward

The Direct Market is stacked against the small press publisher and is a serious obstacle to the self-publisher. It wasn’t designed that way, but that’s definitely how the market has headed under Diamond’s watch.

The two alternatives are self-distribution and the emerging POD channel.

Self-distribution is a combination of selling directly to both retailers and the consumers. For retailers, a self-publisher needs to make a list of retailers friendly to small press – essentially the 300-500 stores that actively support that market – and contact them directly to sell them the book. For consumers, it’s a combination of selling at conventions and offering mail order.

This is not an easy road, but it’s how some creators start out.

While low print runs on color graphic novels don’t work out well from a traditional printing perspective, color Print On Demand graphic novels became a financially viable option from Lightning Source, a division of the book wholesaler Ingram Content Group.56

While Lightning Source doesn’t offer the standard graphic novel size (6.6” x 10.2”), it offers one size slightly smaller (6”x9”) and one slightly larger (7”x10”). Lightning Source inserts the book into the wholesale channel directly. While the “Premium Color” higher-end format doesn’t yield a good margin, setting a short discount of 20% and choosing the “Standard Color” option will yield acceptable margins, even if the book will only be stocked by online bookstores like Amazon and BN.com.

POD is expanding rapidly and the margins and print quality will improve. Amazon’s CreateSpace will likely jump into the comics area with force as they finish integrating Comixology.

The POD option can also be used to obtain books for direct-to-consumer sales, but likely won’t yield margins high enough for a retail presence to be worthwhile. This is essentially a work-around for the Direct Market.

Chapter 4: The Economics of Newspaper Comic Strips

The business model of newspaper comic strips is a very simple one: the syndicate sells comic strips to newspapers and splits the revenue with the cartoonist(s) 50%-50%. The cost of a strip will be based on the size of the newspaper. Small ones will pay $10 per week and as the circulation of the paper goes up, the price of the strip will rise to $40 per week for medium-sized papers. Large circulation papers can be charged $50+ per week with the upper limit unclear. $10-$50/week is a good estimation range unless some very large circulation papers are involved.

The problem with the newspaper comics strip market is that it’s a largely a closed market in an industry that’s having financial problems. For several years now, many newspapers have been reducing the number of comic strips they run and some are starting to drop the comics section altogether, the latest being the New York Post.57 There’s a secondary problem for cartoonists trying to break into newspaper syndication: legacy strips. Many classic strips like Blondie, B.C. or Family Circus are no longer drawn by the original creators and have been continued by new cartoonists, in some cases relatives of the original creators. While this is considered normal in the comic book world, there’s come controversy over it in the comic strip world where many people think the legacy strips tie up slots that should go to new strips and new cartoonists. There also are a few instances like Peanuts, a strip that did not switch to a new cartoonist when creator Charles Schultz died, but still has previously published strips running since 2000. Other strips in reruns include Tarzan, Flash Gordon and Mandrake the Magician.

These market conditions have made the launch of new comic strips somewhat rare and limits the number of newspaper slots available to new strips.

According to the Daily Cartoonist, 3 new comic strips were launched by syndicates in 2009 and 7 new strips in 2010.58 Editor & Publisher, reported King’s “Take It From the Tinkersons” was the only launch in the first half of 2013, with Tinkersons cartoonist Bill Bettwy saying, “Not only is it a hard industry to get into, it’s getting harder and harder. In the 1990s, they launched three comics a year. Now it’s one every 18 months.”59 Universal Uclick’s “WuMo” in November 2013, was their first launch since 2010, though Universal UClick President John Glynn says the plan is to launch “at least one a year” in the future.60

The Alternate Weekly market has been hit particularly hard, as well with even Simpsons creator Matt Groening shuttering his Life in Hell weekly strip in 2012.

Anyone can start a webcomic. While Diamond’s requirements make it harder to get picked up than in years past, the Direct Market is structured to make it easy to publish a print comic book. It is extremely difficult to place a comic strip with a syndicate and, unless you’re dealing with Alternative Weeklies, you need to be signed with a syndicate. It isn’t impossible, but it’s highly impractical to break in. In recent years, a handful of webcartoonists have broken into newspaper syndication and then retreated, drawing into question the desirability of newspaper syndication in the current climate.

Much as the print comic book world has taken to eBooks, newspaper syndicates have taken to webcomics. Universal Uclick has emerged as a consolidator of multiple syndicates and even webcomics with GoComics. King Features Syndicate operates Comics Kingdom (and previously Daily Ink which was merged in to Comics Kingdom).“We pay royalties based on applying Google Analytics to our ad revenue and then from the revenue paid by our paid subscriber base — which is 45,000+,” explain Glynn.

GoComics also carries an increasing number of webcomics mixed in with the syndicated comics, though they don’t draw a huge amount of traffic, based on the numbers of subscribers listed on the site. A low traffic strip might make $1K-2K/year. A popular strip like Fox Trot could theoretically see six figures of revenue depending on the CPM. And for strips like Fox Trot that appear on newspaper sites, the online version of the comics section is also a revenue stream.

Chapter 5: Digital Comics and Their Flavors

Digital comics are no longer a single category. Part of this is just a function of the category maturing. Part of this is a natural outgrowth of the two major influences of comics: comic strips and comic books.

When comics first went online, the comic strip was the primary influence. In the United States, the gag strip overtook the story strip sometime in the 1950s and has done nothing but remain more dominant. Story-based comics, particularly in science fiction, horror and superhero genres moved over to the comic book. While genre is usually not the basis for economic models, it plays heavily into the evolution of digital comics.

The webcomic is the format most people associate with digital comics. Penny Arcade, PVP, Girl Genius, Freak Angels: what do they have in common? They’re all comics freely available for viewing on the web. Webcomics will occasionally have a paid section (or in the case of Schlock Mercenary, a paid iPad app), but their primary business model is to get as many viewers as they can and monetize by means of advertising and merchandising. While you see some entries here that cling to the comic book school, like Girl Genius building graphic novels one page at a time or Freak Angels dropping weekly installments in much the same manner as a British comic like 2000AD, the comic strip school is where webcomics sprung out of and you see more gag strips.

The eBook is a newer format for comics. Most people are referring to the eBook as “digital downloads” or “digital comics,” but that’s a myopic view. Comics were late to the eBook party, owing to the extra challenges of graphics for a format initially designed for text and have a tendency to mirror the foibles of digital music circa 2000: multiple digital formats (many of which are proprietary) and Digital Rights Management issues. With comics, an eBook can be the digital version of a monthly comic or a graphic novel. For economic purposes, the only differences between a monthly comic and a graphic novel are size and frequency. There are more product management and marketing differences than anything else.

Comic book publishers gravitate to the eBook format for a number of reasons. Selling an eBook, which has a standard price, makes it more straightforward to generate a royalty statement than to monetize pageviews with advertising and merchandising. You can release eBooks in a cycle mimicking the Direct Market schedule. This material is usually intended to be released in 20-22 page chunks. The business model isn’t ruled by fluctuations in the advertising market, either.

On the other hand, eBooks have limited audiences when compared to webcomics. It isn’t just a tradeoff of a payment vs. advertising. By limiting the audience, you give up the majority of your merchandising potential.

There is also a subset of eBooks, we’ll call the Library Subscription. To use the digital music analogy, this is the paid version of Pandora or Spotify. You pay a monthly subscription fee and have access to everything in the library. This started out with the Modern Tales family of sites, which were essentially subscription-based webcomics, and moved to eBooks with offering from Crossgen and Marvel.

Webcomics are much more established as a model than eBooks. It isn’t clear what reasonable expectations for eBook sales are yet, and while eBooks for prose is a market that’s come into its own, eBooks for comics is still finding its way.

One of the challenges for webcomics is the story-based comic. Story-based comics tend not to lend themselves to as wide a variety of merchandising as gag strips. This makes story strips rely more heavily on advertising and print collections. This also makes eBooks an attractive option for story-based comics, although there are some limitations we’ll discuss later.

Chapter 6: A Short History of Webcomics

The history of webcomics isn’t one of proprietary formats and business innovation like that of the eBooks/digital downloads market, so much as the story of growth and acceptance of comic in a new medium.

Webcomics started at much the same time that the direct market for print comics passed its peak and started its long slide. On September 23, 1993, Doctor Fun, the first regularly updated comic on the World Web Web was launched. This was a single panel cartoon in the tradition of “The Far Side.” While it ended in 2006, an archive still exists at: <http://www.ibiblio.org/Dave/drfun.html>.

As the web’s popularity grew, more comics gradually appeared online. 1993 to 1997 saw the initial experimentation of webcomics occurring. Notable webcomics from this early period include:

• In June 1995, Charley Parker launched the popular “Argon Zark” feature, which might be best described as an interactive comic book.61
• “Kevin and Kell,” launched in September 1995 by Bill Holbrook, who also creates two comic strips, “On the Fast Track” and “Safe Havens,” for newspapers.
• Peter Zale started work on “Helen, Sweetheart of the Internet,” in 1996. In 2000, it ceased to be a webcomic strip and became a syndicated newspaper strip.62
  While not as heralded, Marvel Comics started dabbling in webcomics in 1996 in a deal with AOL’s then-proprietary content service. Marvel’s Cybercomics, initially featuring Spider-Man, were produced in Shockwave and featured some limited animation and sound.63 In many ways, the Cybercomics are a forefather not just of Marvel’s DotComics and Comixology’s format, but also of Madefire’s Motion Books.

In 1997, as Diamond settled in as the primary point of comics distribution for the direct market and publishers became used to the segregated sections of the Diamond catalog, many currently popular strips started to appear. “Goats” first appeared on April 1, 1997.64 “Sluggy Freelance” first appeared on August 25, 1997. “User Friendly” first appeared on November 17, 1997.65 United Media also launched comiczone.com for their syndicated strips, putting them online. Comicszone would evolve into the better known comics.com in 1999.

After 1997, the floodgates were thrown open and the number of webcomics proliferated quickly, with new strips each year and growing readerships. In all likelihood, part of the timing of the blossoming of webcomics was due to the growing popularity and availability of Internet access, but it still parallels the decline of the direct market and it is, at worst, an interesting coincidence that a big wave of long running, popular strips started up as a shift in distributors tightened the clamp on independent comic books.

2000 saw the beginning of MegaTokyo, one of the first webcomics to sign with traditional print publishers for collected print editions.

2001 saw Marvel Comics launch their “dotComics” program, showing their comics, for free, on a Flash-based platform. The platform was actually developed by future Comixology co-founder, John D. Roberts.

2002 saw the launch of Modern Tales, one of the first paid digital comics and the first example of a library subscription site for comics where paid subscribers received full access to its archives, although it was firmly in the webcomics school and eventually switched to an advertising revenue model. It also saw the launch of Crossgen’s Comics on Web as the counterexample of a comic book company with a library subscription site in a pre-eBook world.66 Panaccio reports Comics on the Web had 5,000 subscribers in 2003. 67

2005 saw the emergence of what may be the most popular non-video game-based webcomic, “xkcd.” 2005 also saw a crossover from print comic books to the web, with 3 prominent independent cartoonists moving their comic books online: Phil Foglio moved “Girl Genius,” Carla Speed McNeil moved “Finder” and Batton Lash moved “Supernatural Law” (also known in print as “Wolff and Byrd, Counselors of the Macbre”). Uclick launched GoComics. Uclick would eventually merge to become Universal Uclick and GoComics would take over Comics.com as well as consolidate a very large syndication library.

2006 saw Modern Tales and the other websites in its network move away from the library subscription model for an advertising-based revenue model. American Born Chinese, which was originally a webcomic at Modern Tales, is collected in book form and named a National Book Award Finalist.68 King Features launches the DailyInk site to sell subscriptions to their strips. GoComic retools for comic strips.

2007 saw DC Comics jump online with “Zuda,” an American Idol-style new talent contest for webcomics, using Flash for the presentation, which would run until 2010. TopatoCo expanded into a fulfillment business for third-party webcomics.

2008 saw independent comic book publisher Avatar go online with Freak Angels, an original webcomic, pairing star print comic book writer Warren Ellis with artist Paul Duffield. It ran through 2011 generating six collected editions.

2009 saw Volume 8 of Phil Foglio’s Girl Genius win the inaugural Hugo Award for Best Graphic Story.69 A webcomic would go on to win the award five times in the first six years of the award. Long running and popular webcomic Scary Go Round ended, with cartoonist John Allison replacing it with Bad Machinery. Kickstarter launched and the age of crowdfunding began.

2010 saw Jonathan Rosenberg end the story-driven Goats webcomic and replace it with the gag-based Scenes From a Multiverse. First Second Books started its “To Be Continued…” program where pages intended for print graphic novels were serialized online as webcomics before being published in bookstores.70

2011 saw a higher prolife for licensed properties released as webcomics, including the Burn Notice television show and Boom! Studios serializing a prequel to the Rise of the Planet of The Apes film.

2012 saw print comics veteran Mark Waid launch his Thrillbent site, continuing the movement of traditional print comics style material to webcomic delivery. The Fall 2012 issue of Occupational Outlook Quarterly, published by the United States Department of Labor’s Bureau of Labor Statistics highlighted “webcomics artist” as a digital career. If the government says that making webcomics is a job, that makes it official.71 Modern Tales shuts down.

2013 saw Patreon launch a different style of crowdfunding many webcomics would utilize.

2014 saw Thrillbent add a subscription model for specific comics and archive access.72

The comic syndicates moved online and evolved into primarily two camps/websites: Universal Uclick consolidating almost every syndicated strip, plus a few independent webcomics on GoComics (the former) Comics.com and King Features with their DailyInk/Comics Kingdom sites. Some more popular strips like Dilbert or The Phantom will have standalone sites, others will not.

The comic book publishers dabbled in webcomics, but except for First Second Books, the comic book publishers shifted towards digital downloads and eBooks when that market became viable.

All the while, operating outside the walls of the traditional comics industry, webcomics continued to grow their audience and become increasingly accepted as a normal Internet feature.

How popular can webcomics get? The most popular webcomic is most likely xkcd, which had 59 million unique visitors and 1.1 billion pageviews in 2012. That would be an average of roughly 91.67 million pageviews per month.73 In 2010, The Oatmeal had a quarter billion pageviews (roughly 20.8 million per month) and 4 million unique viewer per month.74 In 2009, CTR+ALT+DEL had 38 million pageviews and 1.8 million unique visitors per month.75

Those are webcomics in the upper traffic tiers, but the most popular strips do have audiences in the millions. It’s not unusual for moderately popular webcomics to have 500K to 1 million pageviews per month, but traffic varies a great deal by site.

While there is not a wealth of audience data for the popularity of these webcomics, it is possible to get a sense of the historical traffic on these sites. In a snapshot from 2004, “Penny Arcade,” perhaps the most popular individual strip online at the time, reports an audience of 3.1 million readers and 29 million page views per month.76 Keenspot, a publisher of more than 50 webcomics and a webcomics portal unto itself, reports an audience of 2.5 million unique monthly visitor and a staggering 70 million page views per month.77 “Our most popular strip does well over 5 million,” reports Darren “Gav” Bleuel, Keenspot co-owner and ad rep. “There are about 15 that do over a million–about five or six of those do over 2 million”78. “Sinfest,” Keenspot’s most popular strip, links to a traffic tracking webpage that lists it as having 941,654 unique visitors in January 2004.79 In January 2003, “PVP” reported 9,714,513 page views and 449,882 unique visits.80 The risqué sex farce “Sexy Losers” reports 6 million page views per month and one million unique users.81 “Real Life” reports 5 million page views per month and 40,000 readers daily.82 “Goats,” arguably the first of the modern wave of webcomics, reports 95,000 unique I.P. visits and 1.5 million page views per month.83 “Bob and George,” somewhere between a pastiche of, and an homage to, the video game “Mega Man,” reports 1.5 million page views each month and over 500,000 unique visitors ( 537,859 for January 2004).84 In February 2010, Misfile reported 250,000 unique visitors per month and 2.3 million page views per month.85 Saturday Morning Breakfast Cereal reported approximately 1 million unique visitors per month and 20 million page views per month.86

Webcomic

Unique I.P.’s/Readers/Visitors Per Month

Pageviews/Month

Keenspot (Then a network)

2.5 Million

70 Million

Penny Arcade

3.1 Million

29 Million

Saturday Morning Breakfast Cereal

1 Million

20 Million

PVP (Jan 2003)

450K

9+ Million

Sexy Losers

1 Million

6 Million

Sinfest (Keenspot feature)

941K

5+ Million

Real Life

40K, Daily

5 Million

Misfile

250K

2.3 Million

Goats

95K

1.5 Million

Bob and George

500+K

1.5 Million

The relationship between page views and unique visitors / IP addresses / readers is somewhat complicated and a subject of debate. PVP’s Scott Kurtz, one of the more respected businessmen in the webcomics arena, provides a good “plain English” summary:

“Page impressions represent the number of times any page on the PvP site is viewed by a reader. At any one sitting, a reader could look at 10 different pages (and your ad 10 different times). So although page impressions are very accurate numbers wise, it’s not quite as impressive a number once you realize that 20 impressions could equal just one potential customer.

“That’s where Unique Visitors come in. This metric is a little less accurate since another name for a unique visitor is unique IP address. That means that a person who looks at the site at work, from one IP address, and then again that same day at home from another IP address would show up as two unique people. However, it works the other way as well. PvP has a lot of fans at Blizzard Entertainment and if 50 employees look at the site from the company network, that only counts as one IP address or one unique viewer.”87

In practical terms for a site owner, pageviews are for the advertising model and unique visitors have more of an effect on your merchandising potential. While advertisers will be interested in the number of your unique visitors to judge the reach of your site, it is the number of pageviews you will get paid for. If your primary revenue stream is selling merchandise, the more unique visitors you have, the more potential customers you have.

The business of webcomics – and as you can see by the audience at the higher end of the spectrum, it is a business – is really just a microcosm of the business of online content. When looking at online content in general, and webcomics specifically, certain media economics and marketing concepts come to the surface.

Metcalfe’s Law of Connectivity has value when explaining the Internet. Entertainment industry economist Harold Vogel explains it as: “Assuming that a network has sufficient capacity to remain unclogged even while carrying lots of traffic, its utility (or value) rises by at least the number of users (or nodes) squared.”88 This law has two applications. The first as Vogel notes, is that web servers can sustain multiple connections (you could define that as users or nodes, depending on your perspective) at the same time, causing the value of the Internet to increase exponentially as new nodes are added.89 The second application of this law is to content. The more content on a site, the more there is for a viewer to look at, the more there is for a viewer to use as an entry point from a search engine, and a similar snowball effect of increasing traffic occurs.

Note the traffic statistics of Keenspot. Keenspot had fewer viewers than Penny Arcade, but dwarfed them in pageviews. Keenspot had a multitude of comic strips on their site, over 50 accessible from their homepage. Keenspot’s owners call themselves a publisher. In the context of Metcalfe’s Law, they are a Network unto themselves. Keenspot promoted their internal network with a “newsbox” advertising other comics on their site. “On a good day, the newsbox can generate an extra 250,000 pageviews for a small comic,” Bleuel says of the initiative. “I know a lot of comics say their readership doubles or even triples immediately upon joining Keenspot.”90 [Note: Keenspot is a vastly different site in 2014]

Similarly, Modern Tales reported 900 of their 3400 subscribers had multiple accounts. Not growth as drastic as Metcalfe’s Law would indicate, but an illustration of the principle in action. For single feature sites, compare Goats and Bob and George. Each feature reported 1.5 million page views. Goats did it off 95,000 unique viewers, Bob and George needed over 500,000. Goats was a seven-year-old strip at the time and has more nodes in the form of comics or content to look at.

The fact that having a plethora of old content, usually in the form of last year’s comic strips, equates to increased traffic illustrates that the concept of “evergreen” properties exists in a much broader capacity. The difference between an evergreen web page and something like a Disney cartoon, most of which are considered evergreen properties, is that web browsing is the equivalent of media rental, pricing to discourage ownership does not seem to apply to the web as it does to film.91

It should also be noted that webcomics have grown into a wider variety of genres and formats than the printed comic book. Print comic books are largely super heroes with a smattering of science fiction, with the Archie line, almost absent from the direct market, being the main source of humor. Subject diversification in the primary Direct Market channel didn’t start opening to wider offering until 2011 or 2012. Webcomics cover a wider range of genres, although super heroes are generally not a genre done to excess. One very popular genre is video games. Penny Arcade is largely a humor strip about video games. Bob and George is based on the Mega Man video game, specifically. PVP started out a video game themed strip and has evolved into a bit more of a humorous character study, but still makes the odd excursion into video game material.

Webcomics theorist and academic Scott McCloud calls this proliferation of alternate themes “side-door diversification.” McCloud defines the front door as the comic book store where a reader walks in and looks at what comics are on the rack because he’s already interested in comics. Citing “the gaming strip” as the first example of this, McCloud summarizes the side-door theory by saying “You’re reading a comic because it’s something you’re interested in, not because it’s a comic.” The side-door opportunities then expand the circle of readers.92 Other side-door examples would include User Friendly for the computer science crowd and Diesel Sweeties which maintains an unusually high demographic among women.

MIT Comparative Media Professor Henry Jenkins commented on this phenomenon in Technology Review, saying “Many new artists are releasing their first comics online, self-publishing in order to maintain creative control. Some will be pulled into the mainstream later, they haven’t forsaken any chance of drawing Batman down the line, but right now, in what has been perhaps the greatest flourishing of young talent in comics since the underground comic movement of the 1960s, they are enjoying on the fringes. These artists are targeting comics at everyone from ravers and skateboarders to sports fans, gamers and chess fanatics. They are mixing and matching comics with flash animation as well as playing with the graphic possibilities of a vastly expanded canvas. They nostalgically evoke older traditions as well as produce work that doesn’t look like anything we’ve seen before. They offer everything from cute kids to barbed social commentary and gross bathroom humor.”93

The two biggest things to take away from the history of webcomics are the differences in genre and the Long Tail/evergreen effect of accumulating older work.

In newspaper comic strips, you tend to have very broad genres like family humor (Family Circus, Blondie, Foxtrot, Baby Blues, etc.). In comic books, it’s most often superhero, horror or science fiction. In webcomics, popularity can be found by breaking it down to niche audiences. Besides the video games, there are very successful webcomics about history (Hark, a Vagrant), librarians (Unshelved), graduate school (PhD) and mathematics (xkcd – a contender for most popular webcomic of all). As with the web content in general, you can be very successful with a niche topic as long as you can market to and engage that niche.

Also, as is the case with the web in general, the more material you have online, the more potential pageviews you have. Much as you have backlist for books, readers can go back and catch up on older material (which can also translate into sales of older print collected editions).

The caveat seems to be that if you’re doing a story-based strip, you need to have clear jumping on points for new readers. It may be difficult for a new reader to jump into a story-arc that has been going on for multiple years. Some long running story strips have stopped and rebooted or switched altogether. Goats, which grew into a long, complex storyline with more of a novel-like structure was eventually shuttered and replaced with the more short form humor webcomic, Scenes From a Multiverse. Scary Go Round was shuttered for Bad Machinery, dividing things much like a different sequence of novels.

In the world of newspaper comics, there’s more momentum for established comic strips. Peanuts lives on reprints. Blondie just gets a new creative team. In other mediums like television or comic books, the audience will gradually thin out over time, leading to a series getting cancelled and the creative staff moving on to something else. It isn’t clear if audience attrition will definitely be an issue with webcomics, because the format is still rather young and it hasn’t been thought of in such terms, but it is an issue to watch for in the future.

As can be gathered by the much larger numbers from more recent articles on xkcd, The Oatmeal and CTL+ALT+DEL, as webcomics become more accepted by the general public, the upper limit of traffic goes up. For many readers, these aren’t “webcomics,” so much as they’re just “comics.” While the proliferation of webcomics and increasingly lower barrier to entry can make it harder for a new webcomic to get noticed and get traction, they’re no longer considered unusual. After all, an occupation has to be somewhat mainstream for the Bureau of Labor Statistics to highlight it.

Chapter 7: The Economics of Webcomics

Webcomics derive their income primarily from the following menu:

• Merchandising (t-shirts, print collections/books, stuffed animals, shot glasses, etc.)
• Advertising (banner ads, sponsorships, product placement)
• Subscriptions for bonus content/Apps (Freemium)
• Donations/Crowdfunding (Patreon version)
• Freelancing from a webcomics portfolio
• Crowdfunding (traditional/Kickstarter version)
• Convention sales
  [Remember, by our definitions, if the only access to the comic is pay-per-view, it’s an eBook, not a webcomic.]

The revenue streams we’re about to discuss are not a business model unto themselves. They’re just a menu of options that can be used to create a business model for a webcomic. Different revenue streams work with different sites and no two sites have exactly the same revenue model. If a webcartoonist says “Look at my site and do what I do,” take it with a grain of salt. The revenue streams will ultimately be determined by your comic, your audience and your ability to translate your comic into merchandise. Some of this is accomplished through trial and error, and there are some genre considerations. The most financially successful webcomics tend to be humor-based. This is because humor tends to lend itself to a wider variety of merchandising that has proven popular with consumers and partially because humor translates better to social media sharing. Humorous, occasionally ironic, t-shirts are a staple of commercially successful webcomics. These are frequently panels and sayings lifted from the webcomic, itself. Catchphrases translate well to buttons, posters and even shot glasses. If there is an anthropomorphic character or animal in a webcomic, sometimes a stuffed animal does well.

If your webcomic is story-based, particularly if it has no fantasy or science fiction elements and is serious in nature, you may well have less of these obvious options available to you, in which case you may be relying more on advertising and print collections. Story-based strips also tend not to generate a lot of social media traffic, since Digg, Reddit and company are the digital equivalent of clipping a comic strip and putting it on the fridge/desk and such things are usually reserved for individual gags. This does not mean story strips are an untenable format, as strips like Girl Genius, Schlock Mercenary and Order of the Stick have had success. It may mean you have fewer alternate revenue streams, however. There is a school of thought that story-based comics may be better suited to the digital download format or possible a different presentation format than the daily strip.

The first thing that needs to be mentioned is that unless the sole method of monetizing a webcomic is by selling collected editions, donations or a subscription, the comic is the marketing draw and something else is being sold to pay for it. Merchandising is often reviled and ridiculed by artists, but merchandising pays the bills for a lot of webcomics. Advertising is often reviled and ridiculed by artists, but it’s also something that pays the bills. A comic doesn’t have to be a business. A comic can be done just to be art, but if the goal is to earn a living making comics, merchandising or advertising will most likely be necessary in some form.

The second thing that needs to be mentioned is that revenue doesn’t always start with the first installment of a webcomic. A Google Adsense type of ad can be put on a site immediately, but that’s really the only thing that can be started out with – and that’s only if the webcomic meets guidelines. To generate revenue a webcomic first needs material and an audience. Both come with time. Even if the audience comes quickly, which is historically unlikely for a new strip, it may take a few months for the material to suggest appropriate merchandising. A book collecting the webcomic, depending on the frequency and format of the comic, often takes well over a year to produce. Acquiring enough audience to make a freemium/paid subscription secondary feature can take years. Nothing should be expected to come easily and quickly.

Merchandising

The first revenue stream is merchandising. This is the packaging and licensing of real world goods based on the webcomic. This can include t-shirts, buttons, stickers and stuffed animals. For the definitions of this book, it will also include the printed and eBook editions of the webcomics, as they are not the original format and have become revenue streams separate from the web incarnation of the comics.

It is important to recognize that web merchandising is very idiosyncratic. Not every webcomic is equally well suited for a stuffed animal. Some art styles may not lend themselves to t-shirts as well as others. As has been mentioned specifically in the case of Scott McCloud, some webcomics are not meant to be collected in print.

Two of the biggest proponents of merchandising as a revenue stream are Jon Rosenberg of Goats / Scenes From a Multiverse and R Stevens of Diesel Sweeties. Both have given up advertising in favor of merchandising, although Rosenberg eventually brought it back. Stevens took merchandising a step further and has experimented with a merchandise subscription in the early 2000s. His “Clango Club” was essentially “a subscription service which uses a recurring Paypal payment to charge $5 per month from a user in exchange for stickers, buttons, extra comics, etc. on a mostly monthly basis.” Stevens places his subscriber base at around 200 and his average number of daily visitors around 20,000.94 This would put his number of subscribers at 1%.

Vin Crosbie writes that the average adoption rate of users subscribing to an online paper or magazine that was previously free of charge is 1%.95 When projecting any type of conversion from a website, 1% is the magic number. If the merchandise is a particularly good fit with the audience, and/or the audience is particularly loyal and engaged, 3% isn’t out of the question. In some rare cases conversion may scale up to 10%, but 1% is the rule of thumb. If 1% of the unique viewers are buying something, the merchandise and the users should be matching up. If the conversion is under 1%, the merchandise and perhaps the presentation of the merchandise may not be meshing with the audience.

Rosenberg agrees with using 1% as a rule of thumb for how many of a web comic’s audience will buy merchandise. Rosenberg has found great success selling t-shirts. A riff on Harry Potter’s arch foe resulted in the “Republicans for Voldemort” which quickly sold over 1,000 shirts. Other shirts sell around half that in 2003. Rosenberg mused that, in a way, he’s created a t-shirt store that’s sponsored by a comic strip, and one of his challenges as a designer is to create shirts that, while retaining some connection to the strip, are still hip and entertaining to someone who’s never seen Goats.96

Rosenberg said that he has been able to make five times as much off his merchandising as off his subscriptions and that advertising doesn’t come close to generating the revenue he gets off t-shirts, noting a profit margin of up to 50%, which would be as much as $9 per item in some cases. Stevens quotes $4-$5 as his margin. Rosenberg further claims to have tripled his 2003 income by switching to t-shirt sales in the last three months of 2003.

Chris Crosby of Keenspot re-emphasizes that merchandising varies heavily from webcomic to webcomic, and running a site with over 50 features would give him some perspective on this. Stating that some features lend themselves better to plush toys (Crosby currently sells two stuffed toys from Keenspot features) and t-shirts, he sums it up by saying, “Generally, you can count on at least 0.5% of your readership buying stuff, if the stuff is at all appealing (and that can be tricky for some cartoonists). But it all depends on lots of factors.” In general he sees no reason, if the combination of audience and design are correct, not to equal or exceed advertising revenues with merchandising.

Looking past the t-shirts, back to books, there seems to be a consensus that books are more for the hardcore fan of a comic and t-shirts can find a wider audience outside the normal audience. Books come along slowly, as material accumulates, while t-shirts are deployed more rapidly. Rosenberg and Stevens both speak of “retiring” shirts and moving on to new designs.

“I think the T-shirt thing is so popular because it’s so easy,” says Robert Khoo. “With a little extra effort, you can get some pretty slick products that make a lot more sense to your brand that can also really differentiate you from the competition. (A good example of this are the socks from R Stevens) I can’t really provide you a magic bullet product that hasn’t been done before, because I think the key is looking specifically at your audience and their hobbies, needs and desires, and creative a product that’s catered specifically to them.”97

A good example of creating a product that fits a webcomic is The Oatmeal’s posters. While every comic at the Oatmeal doesn’t naturally allow for reformatting as a poster, those that do have become a popular product line for Oatmeal creator Matthew Inman. Inman also provides a valuable lesson in the profitability of Print On Demand merchandise vs. ordering in bulk.

“After selling 1,000 posters at $12 apiece—$12,000 gross—Inman got a check from Zazzle for $300. But success breeds success, and that’s how it worked for Inman. Eventually, he became confident enough of future orders to buy merchandise in bulk in advance. His posters are now printed at Savage Color, just a few blocks from his house, and at Windward Press in Greenwood. Instead of customers choosing the comics they want, Inman chooses which strips, or individual panels, will work best on posters. And by buying in volume and stocking his own inventory, he pays just $1.50 for each poster. So now when he sells 1,000 posters, he gets to keep $10,500 instead of $300.”98

When starting out, it may be prudent to initially use a service like Zazzle or Café Press to produce t-shirts or posters. While color POD is in its infancy, Lightning Source and CreateSpace offer options for POD books. With POD, the margins will be a fraction of what they would be with bulk ordering, but it allows the opportunity to experiment with offerings and to discover what a particular comic’s audience responds to. Yes, there can be some trial and error when determining the right revenue and product mix for a new comic and it’s hard to know what will work before trying it. Audience surveys can help, but there’s no test like seeing what is actually ordered. Using POD services can also free the cartoonist from having to do manual fulfillment, although with POD books, it might still be fiscally prudent.

Where is the merchandise sold? For the most part, it will be sold off the webcomic’s website. This can be done in a few different ways. POD services like Zazzle and Café Press will have their own storefronts available, which can be integrated into the site or linked to. There are ecommerce packages like Shopify or Store Envy which can be added or linked to if the merchandise has been bulk ordered or comes from multiple services. Some cartoonists use a third party fulfillment service like TopatoCo. Another alternative is Gumroad, which is a link-based storefront popular with downloads.

For the most part, the merchandise will only be sold through the comic’s website or perhaps by the cartoonist at conventions. The possible exception is books. Starting around 2012, the Direct Market for comic books started to see a shift away from being as uniformly superhero-driven, at least for around 15-20% of the market. The roughly 300-500 indie friendly stores may be open to collected editions of webcomics. The problem is getting into the stores. Diamond has not been a particularly friendly option to webcartoonists. Getting into those stores will usually require contacting individual stores or hiring an agent to act as a distributor. It’s not an easy process, but it’s an increasingly possible one for that indie-friendly subset of stores. Some popular webcomics also opt for publishing deals with both Direct Market comic book publishers and mainstream book publishers.

It’s possible to get into mainstream online bookstore channels with Print On Demand. Technically, POD can get into brick & mortar bookstores, but that’s unusual - the book is returnable and POD margins don’t always work out in the publisher’s favor if the book is returnable. Another option is to set up a seller account on Amazon and sell the book through Amazon as a vendor through their “Amazon Sellers” program, which costs roughly $0.99 + 15% of the transaction price. Amazon has options where they fulfill the orders and where the Seller fulfills the orders. Amazon Advantage is another program that will get books on Amazon with Amazon fulfillment.

With eBooks, there are also several distribution options that will be covered in the next two chapters. The potential issue with that is how much of a discount is necessary to give to the publishing platform or store. Typically it ranges from 30% to 65% and many webcartoonists dislike the deal structure.

Alternately, selling bulk ordered books off the comic’s website can be very profitable if you have sufficient demand and the financing to purchase the initial inventory. Using the overseas printing examples from Chapter Three, a 160 page full color trade paperback would cost approximately $5.44 per copy for a print run of 1000. If it were priced at $19.95 and the shipping and handle charge was sufficient to cover the costs of shipping, it would yield a profit of $14.51 per copy or $14,510 for a sellout. A run of 3,000 would cost $2.98 per copy with a profit per copy of $16.97 at a $19.95 list price and a total profit of $50,910 for a sellout. 160 pages would be more than a year’s worth of material for many webcomics and with a 1% conversion rate, would require 300K readers, but it’s easy to see how this sort of thing can scale if a comic is popular and the collected editions can be sold directly to the consumer without a distributor’s discount.

While merchandising may not be for every strip, it has the potential to supplant (or supplement) other revenue models. One of the natural conflicts for websites that have merchandising is with advertising. Advertising takes readers off the site if they click on it, taking them away from merchandise. It’s possible, even common, to do both. It’s also common to advertise merchandise on the same site using banner ads.

Advertising

Advertising is not appropriate for all types of content. Advertisers typically don’t like to have their brands associated with things like sex, nudity, profanity or graphic violence. Think television content guidelines vs. the type of explicit material on a pay movie channel like HBO or Showtime. That will give you a sort of baseline idea to work with, in terms of whether a specific strip is suitable for advertising to be a major revenue stream. A lot of webcomics like to push the envelope in terms of content. That’s an artistic choice and a valid thing, but it may cause the webcomic to violate the terms of the advertising network. If that’s the case, the cartoonist needs to look at different forms of revenue. If that’s not the case, advertising is a possible revenue component.

Advertising most commonly comes in the form of banner ads. Banner ads are commonly sold in CPM units, a standard advertising measure. CPM is defined as Cost Per Thousand (M being the Roman numeral one thousand). Thus, the value of one viewer of a Web comic supported by a single banner ad is the CPM Rate divided by 1000. Banner ads can also come in CPC (Cost Per Click) and CPA (Cost Per Action) formats which require the viewer to either click on the ad or perform an action before a larger commission is paid. CPM and CPC are often mixed.

How does a webcomic acquire online advertising? You can sell the ads yourself or you can also join an advertising network or exchange.

Of all these options, selling the ads yourself is usually the best option, since you don’t have to split the fee with anyone else. Of course, this can also be quite time consuming and you usually have to have fairly high traffic to be able to sell your own material.

Google AdSense is usually the first option for new websites (not just webcomics). AdSense used to be contextual advertising and primarily CPC payouts. Now the ads are primarily contextual and matched by user interests, with both CPC and CPM ads.

Contextual ads are based on the context of an actual page. Essentially Google’s ad system reads the page and determines what the content is based keywords and the content of things like alt tags on pictures. This is a little dangerous for graphic heavy/text light pages like webcomics sometimes are. Without much text, it’s hard for contextual advertising to know what kind of ads to serve, so if you’re using AdSense, it’s extremely important to have alt tags on your graphics describing what they are and any text on the rest of the page is a definite plus.

Interest based ads are served based on Google’s interactions with the person viewing the webpage. Which is to say Google keeps track as best it can of what kind of content people read and serve ads to match the interests. The good news is this means AdSense isn’t completely relying on the text on a given page to serve ads and if the viewers are tagged as having interest in high CPM topics like consumer electronics, that might get a better CPM or CPC rate for the ad. The bad news is that Google Ads can be a little unpredictable.

Unfortunately “comics” is not a high CPM interest most of the time. AdSense was not a particularly good option for webcomics when it was contextual advertising only. Interests is an improvement, but AdSense is something that needs to be tried before its worth can be properly gauged.

Project Wonderful is usually the next advertising solution mentioned and is something of a mixed bag for publishers. On the one hand, you can easily get listed, will not be banned for adult content/language, they only keep a 25% commission and the minimum payout is only $10. On the other hand, you aren’t guaranteed any ad inventory and on 11/14/2014 when searching for Skyscraper and Leaderboard ads in the webcomics category, the range of CPM for sites averaging over 100K pageviews/day in the previous 30 days was $0.01-$0.40, with only 2 ads being over a $0.16 CPM. That’s rock bottom pricing and may be less effective than AdSense or traditional ad networks.

Ad networks rise and fall. For that matter ad rates rise and fall. It’s very common to see the ranking of ad networks change drastically over the course of a year. The other x-factor is the rise of Real Time Bidding (RTB) and ad exchanges. The idea behind Exchanges and RTB is that inventory can be filled in real time based on the profile of the website’s reader. Ad Exchanges are essentially a more sophisticated version of the AdSense interest category based largely on cookies on the reader’s computer. Ads are bid against each other based on the reader profile and, in theory, makes for a better price. Exchanges can be the primary source of ads, but they’re perhaps better used to fill out unsold inventory after more traditionally targeted ads have been placed either directly by the owner of the website or by an ad network. Of course, effectiveness depends on the site in question.

When dealing with ad networks, expect them to keep between 40-50% of the CPM, depending on the exact terms of your agreement. It’s true that ad networks used to exclude webcomics sites, but much like blogs eventually gained acceptance, so have comics and that’s less of an issue than it used to be. A few examples of ad networks include PulsePoint (which is also an exchange), Media.net, Tribal Fusion and Advertising.com. Large Ad Exchanges include (Google’s) Double Click Ad Exchage, Open X Exchange and Rubicon Project. Some of these networks and exchanges have minimum monthly traffic requirements to enter them, some higher than others. By all accounts, direct access to the ad exchanges is a significant improvement over using networks, but not necessarily more than if a site sells premium space directly to an advertiser. While not totally accurate, a simplified way of looking at the differences would be to call the contextual + interests structure of AdSense as “exchange lite.” It’s a step in that direction, but lacks more sophisticated targeting and ad redirects (showing banners based on sites and stores the viewer has previously visited). As the traffic of a site grows, attention should be paid to the current traffic minimums to move up to better networks and exchanges.

You will likely not get your entire inventory of ads filled by one network, so it is customary to plug in something like Project Wonderful or Ad Sense for the ads not served by a network. Larger traffic sites may have a chain of 3-4 networks. Frequently this involves the use of ad management software like (Google’s) DoubleClick For Publishers or Open X.

With banner ads, outside of the exchanges, there is a question of whether you fit a particular demographic or not. This is a case where being a niche comic may be fiscally beneficial to you. For instance, video game-based comics like Penny Arcade and PVP can command higher advertising rates from video game advertisers. If you do not fall into a niche demographic, you’ll probably be a general buy and get lower rates.

Finding an average price for a CPM is an attempt to hit a moving target. Rates will change from site to site, with differences in demographics, and in some cases by the skill of the salesman, with large differences between banners targeted to a specific site and “run of network” ads used to fill inventory by advertising networks. The following are historical rates:

In a historical slice of the market, Penny Arcade’s rate card lists their CPM for the two banners they offer at $5.00 and $5.50.99 Advertising accounts for 55% of Penny Arcade’s revenues.100 By 2007, Penny Arcade’s CPM rates moved up to $5-$9. MegaTokyo charges between $1.59 - $1.30 CPM for banner ads.101 Sexy Losers charges a $1.25 CPM102 and its anonymous artist “Hard” estimates its sell-through at 10-15% of inventory.103 Keenspot offers a range from $1.25 - $1.00 CPM.104 Keenspot’s Darren Bleuel says they sell about 5% of their inventory, do offer bulk discounts, and get around a $0.15 CPM through the third-party networks they use to fill out the inventory.105 The network CPM for Keenspot is disturbingly low and probably indicative of the need to fill up some 70 million pages with advertising. Some other strips report sub-$1.00 CPMs, but nothing as low as $0.15. What emerges is a range from $5.50 to $0.15CPM, with $1.00 - $1.25 being the most common rate for a targeted site. It is additionally likely that the Penny Arcade CPM is normally discounted lower than $5.50, as video game firms seem to buy advertising from that site in bulk (which is also likely the reason for the higher rate). This doesn’t necessarily look lower than you might expect for direct sale rates today, though Penny Arcade is thought to have increased their prices.

It is appropriate to take a look at raw levels of income from advertising. We’ll take the historical pageview traffic levels listed in Chapter 6, plus 500K and 100K levels to simulate lower traffic sites. We’ll then calculate what kind of revenue those sites would generate at the following CPM benchmarks:

• $0.015 and $0.2025 are the average CPMs for large webcomics sites on Project Wonderful, less PW’s cut.
• $0.50 is a $1 CPM less 50% for an ad network’s cut.
• $1 is a rate many general entertainment sites try and get for “run of network”/non-targeted advertising.
• $5.50 is the Penny Arcade rate and $2.75 is that rate after an agency 50% cut.
  $0.015

$0.2025

$0.50

70 M. (Keespot)

$1050

$14,175

$35,000

29 M. (Penny Arcade)

$435

$5,872.50

$14,500

20M (SMBC)

$300

$4,050

$10,000

9 M. (PVP)

$135

$1,822.50

$4,500

6 M.(Sexy Losers)

$90

$1,215

$3,000

5 M.(Sinfest /Real Life)

$75

$1,012.50

$2,500

2.3M (Misfile)

$34.50

$465.75

$1,150

1.5 M. (Goats /Bob and George)

$22.50

$303.75

$750

500K

$7.50

$101.25

$250

100K

$1.50

$20.25

$50

$1

$2.75

$5.50

70 M. (Keenspot)

$70,000

$192,500

$385,000

29 M. (Penny Arcade)

$29,000

$79,750

$159,500

20M (SMBC)

$20,000

$55,000

$110,000

9 M. (PVP)

$9,000

$24,750

$49,500

6 M.(Sexy Losers)

$6,000

$16,500

$33,000

5 M.(Sinfest / Real Life)

$5,000

$13,750

$27,500

2.3M (Misfile)

$2,300

$6,325

$12,650

1.5 M. (Goats / Bob and George)

$1,500

$4125

$8,250

500K

$500

$1375

$2,750

100K

$100

$275

$550

The CPM from an ad network will vary from month to month and year to year. Most ad networks will run several campaigns at a variety of price points from say $0.50 CPM to $5.00 CPM, with an average price somewhere in the middle. Prices will shift based on demographic features, as well. Website owners using networks will pick a target number, $1 CPM is a frequent target for sites without a particular demographic niche, and then switch around networks in an effort to maintain it. Advertising networks generally do not serve 100% of a site’s available ads. The exact percentage varies, but figure somewhere between 10-30% will be unpaid “default views.” Possibly higher. Most ad networks will allow you to insert code for what will be served on a default view. The custom is to have an unpaid ad default to another ad network or a contextual ad service like Google AdSense/AdWords or Project Wonderful. Evaluate each network in the chain on its own and also determine what your overall functional CPM.

Many sites display more than one ad per page. For example, the home page of Penny Arcade displays 2 ads. Theoretically, Penny Arcade could have a functional CPM of $11 for their homepage ($5.50 x 2). Now in practice, different sized banners may get different rates. Typically the highest rates will go for leaderboards (long banners across the top of the page), skyscrapers (long banners down the sides of a page) and boxes (large boxes in the middle of the page). Sometimes smaller units will be added for lower prices.

Freemium and Subscriptions

Freemium is usually defined as giving the initial product away for free, with the expectation that a certain percentage of the audience will pay for a more robust version of the product, or in the case of webcomics, for extra product.

This was a semi-popular option early on for some of the first wave of webcomics, but fell out of popular use. Goats at one time had 250 subscribers who pay $20 annually for a premium membership or $60 for a “super-premium” membership. Chris Crosby described Keenspot’s premium subscribers as being “in the high triple digits” for a service available for $4.95 a month or $44.95 per year (Crosby).106

Modern Tales, though it eventually dropped the subscription model for advertising was the most well-known subscription site for many years. Subscriptions are also popular with the newspaper comics syndicates like Go Comics and Comics Kingdom/Daily Ink.

Currently, on the pure webcomics side, the Thrillbent comics site charges $3.99 for access to full archives and special exclusive comics, notably a sequel to the cult favorite comic book Empire.

Freemium and subscriptions have not been the most stable webcomics business model, but have performed for some sites. Typically, advertising is frowned upon for sections that are subscription only. While it hasn’t been explored as such, freemium bonus features might be a natural pairing for the Patreon model of crowdfunding.

Donations and Crowdfunding (Patreon Version)

A tangent off of subscriptions that originally only warranted a cursory look, but grew into something much more notable is donations. Not originally considered the soundest means of generating revenue, it did have some early anecdotes. Jon Rosenberg reports that for the better part of a year, Goats took in $750 to $1000 per month in donations running a sort of web-telethon for the strip promising a special “Sunday strip” if they met their donation goals. This worked quite well until the first month that the goal was not met. People become upset they had donated and the Sunday strip didn’t appear. Donations fizzled out after that. Interestingly, Rosenberg notes that most people gave $5, even though the default value was set lower. He has hypothesized that the secret to transactions on the web is not so much the barrier of price, as it is the barrier to purchase or donate. Once you’ve convinced them to make a transaction, the amount has not been a delimiting factor in his experience.107

Echoing this sentiment is Dave Anez of BobandGeorge.com, who says, “Donations are few and far between, but since I rely more on advertising, it’s not a problem. I’ve tried different donation incentive programs in the past, and they never really worked. The only time donations really came in handy is when the site was in serious trouble and I actually asked for help; the fans sent in over $1000 that month, but because of that, I’m reluctant to ask them for any more.”108

While no longer detailed on his web site, in the early Fall of 2003, Pete Abrams of Sluggy Freelance posted a plea for people to support the strip and buy some merchandise or he might have to devote less time to the strip. That request could be considered similar to Anez’s experience, as the results were apparently to Abrams’ satisfaction and the plea was not quickly repeated.

These stories, which seem typical of the experience, formed a hypothesis that donations can be an effective emergency measure if a webcomic has developed a following and there is a demonstrable crisis at hand. Donations seemed to be a minor afterthought in the early days of webcomics and were largely regarded as unreliable until Patreon opened for business in 2013.

Patreon, which is discussed in depth in the Crowdfunding Appendix, is a lot like turning a donation into a subscription. The patron signs up for a pledge amount and it becomes a reoccurring monthly payment. The cartoonist usually offers rewards for certain levels of pledging – anything from a monthly Q&A or podcast to original art. In some cases, overall pledge levels are tied to removing pieces of advertising from a site, so this may eventually become a case of donations/voluntary subscriptions replacing advertising. That would have been unthinkable as recently as 2012 and is a testament to the Patreon model.

Patreon is still a very new company and caution should be taken with investing too many resources with a new company, but the early returns have been extremely positive and jaw dropping. As of 11/14/14, Zack Weinersmith’s SMBC webcomic is being pledged $8,709.50 from 3,359 patrons. Patreon’s fee + credit card processing is approximately 9%, which would leave SMBC with $ 7925.64 in pledge money each month. Assuming the pledge levels remained stable, that would be a little over $95K per year. Is this a high water mark? Certainly. But it is a very real demonstration of the power of the intersection of donations and crowdfunding.

The catch to the new flavor of donations is that it requires a pre-existing audience. Whether a new creator can effectively grow the donations as the comic’s audience is grown is an open question. It might be better wait for an audience to accumulate before introducing Patreon or it might not matter. The format is too young for the trends to have become established.

Freelancing From a Webcomics Portfolio

A sometimes unintended benefit of doing a webcomic is that it can lead to freelance work. A webcomic is also a portfolio of a cartoonist’s work. In the example of Penny Arcade, specialty comic strips are sometimes commissioned for games or other sites. Dorothy Gambrell of the Cat and Girl webcomic keeps an ongoing chart of where her income is derived. In 2013, 89% of her income came from freelance (as opposed to 6% from selling t-shirts). In 2014, through September, 91% of her income was from freelance (as opposed to 3% from t-shirts).109 ()

Freelancing can be an indirect result of producing a webcomic, but isn’t necessarily any different from selling t-shirts from a webcomics site, in terms of how closely the income directly flows from the comic. Revenue can be about pragmatic choices and opportunities come in different forms.

Crowdfunding (traditional/Kickstarter version)

Kickstarter launched in 2009 and popularized the traditional form of crowdfunding where a creator(s) presents a project, lists a budget required to complete the project and lists a series of rewards based on pledge level (usually copies of the completed project, but also high end items like original art and personal appearances). Crowdfunding in general, and Kickstarter in particular, have been very, very good to webcomics.

A sane way for a cartoonist to look at crowdfunding is as a form of pre-sales or pre-orders. “I’m ready to print a book collecting my comic, would you like to order one?” It allows the cartoonist to collect money in advance of paying for printing. It helps determine the print run and higher print runs.

What kind of money can be raised with crowdfunding? The high water mark for all of comics is $1,254,120 for a mass reprinting of Order of the Stick reprint collections. 14,952 people backed that project.110

That’s more than double the amount raised by the next highest comic, but it’s not uncommon for the most popular webcomics to raise over $100K through crowdfunding. Does a comic have to be popular to successfully crowdfund? No, but a modest goal needs to be set, not a big one. It is definitely possible to obtain a few thousand dollars for a small project if the presentation and marketing is correct. This will be discussed in greater detail in the Crowdfunding Appendix.

Convention sales

Comics conventions have achieved a growing prominence in American popular culture. Some cartoonists find convention sales to be an important part of their revenue model. Some cartoonists find conventions to be a sure way to lose money. The truth is likely somewhere in between and will vary from cartoonist to cartoonist. The more popular a webcomic is, the more likely it is to draw business at a convention. There are a few basic guidelines that can be followed when exploring convention sales.

• Convention costs add up: the cost of a table, travel costs, lodging costs, food costs. Before committing to a convention, estimate those costs. How many items will you have to sell to recoup those costs? (Remember, not gross sales, net sales after printing/manufacturing costs.) If it looks like too ambitious a goal, consider not exhibiting. Not every convention needs to be attended. Make sure you have enough inventory available for sale to cover costs.
• Local conventions are a good place to start. They cut down on transportation and lodging expenses.
• Try to choose conventions whose attendees are compatible with your content. It wouldn’t make sense for a funny animal gag-a-day strip to set up shop at a mystery novel convention, but it might make sense for the right type of science fiction strip to set up shop at an anime convention. Be wary of conventions that claim to be comic conventions, but are really celebrity autograph shows. Sometimes an engaging comic booth can do well by being some of the only comics material in a show that lacks comics. This seems to work better when the faux-comics autograph show is the only comics convention in a given area. Sometimes, the attendees are only interested in autographs and it’s a waste of time and money.
• The larger the convention, the harder it is to stand out. Especially if the comic is new and the location isn’t a natural gathering place for your comic’s existing audience. Sometimes mid-tier and smaller shows offer more attention and better sales.
• Showmanship and presentation count. It isn’t enough to sit at a booth and expect sales to come flowing in. The audience needs to be engaged. The merchandise needs to be presented in an attractive manner. Signage and a backdrop can help immensely. Selling to the public, especially people who aren’t familiar with comic or cartoonist, requires talking to people walking by and salesmanship. It’s not for everyone and introverts may need a little time to grow into the role.
• Try to hit a variety of price points. Don’t just sell a $20 graphic novel. Have some buttons for $1, prints for $5, and so forth. Attendee budgets vary, so giving people the opportunity to buy from you at different price levels will raise your overall sales total and let you interact with more customers. If you only have one piece of merchandise, it’s harder to turn a profit for a convention.
• Display your URL. A webcomic is not the odd amateur thing it was widely thought to be in 2000. If you present yourself like a professional, then you are a professional. That URL is still an advertisement for your site, even if you don’t make a sale.
• Where your table is located matters. At some shows, it’s better to be in artists’ alley. At some shows, it’s better to be exhibitor area. It also matters where in artists’ alley or the exhibitor area that a table/booth is located, but exact placement is usually out of the cartoonist’s control. It’s better to know the convention or at least talk to someone who’s worked that convention before reserving space.
  The Devastator conducted a survey of 2013 comic convention exhibitors.

Overall sales averaged $1300 per show. $1940 for “Comic-Cons” vs. $530 for “Indie Cons.” “Individual artists” averaged $1400 vs. $1225 for “small press.”

The Devastator also found huge differences in how many years of exhibition experience a person had.

0-2 Years: $335 3-5 Years: $1370 6+ Years: $2030111

Some cartoonists do a good business at conventions. Do not go into a convention blindly and try to have realistic expectations.

Hybrid Models and Diversification

Most cartoonists combine revenue models in much the same way that different websites sell different types of merchandise in different proportions. Girl and Cat has had differing percentages of ad sales, merchandise and freelance over the years. Howard Taylor of Schlock Mercenary has reported 80% of his revenue comes from books, the rest being other merchandise and advertising.112 The Oatmeal reports only 10-15% advertising income.113 Thrillbent combines a subscription model with selling eBooks of their content, but has thus far avoided advertising.

For the sites that do well with merchandise, merchandise tends to be the largest revenue component, but no two sites are exactly the same for revenue mix. These mixes change over time, with the current trend being the Patreon flavor of donations entering the mix and in some cases lowering the advertising part of the revenue mix.

On the extreme side of revenue diversification, Penny Arcade launched “PAX,” a convention devoted to gaming. In 2015, they are scheduled to have PAX conventions in Seattle, Boston, San Antonio and Melbourne, with a second convention in Seattle geared toward game developers. Penny Arcade was able to branch out into conventions because they were able to identify an underserved need of their audience (Penny Arcade being primarily a comic about gaming). Not every comic will have a large enough audience for that kind of an undertaking, but this illustrates the need for the cartoonist to think out of the box and specifically about their audience when monetizing a site.

Comparing Ad and Merchandising Revenue

How does merchandise compare to advertising, in terms of pure revenue. It depends on a few factors: the effective CPM of the advertising, the average margin (profit) on a merchandise sale and the conversion rate for merchandise.

This is an example of one way to run a comparison between the two revenue models using some numbers that should be ballpark for most sites.

Assuming a merchandise purchasing conversion rate of 1%, 100 readers will yield 1 customer. We’ll assume the comic runs 5 days/week and 4 weeks/month, so those 100 readers will also yield 2000 pageviews.

Thus, 2000 pageviews = 1 shirt sold – or the shirt is equal to two CPM payment units. If the margin on the shirt is $9, the shirt is the equivalent of a $4.50 CPM. If the margin on the shirt is $5, the shirt is the equivalent of a $2.50 CPM.

The formula is: (Profit margin on an item) / [ (pageviews generated by the number of unique visitors required to sell one item) / 1000] = effective CPM of merchandise

In practice, the 1 unique viewer will not have read every strip published in a month and the number of pageviews per unique viewers will vary from month to month, so use those numbers for an exact rate. Using the full month’s worth of strips as pageviews will be more accurate when projecting for the core fanbase than casual readers.

The following chart shows the effective CPM of a piece of merchandise based on a set product margin, contrasted with a hypothetical conversion rate and the number of strips appearing per week. The chart is based on a one month period and accounts for the 1% conversion rate endorsed by Rosenberg and Crosbie, as well as the worst-case scenario 0.5% suggested by Crosby.

1% conversion - @3/week

1% conversion - @5/week

0.5% conversion - @3/week

0.5% conversion - @5/week

$9 margin

$7.50

$4.50

$3.75

$2.25

$5 margin

$4.17

$2.50

$2.08

$1.25

$3 margin

$2.50

$1.50

$1.25

$0.75

$1 margin

$0.83

$0.50

$0.42

$0.25

Mathematics say, should the theory hold and the cartoonist can produce an attractive product with at least a $5 margin, the site should be at least as well off with merchandising as it is with advertising, unless it has a particularly desirable demographic (e.g., Penny Arcade and, most likely, PVP). Sites with worse luck obtaining high CPM rates could conceivably be better off selling an item with a $1 margin, but such trade-offs would require close monitoring.

The Disjointed World of Webcomics Marketing

It’s easier to market print comic books than it is to market webcomics and marketing print comic books isn’t a particularly easy thing unless the comic is from a major publisher or from a major creator. The good news about webcomics is that the publisher bias of print comics and the Direct Market doesn’t exist. The bad news is that there’s even less of an infrastructure for marketing webcomics.

With the Direct Market-centric print comics, there are a number of websites that are read by both retailers and consumers. The coverage is partially dependent on the publisher and creators involved, but there is a network of sites speaking to the demographic, or at least a large part of the demographic. There is no commonly accepted network of news sites for webcomics. There was more of a network circa 2009-2011, but sites have shut down for the most part and people have moved on. Fleen may be the closest thing to a news site, but in many ways it’s more of a personal blog that talks about webcomics than a formal news site. Announcements of print collections or crowdfunding initiatives from established comics seem to be a popular topic. The comic book news sites do sporadically run webcomics news, so they may be approached, if not counted upon for announcements.

In terms of traditional PR for webcomics, it may be better to look at two classes of outlets: comics-friendly sites/publications and sites/publications related to the topic of the webcomic in question.

Examples of comics-friendly sites and publications would include io9, Boing Boing and Wired. Stories about webcomics appear on those pages and screens with some regularity. Sites related to the topic of strip will depend on the strip. For a science fiction themed strip, contact science fiction-themed sites. Start with io9 and expand to things like Tor and Locus. If the strip is about a fisherman, send announcements to fishing sites.

It might be a good idea to hold off on announcements for new strips until a few weeks’ worth of material is online. One strip may not convert a browser to a regular reader, but several pages of comics might.

In terms of ongoing promotions, there are differing opinions on what works best. Several cartoonists say their best traffic has come when a more established webcomic has linked to them and that offers the best way to quickly grow an audience. Posting comics to social sharing sites like Reddit, Digg and StumbleUpon has been mentioned with Reddit having a particularly robust community for both sharing and traffic. Social sharing is, in a sense, an evolution past getting listed in the “Top 100 webcomics” style lists that were popular in the past, but are given less attention today.

Social media is another popular way to share links to current strips. In some ways, Facebook and Twitter have supplanted RSS feeds for a class of readers. It’s advisable to have both a cartoonist’s social media profile and a profile for the site/comic. Reader engagement is typically done through a cartoonist’s profile more than the comic’s. There is also an ongoing evolution of how Facebook may or may not throttle postings that come from Fan Pages, such as might be set up for a comic. Personal accounts, at least for the moment, seem less likely to be the subject of an arbitrary filter coupled with requests to buy advertising to get the links to appear in readers’ feeds. This is an evolving situation, but that’s the direction it’s moving in. Social media reach is extremely important for crowdfunding efforts, aside from basic traffic building. Social media falls broadly under the “word of mouth” marketing umbrella, which is a concept we’ll return to shortly.

Tumblr is a special case that needs to be discussed as its own entity. Tumblr is perhaps the best social network for sharing comics images. Reblogging is quick and easy. The demographics match up better than Pinterest. It’s also extremely easy for a cartoonist to lose control of the work and attribution. If Tumblr is used, a domain name or URL must be placed somewhere on the graphic. That will give a reader seeing the graphic a way to find the source material and the rest of the comic’s content. Can links to a storefront or Gumroad page be included on a Tumblr page or feed? Absolutely. But unless the reader of the reblogged content gets back to that page or to the standalone website, there can’t be any sale. The way Tumblr is read needs to be remembered if it’s used as a promotional channel. Tumblr could also be a potentially strange way to publish comics that need to be read in a specific sequence. There’s no denying its reach, though.

Advertising is another marketing method that gets mixed reviews for webcomics. The thing to keep in mind is targeting the audience. The more specific the target, the more likely success is. One popular method is to find similarly themed comics on Project Wonderful. All webcomics do not share the same audience, so the key is trying to match your comic to another one that the same readers might enjoy. Another option is Facebook advertising. Again, the key is to focus on criteria of people that would enjoy your strip. If liking fan pages for other webcomics yields a large number of people, that’s one way, but on Facebook you can also filter for other interests, so if it’s a comic about fishing, try for an intersection of people who like comics and fishing. Narrow the criteria for displaying the ads. But remember with Facebook, if you’re advertising for “likes” on the comic’s fan page, Facebook might throttle how often the fan page posts appear in news feeds. Getting readers to the strips takes precedence over likes until Facebook decides to play fair with fan pages.

Gag-of-the-Day Comics vs. Story Comics

One of the points of contention in webcomics is the argument about whether it’s better to do a comic that’s a series of standalone gags or an ongoing story. The answer is, it depends on what you want to do and what you feel comfortable with. It’s usually best to go with what interests you. The reader will know if you’re not engaged with your own comic. That said, it is definitely easier to promote and possibly to monetize a gag-a-day strip than it is an ongoing story strip.

There are two big promotional advantages to one-off humor as a format. First, it’s much easier for these strips to get shared through social media and social sharing sites. It’s simply a matter of people passing around a joke, which is, metaphorically speaking, the online equivalent of posting a strip on the refrigerator. Second, a new reader can come in at any time. There usually isn’t a lot of backstory to worry about.

On the merchandising side, humor does tend to lend itself to merchandising better than ongoing stories. The Oatmeal likes to convert popular comics to poster format for an example. If a gag can be summed up in one image, that’s something that’s easy to put on a t-shirt. (Please note: putting a punchline on a t-shirt does not always make sense without the context of the panels leading up to it.) The idea is to mine the humor that translates to other mediums and forms, not blindly shove it into other formats. Humor does tend to present options and an audience going to a website for humor is more likely to buy funny t-shirts, even if they’re not directly based on the website’s comic.

With story based strips, there are things that need to be thought about before the strip goes online. A problem that arises with story strips is that new readers can’t always just jump into a comic mid-story. They need to either jump back to the beginning of the story or back to the beginning of the entire comic. If the comic is several years old, this can be a daunting task.

It may be a good idea to approach each story arc as though it were a standalone book. In fact, these stories might be published as standalone books later. Introduce the main characters as they appear. Don’t make the new reader go back to read old material to figure out what’s going on. Give the new reader the opportunity to jump to the beginning of the story arc, rather than to the first chapter.

A story-based webcomic should not automatically be presented the same way as a one-off humor webcomic. You see them presented in several different ways: the standard newspaper-style strip, one comic book/graphic novel page at a time or in the case of Avatar Press’s webcomics (Freak Angels or Disenchanted) a chapter at a time. Each format has been used successfully, but the question remains, what is most appropriate?

If the end-game for the webcomic is collection as a print book or eBook, it’s appropriate to think about the structure in terms of the final pages and how those will be read. That doesn’t mean that full pages need to be what’s posted, but if the newspaper-style strips will be stacked to make pages, the strips should be produced with the final pages in mind.

If advertising is a major part of the revenue model, then having individual strips posted one per page makes sense. If advertising is not a major part of the revenue model, it might make sense to have more content on a single webpage and allow for more of a reading experience, be it posting the comics as book pages or several strips on one page.

Another idea worth considering is Heidi MacDonald’s “Satisfying Chunk” theory from comic books. The theory is that in each installment of a comic, there should be enough material for the reader to consider it a “Satisfying Chunk” of material. Something happens in the installment: the plot moves forward or there is a significant character development. This is more typical of webcomics like Freak Angels that publish in chapters and the Freak Angels structure of six page installments which it borrows from the tradition of British weekly comics like 2000 A.D.

Readers may also opt to create the Satisfying Chunk experience on their own by visiting a webcomic on a monthly basis, instead of daily or weekly, thus reading more new material in one sitting.

The downside to the Satisfying Chunk is that it can require more material to be generated than a webcomic typically produces and lends itself to a slower update schedule: more weekly than daily. For some types of stories, it may be a valid option and lend itself towards a better reading experience for the eventual collected edition.

Since the collected editions tend to be a larger part of the revenue stream for story-based comics, it is important to keep the entire series of books in print. The urge to start at the beginning of the series is even stronger for books and on the off chance the print editions find their way into the Direct Market comics retail system, it will be harder for retailers to sell the third volume in a series if the first volume is out of print.

Since story comics aren’t as good a fit for social sharing, cartoonists need to go on the offensive to promote when a new story arc (i.e., jumping on point) launches. Much as with launching a new webcomic, and in keeping with the Satisfying Chunk theory, it may be a good idea to wait until there’s enough material for the new reader to get a feel for the story before courting new readers and link to the first page/strip of the new story.

How Long Does It Take To Get Momentum?

There really is not a formula for how long it takes for a webcomic to gather momentum and start becoming successful. There are also different definitions of success: number of readers, growth in readers, supplemental income, full-time/quit the day job income. All are valid definitions depending on a cartoonist’s circumstances.

In 2004, the conventional wisdom was that it took a year for a webcomic to gain traction and to be able to tell what it was going to be and start earning some revenue. In 2014, the conventional wisdom is two or three years. Part of that is that there are more webcomics now and it’s harder to stand out. Part of it is because getting enough material for a book can take two or three years, depending on how frequently the strip is updated, and crowdfunding the print edition is approaching a rite of passage status for cartoonists.

Cartoonist Andres Rodriguez has created a rough model that places webcomics in four tiers, based on their size and success. In most cases, he’s noticed that the tiers also correspond to how long the webcomic has been produced.

Tier 1 – The webcomic is a successful and “proper” business with multiple projects. Established for over 10 years. Example: Penny Arcade

Tier 2 – The webcomic earns a “steady, secure income,” but not may not have a staff (i.e., full-time employees) and isn’t in multiple forms of media (animation or Penny Arcade’s convention business). Essentially, the webcomic is a business, but isn’t a multi-media empire. Established for 8-9 years. Example: The Oatmeal, PVP, SMBC

Tier 3 – The webcomic is established with a following, but is supplemental income, rather than a full-time income. Essentially,the webcomic is a part-time business. Established 3-8 years. Example: Zorphbert and Fred.

Tier 4 – The webcomic is new and/or the creator is just getting established. Essentially the hobbyist stage before it starts functioning as a part-time business. Established 0-3 years.

Rodriguez notes that it’s easy enough to advance from Tier 4 to Tier 3, but gets harder to jump tiers as you move up. He also notes the lower Tiers “suffer from saturation and homogenization.”114 This model isn’t perfect, but a significant number of webcomics fit into it and into its timelines, with the caveat that The Oatmeal and SMBC might be comfortable with their current incarnations and the respective cartoonists aren’t the only persons working on their businesses. That the timelines roughly fit speaks to the discoverability and marketing issues faced by webcomics.

The higher Tier comics have been around longer, were established when there was less competition and the cartoonists have had more time to develop their business practices and determine what works with their comic and their audience. It also suggests that word of mouth places a large role in the growth of a webcomic. The longer a webcomic is around, the more people will eventually encounter and – assuming the quality is sufficient to keep the readers – the audience should grow incrementally over time. It suggests that shortcuts to advancing in popularity and revenue are somewhat uncommon.

While there are exceptions to this rule, it does appear to be a somewhat sound general approach to the webcomics market. Getting some basic traction and revenue will likely take somewhere in the 1-3 year range and at least another year or two before anything approaching a full-time income presents itself.

Webcomics require a long term commitment.

Hosting Costs

The real wild card in calculating the revenues of webcomics is the cost of bandwidth. The size of a web comic tends to be very much a personal thing for cartoonists with anything going from a black and white replication of a daily newspaper comic strip to a comic-book sized full color page. The cost of bandwidth also varies widely – to the extent, once a beginner account is passed, there is no rhyme or reason to hosting costs. It all boils down to what kind of a deal can be negotiated and who the host is.

The graphic for a black and white comic strip formatted web comic, roughly 670 pixels x 275 pixels, will be in the neighborhood of 30K in size. A full color comic book page (600 pixels by 875 pixels) could be 500K or more in size. Additionally, many web comics have a great deal of text on the page with advertising copy, links, logos and the like and adding as much as an additional 100K to the page.

Web design manuals will talk about how large the file size of a page should be, in terms of downloading quickly. You should also be concerned how large a page’s download size is, because you’re ultimately paying for the amount a data transferred. As your traffic increases, this becomes increasingly important, so get in the mindset of conserving bandwidth now, and always determine what your cost to serve a webpage is in relationship to the income off a page. It may sound obvious, but it is seldom emphasized. If your traffic is in the millions of pageviews each month, it will eventually adds up.

A basic hosting package will normally cost about $10-$30 per month and give perhaps 1TB (1000GB) worth of data transfer. 1TB/1000 GB would account for approximately 7.5 million pageviews of a 30K web comic with 100K of other material on the page. For a larger strip of 150K (the largest size you’ll find in most webcomics) with 100K of extra material per page, such an account would account for 4 million page views. This really should be adequate for a webcomic starting out. Many webhosts advertise unlimited bandwidth. In practice, it’s usually unlimited up to a point and at that point you’ll be contacted about upgrading the site.

Web hosting is not nearly the expense it used to be, when, off the record, you’d hear of webcartoonists paying $800 - $1000 per month for large amounts of data transfer or dedicated connections. A high end managed server might cost $55 per month. A site with particularly large comics, say 250K/page, getting Oatmeal-esque traffic of 21 million pageviews/month would require 5,250 GB/5.25 TB of transfer. That’s likely to cost anywhere from $100 to $1000 per month, depending on the host, uptime guarantee and if the hosting services are managed. It’s not necessarily a guaranteed $1000+/mo like it previously was.

The alternative is to utilize a comics hosting service. There are a number of these, most of them are free and whether they offer a revenue share on advertising depends on the individual host. These services offer the possibility of getting some portal traffic from being on the site, but in reality that’s easier said than done, since a new strip will be competing with all the other ones on the site.

The free hosting services are all right for a hobby, but generally unsuitable if the comic achieves critical mass and it’s time to start generating revenue. At that point, the comic should have its own advertising and its own store. Those things just don’t work very well on the free hosts. If using a free host, the absolute most important thing is to buy a domain name for the comic and brand the comic as heavily as possible with that domain. If the comic leaves the free host, graduates if you will, a portion of the readers accessing it through the free hosting domain/portal will not move with the site, but all the people accessing the comic through the comic’s domain name should. There can be problems if the actual URL for the comic has the host’s domain name in it and the host’s branding supersedes the comic’s branding.

If a free host is used, always keep a backup of the material separate from the host. Anytime you do not control your own hosting, you will be subject to changes in host policies. The host could also cease operations and necessitate a move. Owning your own site is just better business in the long run and webcomics need to be thought of as a long term investment.

Chapter 8: A Short History of Digital Downloads

The music industry has been transformed by the paid download. In music, things sputtered around a bit before the digital format settled on .mp3 and then DRM-free files became standard. DRM-free means the files don’t have Digital Rights Management software attached. DRM files can only be copied a few times on certain computers in the most common implementation. It frequently means you don’t own your own digital files, you just have a license to use them. It’s messy and few music listeners liked the concept.

The history of digital downloads and eBooks for comics is a story about the struggle over who owns the rights to how digital comics are read, struggles with payment, the prodding of pirate sites and the appeasement of the Direct Market.

Pirates

Piracy came first, of course. It dates back to the mid-90s with the emergence of consumer-priced scanners. Originally, the pirated comics were just image files - .GIFs or .JPGs, one file per page. These pirated comics weren’t particularly easy to read, since instead of flipping a page, the pirate had to load a new file into the viewer. There aren’t clear records of the pirate trade, but consensus is that the .CBR and .CBZ formats appeared around 1999 or 2000. These were the same old graphic files, more frequently .JPGs, numbered sequentially and zipped in files, so that one file would be an entire issue of a comic. .CBR was the RAR format and .CBZ was the Zip format. With reader software, like the popular CDisplay program, the pirate could load the comic into the reader and flip through pages by pressing the spacebar. It is agreed that CDisplay first appeared on CNet’s software download service in May of 2000.115

The piracy was originally done on USENet, IRC and DC++, but became more widespread with the advent of torrents, much as with the music industry. It was the piracy that originally proved that people were at least willing to read comics on a computer screen, though it took traditional publishers a little while to completely come to grips with this.

Early Efforts

The first paid downloads to gain any widespread attention were eBooks at UnboundComics.com in 2001. Starting at $1.50 and then raising to $1.75 each, you could download PDF/Adobe formatted eBooks of a variety of old and out of print comics like Dalgoda and Timothy Truman’s Wilderness. Unbound also featured some original content, notably early work from Ben (30 Days of Night) Templesmith, as Templesmith adapted Shakespeare’s Hamlet.116

Unbound was eventually folded into the eBook website Fictionwise.com.

The really early download efforts never really got any traction, partially because transaction costs were so high. The credit card processing fee could be $1 or even $1.50, so on a $1.50 PDF, it’s likely less than $0.50 remained for the website and the cartoonists to split. Getting around the transaction fees was a huge problem for items with low prices in the early days of e-commerce. These small amount payments were referred to as “micropayments.” While the definition of micropayments varies and can mean anything from $2 to less than a dollar, this was the single biggest barrier for digital downloads at the dawn of the web browsing era.

Also in 2001, Marvel launched their “DotComics” program. These were Flash-based comics to be viewed in the browser. Flash allowed a panel-based navigation to be constructed, so instead of loading the entire page into a browser and scrolling up and down to read the page, sections of a page could be viewed at larger size, usually around 1/3 of a page. Marvel also had the advantage of the Flash format making it much more difficult for the comics to be pirated.

The DotComics were normally recent Marvel Comics that had sold out. At the time, Marvel wasn’t overprinting comics, so if the retailers’ initial orders were too low, there was an untapped demand and one of the benefits of the program was that readers could stay current with sold out titles. Notably, this supported the launch of Marvel’s Ultimate line of comics.

At one point, 100,000 DotComics were being downloaded each day and some series, such as “The Call” had higher digital download counts than print sales.117

Marvel moved away from the DotComics program in 2003.

In 2002, Crossgen launched their “Comics on the Web” program. Positioned more as an audience recruitment tool than a cash cow, for $1, the subscriber had web-based access to all of Crossgen’s comics library, but backdated 6 months from the current issues. Essentially what the world now calls “the Netflix model,” though Netflix didn’t start streaming until 2007. The initial goal was to get as many subscribers as possible with the knowledge that a percentage of online readers would buy the trade paperback collections in print and another percentage would be converted to buying the current print issues.118 There were at least 5000 subscribers.

Crossgen went bankrupt in 2004. Their assets were bought by Disney and their digital practices were more influential than anyone would have guessed in 2002.

Trying to Work Around Micropayments

In 2003, a company called BitPass jumped into the micropayments space with a comics angle. BitPass was one of a class of companies that attempted to facilitate micropayments by having the consumer run their credit card for a larger amount and put credits into an account on their service. Every time a purchase is made, a credit or set of credits is subtracted. It was a lot like using a bus pass or a commuter card, where you can put $5 on your pass and subtract $2 every time you get on the bus.

In the case of BitPass, they enlisted Scott McCloud to create and serialize a comic called “The Right Number” in their system. McCloud’s Understanding Comics work has made him nearly as famous in computing circles as he is in comics circles, particularly in design and UIX departments, so he was an ideal crossover creator. The idea was that consumers should purchase a minimum $3 worth of BitPass credits, pay $0.25 for the first installment of “The Right Number” and then have $2.75 worth of credit to spend on other content in their system.119

The problem occurred when many, likely most, of the people who came to BitPass for McCloud’s work couldn’t find any other content they wished to purchase. This is the sort of thing that only really works if there’s enough content in each particular niche to warrant buying into the commerce ecosystem. BitPass was a flashpoint for controversy, both in the comics community and the larger tech community. It never acquired the amount of content it needed and in January 2007, BitPass went out of business. PayPal’s entrance into the world of micropayments was really the death knell for the BitPass class of micropayments work-around services.120

In August 2005, online payment processor, PayPal, announced a new discount structure for micropayments: transactions under $2.00 cost $.05 plus 5% of the transaction.121

This solved the longstanding problem that micropayment companies had been trying to scheme their way around. Digital downloads could now be sold for less than a dollar. Bundling wasn’t required. Keeping money in an account wasn’t required. The consumer could now buy only what was wanted and while the percentage kept after transaction did get low as the price approached $0.25, that $0.25 price wasn’t even feasible in July 2005, outside of one of the bus-pass centric micropayment systems. It also made it much simpler for someone to process online transactions with PayPal operating as both a merchant account and payment gateway. This opened up e-commerce for more than just comics and fundamentally changed how payments were processed.

The First of the Next Wave

Clickwheel was an early entrant in 2005 and initially focusing on .PDFs and later .CBRs. Never a major player in the United States, they were bought by the UK’s Rebellion (owners of 2000 AD) in early 2007, making that the first publisher-owned digital comics download service.122 This is the longest lived paid comics download service, though it’s in a slightly different form than it originated in.

An Expensive Download

Moving forward to February 2006, another download experiment began, one with a bit more data available, as your author was in charge of the implementation. The Flying Friar was a one-shot graphic novella possibly best known at the time of solicitation for its author, Rich Johnston. Johnston was best known at the time for the long-running gossip column “Lying in the Gutters” at ComicBookResources.com, and though he has dabbled in comics several times over the years, was not really known for his comics work at this point. Initial orders for the book were estimated at 1700.

A week before book was released, a minor media storm hit. The Flying Friar was a satire combining the myth of Superman with St. Joseph of Copertino, an actual Catholic saint. The book was covered by the Times of London, The Guardian, BBC radio and papers as far away as Italy and India. In the face of a sudden swarm of publicity, it was decided to co-opt the RichJohnston.com website into a download site for a PDF version of The Flying Friar. As the download was to be launched the Sunday after the book was released in print, the price was set at the same as the cover price, $4.95, in an effort to reduce channel conflict and promote the download as an alternative to the print edition. Unfortunately, the site was launched after the initial mainstream coverage and was discussed almost exclusively on comic book web sites.

The response was successful more from a systemic sense, than raw numbers. In the following year, 44 copies were downloaded. A small number, but not necessarily when looked at in context. 1% is the rule of thumb number when figuring conversions. 44 copies translate to a little over 2.5% of the print orders. Additionally, the conversion rate for incoming visitors was 2%. Both numbers being double what you would expect for a one-off website of a small press product, especially when dealing with an audience known for collecting printed comics. Perhaps more in line with expectations in an international marketplace, 23% of downloads were confirmed as foreign. 44 copies of the Flying Friar yielded $217.80.

As a test case, this shows a slightly greater than expected market proportional to the traditional print market showing up and purchasing for the print price. It also made a case for further experiments, and it was towards the tail end of that year the experiments began in earnest.

Downloads For Everyone

The end of 2006 and early 2007 saw three new players entering this paid download space:

• Eyemelt.com, the online effort of print publisher, Slave Labor Graphics/SLG. Eyemelt sold digital editions of print. Downloads that were previously in print cost $0.69. Files were in .CBZ format.123
• Pullboxonline.com was an online effort by the staff of Devil’s Due, primarily offering downloads of comics by Devil’s Due, along with a smaller selection of IDW titles, downloads by cartoonist Jim Mahfood, and other assorted independent fare. Most downloads were priced at $0.99, up to $4.99 for a graphic novel. Files were in .PDF and .CBR formats.124
• Drivethrucomics.com, an eBook store/spinoff by online role playing games retailer, Drivethrurpg.com. Drivethrucomics.com offered most downloads for $1.99, though a digital edition of a graphic novel could be as high as $11.95. Drivethrucomics initially offered both old and current comics by a variety of publishers, but has since started offering original works. All comics are .PDF. Driverthrucomics is interesting in that it spins out of a gaming website and to this day its content mix is very different than the digital comics companies with more of a print pedigree.125
  Marvel Comics Back To Digital

In November of 2007, Marvel attempted to duplicate Crossgen’s Comics On the Web program. Initially titled Marvel Digital Comics Unlimited, AKA Marvel DCU (a joke at the expense of rival DC, whose “DC Universe” of superhero titles is referred to as the “DCU”), this was an attempt to monetize Marvel’s back issue catalog. For a monthly fee of $9.99, readers could access as many back issues online as they cared to read.126

The initial issue selection was extremely spotty and by 2014, the entire catalog still isn’t quite online. How current the selection of comics is has varied over the years. Officially, it was always stated comics would be six months behind the current issues – just like Comics On the Web – however, in practice, it was often closer to a year behind, though a renewed emphasis on the program in 2013 and 2014 saw a more uniform return to the six month delay as a standard.

Not quite a year later, in October 2008, Marvel expanded to comics on cell phones in the European market, partnering with Campfire A/S.127

The 800lb Gorilla Arrives in Disguise

While Marvel, Slave Labor, Devil’s Due and Drivethrucomics were all busy putting comics online in 2007, the eventual market leader was quietly born. Comixology won a business plan competition at NYU and was born with the prize money. Comixology didn’t start out by putting digital comics online. They started out as a service to help Direct Market comic retailers and their customers keep more up-to-date advance order lists. John D. Roberts, the real father of Marvel’s then-abandoned DotComics program was a co-founder of Comixology. Marvel’s decision to discontinue DotComics would prove to be a very foolish one and Roberts quietly started building the next iteration of his digital comics vision. One that would not pop up in public for a several months.

The Format Wars Begin

Prior to 2007, the early attempts at downloadable comics were in formats like PDF, .CBR and .CBZ. Adobe’s .PDF standard was proprietary at the time, not becoming an open standard until 2008. It was a fairly common format, though, and not one owned by a comics publisher or website. .CBR and .CBZ are open source and by some definitions, not a real publication format. They also weren’t protected by Digital Rights Management software (DRM). All this was about to change, as established publishing and licensed characters were about to enter the world of downloadable comics.

A very high percentage of modern comics is concerned with licensed characters from Hollywood-centric properties. DC is owned by Warner Brothers. Marvel is owned by Disney. Popular independently published comics with licensed characters include Transformers, GI Joe, My Little Pony, Aliens, Predator, Big Trouble in Little China, X-Files and Star Trek. Hollywood is very much into DRM, largely because of their dislike of movie pirates. That’s not exactly news, but not everyone realizes that the contracts for licensed comics usually dictated that digital must have DRM attached to it, particularly as digital downloadable comics were starting up. This makes .CBR and .CBZ unusable and .PDF less than optimal. On top of that, there are some issues related to how to display a comic on a screen of varying sizes, the question of partial page navigation and fixed width display, so ePub wasn’t really made for comics, especially in its early iterations. This meant it was time for a new format.

With new formats come new opportunities. When a DVD or a Blu-Ray is encoded, a fee must be paid for use of the format. A proprietary format means the inventor owns the format and can either profit as other people use it or keep the format in-house. In the case of Amazon, they use their Kindle eBook format to lock readers into their system. In the case of Blu-Ray, Sony receives payments for the technology’s use.

This DRM and proprietary format comes with some downsides. In the case of digital files, a consumer can be buying a license for the content instead of actually owning the file. It means the consumer may have trouble maintaining a backup copy. It means that if a startup goes out of business, the consumer may no longer have the copies of what was purchased or a means to read the files. In the music industry and open standard – .MP3 – was settled on and sales didn’t really take off until DRM-free files were readily available. This has been an issue from day one with licensed digital comics and is an issue that isn’t quite resolved yet.

Several players had already jumped into the digital downloads/ eBooks for comics space. Not all of them had proprietary formats and most of them have not survived. 2008 was when things started to get interesting.

The first major player to emerge in the age of proprietary formats, with the DRM necessary to appease the licensing concerns was iVerse in 2008. iVerse’s initial point of focus was the iPhone and iPod Touch.128 This was before the advent of the iPad, but starts the close association digital comics have had with Apple and the iTunes commerce engine. iVerse would become one of the first major players, specializing in publisher specific-apps for companies like IDW129, Archie and Ape Entertainment’s Pocket God comic. Pocket God would go on to sell more than half a million digital comics, one of the first breakout hits.130

Comixology would finally launch their “Comics by Comixology” app in mid-2009.131 Much like iVerse they started out targeting the iPhone for the initial efforts. Comixology’s calling card was “Guided View,” a more refined version of the DotComic navigation system, which could go down to a panel-by-panel and word balloon by word balloon progression if need be.

Marvel held out until late October of 2009 before starting to release digital through iVerse, Comixology, PanelFly and Scrollmotion.132 PanelFly is another early comics app.While the company does not appear to have formally shut down, the app is no longer in Apple’s App Store. Scrollmotion is an eBook platform that no longer appears to be workign with Marvel.

This set the stage for what was the brief reign of mobile phones and a little bit of web browser-based comics reading. What comics was missing was the natural piece of hardware to read comics on. After all, the iPod played an important part in sparking music sales and the early Kindles were black and white, without suitable graphics capabilities for comics. The killer piece of hardware was unveiled in early 2010 – the iPad.

The big winners in the iPad launch were Marvel and Comixology. Comixology made a Marvel app that was pre-loaded on the initial release of the iPads to technology reviewers and intended to showcase what you could do with an iPad.133 There’s a bit more to that story, though. Marvel was bought by Disney. Because of Disney’s acquisition of Pixar, Steve Jobs was the single largest Disney shareholder at the time. While the Marvel app certainly was appropriate for showing off the iPad’s capabilities, Jobs was also doing Disney, and himself, a favor by promoting Marvel’s app in the initial launch.

Comixology had a previous relationship with Marvel in the form of co-founder John Roberts. They were also widely considered the better display app at the time. Still, it was that exposure with the iPad rollout that gave Comixology momentum and also starting swinging traffic to their iPad app. If iVerse had done the Marvel app, as they had experience doing with IDW and Archie or if the non-company specific iVerse app were featured instead of a Comixology app, it’s likely the tablet momentum would’ve been started out with iVerse and we might have a slightly different landscape today. The iPad exposure was that pivotal for the digital download market.

The iPad was commercially available in April of 2010, but at that point it was just Marvel, Archie (much of whose circulation exists outside the Direct Market) and the independent publishers offering the download/eBook experience. It was not until June 2010 that DC finally agreed to enter this market, choosing to place their comics with Comixology and also on the Playstation gaming platform, which ceased selling digital comics in 2012.134 DC did not enter into an exclusive arrangement with Comixology, but it has remained the only general comics app they’ve used. Comixology also built a publisher-specific app for DC.

The final major straggler was Dark Horse Comics, which waited until April 2011 to go digital and did so with its own proprietary web store and app.135 Dark Horse would go on to provide digital trade paperbacks to online bookstores like Amazon, but keep their monthly titles in-house.

Online Bookstores Join In

Shortly after the launch of the iPad, online bookstores started to take an active interest in comics as eBooks. As noted by Andy Ihnatk in his account of the iPad launch, iBooks had a category for “Comics and Graphic Novels” set up and ready to be populated out with books.136 iBooks used an ePub3 format with some custom hooks for fixed width display.

The Kindle Fire and the color Nook brought Amazon and Barnes & Noble into the fray. In September 2011, DC gave Amazon and the Kindle exclusive digital rights to 100 Graphic Novels.137 This prompted Barnes & Noble and Books-A-Million to remove the physical graphic novels from their shelves in a dispute.138 DC would expand the digital distribution of its monthly titles to include Kindle, Nook and iBooks in October 2012139 and add Google Play to the mix with Graphic Novels in October 2013140 and then the monthly comics in April 2014141.

Marvel went over to the Nook platform with digital graphic novels in November 2011, shortly after DC’s incident with the Kindle exclusivity.142 They came to a broad agreement with Amazon for the Kindle in December 2012.143

The online bookstore market tends to mirror the physical bookstore market and put an emphasis on the digital versions of graphic novels, though the stores will tend to have some of the monthly issues. The major players have settled down to Amazon/Kindle, Barnes & Noble/Nook (Nook being due to be spun off), Apple/iBooks and Google Play. Google Play being newest to the game.

As the eBook market was growing, the major comics publishers were chess pieces as Kindle and Nook wanted to have exclusive material, at least exclusive from each other. For a period of time, you’d most likely see all the monthlies at Comixology and then the digital tpbs scattered between the various eBook outlets with a few monthlies scattered about. Comixology didn’t start out getting a large percentage of the digital trade paperbacks. This eventually was smoothed over and the major publisher content is in most places. The distribution of the independent content, particularly independent monthly comics, is more likely to be on a comics app like Comixology or iVerse, however. The mix of graphic novels and monthly comics is changing, and will change drastically as Amazon integrates Comixology, but that is the rule of thumb for the moment.

Simultaneous Delivery – The Next Barrier

When comics first went digital, only the occasional Marvel DotComic would come out anywhere near the issue’s print release date. The overwhelming majority of digital comics were back issues, rolled out in what often seemed like a random order and distribution. For the digital download/eBook market to really grow, the current issues needed to come out at the same time as the print issues did.

The first simultaneous release was an experiment by BOOM! Studios. In January of 2008, BOOM! started releasing the mini-series North Wind as a free download on MySpace at the same time as print. Like the DotComics, this was a promotional effort that BOOM! said yielded a 30% increase in print orders. It also caused considerable concern among Direct Market retailers, many of whom were very upset, feeling that digital availability would undercut sales.144

Much like the Direct Market, shifts in digital downloads seldom happen until DC and Marvel participate. In June of 2010, Marvel announced that Iron Man Annual #1 would be simultaneously released in print and digital at the end of the month. Interestingly, likely in an attempt to appease Direct Market retailers, the annual would be sold in 3 separate files and the total cost would be $1 more than the print version. 145

After finally venturing into digital comics with their own characters, DC jumped in and made an announcement that their Generation Lost mini-series would be simultaneously released in print and digital starting the third week of June 2010.146 So Marvel announced first, but DC actually published first.

This started more publishers experimenting with simultaneous release here and there. Archie was the first publisher to move their entire line over to simultaneous release. They announced it in January of 2011 for an April launch.147 Archie has never had as much of its line sold in the Direct Market as the other comics publishers, so they really had less to lose, by way of retailers potentially become angry and cutting orders. This opened the floodgates.

DC opted to start simultaneous release with their “New 52” relaunch of their line in September 2011.148 This forced Marvel’s hand and in November of 2011, they announced they would start rolling out simultaneous release with the goal of having all titles in both digital and print by the end of March 2012.149

As the simultaneous release started, the channel conflict, which had largely been simmering in the background erupted. The Direct Market retailers had never liked the idea of comics being sold online. They didn’t like it when Marvel’s DotComic program put sold out comics online. They didn’t like it when the Flying Friar came out a few days after it did in print (ironically, many of those complaining had never ordered the comic in the first place, making it a moot point). They didn’t like it when North Wind was released online. And they certainly didn’t like having DC and Marvel selling their comics online at the same time. Even though most of this digital commerce was done through online vendors, a large number of retailers considered this to be publishers acting against the best interests of retail.

Forrester Research VP calls this kind of channel conflict the “thorniest issue of all on the Internet,” and warns that traditional sales channel partners can be detrimental when it comes to the Internet, blocking sales growth and causing potential customers to become frustrated and cease trying to buy an item or brand when they cannot easily purchase a product from a company site that has been reduced to strictly marketing content by aggressive channel partners.150

The concession publishers made to the Direct Market was to keep the list price of the digital comics the same as the cover price of the print comics, even though consumer expectations for prose books is a lower price for digital. Some publishers will lower the price after an issue has been on sale a month or two.

Retailers eventually calmed down a bit after it became clear that print sales were still going up at the same time digital sales were rising, but the spectre of channel conflict has not left the industry and could resurface at any time, particularly if discounts for digital comics should start appearing.

Digital First

“Digital first” comics, as they call comics that are first released in digital format, usually with some sort of print collection being intended at a later date, really started with .PDF files back in the days following the turn of the century. They were small circulation and far removed from the world of print comics.

Digital first as it’s more commonly known today started in May 2009. Early digital adopter Slave Labor Graphics, now going by the name SLG Publishing, had their Warlord of Io comic rejected by Diamond on the grounds that the one-shot preceding it hadn’t sold well enough. SLG responded by putting the issue for sale online and planning a collected edition later.151 SLG went one step further and switched to entirely digital first distribution in September 2011, roughly the same time DC switched to simultaneous release. SLG would serialize the stories for all series in digital issues and then collected them in print as books. Really, the process is not all that different from the print collections of webcomics or comic strips.152

DC was experimenting with digital first as early as May 2011 with “digital exclusive” supplements to its Batman: Arkham City mini-series.153 In February 2012, they’d start their first ongoing digital first titles with Batman Beyond and Justice League Beyond.154 This would start a regular cycle of digital first comics featuring Superman, Batman, Wonder Woman and comic versions of DC’s TV shows and video games. In January 2013, DC launched what would be traditional publishing’s first and greatest breakout hit in the digital first world: Injustice: Gods Among Us, based on the video game.155 DC’s digital first strategy is predicated on later collecting digital issues in monthly print editions and then in book format. DC has made the largest commitment to digital first among the major publishers, typically having 5 new digital issues each week.

Marvel had been previously been experimenting with adding new digital comics to their Marvel Digital Comics Unlimited format, such as a 2009 Spider-Girl series.156 Marvel didn’t really enter the digital download market with any force until they launched their “Infinite” line of digital comics in March of 2012, coinciding with and tying into their AVX event/mini-series.157 “Infinite” comics are initially associated with Mark Waid, who wrote the first installment and would launch his Thrillbent digital comics website with similar display methods two months later.

Much of the print market planned their digital first experiments in 2011 and then launched in 2012. As far as pure digital first, with print as non-concern, the best known imprint is Monkeybrain, which launched its lineup on July 4, 2012.158 Monkeybrain Comics is a digital offshoot of Monkeybrain Books, which operated in the print market with prose books. Launching under an exclusive deal with Comixology, Monkeybrain had launched 53 titles by September 2013. Not all titles are ongoing or monthly, but it has produced the most lauded digital first comic outside the print publishers in Bandette, which won the 2013 Eisner for Best Digital Comic.159 Monkeybrain is unusual in that they only ask for digital rights, leaving their creators to shop the properties around for print collections. Book-format reprints have been issued by Dark Horse and IDW, among others.

Diamond Enters the Digital Market

As all the digital first experiments were starting to get underway, Diamond decided to attempt to join the digital landscape. Diamond partnered with iVerse to launch their own digital comics network on July 23, 2012.160 () As Diamond was a distributor, they didn’t want to compete with the Direct Market retailers. Rather, they wanted to provide a way for the retailers to sell digital comics. The ultimate solution was to let retailers place a digital comics storefront on their store’s website. Customers could buy the comics at the store’s website and then read the digital comics using a separate “Digital Comics Reader” app. It was not possible to buy comics directly through this app. In theory, this meant Diamond was distributing digital comics to the Direct Market stores. In reality, it was an incredibly clunky process and anyone downloading the Digital Comics Reader app without already knowing what the relationship with the Direct Market retailer digital storefronts was would likely be utterly baffled.

Aside from the overly complicated way that the consumer would need to buy in one place and read in another, Diamond’s digital comics had another problem: DC and Marvel weren’t signed on for the offering. Marvel was in the middle of an exclusive with Comixology, so that was unlikely to have been in the cards from the point of initial planning, however without DC or Marvel, that’s roughly 70% of Diamond’s market unavailable in their digital offering. If the consumer wanted to have any DC or Marvel comics in their digital library, they would have to use two different formats or apps. This made the app a non-starter. Diamond shut down the program at the end of February 2014.161

Diamond didn’t wait very long for their next incursion into the digital world. At the end of May 2014, three months after discontinuing the previous program, Diamond entered into a partnership with Trajectory, a “digital publishing and distribution vendor.”162 Trajectory’s business model is to convert comics (or books) into the various online formats and distribute them to eBook distributors and storefronts globally. They also do some translation work for the foreign markets. This relationship will, in theory, allow Diamond to become a digital distributor and effectively route the digital comics in a similar way to how their book distribution wing works.

iVerse Diversifies

While Trajectory moving into foreign distribution and translation for comics may sound like a bold move, it really wasn’t. As the digital comics market started to play out, iVerse noticed that over 50% of their sales were foreign, which prompted them to take a little closer look at those markets. In September 2012, they launched a program to translate both monthly comics and trade paperbacks and sell them in the native language in markets like Japan, China and India.163

The library market also caught iVerse’s eye. While there was a small amount of material available through the Overdrive network, iVerse identified a need for more material: a combination of young adult, manga and Direct Market titles. The program was announced in April of 2012164 and formally launched in June 2013.165

Newcomers Arriving

Tablets opened up the digital download market in a much bigger way than smart phones did. While Apple and the iPad were definitely the driver, they weren’t the only game in town and the expanding marketplace started to bring some newcomers to the field.

Madefire publicly launched in June of 2012.166 Madefire is a platform that pushes the boundaries between comics and animation. While not precisely a motion comic – Madefire still uses word balloons instead of voice overs – this format adds minor animation, sound effects and the ability to step through and have the word balloons or sound effects appear in the panel/frame one at a time. It’s a more built out version of Marvel’s Infinity format or Thrillbent on the webcomics side of things.

While slow to expand beyond the iOS platform, Madefire struck a deal both to make its tools available onsite for members of the massively large website and artists’ community DeviantART and sell their motion books on the site.167 This has already produced a breakout hit. “Milk for the Ugly,” a motion book native to the DeviantART community has exceeded 700K views.168

Madefire also created an unusual sort of hybrid comic with DC. Batman: Arkham Origins combined the choices and structure of a Choose Your Own Adventure book with a motion book, to make a comic book where the reader chooses the path of the story. Something that further pushes the boundaries of the medium.169

Another company that would affect the digital downloads market is Gumroad. Launched in April 2011, though flying under the general radar at the time, Gumroad merged a link shortener with an e-commerce platform. Essentially allowing users to share a short link which leads to a product page and a quick purchase. Gumroad has become a popular digital download tool for webcomics creators.170

In March 2013, Brian K. Vaughan started his Panel Syndicate site with The Private Eye, a digital download in collaboration with artist Marcos Martin. This was a highly unusual project for two reasons. First off, Vaughan was an incredibly hot writer from his Saga work and Martin was coming off some much lauded work on Daredevil. Possibly the hottest creator combination on a digital first comic to date. Secondly, The Private Eye was offered on a “Pay What You Want” basis, the pricing scheme made famous by Radiohead’s In Rainbows album release where the consumer downloads the piece and sets their own price. This could be nothing or could, in theory, be $100.171

While this is not a common business model and the Vaughan/Martin combination gets more attention than most creator pairings, as the 8th issue was being released, Vaughan reported the previous 7 had achieved over 6 figures in both sales/download and revenue, making that a very successful project.172 A flat $100,000 in revenue would break down to a bit over $14,000 per issue and would work out to the normal $500/page standard rate for DC and Marvel for a 28 page issue. Likely Vaughan and Martin are coming out a little ahead of the standard rates while existing outside the traditional system.

In April, 2014, Humble Bundle started distributing comics with a set of Image titles.173 Humble Bundle is a company that offers bundles of a variety of different content, including video games and eBooks, in a system where the consumer names their own price, with certain content held back for specific minimum prices. Part of the revenue goes towards charity. Humble Bundle can move 10,000+ bundles with some regularity. Their best performing bundle was Doctor Who comics from IDW with 50,139 bundles downloaded and for $563,351.39.174

DRM Opening Up

One of the major issues with the growth of digital comics has been DRM. DRM was a major issue for the rise of digital music, which didn’t really take off until DRM was done away with. Digital comics initially clung to DRM, but the tide was starting to change in the Fall of 2014.

The warning shot against DRM was the collapse of JManga in March 2013. JManga was a site that allowed consumers to buy access to issues of manga viewable on that site. When the site went out of business, JManga’s customers lost their ability to read the comics they’d purchased.175

While this may not seem like a direct comparison to DRM, it really is. With DRM, you frequently are buying a license to use a file, not the actual file. If you switch computers too many times, you could have trouble moving your files. If the company you’re buying the digital comics from is using a proprietary format for the files and the company goes out of business, you could have trouble being able to read the files. Particularly if the reader software stops working with newer operating systems. That’s a very real issue, especially when dealing with technology startups.

DRM wasn’t an issue for the earliest adopters like SLG, but when the comics apps came around, DRM was firmly in place. The first of the major publishers to go DRM-Free was Image Comics in July of 2013. Image, unencumbered by licensing deals, launched their own digital store on the Image website and started offering DRM-free copies in .PDF, ePub, .CBR and .CBZ.176

In July 2014, Comixology announced they would have DRM-free backups available for certain publishers, including Top Shelf, Image, Dynamite, Thrillbent, and Zenescope. The primary purchases would still be in Comixology’s proprietary format, but .PDF and .CBZ format files would be available on participating titles.177

A month later, Dynamite launched their own digital store, not unlike Image and SLG before them, offering more DRM-free titles.178

In September 2014, Comixology announced a second wave of publishers including IDW Publishing, Valiant Entertainment, Oni Press, Fantagraphics Books, Aspen Comics, Action Lab Entertainment, Th3rd World Studios, A Wave Blue World, Blind Ferret Entertainment, Caliber Comics, Creative Impulse Entertainment, Devil’s Due Entertainment, GT Labs Comics and Kingstone Media.179

While Dynamite had previously made licensed titles DRM-free, such as the Conde Nast pulp character comics, IDW throwing in had great significance. IDW further clarified, “It’s our entire line with the exception of TMNT, Godzilla and Cartoon Network titles. Those are restricted per licensor request.”180

This means Hasbro (GI Joe, Transformers) and CBS/Paramount (Star Trek) signed off on DRM-free distribution and the first sign of Hollywood’s acceptance of DRM-free occurred. This is not yet a universal attitude. Disney (Marvel) and Warner (DC and the Cartoon Network line published by IDW) are still the major players in comics and committed to DRM.

Amazon Acquires Comixology and the Chain Reactions Start

Amazon turned the digital comics market upside down when it acquired Comixology, but there’s a narrative that leads into the acquisition.

Comixology is a venture capital-backed company. It’s not remotely unusual for a technology-based startup to have VC backing, but it means that the investors need an exit. That usually means that the company needs to be bought or do an IPO so the investors can sell their shares. So an acquisition was always a possible, if not likely, outcome for Comixology.

As 2013 started, Comixology was the master of its domain. It was the primary digital source for new comics. It controlled the company apps for the majority of the major comics publishers. A string of events happened that caused a shift in how the market viewed Comixology and likely hastened the sale.

In March 2013, Comixology was set to make a big splash at SXSW, a major conference for the interactive technology world. Marvel and Comixology were set to announce a giveaway – 700 free Marvel #1 issues, which would be downloaded from Comixology. It was a popular promotion. Entirely too popular as it turns out. The rush of consumers to get their free comics completely shut down Comixology’s servers, starting around 6 hours after the announcement on the 10th (the Sunday of the announcement) and things weren’t comfortably stabilized until late Monday or Tuesday, fortunately avoiding an outage on Wednesday (new comic book day).181

This shutdown also affected publisher storefronts, with publishers unable to sell both on the Comixology site/app and their own apps. Many users were locked out of their accounts, so if they had a comic that was purchased but they hadn’t downloaded yet, they weren’t able to download. This caused great distress for the publishers, most of whom declined comment and didn’t make the consumer base particularly happy.182

A few weeks after the server meltdown, another crisis happened. Comixology ran the vast majority of their transactions through their Apple app and Apple was well known for banning what Apple construed to be material inappropriate to children from being sold in the app store. Brian K. Vaughan announced that Saga #12 would not be available on iOS, saying, “Unfortunately, because of two postage stamp-sized images of gay sex, Apple is banning tomorrow’s SAGA #12 from being sold through any iOS apps.”183

It turned out that Saga #12 hadn’t been banned by Apple. Comixology was just concerned that Apple would ban it and hadn’t submitted it. That it hadn’t even been submitted was not clearly communicated and somewhere in the communication chain between Comixology, Image Comics and Vaughan, the distinction was not made.184

Saga would always be available in iBooks, which doesn’t have the same restrictions. Vaughan’s initial angry reaction to the situation garnered a lot of publicity and opened the discussion of comics that Comixology wouldn’t or couldn’t sell on their app to greater scrutiny.

It came out later in the year that Apple had banned at least 59 comics from purchase within an iOS app, effectively locking those comics out of the dominant comics purchasing platform. Creators and publishers were not happy. Image Comics, in particular, was not happy and the censorship issue combined with the access issues surrounding the SXSW system outage were likely factors in Image opening its own digital comics service. While Comixology likely could have communicated with publishers and creators about the Apple bannings with more transparency, this was ultimately an issue outside of their control.185

When the 2014 SXSW festival rolled around the following March, there were plenty of rumors making the rounds that a multitude of publishers were still angry about the previous year’s outage and that Marvel, in particular, was continuing to ramp up their interactive department with an eye on a new digital comics reader and perhaps selling new releases on their own app. Sure enough, at SXSW Marvel did announce some major enhancement to their Marvel Unlimited app, which included music to accompany the reading of certain issues and the ability to view Marvel’s AR (DVD-like extras, like creator commentary videos) from within the digital comics. Things that were not offered with Comixology.186

Marvel did not announce their intent to sell current comics on their Unlimited app. Then again, Marvel was under contract with Comixology for that and Marvel VP of Digital Content and Programming John Cerilli didn’t deny the possibility, saying, “Will books be in there day-and-date someday? Who knows? It all depends on how the market goes.”187

It certainly looked like Marvel could be laying the groundwork for that and offering incentives to choose their system over Comixiology’s with those new features. And Marvel no longer being exclusive would almost certainly put a noticeable dent in Comixology’s revenues, particularly if Marvel were to pull their Comixology-powered Marvel app back in-house in a manner similar to Dark Horse.

The rumors continued and a month later on April 3, 2014 DC added Google Play to their vendor list for monthly comics.188

On April 10, 2014, Amazon announced plans to buy Comixology.189

Talks likely started before SXSW, but with Marvel building up their internal offerings and DC diversifying their distribution, it may have been justifiable to sell while the revenues were up and let the investors have their exit. Amazon already had their own proprietary format for eBook, much as Comixology did for comics. It gave Comixology access and integration to the Kindle platform. The acquisition made sense on a number of levels for both Amazon and Comixology.

For publishers, this was a potentially alarming development. Yes, your digital comics listed inside the Amazon website is a good thing. Comixology is also a better reading experience than Amazon’s original digital comics format and adding the Comixology format can only help sales, once integrated. On the other hand, combining the sales of Comixology and Kindle makes for an extremely high percentage of sales in one place. Not as high as with Diamond and print, but close enough. Had the publishers just found themselves at the mercy of another distribution monopoly? It was the first thought crossing many minds and Amazon was known for playing hardball in contract negotiations.

The Amazon Fallout Begins

The comics community didn’t have a quick reaction, but Amazon isn’t a company most publishers want to be in an exclusive relationship with.

In July 2014, Madefire decided to start selling “print” comics. By this, they meant digital comics that weren’t enhanced by their motion books format.190

The publisher fallout really started in August. First, former Comixology-exclusive publisher, Valiant, added iVerse to the distribution list.191 Shortly after, they added DriveThru Comics.192 Then they added the “print” option with Madefire for current comics.193

Also in August, Dynamite opened their own digital comics storefront on their website.194

In November 2014, Marvel struck a deal with Kobo to sell 250 digital editions of their graphic novels on Kobo’s eBook platform.195

In December 2014, DC made their monthly titles availabe to iVerse and their ComicsPlus app.196

Diversification was becoming the new thing.

What was Comixology doing during this time? Starting the long process of integrating with Amazon and launching a DRM-free option. The DRM-free option being an important step and a signal that while Comixology still believes its browser is the best way to read comics, they also don’t want DRM to be a barrier to purchase and it insulates against incidents like the closing of JManga, even if it seems highly unlikely that Amazon would go out of business.

Looking Ahead

The biggest questions facing the digital download/eBook in the Fall of 2014 revolve around the integration of Comixology into Amazon. While it appears that Comixology’s integration will follow the model of Audible, which involves Comixology maintaining a separate web and app presence outside of Amazon while having all their content listed on Amazon’s site, it isn’t clear precisely how that will be broken down.

DRM is an issue that’s on the move and requires close watching to see if the rest of comics – and the entertainment industry giants behind the publishers and the licensed properties – relent and allow DRM-free publications across the board. The elimination of DRM was a key in the acceptance of digital music purchases.

Similarly, will there be a standardized open source file format for digital comics? ePub 3 and the fixed width display are coming on strong, but there’s a little more work to be done, particularly with chopping up a comics page for smaller screens, though there’s potential for a legal challenge to that from Marvel/Disney, who have some patents in that area.

A lot of the DRM-free distribution is being done in .PDF, which isn’t an optimal format and .CBR/.CBZ, which isn’t an eBook format, so much as a bundling of graphics files. Music standardized on .MP3 before sales took off. Comics have not settled on an open source format to complement the DRM-free advances.

The question of what Marvel intends to do with their digital comics also looms large. Marvel has been under contract with Comixology, but has obviously been building up their internal resources. Will they continue with an exclusive, expand their distribution of the monthly comics to other sites like DC has or pull all the monthlies in-house like Dark Horse? Expanding the distribution seems most likely, but it’s an open question.

With music, all you need is an .MP3 player. With comics, it’s possible to need Comixology for Marvel, Dark Horse’s app for Dark Horse, a PDF reader for DRM-free comics and/or a .CBZ/.CBR reader.

The worst thing for comics is a multitude of formats and software being required to read a normal monthly selection of titles. For monthly comics, Dark Horse makes it difficult for a one-browser solution, although they’re not at the mercy of any website or application provider for distribution.

Some indications are that digital comics are expanding away from the comics-specific apps and into the online bookstores. One publisher, speaking on condition of anonymity, reported that discovery had already started shifting to online bookstores, particularly with children’s titles and that app sales were being projected at 50% or less. Amazon already had some digital comics on their site and Comixology will increase that selection, so a shift from app to Amazon-proper may be a natural occurrence, particularly for non-Direct Market-centric readers. Google Play, Nook and iBooks all have comics. Trajectory is seeking to facilitate more online bookstore penetration. This is all good for general audience readership and especially for licensed titles with a built-in audience that might not automatically go to the trouble of downloading a comics-specific app to find the tie-in comics. It also remains to be seen how the lack of a standard format will affect the digital bookstore market, past Amazon broadening the reach of the Comixology format and integrating it into the Kindle software.

Comics apps aren’t likely to go away. Comixology will still have its own interfaces on web and in apps, but the point of emphasis might be moving away from the presentation of the current apps which emulate the appearance of the Direct Market, a topic that will be discussed further in the next chapter. Further, there is plenty of evidence that the consumer preferred using the in-app purchases environment in the iTunes system, so that could make a comeback with a different app.

The real question is how many comics and comic purchases will make the jump to the general online bookstores and how many will remain in comics apps? It is possible to cultivate niche audiences with apps and specialty websites, so that could remain a viable set of venues for some publishers. It also raises the question of how long it will take for the various online bookstores to start to have a complete lineup of comics. Comixology had exclusives and while those may not get renewed, it may take time for the existing deals to expire.

Rumors persist that a version of Marvel Unlimited, a Netflix-style monthly subscription for unlimited reading within the app/site/library, will appear for independent comics and have a sufficiently deep library to have value for the consumer. The barrier for such a service starting has been more about independent publishers agreeing to pool content and the implications of licensing deals on the economics of such a venture than about the technology involved. Sooner or later one of these will launch and make a real attempt at gaining critical mass.

Finally, keep an eye on the web-to-print market. There’s already been a little bit of activity here with some of the Monkeybrain titles and DC’s digital first lineup. As the Print On Demand technology improves, this will be increasingly easy to do. Amazon’s CreateSpace division is almost guaranteed to sync up POD with Comixology Submit, much like they work in conjunction with KDP for prose. The major difference between offering a print collection of a comic serialized as a digital download and a webcomic is that the webcomic will almost always have a wider audience to draw upon than a paid download. Offering free comic eBook downloads to create demand for the physical graphic novel is an option, but not one that’s been frequently pursued as a strategy, though having the first issue of a series available for free as a sampler is not uncommon.

This is definitely a time of transition for the digital downloads/eBooks flavor of comics as Amazon integrates and the rest of the market slowly starts to react.

Chapter 9: The Economics of Digital Downloads and ebooks

Digital downloads/eBooks were estimated as a $90M market for comics in 2013 by ICV2. The market started out at roughly $1M in 2009, jumped to $8M in 2010 as the iPad rolled out, to $25M in 2011 as simultaneous release with print started to roll out over the course of the year, to $70M in 2012 with almost all titles being released at the same time as the print editions and then finally up to $90M in 2013.197

The growth curve was a combination of consumption devices, largely tablets and heavily iPads, becoming more common and the increasingly timely delivery of new material. While the growth was “only” 29% from 2012 to 2013, after the print and digital release dates were synced up across the board, that still represented much higher growth than eBooks saw in that time period. Then again, digital comics got off to a slightly slower start. And then in 2014, the growth trend changed.

Multiple publishers speaking on the condition of anonymity reported that when Comixology switched off of Apple’s payment system, all growth stopped. Comixology’s in-house payment system, a stopgap measure before integrating Amazon Payments into their system, eliminated In-App Purchasing on their primary interface – the iPad app. This meant customers had to go to the Comixology website, make purchases there, and then download the comics to their iPad using the Comixology app. This was not a popular move with the user base. The publishers said that there was still a little bit of growth with other venues like Amazon’s Kindle platform and iBooks, but that everything had flattened out as a whole. At the 2014 ICV2 conference, Milton Griepp confirmed digital sales as “flat” for 2014 to date. 198

While Comixology is in a transition period as it integrates into the Kindle software packages, this illustrates how important platforms can be to sales. Especially if a service switches platforms. In-App Purchases were a driving factor for comics sales and without them a new user is really just downloading a digital reader, not a store app. While this is how Amazon has always done business, it represents a shift in purchasing procedure for Comixology and it remains to be seen how this plays out. It seems likely that growth should return when the Amazon/Comixology integration is completed, but it is unclear what the rate of growth will be.

As 2014 draws to a close, the digital market remains a still-healthy $90M, but with the suspicion that it probably should have been at least $100M had the market not been shaken up by the Comixology purchase.

The Revenue Models of Digital Downloads

In terms of revenue, digital downloads are mostly about list price and discount. With the exception of Amazon, which charges a transfer fee based on file size if you don’t have an agency level agreement, this is all fairly straight forward.

Model #1: iTunes Store/iBooks/Google Play.

The pricing structure used by Apple and Google will charge a 30% commission on all transactions.

List Price

Amount Received by Publisher

$0.99

$0.693

$1.99

$1.393

$2.99

$2.093

$3.99

$2.793

Model #2: Kindle Direct Platform

Kindle Direct offers two royalty options, 35% and 70%

For the 35% option, no download fees are charged, but Amazon/Kindle dictates the minimum price based on file size:

Under 3 MB, the minimum price in $0.99

3MB – 10 MB, the minimum price is $1.99

Over 10 MB, the minimum price is $2.99199

List Price

Amount Received by Publisher

$0.99

$0.3465

$1.99

$0.6965

$2.99

$1.0465

$3.99

$1.3965

Depending on the resolution of the graphics, a 22 page color comic is likely to be anywhere from 12 MB to 20 MB in size, so the ability to price it at $1.99 is questionable and $0.99 is almost certainly out of the question.

The 70% option requires a price from $2.99 to $9.99 and charges a $0.15/MB delivery fee.200 The formula here is [.7 (price – delivery fee)= royalty]. File sizes will change with the resolution and actual content, so for the examples we’ll use 12 MB ($1.80), 16 MB ($2.40) and 20 MB ($3.00)

List Price

Amount Received by Publisher

12 MB

16 MB

20 MB

$2.99

$0.83

$0.413

-$0.01

$3.99

$1.533

$1.113

$0.693

While low resolution black and white graphics will earn more with 70% and a download fee, a standard $2.99 comic should only be done with the 35%/no transfer fee model. A $3.99 comic might have some benefit from the 70% model, but only with lower resolution.

This will all likely be changing once the Comixology format is integrated into Amazon’s Kindle software, at which point, the 50% royalty through Comixology’s Submit program should replace the KDP program for comics and assuming that Submit isn’t changed to conform to Amazon’s pre-existing policies.

Model #2b Amazon Agency Agreement

Amazon’s agency level agreements with publishers appear to pay 70% of list price and do not have a data transfer fee associated with them.

List Price

Amount Received by Publisher

$0.99

$0.693

$1.99

$1.393

$2.99

$2.093

$3.99

$2.793

Model #3 Barnes & Noble Nook

Much like Kindle Direct, Barnes & Noble’s “PubIt!” platform for uploading digital books to the Nook is tier with two payment levels based on list price:

65%: $2.99-9.99

List Price

Amount Received by Publisher

$2.99

$1.9435

$3.99

$2.5935

40%: $0.99 - $2.98; $10.00 - $199.99

List Price

Amount Received by Publisher

$0.99

$0.396

$1.99

$0.796

While there are not data transfer fees, PubIt/Barnes & Noble allows a maximum of 20 MB in file size.201

Model #4 Comics Application Provider

(Pre-Amazon Comixology, iVerse, etc)

Option 1: In-App Purchases through the iTunes store

While individual deals may vary, multiple sources say that the standard deal is 50% of list price after the 30% iTunes cut (70% / 2 = 35%). Yes, this is the same cut as you’d get with Kindle Direct if you opted not to pay data transfer fees, although you have more pricing freedoms with the app providers. This may or may not also apply to In-App Purchases through Google Play, depending on how the app is set up.

List Price

Amount Received by Publisher

$0.99

$0.3465

$1.99

$0.6965

$2.99

$1.0465

$3.99

$1.3965

Option 2: Buying directly off the Application Provider’s website (and cutting out the iTunes fee).

If buying off the Application Provider’s website, there may or may not be a credit card processing fee, but the revenue split reverts back to the original percentage and the iTunes 30% is no longer in the picture. This is where Comixology’s general Submit program terms are after Amazon’s initial acquisition and moving over to their payment systems, though it is likely some publishers with larger catalogs and/or exclusives will have more favorable terms, probably similar to an Amazon publisher-level agreement.

List Price

Amount Received by Publisher

$0.99

$0.495

$1.99

$0.995

$2.99

$1.495

$3.99

$1.995

Model #5 Direct Sale Off Your Own Site

A method favored by Dark Horse, there is no commission charged, just the fees associated with the transaction. Typically speaking, a single issue download is a micropayment and micropayments tend to have their own set of fees. PayPal was one of the pioneers of micropayments and their fees are 5% of the transaction plus $0.05.202 This is a good baseline for micropayment transaction fees, so we’ll use it here.

List Price

Amount Received by Publisher

$0.99

$0.89

$1.99

$1.84

$2.99

$2.79

$3.99

$3.74

Model 6: Gumroad

Gumroad is a popular service among webcomics creators who want to sell eBook formatted comics. Essentially, it provides a link to where a file can be purchased and downloaded. It’s a workaround that can eliminate the need for the cartoonist to have an e-commerce site for their downloads. The fee structure is 5% + $0.25 per transaction.

List Price

Amount Received by Publisher

$0.99

$0.69

$1.99

$1.64

$2.99

$2.59

$3.99

$3.54

What’s the better deal?

That’s a more complicated question than it appears at first glance. On a per-transaction basis, it’s preferable to either sell off your own site or use a low-cost solution like Gumroad. Volume and the costs of self-hosting an e-commerce site determine which of those two would ultimately be the most profitable per unit. Past that, any site with a 70%/30% split like iBooks or the book section of Google Play or if you can get a publisher level 70%/30%. Then a 50%/50% split that doesn’t incur an extra In-App Purchase fee. Then, depending on the size of the file, either the Kindle KDP program (which will theoretically be ending) or the 50%/50% split with the In-App Purchase fees.

However, the percentage of the list price received is not necessarily the primary consideration in choosing on which platforms to place a digital comic or where to direct traffic. Where the readers of a given comic like to shop is a huge consideration, particularly for secondary publishers or individual creators. If a comic’s audience is already using iBooks or Comixology, more sales may occur there even if an attempt is made to drive readers to a publisher’s/creator’s own site or service like Gumroad. While apps that used the Apple payment system and it’s extra 30% fee are the worst deal on a per issue basis, that was where the majority of transactions were done prior to Amazon’s acquisition of Comixology. If another app rises to the same level of prominence in the Apple App Store system, that could become a source of sales that are either taken at the lower revenue percentage or simply not taken at all. Simply put, sometimes you have to go to where the customers are.

There are many variables that may matter to the consumer. The level of trust in the store/website matters. The consumer’s opinion of the software for reading comics matters, since the software isn’t standard. Whether the material is DRM-Free may matter. The discoverability of an app or online store also matters, as that’s where an audience can be grown. Discoverability, however has long been an Achilles’ heel for comics in the digital download/eBook world.

Discoverability and Comics

The classic discoverability model for online bookstores is the cross-sell. A feature best known as Amazon’s “Customers Who Bought This Item Also Bought.” If there’s enough correlation between the buyers of two comics, they will both show up in each other’s “also bought” field. Readers can discover comics by what’s listed on the front page of a webstore or section (example: titles highlighted on the index page for Amazon’s “Comics and Graphic Novels” section), by bestseller lists (also bestseller lists for smaller classifications like “Kindle Store > Kindle eBooks > Comics & Graphic Novels > Graphic Novels > Mystery, Thriller & Suspense”), by genre classification or by searching for creators.

How does the consumer find the comic they’re looking for? In iBooks and Google Play, they’re better off typing it in the search function. Google Play notably has a deal for current single issues of DC titles, just like Comixology, but offers no general listing of them or link from the home screen of their comic section. For example, this month’s Detective Comics is invisible unless specifically searched for. iBooks has a similar problem and neither iBooks nor Google Play has an comprehensive listing of what single issues are released recently.

If you go to the comic apps like Comixology and iVerse, you find the emphasis is on the new releases of the week. Which is to say, the Direct Market release schedule. While genre lists do exist, after the listing of the current week’s releases, the fallback search/list for comics is by publisher. It was previously discussed how much emphasis the print world and Direct Market retailers put on publishers. This has followed through to the world of digital comics. The greatest triumph of the comic apps, particularly Comixology, has been the ability to recreate the Direct Market shopping experience online. That includes the drawbacks of the Direct Market experience. Interestingly, that emphasis on publishers bleeds over to the online bookstores. Is it a concession to the Direct Market or a by-product of the online bookstores pursuing deals with individual publishers as they started carrying digital comics? Probably a bit of both.

Focusing on Comixology, still the most dominant app, a digital first or digital copy of a small press comic will have one week in the “New Releases” listing to be seen by consumers browsing the site. Perhaps a bit longer in the “Digital Firsts” or “Comixology Submit” fields, which are not the primary browsing focus, and perhaps not. After that first week of being new, the only time a consumer is likely to see a comic is if they are browsing the correct publisher listings or search specifically for that comic.

Yes, there is a long bestseller list on Comixology, but it is dominated by the top publishers and reflects the print sales. A smaller title or digital first title is less likely to appear there without some sort of promotion having happened. There are genre lists, but they’re not a point of emphasis and can be a bit laborious to sort through, especially if the title of a comic isn’t towards the front of the alphabet.

Comixology’s creator search and sorting is subpar and only partially exists. There are no writer/artist credits associated with the comics on any sorting or mass listing screen, like you’d see an author credit at the bookstore sites. The only time you see creators is on the description page for an individual comic or graphic novel. When you search for a creator, Comixology’s results initially will show you the titles the creator worked on, but not the individual issues. The individual issues are a separate field that requires scrolling down the page. If you click on the name of a creator from the description page of a comic, the only thing you get for results is the list of titles that creator worked on. So if, for example, you were clicking on Doug Moench’s name and were interested in his issues of Batman, you’d need to click on the individual issues to see if he wrote them. That there are 415 issues of that volume of Batman on Comixology is inconvenient, so hopefully the consumer has some idea where to start looking.

Comixology does have a small cross-sell feature, but only four series (not issues). That’s too small a selection for variety to insert itself into the discovery equation, plus the question of which issues of any long-running series might be the actual cross-sell. Rival service iVerse does not have a cross-sell feature.

Discoverability for comics is substandard across the board. The hope is when Amazon integrates Comixology into its listings, their discovery engine will plug into Comixology’s listings and help readers find new material. This sort of thing has worked very well for prose in Amazon’s self-publishing KDP program and Amazon is likely to try and back Comixology Submit in a similar way, but that is not the reality of 2014. All the platforms need to get better about how they present comics or discoverability will be limited to 4 things:

2. What the platform features on their initial page/screen
3. This week’s new releases (though this feature is lackluster on the bookstore sites)
4. Publisher search
5. What the consumer types into the search feature
   If discoverability improves for a platform, it may be worthwhile for the creator or publisher to direct traffic there. The more purchases there are on a platform, the more data there is for the discoverability programming to help find new buyers. The reality of the current setup is that the customers are going to shop where they feel like and it’s beneficial to have the comic available where its audience is shopping. They may need to already be looking for a specific comic, though, particularly if it isn’t from a major print publisher. Attempting to direct the audience to a more favorable revenue share probably isn’t going to hurt discoverability in the current digital landscape, but that could change in the future if the platforms improve. It’s possible to miss out on sales, however, by not being on all platforms. The lack of a standard format also suggests needing to be in all the different formats, including proprietary ones, or potentially miss sales.

For the moment, the online bookstores aren’t suited towards the weekly shopping of the Direct Market-style audience and the comic apps aren’t suited for broad browsing that isn’t publisher-based and the sort of cross-sell discovery and secondary lists and sorts of the bookstore sites.

How Many Copies Do Digital Downloads/eBooks Sell?

That’s an excellent question that relatively few people go on the record about. When sales are discussed, they’re usually described in terms of a percentage of print sales. Some popular ranges being discussed on condition of anonymity are: 5%-30% of print and 10%-20% of print. It was suggested by a larger independent publisher that his titles that sold best in digital format sold around 25% and this was driven by retailers not re-ordering certain titles, causing the readers to switch to digital. 10-20% is probably the most common range with a few titles hitting as high as 30% on the high end and a few hitting 5% on the low end. It was also suggested that the titles selling only 5% were usually due to publishers not embracing the promotion of the digital titles properly.

On the record, digital sales make up around 12% of Dynamite’s total sales.203 Digital sales are roughly 15% of IDW’s total sales, with the caveat that not all of IDW’s material has digital edition, meaning that some of the material sells better than 15% digitally. (Private Interview) Small press publisher ComixTribe reports 13% of print sales with their top digital book selling 20% of print sales.204

The high end of digital download sales is likely in the neighborhood of 100k paid downloads. Pocket Gods, based the video game and being sold 500K downloads over its first 11 issues back in 2011.205 The first issues is though to have been well over 100K with diminishing returns as the series continued. This is not a normal sales total. Outside of that, the highest totals are usually surrounding a media event like a Transformers or Star Wars movie and with the comics being available in a dedicated app, not as something that primarily appears inside a general comics app or an online bookstore.

As far back as 2009, IDW was selling the Star Trek: Countdown movie prequel comic as digital apps for the iPhone and iPod – pre-iPad. “We sell as many iTunes apps [of Countdown] as we will of as the print version,” according to IDW publisher Ted Adams.206

Those are special examples and the outside apps make for special circumstances. What’s the highest a “normal” digital comic will sell? To answer that question, let’s consider the sales on the #1 selling ongoing comic of recent years: Batman. Batman will normally sell between 115K-150K copies, depending on the issue, whether it’s an Event, whether there are alternative covers and so forth. Remember, alternate covers aren’t a big selling point with digital comics, nor do you have anyone buying multiple copies for investment purposes. They’re reading copies. With that in mind, let’s set the ceiling for Batman at 125K reading copies. 20% of that would be 25K digital downloads. 30% would be 37.5K. So the upper limit for an ongoing title is likely between 25K and 37K, with the occasional Event issue or mini-series perhaps selling a bit above that. For the most part, the digital sales of print comics are based on their print sales, as backwards as that may sound.

There are a few exceptions to the rule. The sole exception at DC and Marvel, controllers of roughly 70% of the print market, is Ms. Marvel. Ms. Marvel is a comic about a teen-aged Muslim girl in New Jersey that wasn’t ordered particularly strongly by Direct Market Retailers, but got a large amount of media coverage when it came out. Most often, the big comic Events are announced to the press around the time that the retailers place their orders – three months in advance. Ms. Marvel got its media coverage when the first issue came out and it’s only natural that people who don’t normally frequent comic book shops should look for the comic online. In this case, they could find it and download it – something that’s not possible if an announcement like the Death of Spider-Man or Wolverine is publicized months before anything is available for purchase. (This is the great disconnect that happens when the marketing cycles of retail sell-in get mingled with consumer promotion.)

Ms. Marvel did not actually sell more in digital than it did in print by the time the sixth print was released, despite some media reporting that it was a better seller in print. Marvel did confirm that it was a “complete anomaly” compared with the digital sales of the rest of its line.207 Ms. Marvel’s editor, Sana Amanat later identified Ms. Marvel as Marvel’s “#1 digital seller.”208

If Amazing Spider-Man sells in the vicinity of 100K, then digital sales on that would likely be 15-20K. Ms. Marvel sells in the vicinity of 30K per issue, so its digital circulation is likely at least 60-70% of print. An impressive and highly unusual feat for a DC or Marvel title, but one targeted at an audience that might be atypical of Direct Market consumers and promoted to the mainstream only when the digital was available for purchase. Continued digital sales would suggest the content appealed to that audience and brought them back.

Another anomaly from the independent side of digital comics is Think Tank from the Top Cow imprint at Image Comics. Think Tank’s digital edition outsells the print edition “in aggregate,” which writer Matt Hawkins reasons “Might have more to do with the low initial print runs of the actual printed books.”209 Think Tank had estimated sales of 3,009 in May 2014,210 which is not an unusually low number for an ongoing creator-owned comic. By the normal percentages, that would suggest a print audience of between 15K-30K. It might have a better demographic fit with online readers or it might just not be ordered properly at the retail level.

Still, these are examples of exceptions to the rule.

Digital First Sales

With publishers keeping quiet about digital sales on print books being simultaneously released, the sales of comics published first in digital formats is a bit of a mystery. The one thing that isn’t in question is what the bestselling digital first title is. That’s Injustice: Gods Among Us by DC Comics, based on the video game of the same title. It’s usually the bestselling digital comic on every platform it’s sold on, which means it outsells Batman. Which means it likely sells at least in the 30K-40K range for each weekly issue, possibly as high as 60K/issue. If that weren’t enough, digital being the platform it is, the early issues continue to sell.

Injustice may not be the best example to base digital comics sales on. It’s a video game comic from a major publisher that’s also received positive critical reviews in the Direct Market and caught the imagination as only a few comics can do at a given time. What can a totally independent digital first comic sell?

That’s tightly guarded information. With Comixology being the primary outlet for comics sales and the sole market for some publishers, it’s possible to see where a digital first comic turns up on their sales charts and estimate its sales based on the print titles around it. The highest charting digital first comic appears to be Monkeybrain’s Bandette, with sales theoretically in the vicinity of 5K/issue based on that chart and the print books that appear around it. Bandette has the distinction of winning an Eisner Award, so it has one of the highest profiles of any digital first comic with no relationship with the print world.

What do other digital first comics sell? Becky Cloonan reports selling 6,000 downloads across three comics in Q2 of 2013.211 That would come out to an average of 2,000/comic, but it’s likely one of them sold better than the others. Another well-reviewed digital first publisher, preferring to be anonymous, reported that their sales were “in the hundreds, not thousands.”

A print publisher well-acquainted with digital and digital first sales, anonymously offered that the cap for most independent digital first comics without print or licensed character tie-ins would probably be in the low thousands, which seems fairly consistent with the proximity of titles surrounding the digital first offerings on Comixology’s sales chart.

When it looks like there may be more independent creators selling in the hundreds than thousands, this raises two questions: Are digital comics really the newsstand? Does the print edition establish the value of a digital comic?

Are digital comics really the newsstand?

The Direct Market was established as a collector’s market. Non-returnable books were sold to shops specializing in them and also selling back issues. This let “fan favorite” books thrive where they might not have been able to stand out to the general audience.

The newsstand has contracted to the point that Marvel has opted out of it. It’s popular to say that digital comics are the new newsstand. That digital comics are a place for the general audience, not the collector audience. This may not be true. On one hand, digital comics are definitely for a “reader” audience. After all, the reader can’t sell digital back issues like collectors can with print comics. Digital files don’t appreciate in value. But whether digital is a “general audience” is another question entirely.

Marvel reports “It’s fair to say that DM & Digital top-sellers look similar”.212

Hank Kanalz, DC’s Senior VP of Vertigo and Integrated Publishing confirmed that the sales of digital comics mirror the rankings of the print counterparts. “For the most part, yes, they line up the same, with maybe a one or two line shift…meaning, if an issue is #5 in print, it may be #4 or #6 on digital.”213

The strange thing is that the newsstand market sales and Direct Market sales never matched up cleanly like that. Superman would sell proportionally better on the newsstand when it wasn’t a huge concern in the Direct Market. Archie’s bread and butter was always on the newsstand. The pre-Guardians of the Galaxy Nova comic of the mid-’00s had a much better sales ranking for Marvel on the newsstand than it ever did in the Direct Market. The newsstands and Direct Market were different audiences.

The digital editions of print comics, by overwhelming majority, sell in a fairly close proportion to their print siblings. While the digital world should be the new newsstand, the only place that appears to be true is when the comics get out of the general comics apps, like those video game and movie comics occasionally do, or possibly with DC digital first apps that are based on video games and TV shows.

On the other hand, there definitely are people who discover comics through the digital download/eBook sector.

“According to comiXology’s research released in October, 20% of customers in Q3 2013 purchased their first comic as a digital comic. 64% of those new digital readers subsequently went on to patronize retail shops.”214

The Comixology data indicates a sort of feedback loop into the Direct Market and illustrates the extent to which digital comics’ largest outlet operates as an unofficial arm of print.

Does the Print Edition Establish Value?

Part of the success of prose eBooks in general and the Kindle platform in particular is the success of the independent eBook. Authors write a book and submit it to online bookstore systems like Amazon/Kindle and Barnes & Noble/Nook. Some of these books, generally priced lower than the ones from print publishers, sell quite well and the most popular are competitive with the bestsellers originating in the print world. Some of these original eBooks are established authors branching out on their own. Some are new authors finding fame and fortune with eBooks.

This simply isn’t happening with digital comics.

Yes, DC has a huge hit with Injustice: Gods Among Us and generally does better with its digital first practice than anyone else, but they’re a major publisher. There are minor successes, relative to the market, like some of the Monkeybrain titles or Becky Cloonan’s self-published work, but those likely wouldn’t crack the top 50 for a full month’s chart and the number of non-print publisher-related digital first comics with significant sales outside of a bundled promotion or discount is small. Pricing the independent digital first comics below the normal prices of print comics doesn’t seem to have much effect outside of the sales and bundles, to further differentiate the audience reception between prose and comics.

It raises the question of whether it takes a print edition of a comic to establish value. This may be a function of the overwhelming importance that the comics marketplace puts on the publisher. From the Diamond Catalog to the comics apps and online bookstores, everyone is sorting comics by publishers in ways that are largely irrelevant to “normal” booksellers… with the possible exception of Harlequin for romance novels. Still, the digital first fare is having more trouble finding traction than its prose cousin.

If comics were finding more of a general audience, the attitudes of the Direct Market towards publishers shouldn’t be a factor, but perhaps it’s an issue of discovery and presentation. It seems likely that Amazon will wish to start promoting Comixology Submit, the self-publishing function at Comixology, in a similar way to how it promoted the self-published eBooks for Kindle via their KDP platform and de-emphasize the publishers once Comixology is integrated into Amazon’s platform. But for now, the fate of digital comics seems strangely linked with that of the print publishers and print editions. This shouldn’t be, but if anyone is breaking out in the digital download/eBook category of comics like Amanda Hocking did with prose eBooks, they’re not telling anyone about it and comics is not an industry where success tends to be taken with modesty.

Gumroad Shows Success Outside the Bookstores and Apps

In sharp contrast to the discovery issues of the comic apps and online bookstores, Gumroad offers a download service without a storefront. There is zero discovery with Gumroad. It’s a download link or, in some circumstances, an unadvertised page with a creators various works on it. The creator has to drive traffic to Gumroad’s sales pages or there will be no sales. Even under those constraints, some creators, notably from the webcomics area, are having success with digital downloads and eBooks.

“We have hundreds of comics creators on Gumroad selling thousands of comics,” says Gumroad founder and CEO Sahil Lavingia. “Many have made significant incomes doing so. Without getting into tight numbers (privacy reasons and all), I’m clicking around and finding dozens of cartoonists who have made well over $1k, many making over $10k.”215

That means there are dozens of cartoonists on Gumroad selling at least as many eBooks as their independent cartoonist counterparts appear to be doing on the comics apps and online bookstores.

Lavingia reports that the number of comics downloads at Gumroad are in the hundreds of thousands, though it should be noted that Gumroad is a popular service for the downloadable rewards from Kickstarter campaigns, so it’s likely not all of those downloads would be paid downloads.

Webcartoonists like Gumroad because of the low cost and elegant fulfillment solution. When talking about the comics apps and online bookstores, many webcartoonists will express dismay at giving up 30% to a bookstore and outright anger at an app wanting 50% of the list price. Instead of relying on the storefront of an online bookstore or app to connect buyers with their eBooks, webcartoonists direct their existing audience to their Gumroad page for a direct download. Audience recruitment is done with the webcomic instead of the bookstore.

Marketing Digital Downloads and eBooks

Marketing is always a complicated and potentially dismaying topic in all forms of comics. The digital download/eBook segment of the market has the disadvantages of both the print and webcomics segments. There is no large news site that specializes in digitally formatted comics. Digital comics are not necessarily given the same weight as print books on comics news sites. While a digital comic from a major publisher like DC or Marvel will get some coverage, the independent creator will likely find their publicity to be a tough sell.

A creator known for their print work can get coverage on the comics industry sites easier than a webcartoonist seeking to publicize a download. Notably, Monkeybrain received coverage for having print creators in their lineup and received more publicity for co-founder Roberson having recently stopped writing for DC Comics under somewhat acrimonious circumstances not long before Monkeybrain’s launch. There is a hierarchy from print publisher to established print creator to established webcartoonist to total unknown, in terms of getting publicity on traditional comics news sites.

From a pure marketing perspective, what seems to work best is the ability to drive readers directly towards a purchasing screen. The publisher or creator needs to be able to distribute a link, be it through a newsletter or social media. Media coverage is nice, but not always predictable. A mailing list or social following can be used at will, though these require management and cultivation.

Things that work – Bundles and sales.

A quick glance at the Comixology sales chart will immediately inform you that sales work. Comixology will generally have several slots on their 28 issue first screen of bestsellers taken up by sale books, and not exclusively DC and Marvel sale books. Consumers like to get a deal and sales are an important part of the digital comics market.

The sales are frequently part of the Long Tail phenomenon. The Long Tail has seen its definition grow to encompass a few different things over the years, but originally it meant discovering an old work through a new work and the original example was about a new book on mountain climbing, Into Thin Air, causing people to find an older book, Touching the Void. Touching the Void got a new lease on life because of renewed interest in its subject matter and went on to sell a lot of copies.216

With the sales, you commonly see things that are co-promoting a new event or holiday. It’s Halloween, so here are some horror comics on sale. The Flash is now on TV, so here is a set of Flash comics on sale. A particular writer is starting a new, high profile series, so here’s his last series on sale. Now, the sales are partially playing up the Long Tail and partially helping to create it. The Long Tail doesn’t need a sale to sell back issues. Sometimes current events or a creator taking on a new project will trigger the Long Tail without a sale being necessary. It is important to remember that back issues do have a long shelf life and can accumulate over time, even if they don’t chart highly. Sometimes all it takes is for a current event or publishing trend to spark a little interest in them.

The other sales tool is bundling.

Bundling is most famously employed by “Humble Bundle,” a website that donates a portion of its proceeds to charity. Humble Bundle usually features digital comics grouped by publisher or property and will feature dozens of issues. Generally speaking, the first story arc of several series and how many comics the consumer gets depends on how much they want to pay. This is generally regarded as heavily discounted samplers from the publisher’s perspective, getting a small amount of revenue, but getting the comics exposed to a new audience with the hope that some of them will come back for more.

How many bundles can Humble Bundle move? Usually over 10K. The record being a Doctor Who comics bundle that saw 50,139 bundles purchased for$563,351.99.217 (Private Correspondence)

Comixology also occasionally employs bundles, such as offering 100 comics from Comixology Submit for $10 in conjunction with the 2014 SXSW festival.218

Since bundling is a wide-ranging sampler in nature, it’s not something an individual creator can do unless there’s a lot of material available. It’s commonly for publishers or groups of creators and is more of a promotion than can have some minor income associated with it than an actual revenue stream. Bundling can be effective, though, as a variation on putting issues on sale.

The potentially different purchasing mentality of digital and sales

The success of sales for digital comics highlights the major difference in digital and print sales trends.

The print world is driven by a weekly trip to the Direct Market retailer. The consumer needs to buy their books that week, lest they sell out.

The digital world can’t sell out unless the publisher pulls the comic off the market. There’s no real urgency to buy on Wednesday, unless the consumer has been conditioned to do so by years of buying in the Direct Market or is just anxious to read the latest releases. If the consumer is patient, many publishers will lower the price of an issue after one or two months. If the consumer is particularly patient, most of the independent titles and a reasonable number of DC/Marvel titles will show up for sale at a $0.99 or $1.99 price point. There are actually substantial fiscal incentives to exercise patience. Sale books are typically back issues. Back issue sales don’t really exist from a publisher’s perspective in the modern Direct Market for print.

It may be such a thing that the general newsstand audience is disguised. They may not be buying the new issues at all. They may be the ones driving the purchase of comics on sale. When buying comics on sale, it’s more likely several issues of title will be bought, comprising whole stories instead of buying the monthly serialized chapters one at a time. At this point, it might functionally start to become more of a traditional book audience, in terms of how the stories are consumed.

The comics apps and the digital book stores have every reason to cultivate that rush to download new issues every Wednesday. It’s good and steady business. But much as the general audience in print has started to shift towards graphic novels instead of the slowly disappearing newsstand, the general audience for digital may also be gravitating to digital graphic novels and/or picking up a complete story by purchasing a six issue run of a comic.

The presentation may be emphasizing one demographic and concealing the other. This is a possibility creators and publishers should keep in mind.

The digital library/Netflix model

While not as widespread a model, the digital library subscription will always have a place in digital comics. This is the model where the consumer pays a monthly subscription fee and then can read anything in the digital library.

The payout usually starts out with a pool of money based on the number of subscribers. That pool is then divided amongst the publishers and/or creators based on how many comics were downloaded/viewed.

Hypothetically speaking, it would work something like this:

1000 subscribers at $10/mo = $10,000.The library service keeps $5,000 for itself and puts $5,000 into the royalty pool.

10,000 comics are downloaded this month. Publisher A had 1,000 downloads or 10% of the traffic. Publisher A receives $500 or 10% of the royalty pool. Publisher A could then distribute royalties to its creators based on the download percentage of individual comics.

If the subscribers read a lot of comics, the royalty pool can get stretched thin. This can be a problem for publishers of licensed comics who may need to pay the licensor a set amount every time someone downloads a licensed comic.

On the other hand, it can be passive income for back issue material and part of a Long Tail revenue stream.

Formatting the Bookstore/App Listing

When preparing to place a digital comic in some sort of storefront, particularly an online bookstore or an app, it’s important to step back a moment and contemplate what the selling tools available to you really are. The primary thing that the prospective consumer will see is the cover. The title of the series and issue number will probably be displayed, but unless the consumer has already clicked through to the comic’s full listing page, they may not see a listing of the creative team, depending on the exact platform.

When they see the cover, more than likely it will be in some sort of list or grid of comic covers. The cover will be thumbnail sized, 1”-2” tall. It is extremely important that covers for the digital download/eBook comics are designed so that they are readable and recognizable at thumbnail size. Especially with the prevalence of the “new releases” sections of comics apps, the sight of the cover thumbnail may be the only opportunity for a comic to attract the attention of the browsing consumer.

If the consumer clicks through the initial listing, there’s an opportunity for sample pages, but the next thing they’re likely to look at is the description. A one sentence hook only works for a comic the consumer was already planning on buying. A new title will need to have some details of the scenario, setting, characters and some sort of hook. Put some time into a description that courts a purchase, not three bulleted sentences that assume everyone has been a longtime reader.

Distribution of Risk and Exclusivity

Exclusivity is something that’s worked its way into the DNA of comics distribution ever since Diamond became the primary distributor. It’s a strange concept for digital comics, though. Shouldn’t the point of digital be that the consumer can buy a digital comic anywhere such things are sold? This has not been the case. While it’s a trend that may be going away, it’s something that warrants discussion and warnings.

Redundancy is especially important when dealing with startups, as many of the digital comics services are. The digital comics field is littered with failed startups. Jmanga, Graphicly, Longbox (which never actually launched, despite much press) and Panelfly were all part of the conversation at one point, but no longer in the mix. Giving a startup exclusive rights is always dangerous, since startups frequently fail and can create not just problems in distribution, but problems with consumers who may no longer be able to read the material they purchased.

Exclusivity should not be given away with significant financial incentives. Even with financial incentives, exclusivity should be considered only with great caution. The more purchase outlets that are available, the more potential sales there are. On the flip side, if one company holds the sole distribution rights, the publisher/creator may be at a serious disadvantage for negotiating terms.

The most benign form of exclusivity is the publisher/creator only selling from their own site or store. At least with this method, distribution is not at the mercy of a third party. Depending on the format(s) offered, it could contribute to the general problem digital comics face of consumers potentially needing to use multiple browsers to read their purchases.

Looking Forward

The big questions moving forward center around Amazon and Apple.

How effectively will Amazon integrate Comixology? Will the majority of Comixology sales move to the Amazon website and/or Kindle platform? Can Comixology maintain dominance on the iPad? Will integration on the Amazon website and Kindle platform help with discoverability? How much will financial terms change?

Comixology is a serious update to the Kindle’s comic-reading experience. This legitimately offers the potential of expansion into market with a very large reader base. Comics have been strongly associated with the Apple platform and iPad, but Amazon is poised to make a real run at shaking that up.

Amazon is very likely to integrate Comixology with CreateSpace, which would in theory allow for a very streamlined production of digital + Print On Demand for comics. The economics of such an arrangement would not necessarily circumvent the Direct Market, but that outcome is entirely possible and could see a secondary print market spring directly out of digital comics. (This could also spring out of Ingram Content Group’s Lightning Source Print On Demand unit, which is the primary competitor of CreateSpace.)

On the flip side, the relationship between Amazon and Comixology needs to be closely monitored. Particularly in terms of Comixology’s ability to set their own pricing. In the early stages of their relationship, Comixology is maintaining its own offices and acting like a separate entity. Whether or not this continues to be the case 2-5 years down the road is extremely important to comics publishers and creators because of the pricing dynamic between comics and Amazon vs. comics and Comixology.

As stated earlier, while publishers have been able to get what is suspected to be a 70%/30% split without having to pay download fees on Amazon, an independent cartoonist or small publisher unable to secure a publisher-level deal will be subject to the choice of either a 35% royalty or paying download fees that are potentially greater than the list price of the comic. Comixology is being positioned to use its Submit program and its 50%-50% no download fee split as the alternative for independent cartoonists and small publishers as the entry point for comics into the Amazon system.

In 2014, Amazon has made headlines for a particularly bitter negotiation over the price and royalty split on eBooks with the publisher Hachette. This is a situation that comic publishers could be faced with if Comixology’s policies become more aligned with Amazon’s. While this hasn’t happened yet, publishers should be aware of the scenario.

Amazon was reported to offer a 70%/30% split to Hachette if Hachette would price their eBooks at $9.99, but for eBooks above $9.99, they would want a 50%-50% split. Effectively a penalty for not conforming to Amazon’s pricing preferences.219

This would seem to indicate that a publisher-level deal at Amazon would have previously been the same standard 70%/30% split as at Apple or Google. It also has some interesting implications for Comixology, should their contracts fall under the Amazon umbrella. The Comixology Submit deal is 50%-50%, so it would seemingly be unaffected by price-sensitive discounting since it doesn’t start at 70%. Nor would the single issue sales necessarily be affected, since single issues tend to be priced in Amazon’s desired range of $2.99-$9.99. But digital collected editions, that could be another story. It is widely rumored that the larger publishers, particularly DC and Marvel have better deals in place at Comixology. Comics publishers like to price the digital editions at the same list price as the print editions. This is all part of the long standing channel conflict issue with the Direct Market. In many cases, the collected edition books have a list price $19.95 or higher. Obviously, the publisher still gets more money with 50% of a $19.95 list price ($9.97) than 70% of a $9.99 list price ($6.99), so cutting the royalty from 70% to 50% for prices over $9.99 is not a carrot vs. stick proposition for comics publishers, so much as a 20% penalty.

There has been language from Amazon that some books and types of specialized content warrant higher prices, but it is unclear whether they have said this with comics in mind or what their conception of a reasonable price for digital comics should be. Amazon clearly does not think digital should be sold at the same price as print. And Amazon may not be wrong about eBook pricing, either. It would be a drastic departure from normal pricing conventions, however.

While it isn’t clear that Comixology will start having negotiations about discount vs. price point with publishers, it is in publishers’ best interests to prepare for that scenario, given Amazon’s actions in 2014. Comics aren’t Amazon’s priority in the same way prose is, but if a general policy has been put in place, it could find its way to comics in good time.

Apple, iTunes and In-App Purchasing

The decline in digital comics growth when Comixology left the Apple payment system is a very strong indicator of the strength of In-App Purchasing on the iPad. It also means there’s a big hole waiting to be filled in the App Store. iVerse is in the process of making a series of major upgrades to its Comics Plus app.220 Can iVerse fill the void on the iPad and it’s In-App system? Can Comixology hold on to its iPad app customers? Will another app show up to fill the void? Will iBooks gain comics moment? The iPad market is in play and iVerse adding DC to their lineup should give it a big boost.

Who’s the Next Major Player?

There is very little status quo in digital technology. At the moment, the conversation about digital comics sales revolves around Amazon and Apple. The online bookstores and major tech powers are discovering comics and making their move, but the inventory selections aren’t complete yet. The balance of power will rise and fall. It’s also entirely possible that an entirely new player will emerge. Things to look for:

• Besides Amazon/Comixology, who can assemble a complete or mostly complete line-up of monthly comics? DC and Marvel are still the lynchpins for sales.
• When will a digital first comic, completely independent of print, have a breakout hit on a standard platform, what platform will it be on and how will it have happened? Right now the only truly independent breakout hit is Private Eye by Vaughan and Marcos, which is on its own platform and benefiting greatly from the fame of its creators.
• Who will solve the discoverability issues plaguing digital comics?
• Will new platforms emerge as strong players? Examples: a return to digital comics on gaming systems like the Xbox or Playstation; online communities like DeviantArt; Chromecast apps; the oft-rumored Netflix for Comics model finding traction.
• Will different revenue sharing models move publishers and creators towards or away from vendors?
• Will international sales become a separate and more prominent category? International revenue is a prominent part of the film industry, but hasn’t traditionally been a point of emphasis for traditional comics publishing.
• Will changes in the print publishing sector trickle over to the digital sector?
• Will a standard format for digital comics finally emerge?
  The digital download/eBook category of digital comics is far from stabilized and in Q4 of 2014 is very much in a period of great changes. This requires publishers and creators to be vigilant in watching for news of new companies and changes in policies and market shares.

Chapter 10: Comparing the Finances of Print, Webcomics and eBooks

Comparing the different formats of print and digital comics is a little bit of an apples to oranges operation. While there’s a bit of similarity between the current distribution models for print and eBooks/digital downloads, webcomics are a very different creature than can have both print books and eBooks in the revenue model. To make the comparison more feasible, we’ll estimate what is necessary in each format to generate $10,000 (the estimated standard creative budget for a 20 page DC or Marvel comic) and $1,667 (the monthly income for an entry level job paying $20K annually).

Print:

10,000 copies of a 32-page, full color comic book priced at $3.99 are estimated to net $9,560, so $10,000 should require between 10,400 – 10,500 copies.

3,000 copies of a 32-page, full color comic book priced at $3.99 are estimated to net $1,428, so $1,667 should require 3,400-3,500 copies.

Those estimates are for selling into the shops using Diamond as a publisher. If using a publisher, while the printing costs will go up, the revenue will be split at best. If using Image, assume a $2500 listing fee and adjust up according.

Are those numbers achievable? Exceeding 10K copies with an independent comic is only done with licensed properties or established print creators, usually ones having previously worked for DC or Marvel. That’s the current market. Markets do change, but it seems extremely unlikely unless retail buying habits shift. Those are also books from established publishers.

Selling 3,400 copies for an entry level wage is also probably a little too ambitious for a completely independent comic from non-established creators. Smaller established publishers will have the lower end of their lines selling around that mark. Think Tank from Image Top Cow sells at or a bit below that and it’s fairly established. It might not be completely out of the question, but it’s highly unlikely without significant retailer buy-in. On the other hand, this is not necessarily an unusual sales level for an Image comic from a first-time creator, they’re probably a bit higher. That $2500 listing fee sucks the profit right out of those kinds of sales, though. But those sales levels are with a publishing brand behind you, not solo.

The reality is, starting out as an independent cartoonist or new publisher, without a previous name in print publishing, the struggle is to simply break even.

You can lower those numbers a little bit by offering digital editions of the print comics. Use 10% or 15% as an estimate of digital sales, since digital sales are effectively a function of print sales in the current environment. (See below for the rate tables based on list price and vendor.) Lower selling print comics can sometimes earn more money from digital, due to the higher printing costs for shorter runs.

Collected editions will also lower the break-even number, but that’s a harder number to predict and can make for irregular cash flow.

On the graphic novel side of things, assuming overseas printing on a 128 page full color book and a $19.99 list price, that would be 6 issues worth of material, so 6 months’ worth of revenue would need to be generated. $60K and $10K, respectively

It would take around 9,500 copies to net $60K.

It would take a little under 2,000 copies to net $10K.

Are these realistic numbers? Direct Market retailers are less likely to order graphic novels from independent publishers than they are single issues. It’s a higher price point and potentially harder to sell than a monthly comic. 300 copies would be a very strong initial order from an unknown. If it sold and was reordered consistently, perhaps 2,000 copies could be sold in a year or two, but that seems extremely ambitious.

The Direct Market just doesn’t support independent newcomers like it did in the 1980s and 1990s.

eBooks/Digital Downloads:

There are a lot more price points and discount levels in play for eBooks.

To achieve $10K in revenue it would take:

Model #1: iTunes Store/iBooks/Google Play

The pricing structure used by Apple and Google will charge a 30% commission on all transactions.

List Price

Amount Received by Publisher

Copies To Sell

$0.99

$0.693

14,430

$1.99

$1.393

7,179

$2.99

$2.093

4,778

$3.99

$2.793

3,581

Model #2: Kindle Direct Platform

35%/no download fee option

List Price

Amount Received by Publisher

Copies To Sell

$0.99

$0.3465

28,860

$1.99

$0.6965

14,358

$2.99

$1.0465

9,556

$3.99

$1.3965

7,161

Model #3 Barnes & Noble Nook

65%: $2.99-9.99

List Price

Amount Received by Publisher

Copies To Sell

$2.99

$1.9435

5,146

$3.99

$2.5935

3,856

40%: $0.99 - $2.98; $10.00 - $199.99

List Price

Amount Received by Publisher

Copies To Sell

$0.99

$0.396

25,253

$1.99

$0.796

12,563

Model #4 Comics Application Provider (Pre-Amazon Comixology, iVerse, etc)

Option 1: In-App Purchases through the iTunes store

While individual deals may vary, multiple sources say that the standard deal is 50% of list price after the 30% iTunes cut. (70% / 2 = 35%)

List Price

Amount Received by Publisher

Copies To Sell

$0.99

$0.3465

28,860

$1.99

$0.6965

14,358

$2.99

$1.0465

9,556

$3.99

$1.3965

7,161

Option 2: Buying directly off the Application Provider’s website (and cutting out the iTunes fee, so 50%-50%).

Notably, this is how Comixology Submit functions.

List Price

Amount Received by Publisher

Copies To Sell

$0.99

$0.495

20,202

$1.99

$0.995

10,051

$2.99

$1.495

6,689

$3.99

$1.995

5,013

Model #5 Direct Sale Off Your Own Site

5% of transaction + $0.05

List Price

Amount Received by Publisher

Copies To Sell

$0.99

$0.89

11,236

$1.99

$1.84

5,435

$2.99

$2.79

3,585

$3.99

$3.74

2,674

Model 6: Gumroad

5% + $0.25 per transaction.

List Price

Amount Received by Publisher

Copies To Sell

$0.99

$0.69

14,493

$1.99

$1.64

6,098

$2.99

$2.59

3,861

$3.99

$3.54

2,825

To achieve $1667 in revenue it would take:

Model #1: iTunes Store/iBooks/Google Play

The pricing structure used by Apple and Google will charge a 30% commission on all transactions.

List Price

Amount Received by Publisher

Copies To Sell

$0.99

$0.693

2,406

$1.99

$1.393

1,197

$2.99

$2.093

797

$3.99

$2.793

597

Model #2: Kindle Direct Platform

35%/no download fee option

List Price

Amount Received by Publisher

Copies To Sell

$0.99

$0.3465

4,811

$1.99

$0.6965

2,394

$2.99

$1.0465

1,593

$3.99

$1.3965

1,194

Model #3 Barnes & Noble Nook

65%: $2.99-9.99

List Price

Amount Received by Publisher

Copies To Sell

$2.99

$1.9435

858

$3.99

$2.5935

643

40%: $0.99 - $2.98; $10.00 - $199.99

List Price

Amount Received by Publisher

Copies To Sell

$0.99

$0.396

4,206

$1.99

$0.796

2,095

Model #4 Comics Application Provider (Pre-Amazon Comixology, iVerse, etc)

Option 1: In-App Purchases through the iTunes store

While individual deals may vary, multiple sources say that the standard deal is 50% of list price after the 30% iTunes cut. (70% / 2 = 35%)

List Price

Amount Received by Publisher

Copies To Sell

$0.99

$0.3465

4,811

$1.99

$0.6965

2,394

$2.99

$1.0465

1,593

$3.99

$1.3965

1,194

Option 2: Buying directly off the Application Provider’s website (and cutting out the iTunes fee, so 50%-50%).

Notably, this is how Comixology Submit functions.

List Price

Amount Received by Publisher

Copies To Sell

$0.99

$0.495

3,367

$1.99

$0.995

1,676

$2.99

$1.495

1,115

$3.99

$1.995

836

Model #5 Direct Sale Off Your Own Site

5% of transaction + $0.05

List Price

Amount Received by Publisher

Copies To Sell

$0.99

$0.89

1,873

$1.99

$1.84

906

$2.99

$2.79

598

$3.99

$3.74

446

Model 6: Gumroad

5% + $0.25 per transaction.

List Price

Amount Received by Publisher

Copies To Sell

$0.99

$0.69

2,416

$1.99

$1.64

1,017

$2.99

$2.59

644

$3.99

$3.54

471

How feasible is it to make these kind of numbers on a digital first comic? The only comic doing so for the standard creative budget is The Private Eye, a “pay what you want” financial model by the very established creative team of Brian K. Vaughan and Marcos Martin. The high water mark for digital first comics in the apps and bookstore world seems to be somewhere in the 2K-5K range with a lot of the selection selling under a thousand copies per issue. If digital first comics follow the example of digital first prose and go for a lower price, like $1.99 or $0.99, there is no precedent for making the pro creative budget through the bookstores and apps. At $2.99, it’s possible that established creative talent might come close. Depending on the platform and revenue split, 5K worth of $2.99 eBooks can add up to $10K in revenue. The $1.99 numbers do not work out for the known traffic levels through online bookstores and apps.

For reaching the entry level job rate of $1,667, if the sales were concentrated on platforms like iBooks and Google Play with a 70%/30% revenue split, that seems like the upper limit of sales for someone starting out – assuming traffic could be directed at the download pages. It’s ambitious, but less ambitious than trying to sell 3,500 copies into the Direct Market. Far from a guaranteed thing for either format.

Being able to direct readers to the comic’s own private download site, which is how The Private Eye works, opens up a lot more possibilities, but that’s traffic that must be acquired and requires a high amount of social media engagement and/or publicity.

It likely would take some time for a beginner to work up the mailing/social list to function as an entry level job.

There is such a thing as backlist sales with digital, which doesn’t really exist for most print monthlies. Backlist and the Long Tail effect can build up some residual income as the comics continue to come out, but this isn’t an easy path for any cartoonist unless there’s a large fan base already in existence and compatible with eBooks. (How much of a print creator’s audience would be willing to switch to digital is still an open question, although The Private Eye does hint that some switching is possible.)

Webcomics:

Estimating webcomics revenues entails a lot more variables than the sales of print and eBook comics. Part of this is a greater diversity of readers. Part of this is the differing conversion rates and publishing schedules. For the purposes of this estimation, we’ll be using a purchase conversion rate of 1% of unique viewers. We’ll use a M-F publishing schedule in the strip format, so 5 webpages per week / 22 per month as an average for calculation. We’ll figure on a unique user reading 22 pages per month – this is higher than most webcomics will see, since there will normally be people popping in for one or two random strips, but for estimation purposes, we’ll focus on regular core readers. Advertising and merchandising are based on slightly different metrics.

If your webcomic is only publishing twice a week or seven days a week, adjust the pages/month accordingly for the advertising comparison.

To earn $10K per month you would need:

Banner ad income, using sample CPMs from earlier:

@$0.015 CPM = 666,666,667 pageviews / 30,303,030 unique viewers

@$0.2025 CPM = 49,382,716 pageviews / 2,244,669 unique viewers

@$0.50 CPM = 20,000,000 pageviews / 909,091 unique viewers

@$1.00 CPM = 10,000,000 pageviews / 454,546 unique viewers

@$2.75 CPM = 3,636,364 pageviews / 165,290 unique viewers

@$5.50 CPM = 1,818,181 pageviews / 82,645 unique viewers

Merchandising income:

T-shirts: @$5 margin = 2,000 shirts / 200,000 unique viewers (single t-shirt purchase)@$9 margin = 1,112 shirts / 111,112 unique viewers (single t-shirt purchase)

Books

Books take a little longer to assemble. If the webcomic is standard newspaper sized and three strips went on one printed page, that would take 18 months to produce enough material for a 120-128 page book, so you’d need to earn out 18 months’ worth of income from the book. That wouldn’t necessarily all come at once (although a lot of it could, especially if crowdfunding was used). That means 18 months’ worth of material would need to generate $180K if books were the sole revenue stream – enough to last through the next book.

Assuming overseas printing on a 128 page full color book priced at $19.99 with no discount and shipping and handling covers shipping, it would take roughly 9975 copies to generate $180K in revenue.

Donations/Patreon

Donations have never really been quantified as a function of unique viewers or pageviews, but were widely perceived as inconsistent. Patreon is consistent, but too young for a rule of thumb on patrons vs. unique viewers to have surfaced. Estimations really aren’t possible without Patreon being around longer and more data being made available.

Freemium/Subscriptions

Likewise, the conversion rates for subscriptions are a little untested in webcomics, though the 1% conversion rate from reader to purchaser would likely be applied here. It would take 100 regular readers to get 1 subscriber, so this is a model best phased in by sites with large existing reader bases.

How feasible is it to make that $10K/mo mark? The largest webcomics exceed them. More than one piece of merchandise can be offered at once and more than one ad can appear on a page. Essentially, the more pageviews a webcomic gets, the more attention needs to be paid to advertising. If good CPM rates can be obtained, be it from direct sale of ads, an ad network or an ad exchange, the advertising revenue can be significant. Sites with over 500K pageviews/a month absolutely need to investigate ad networks and exchanges unless they’re getting unusually high effective CPMs off AdWords or Project Wonderful. Ads and a few different pieces of merchandise in the mix can be combined to lower the threshold of unique viewers required to hit this milestone.

A good margin on merchandise will get a webcomic more revenue than low to mid-range ad rates, though when advertising starts to rise above $2.50 per page, it can displace some lower margin items as a better revenue stream. It all depends on the exact audience, the exact merchandise and how well the merchandise appeals to the audience. There is at least as much art to merchandising as there is to science. The real question is does the webcartoonist have sufficient skill and execution to draw these kinds of audience numbers and how long will that take?

To earn $1,667 per month and an entry level wage:

Banner ad income, using sample CPMs from earlier:

@$0.015 CPM = 111,133,334 pageviews / 5,051,515 unique viewers

@$0.2025 CPM = 8,232,099 pageviews / 374,186 unique viewers

@$0.50 CPM = 2,334,000 pageviews / 106,091 unique viewers

@$1.00 CPM = 1,667,000 pageviews / 75,773 unique viewers @$2.75 CPM = 606,182 pageviews / 27,554 unique viewers

@$5.50 CPM = 303,091 pageviews / 13,777 unique viewers

Merchandising income:

T-shirts: @$5 margin = 334 shirts / 33,340 unique viewers (single t-shirt purchase)@$9 margin = 186 shirts / 18,523 unique viewers (single t-shirt purchase)

Books

Applying the same logic for this revenue level, 18 months’ worth of material would need to generate $30,006 for a book to be the sole revenue stream.

Assuming overseas printing on a 128 page full color book priced at $19.99 with no discount and shipping and handling covers shipping , it would take roughly 1800 copies to generate $30,006 in revenue and 180,000 unique viewers.

Obtaining an entry level salary equivalent from a webcomic still isn’t an instant/turnkey proposition. Somewhere between 15K-30K regular readers are still required, but there are many webcomics out there that do this. It’s an attainable goal, although as a cartoonist approaches the end of their 20s, this is more part-time income than full-time income. But the base has been built before.

Comparing the revenues of the formats

As of late 2014, the Direct Market for print comics is a bit of a closed market for creators and publishers that are already established. Incursions into the Direct Market need to be marketed to individual stores, regardless of whether Diamond is being used, and can be time consuming. The struggle for anyone trying to break into print is not to lose money because of small print runs. Print can be a money pit for low circulation comics.

The eBook/Digital Download market is also largely defined by the print market. While this may not be the case in the future, a good portion of the eBook market sells in proportion to and as a function of the Direct Market. The entry level revenue seems a bit too ambitious and the seasoned professional level seems like a realistic possibility only for the very established – in both cases, it’s probably necessary to already have a fan base contactable through a mailing list or social media who can be directed towards platforms with the most favorable revenue splits if the eBook format is to work. The biggest upside is, if you already have the software to make the comic, it doesn’t cost anything to put the eBook/download in the storefronts.

Webcomics are the loosest, most variable format for making money. Things have to come together, in terms of a larger audience, the right choice and design of merchandise and/or advertising source. It also is the medium that’s had the most growth and the opportunities for high level success are seemingly more attainable with webcomics, this is probably the best place for a cartoonist to start out.

Consider the increasing emphasis on having a mailing list or social following, in terms of promotions.

Webcomics are the format that is most accessible to people. It’s viewed for free, rather than a paid product. It’s the easiest way to get a wide audience and build up those lists. It seems unlikely that someone new would make much, if any, revenue for the first year or two. If we’re honest, we’ll acknowledge that a cartoonist is their own business and it can take a few years for a business to become profitable. A cartoonist isn’t likely to be wildly profitable the first year unless there’s a big break with a print publisher or some interesting freelance work falls in their lap. (Although having a webcomic as portfolio can conceivable help with that.)

An established cartoonist has more nuanced choices. Cartoonists based in the Direct Market have a mixed record with webcomics and eBooks. Sometimes the audience transfers, sometimes it doesn’t. For the most part, it tends to be cult and independent cartoonists moving over to try these formats, not the Direct Market headliners. Opportunities do exist, but the ability to move the fan base over to a different medium is the key to not having to start from scratch.

Webcartoonists face slightly different opportunities and challenges with print and eBooks. Portions of the Direct Market seem to be increasingly receptive to new types of material and may be compatible with webcomic fare. Getting it to that subset of the Direct Market is the challenge and Diamond’s catalog may not be the answer. It might be time for a second distributor focused on smaller publishers that can maintain better contact with that submarket. In the meantime, it’s a matter of selling directly to retailers, obtaining a sales agent to do the same or contracting with a publisher. eBooks and downloads are also interesting. At the moment, that system is far too defined by Direct Market publishers and webcartoonists tend to walk away from the requested revenue splits. If the eBook platforms are different audiences than the websites, it might be advisable for webcartoonists to host the downloads on their own website and direct their own audiences to purchase eBooks there and experiment with offering the eBooks on the online bookstore and app platforms after their on-site promotions have run their course to collect more data. If the discoverability opens up, it could prove to be an interesting market, especially for story-based strips for which book/eBook markets could represent the long tail. Otherwise, it’s effectively an ancillary revenue stream and “found money.”

Above all else, the business of digital comics is a series of evolving technologies, consumer trends and dominant vendors. Things change and sometimes rapidly. It’s best to keep an eye open for new vendors and changes in policies at existing ones. Consumers can change platforms very quickly in an online world and the major players of Amazon, Apple and Google are all starting to jockey for position in the digital comics field.

Appendix – Crowdfunding

Kickstarter is as synonymous with crowdfunding as Xerox is with photocopying. It’s the primary name, but it isn’t the only company in the business and it only represents one type of crowdfunding model. Crowdfunding has the ability to fund work in all three of the comic sectors – print, digital downloads/eBooks and webcomics.

The two types of crowdfunding models are the product-based format made famous by Kickstarter and the new subscription-based donation format pioneered by Patreon. In theory, both formats could be used simultaneously for different purposes.

Product-Based Crowdfunding

The traditional format is Kickstarter’s product-based fundraiser. There are a growing number of sites that participate in this model. The two sites with the most name recognition that frequently host comics-related crowdfunding projects are Kickstarter and Indiegogo. The general principal in product-based crowdfunding is as follows:

• Post a proposal for a product. A graphic novel, a single issue, a year or a webcomic, etc. It can be print, digital or (most times) both.
• List the amount of money needed to make the project happen. (Some crowdfunding platforms like Kickstarter only pay you if you meet the initial financial goal, others like Indiegogo have options for payment no matter how little money is pledged.)
• List the products/rewards available and what level of contribution it takes to get them. This typically starts with a digital copy of a comic, works up to a print copy and then a signed limited edition, with all manner of small tchotchkes like t-shirts and stickers thrown in, all the way up to thousands of dollars for original art or personal appearances.
• People, in theory your existing fanbase, pledge money for those rewards and generate enough money to do the project.
  If you raise enough money, you can proceed with your comic. Sometimes the completed product is placed with a publisher, sometimes not. The basic principles of crowdfunding are very simple, but in practice, it’s not so easy.

Setting Up a Product-Based Crowdfunding Project

The first thing to do is define your product. How many pages is it? Is it in color or black and white? What’s the plot? Who are the characters? What format do you want to print this in?

When you’ve got that figured out, go and price out how much it will cost to print and how much it will cost to buy any art supplies, computers or software you’re going to need to make the comic. You may find, especially if you’re planning on printing a color comic, that you need to print a certain minimum number of comics before the per unit price becomes workable. And don’t forget shipping to get the comics to your door.

For the sake of argument, let’s say the product in question is a 200 page full color graphic novel collecting a webcomic in print – a very common scenario for crowdfunding.

How much will it cost to get the graphic novels delivered to you for:

250 copies: $4,478.05 ($17.91/copy)500 copies: $5,060.21 ($10.12/copy)750 copies: $5,663.15 ($7.55/copy)1000 copies: $6,199.69 ($6.20/copy)

You’ll then need to estimate the postage, packaging material (envelopes), labels and incidental expenses you might run into. For the purposes of a quick walk through, let’s say that comes out to $5 per copy.

That means the cost to fulfill 250 copies of this graphic novel would be $5728.05 ($22.91/book). Of course, the crowdfunding sites take a fee off the top, as well as the transaction processing fee. The fees vary from site to site, but 10% will usually be close. This means to cover your $5728.05 in expenses, you need to raise $6364.50 ($25.46/book). Which means you might need to price a copy of the graphic novel at $25.50-$30, depending on how many copies you think you can sell. The more you print, the lower the per unit cost. If the creator has some capital to invest for a print run to sell through a website or at conventions, crowdfunding can get the print run up and sometimes pay for the initial inventory if it proves popular enough.

Filling in Rewards Around the Intended Product

If your crowdfunding project is a graphic novel, you don’t have to offer any rewards besides that graphic novel. A more common practice is to fill other rewards around the graphic novel and hit various price points. The most popular price point for a crowdfunding reward is said to be between $20-$25. A digital copy of the graphic novel can be placed at $5 or $10 for a lower cost reward, which also is of low-to-no cost to fulfill. T-Shirts and stickers are also popular rewards. If a t-shirt costs you $5 to make and you add it for a $10 reward, that’s really $5 (less shipping) towards the amount of money you need to make that print run. You need to balance the cost of the non-book rewards with the total amount of money for your goal.

The way many crowdfunding projects generate large amounts is with exclusive items. Premium pricing, often hundreds or thousands of dollars can be charged for things like original artwork, naming a character after the person making a large pledge or a personal appearance by the creators.

Shipping – And Its Dangers

Shipping is something that trips people up with crowdfunding. The first trap is foreign shipping, particularly overseas shipping. This is extremely expensive relative to U.S. shipping and an extra fee is required for it. Kickstarter recently added options to formally add shipping costs to pledges based on region, so pay attention to that.

The second danger is with the extra rewards. A book can be sent via media mail. A t-shirt cannot, so the least expensive method is unavailable if you’re shipping both. If multiple rewards are being sent, it’s frequently cheaper to send them in one package. Figure out what your postage costs for bundles of rewards are while you’re determining reward pricing and figure out if you can or can’t send the items together. The larger the number of pledges, the complicated this can get.

Marketing

In an ideal world, you enter the crowdfunding project with a large existing following for your comic or webcomic. You announce it on Twitter/Facebook/Tumblr/Pinterest. You post about it on the comic’s website. A percentage of the audience goes to the crowdfunding project page and places a pre-order/pledge.

If you don’t live in an ideal world and don’t have a large following for yourself or your comic, the burden of proof is on you to convince people the project is worthwhile and they should make a pre-order/pledge. Sample pages are good. A reputation is good. You’ll still want to post to all your social media channels, but your emphasis is on the second step: publicity. You need to contact all the media outlets that fit the project and attempt to get an article placed. At this point you need to manufacture an audience and that is one way to do it.

Now, even if you do have a big social media following, you’ll still want to go out and get those media placements. This is not just an opportunity to get pre-orders from your existing fan base; it’s an opportunity to get new readers exposed to your work.

Here’s the bad news. Media outlets, even the lowliest of blogs, are constantly bombarded with press releases about crowdfunding. In 2010 if you were doing crowdfunding, it might have been unique, special and noteworthy on its own. Not anymore and the burden is on you to find an angle that’s newsworthy. It’s something that must be done.

Social media is perhaps the crowdfunder’s greatest ally. If you can get people to retweet, repost or reblog your announcement, you can get exposure to an ever-widening pool of potential pledges. Tweet early, tweet often. Twitter and Tumblr have the best reputations for message amplification and pledge recruiting, but that also varies from case to case and where an individual’s contacts reside in the social media world.

Have no illusions about this: a 30 day crowdfunding project is 30 days of Hell. You will be stressed chasing bloggers, answering queries, posting to social media and (hopefully) giving interviews. It can be a fulltime job and will suck up any free time you thought you had. This is not something to be entered into lightly.

The Golden Rule of Crowdfunding

Whatever you do, don’t get greedy when setting your goal. This goes double for a Kickstarter goal. With Kickstarter, you only get paid if you meet the goal. If your goal is $30,000 and you have $20,000 pledged, you will receive $0.00 and will have wasted a month of your life. Yes, the reality of the situation is that harsh. Figure out the minimum amount you need. That is your goal. Do not be the person who got greedy and wasted a month.

Consider Stretch Goals

Stretch goals are for when you’ve met your goal and there’s time left on the crowdfunding project. A stretch goal is saying you’ll do something, say give everyone a free digital copy or a sticker, if an extra $1,000 dollars is pledged. In some cases, if enough money is pledged, the person crowdfunding will agree to produce the second book in a series, but it really varies from project to project.

There are two schools of thought with stretch goals. One is that stretch goals keep the project alive and moving forward even if the goal is met, so they’re a good thing, perhaps even necessary. The other theory is that you’re running a project to produce a specific item and people will either want it or they won’t. If they want it, stretch goals are just an extra cost you incur and more things to spend time fulfilling.

Both theories have their merit, so if no stretch goal comes to mind naturally, you might want to skip it. Either way, you should have the stretch goals mapped out when you plan your crowdfunding project and are setting the pledge levels. You don’t want to try and squeeze extra rewards into your budget after you’ve already started.

Kickstarter-style crowdfunding is very common for comics and webcomics. It’s extremely useful for obtaining pre-order funds to pay for printing. Just make sure you research the platform you intend to use and examine how some successful projects have been put together.

Patreon and Crowdfunding as Donations

Patreon is much newer than Kickstarter and so the rulebook for how to use it is still being written. Where Kickstarter resembles a PBS/NPR pledge drive with its rewards, Patreon is more about donations and supporting an artist. A tip jar, if you prefer. The general idea behind Patreon was to create a better revenue stream for people who were regularly making content online, as opposed to the Kickstarter model which tended to focus on physical objects like printing a book. It was originally conceived as a tool for musicians, but quickly expanded into other areas like comics.

Much like traditional crowdfunding pledge levels are set. In the case of Patreon there are two sets of numbers for pledging. The first set is what the patron gets with a certain level of pledge. It can be anything from a “thank you” at a low amount to early access to content, access to exclusive content or a regular Google Hangout session. The second set is for events triggered by reaching a total pledge level. For example when a total of $1,000 dollars has been pledged a comic might post 5 times a week or for $10,000 of total pledges all ads might be removed from the site.

There are also two types of accounts. The first is fairly straightforward and the patron pledges a certain amount each month. The second is a pledge per piece. So payments are triggered by a creative work being completed and posted to Patreon. This is perhaps more appropriately geared towards musicians who release music videos on an irregular schedule than to regularly appearing webcomics. It would, however, function as a subscription if a webcomic was released as a more of a digital comic book behind Patreon’s pay wall. With this option the patrons also elect what the maximum amount they’re willing to spend each month is. If you use this option see how many people have opted to pay for the second, third or fourth piece each month so you don’t have an unexpected shortfall in revenue.

Patreon charges 5% plus credit card processing, so the total fees are roughly 9%.

Being a very new company, founded in mid-2013, Patreon doesn’t have as many best practices and case studies as the Kickstarter flavor of crowdfunding does. The success stories come from existing creators announcing they have joined Patron and explaining the pledge levels. They put a Patreon badge or widget on their site and specifically mention it every so often. The pledge levels, in general, have tended to move upwards.

It isn’t clear if Patreon is well-suited toward growing a revenue stream for a brand new webcomic or a brand new creator. It’s possible that it works better when applied to a webcomic that already has a critical mass of readers and can get a big initial pledge count, rather than slowly growing over time. However, it’s too soon and that implementation strategy simply hasn’t been tested over a long period.

It has produced a revenue stream of over a thousand dollars per month for several webcomics, however, and definitely seems to be working as at least a supplemental revenue stream for established cartoonists. Zach Weinersmith of SMBC earned enough from Patreon to promote a part-time staffer to full-time employee.221

It’s prudent to exercise caution when working with such a young company, but enough cartoonists have jumped in and are receiving regular payments that Patreon has become a viable option for many creators within its first year, which is not an easy feat. Regardless of where a webcomic is, in terms of size and age, Patreon is well worth keeping an eye on as the conventions of its use are established.

The real beauty of it is that it’s a regular, reoccurring payment. Patreon takes the unpredictability out of the tip jar and seems to have made the act of contributing to an artist a more formal process than the previous systems and possibly even fashionable.

The risk is that Patreon is so new, nobody is certain what the lifecycle of a Patron is. Will they be regular donators for life? Will they drift away after a year or two? If your patrons are heavily drawn from college students, is there a behavior change after graduation? Will new patrons cycle in regularly and make any turnover negligible?

No one really knows the answers to those questions, and may not for a few years. In the meantime, the early results are positive.

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135 Alverson, Brigid. “Exclusive: Inside Dark Horse Digital.” 27 April 2011. Comic Book Resources. <<http://www.comicbookresources.com/?page=article&id=32068>>

136 Ihnatko, Andy. “ComixOlogy’s Marvel iPad app shows promise for digital comics.” 31 March 2010. Chicago Sun-Times. < <http://web.archive.org/web/20100404073605/http://www.suntimes.com/technology/ihnatko/2134294,marvel-ipad-comixology-ihnatko-033110.article>>

137 MacDonald, Heidi. “New Kindle Gets Exclusive on DC Graphic Novels.” 30 Sept. 2011. Publishers Weekly. < <http://www.publishersweekly.com/pw/by-topic/booknews/comics/article/48903-new-kindle-gets-exclusive-on-dc-graphic-novels.html>>

138 Streitfeld, David. “In a Battle of the E-Readers, Booksellers Spurn Superheroes.” 18 Oct. 2011. New York Times. <http://www.nytimes.com/2011/10/19/technology/bookstores-drop-comics-after-amazon-deal-with-dc.html?_r=0>

139 “DC Entertainment Digital Comic Books Now Available on Kindle Store, iBookStore and Nook Store.” 7 Nov. 2012. DC Comics. <<http://www.dccomics.com/blog/2012/11/07/dc-entertainment-digital-comic-books-now-available-on-kindle-store-ibookstore-and>>

140 Seppala, Timothy J. “DC Comics and Vertigo graphic novels arrive on Google Play, Sandman and all.” 8 Oct. 2013. Engadget. <<http://www.engadget.com/2013/10/08/dc-comics-and-vertigo-google-play/>>

141 Seppala, Timothy J. “Comic Book Wednesdays come to Google Play with single issues from DC.” 3 April. 2014. Engadget. < <http://www.engadget.com/2014/04/03/google-play-books-dc-comics-single-issues/>>

142 Pantozzi, Jill. “Marvel Announces Barnes & Noble Nook Deal For Digital Comics.” 7 November 2011. The Mary Sue. < <http://www.themarysue.com/marvel-barnes-noble/>>

143 Kozlowski, Michael. “Marvel Comics Now Available on Amazon.” 13 Dec. 2012. Good eReader. < <http://goodereader.com/blog/digital-comic-news/marvel-comics-now-available-on-amazon>>

144 Khouri, Andy. “Boom! Studios Talks “North Wind” Sales, Retailer Reactions.” 19 Feb. 2008. Comic Book Resources. < <http://www.comicbookresources.com/?page=article&id=12603>>

145 Alverson, Brigid. “Invincible Iron Man: Will paper be cheaper than digital?.” 5 June 2010. Robot 6 @ Comic Book Resources. < <http://robot6.comicbookresources.com/2010/06/invincible-iron-man-will-paper-be-cheaper-than-digital/>>

146 Phegley, Kiel. “Lee And Rood Talk DC Digital.” 23 June 2010. Comic Book Resources. < <http://www.comicbookresources.com/?page=article&id=26831>>

147 Mahaedo, Kevin. “Archie Comics Goes Day-and-Date Digital.” 12 Jan. 2011. Comic Book Resources. < <http://www.comicbookresources.com/?page=article&id=30300>>

148 Hyde, David. “DC Comics Announces Historic Renumbering of All Superhero Titles and Landmark Day-and-Date Digital Distribution.” 31 May 2011. DC Comics. < <http://www.dccomics.com/blog/2011/05/31/dc-comics-announces-historic-renumbering-of-all-superhero-titles-and-landmark-day-and-date-digital-distribution>>

149 Wagner, Kyle. “Exclusive: All Marvel Digital Comics Will Be Available Same Day as Print.” 3 Nov. 2011. Gizmodo. < <http://gizmodo.com/5856092/exclusive-all-marvel-digital-comics-will-be-available-same-day-as-print>>

150 Modahl, Mary. Now or never: how companies must change today to win the battle for Internet consumers. New York: HarperCollins, 2000. pp. 169-171.

151 Spurgeon, Tom. “CR Sunday Feature: James Turner’s DM Troubles And Why They’re Our Own.” 3 May 2009. Comics Reporter. < http://www.comicsreporter.com/index.php/cr_sunday_feature_james_turners_troubles_and_why_theyre_our_own/>

152 Vado, Dan. “SLG Publishing Switches To Digital First Distribution.” 16 Sept. 2011. SLG Publishing. < http://www.slgcomic.com/SLG-Publishing-Moving-To-Digital-First-Distribution-Press-Release_b_48.html>

153 “Batman: Arkham City Exclusive Digital Chapter #1.” 18 May 2011. < <https://www.comixology.com/Batman-Arkham-City-Exclusive-Digital-Chapter-1/digital-comic/10613>>

154 Rogers, Vaneta. “DC Breaks Another Digital Barrier in BATMAN BEYOND UNLIMITED.” 16 Nov. 2011. Newsarama. < <http://www.newsarama.com/8726-dc-breaks-another-digital-barrier-in-batman-beyond-unlimited.html>>

155 “Injustice: Gods Among Us (2013) #1.” 15 Jan. 2013. Comixology. < <https://www.comixology.com/Injustice-Gods-Among-Us-2013-1/digital-comic/34080>>

156 “Tuesday Q&A: Tom DeFalco.” 17 Mar 2009. Marvel Comics. < http://marvel.com/news/comics/7253/tuesday_qa_tom_defalco>

157 McMillan, Graeme. “Marvel Announces Digital-Only ‘Infinite Comics’ Imprint and ‘Augmented Reality’ App at SXSW.” 11 March 2012. Comics Alliance. < <http://comicsalliance.com/marvel-infinite-comics-digital-imprint/>>

158 Campbell, Josie. “Roberson, Monkeybrain Publish Creator-Owned Comics Through Comixology.” 2 July 2012. Comic Book Resources. < <http://www.comicbookresources.com/?page=article&id=39490>>

159 Parkin, JK. “SDCC ’13 | ‘Saga,’ David Aja, Chris Ware among Eisner winners.” 20 July 2013. Robot 6 @ Comic Book Resources. < <http://robot6.comicbookresources.com/2013/07/sdcc-13-saga-david-aja-chris-ware-among-eisner-winners/>>

160 White, Matt. “Diamond, iVerse Set to Launch Diamond Digital Service For Comics Shops.” 9 July 2012. Publishers Weekly. < <http://www.publishersweekly.com/pw/by-topic/digital/retailing/article/52927-diamond-iverse-set-to-launch-diamond-digital-service-for-comics-shops.html>>

161 McMillan, Graeme. “Diamond to Close Digital Storefront Program.” 17 Feb. 2014. The Hollywood Reporter. < <http://www.hollywoodreporter.com/heat-vision/diamond-close-digital-storefront-program-680853>>

162 Reid, Calvin. “Diamond, Trajectory Partner to Deliver Digital Comics.” 28 May 2014. Publisher’s Weekly. < <http://www.publishersweekly.com/pw/by-topic/digital/retailing/article/62496-diamond-trajectory-partner-to-deliver-digital-comics.html>>

163 MacDonald, Heidi. “IVerse Debuts Exclusive Digital Foreign Rights Deal with Marvel and Archie.” 19 Sept. 2012. Publishers Weekly. < <http://www.publishersweekly.com/pw/by-topic/booknews/comics/article/54021-iverse-debuts-exclusive-digital-foreign-rights-deal-with-marvel-and-archie.html>>

164 Alverson, Brigid. “iVerse to Launch Digital Comics Library Service.” 23 Apr. 2012. Publishers Weekly. < <http://www.publishersweekly.com/pw/by-topic/digital/devices/article/51628-iverse-to-launch-digital-comics-library-service.html>>

165 Reid, Calvin. “Iverse Media Debuts Digital Comics Lending Service at ALA.” 27 June 2013. Publishers Weekly. < <http://www.publishersweekly.com/pw/by-topic/industry-news/comics/article/57988-iverse-media-debuts-digital-comics-lending-service-at-ala.html>>

166 Roush, Wade. “Madefire’s Comics Bring a New Visual Grammar to the iPad.” 21 June 2012. Xconomy. < <http://www.xconomy.com/san-francisco/2012/06/21/madefires-comics-bring-a-new-visual-grammar-to-the-ipad/>>

167 Allen, Todd. “DeviantART Partners With Madefire For Comics/Storytelling Platform.” 2 Apr. 2013. Publishers Weekly. < <http://www.publishersweekly.com/pw/by-topic/industry-news/comics/article/56629-deviantart-partners-with-madefire-for-comics-storytelling-platform.html>>

168 Private Correspondence. Juliet Travis. PR rep. for Madefire. 6 Oct. 2014.

169 Allen, Todd. “DC, Madefire Partner For New Motion Book Starring Batman.” 19 Dec. 2013. Publishers Weekly. < <http://www.publishersweekly.com/pw/by-topic/industry-news/comics/article/60437-dc-madefire-partner-for-new-motion-book-starring-batman.html>>

170 McCarty, Brad. “Gumroad: Sell digital goods with a link, no storefront needed.” 9 Apr. 2011. The Next Web. < <http://thenextweb.com/apps/2011/04/09/gumroad-sell-digital-goods-with-a-link-no-storefront-needed/>>

171 Matheson, Whitney. “Read this comic: ‘The Private Eye.’” 19 Mar. 2013. USA Today. < <http://www.usatoday.com/story/popcandy/2013/03/19/private-eye-brian-vaughan/1999287>/>

172 MacDonald, Heidi. “Brian K. Vaughan’s PRIVATE EYE announces a new issue, six-figures sales.” 18 Sept. 2014. The Beat. < <http://comicsbeat.com/brian-k-vaughans-private-eye-announces-a-new-issue-six-figures-sales/>>

173 Salazar, Kat. “HUMBLE BUNDLE launches pay-what-you-want IMAGE COMICS bundle.” 29 Apr. 2014. Image Comics. < <https://imagecomics.com/content/view/humble-bundle-launches-pay-what-you-want-image-comics-bundle>>

174 Alverson, Brigid. “How Humble Bundle Is Changing The Face Of Digital Comics Buying.” 3 Oct. 2014. Comic Book Resources. < <http://www.comicbookresources.com/?page=article&id=55996>>

175 Melrose, Kevin. “JManga digital service to shut down May 30.” 14 Mar. 2013. Robot 6 @ Comic Book Resources. < <http://robot6.comicbookresources.com/2013/03/jmanga-digital-service-to-shut-down-may-30/>>

176 Hudson, Laura. “For the First Time, You Can Actually Own the Digital Comics You Buy.” 2 Jul. 2013. Wired. < <http://www.wired.com/2013/07/drm-free-comics-download-image/>>

177 Rosenblatt, Seth. “Amazon’s Comixology delivers DRM-free comics backups.” 24 July 2014. CNET. < <http://www.cnet.com/news/amazons-comixology-delivers-drm-free-comics-backups/>>

178 Sims, Chris. “Dynamite Entertainment Launches DRM-Free Digital Store With Ten-Cent First Issues.” 20 Aug. 2014. Comics Alliance. <<http://comicsalliance.com/dynamite-entertainment-digital-comics-store-ten-cents-drm/>>

179 Doctorow, Cory. “4,000 more DRM-free comics now available on Comixology.” 17 Sept. 2014. Boing Boing. < <http://boingboing.net/2014/09/17/4000-more-drm-free-comics-now.html>>

180 Lidl, Bruce. “More Publishers Join No-DRM Movement at ComiXology.” 17 Sept. 2014. The Beat. < <http://comicsbeat.com/more-publishers-join-no-drm-movement-at-comixology/#comment-1764003>>

181 Rosenblatt, Seth. “Marvel giveaway crashes Comixology’s servers.” 11 Mar. 2013. CNET. < <http://www.cnet.com/news/marvel-giveaway-crashes-comixologys-servers/>>

182 Sunu, Steve. “Digital Comics Stonewalled By Comixology Server Outage.” 11 Mar. 2013. Comic Book Resources. < <http://www.comicbookresources.com/?page=article&id=44223>>

183 Vaughan, Brian K. “A Statement on Apple’s Banning of SAGA #12 from Brian K. Vaughan.” 9 Apr. 2013. Image Comics. < <http://imagecomics.tumblr.com/post/47555617614/a-statement-on-apples-banning-of-saga-12-from>>

184 Robertson, Adi. “Brian K. Vaughan apologizes for saying Apple banned ‘Saga’ after Comixology confusion.” 10 Apr. 2013. The Verge. < <http://www.theverge.com/2013/4/10/4210228/brian-k-vaughan-apologizes-for-blaming-apple-in-saga-controversy>>

185 Alverson, Brigid. “Are Comics Too Hot For Apple?” 22 Nov. 2013. Publishers Weekly. < <http://www.publishersweekly.com/pw/by-topic/industry-news/comics/article/60114-are-comics-too-hot-for-apple.html>>

186 Rosenblatt, Seth. “Finally, Marvel’s ready for you to hear its comics (scoop).” 9 Mar. 2014. CNET. < <http://www.cnet.com/news/finally-marvels-ready-for-you-to-hear-its-comics-scoop/>>

187 Ching, Albert. “Sxsw: Marvel Adds Audio To Unlimited, Debuts Docs And “Ultimate Spider-Man” Infinite.” 9 Mar. 2014. Comic Book Resources. < <http://www.comicbookresources.com/?page=article&id=51353>>

188 Seppala, Timothy J. “Comic Book Wednesdays come to Google Play with single issues from DC.” 3 April. 2014. Engadget. < <http://www.engadget.com/2014/04/03/google-play-books-dc-comics-single-issues/>>

189 Rosenblatt, Seth. “Amazon snaps up digital comics retailer Comixology.” 10 Apr. 2014. CNET. < <http://www.cnet.com/news/amazon-snaps-up-digital-comics-retailer-comixology/>>

190 Cheredar, Tom. “Madefire finally launches an Android app, begins selling ‘print’ comics (update).” 24 July 2014. VentureBeat. < <http://venturebeat.com/2014/07/24/madefire-finally-launches-an-android-app-begins-selling-print-comics/>>

191 MacDonald, Heidi. “Valiant brings entire library to iVerse.” 1 Aug. 2014. The Beat. < <http://comicsbeat.com/valiant-brings-entire-library-to-iverse/>>

192 Wilson, Matt D. “Valiant Partners With DriveThru Comics For Digital Comics, Gives Away Eight Free #1 Issues.” 19 Aug. 2014. Comics Alliance. < <http://comicsalliance.com/valiant-partnership-drivethrucomics-digital-library/>>

193 “Valiant Joins Madefire “Print Books” on iOS and Android for Day-and-Date Digital Releases, Digital Collections.” 20 Aug. 2014. Madefire. < <http://www.madefire.com/valiant-goes-day-and-date-with-madefire/>>

194 Allen, Todd. “Dynamite Launches Their Own Digital Comics Store With Ten Cent DRM-Free Downloads.” 20 Aug. 2014. The Beat. < <http://comicsbeat.com/dynamite-launches-their-own-digital-comics-store-with-ten-cent-drm-free-downloads/>>

195 “Kobo Adds Marvel Digital Graphic Novels.” 28 Oct. 2014. Publishers Weekly. < <http://publishersweekly.com/pw/by-topic/industry-news/comics/article/64536-kobo-adds-marvel-digital-graphic-novels.html>>

196 MacDonald, Heidi. “UPDATE: DC Entertainment Launches Single Issue Comics And Graphic Novels On iVerse Media.” 3 Dec. 2014. The Beat. < <http://comicsbeat.com/update-dc-entertainment-launches-single-issue-comics-and-graphic-novels-on-iverse-media/>>

197 “Digital Comics Sales Rose 29% to $90M in 2013.” 22 July 2014. Publishers Weekly. < <http://publishersweekly.com/pw/by-topic/industry-news/comics/article/63402-digital-comics-sales-rose-29-to-90m-in-2013.html>>

198 MacDonald, Heidi and Reid, Calvin. “ICv2 Confab Showcases New Comics Customers, Growing Sales.” 9 Oct. 2014. Publishers Weekly. < <http://publishersweekly.com/pw/by-topic/industry-news/comics/article/64332-icv2-confab-showcases-new-comics-customers-growing-sales.html>>

199 “List Price Requirements.” Kindle Direct Publishing. < <https://kdp.amazon.com/help?topicId=A301WJ6XCJ8KW0>>

200 “Pricing Page.” Kindle Direct Publishing. < <https://kdp.amazon.com/help?topicId=A29FL26OKE7R7B>>

201 “NOOK Press Pricing and Payment Terms.” Nook Press. < <http://cp-barnesandnoble.kb.net/kb/?ArticleId=4310&source=Article&c=12&cid=28#tab:homeTab:crumb:7:artId:4259>>

202 “PayPal Merchant Fees.” PayPal. < <https://www.paypal.com/us/webapps/mpp/merchant-fees>>

203 MacDonald, Heidi. “Dynamite Entertainment’s Surprising 10 Years.” 28 July 2014. Publishers Weekly. < <http://publishersweekly.com/pw/by-topic/industry-news/comics/article/63480-dynamite-entertainment-s-surprising-10-years.html>>

204 James, Tyler. “Comixology: Yes, a Game Changer.” 2 Dec. 2013. Comix Tribe. < <http://www.comixtribe.com/2013/12/02/comixology-yes-a-game-changer/>>

205 Phegley, Kiel. “Ape Entertainment’s “Pocket God” Hits A Half Million.” 8 Dec. 2011. Comic Book Resources. < <http://www.comicbookresources.com/?page=article&id=35816>>

206 MacDonald, Heidi. “IDW Hires Webber to Oversee E-publishing.” 5 May 2009. Publishers Weekly. < <http://www.publishersweekly.com/pw/by-topic/new-titles/adult-announcements/article/10160-idw-hires-webber-to-oversee-e-publishing.html>>

207 Private correspondence. Chris D’Lando. Communications Admin at Marvel. 30 July 2014.

208 MacDonald, Heidi. “Ms. Marvel is Marvel’s “#1 digital seller.”” 4 Nov. 2014. The Beat. < <http://comicsbeat.com/ms-marvel-is-marvels-1-digital-seller/>>

209 Private correspondence. Matt Hawkins, writer of Think Tank. 20 Oct. 2014.

210 “May 2014 Comic Book Sales Figures.” The Comics Chronicles. < <http://www.comichron.com/monthlycomicssales/2014/2014-05.html>>

211 Cloonan, Becky. “Self Publish or Perish- a “short” essay. (Or: 4,000 words about boxes and boxes of comic books)” 13 Dec. 2013. Ink and Thunder. < <http://beckycloonan.tumblr.com/post/71721963332/self-publish-or-perish-a-short-essay-or>>

212 Private correspondence. Chris D’Lando. Communications Admin at Marvel. 30 July 2014.

213 Private correspondance. Hank Kanalz, Senior VP of Vertigo and Integrated Publishing and Kelly Popham, Publicity Representative. 25 Sept. 2014.

214 Salkowitz, Rob. “2014: The Year of the Digital Shakeout.” 2 Jan. 2014. ICV2. <<http://www.icv2.com/articles/news/27527.html>>

215 Private correspondence. Sahil Lavingia, Founder & CEO - Gumroad. 28 July 2014.

216 Anderson, Chris. “The Long Tail.” October 2004. Wired. < <http://archive.wired.com/wired/archive/12.10/tail.html>>

217 Private correspondence. Kelley L. Allen, Director of Books, Humble Bundle. 4 Oct. 2014.

218 Burlingame, Russ. “ComiXology Unveils 100 Comics For $10 Bundle, Boasts of ComiXology Submit Success at SXSW.” 9 Mar. 2014. ComicBook.com. < <http://comicbook.com/blog/2014/03/09/comixology-unveils-100-comics-for-10-bundle-boasts-of-comixology-submit-success-at-sxsw/>>

219 Garside, Juliette. “Ebook sales: Amazon tells Hachette to give authors more, charge readers less.” 30 July 2014. The Guardian. < http://www.theguardian.com/books/2014/jul/30/amazon-hachette-ebook-sales-too-expensive>

220 MacDonald, Heidi. “iVerse to relaunch ComicsPLUS in November with uView, import and more.” 20 Oct. 2014. The Beat. < <http://comicsbeat.com/iverse-to-relaunch-comicsplus-in-november-with-uview-import-and-more/>>

221 Allen, Todd. “Patreon Raises $2.1 Million.” 24 Feb. 2014. <<http://www.publishersweekly.com/pw/by-topic/industry-news/comics/article/61145-patreon-raises-2-1-million-for-subscription-based-crowdfunding-platform.html>>