Our Digital Comics Strategy is an Evolutionary Dead-end
Why the current digital comics paradigm is no good for comics companies, retailers, or consumers.

Hi, my name is Christopher Butcher, and I’m the manager of The Beguiling Books & Art in Toronto, Canada. We’ll be celebrating our 25th year in business in 2012, and I personally am in the midst of my 17th year working in comic stores. I started out buying my comics from the corner store—Transformers and G.I. Joe before discovering comic book stores, X-Men, Vertigo, and eventually the wide world of art comix afterwards. Comic book stores opened my eyes to the wide variety of material available in comics, and because of that I’d always thought that the point of them, really, was to carry a diversity of material… and, when budget allows, the widest possible diversity of material.

When I started working in stores Diamond did not have a monopoly on the comics market, we ordered new comic books from a bunch of distributors for a bunch of years… Andromeda, Multibook, Grosner, then Capital, Diamond, and Heroes World. While all of those distributors (save Diamond) and many more have subsequently gone the way of the dodo, in my day-to-day at The Beguiling we deal with dozens of distributors in a given month. Comics, books, art, and more. Most retailers are also dealing with toy distributors, t-shirt distributors, supplies distributors, and all kinds of niche and specialty product distributors.

(Can I drop in a shout-out to Last Gasp here? They’re phenomenal at stocking a wider variety of art and alt-culture books. Investigate opening an account with Last Gasp post-haste. )

Anyway, the point of all of this (other than to introduce myself) is to say that as comic retailers, we have options and we have responsibilities. More responsibilities than we often want, not as many options as we’d like, but we’ve got some elbow room and it’s our job to use it. We’ve all suffered under a series of poor distribution decisions that have made things difficult for us, but if we’re willing to put the leg work in we can have the kind of store we want, carry the products we want, and have the kind of industry we want, and on something resembling a level playing field as well.

The problems come in when we are excluded from certain areas of what should be our business, by forces beyond our direct control… and that’s my biggest issue with the current crop of digital comics and distributors of same.

Currently, there is only one digital comics purveyor that has an ‘open’ affiliate program for comics retailers to participate financially in the sale of digital comics, Comixology. I will go on record as saying that the terms are horrible for retailer participation in Comixology’s program in almost every way; in terms of the percentage of the sale we make, in the information that we need to give up to Comixology, in providing that company with access to our customers, and most aggravatingly of all that we receive no information about the customers who are buying from us through Comixology. Compared to an affiliates program like Amazon’s the terms are kind of awful; compared to even a consignment agreement in a brick-and-mortar establishment it is gross.

And that’s even if you can participate—the program is only currently open to American retailers. While I as a Canadian retailer can sell all manner of physical comic books, I am completely excluded from selling digital versions of the same… and to reiterate, none amongst their competition doesn’t seem to have an accessible affiliate program at all.

As far as I’m concerned, that’s not a level playing field. Excluded economically, through bad terms and bad finances; excluded regionally; excluded completely; digital comics don’t have much (if anything) to offer brick and mortar retailers. Just recently, when brick and mortar book retailers Books a Million and Barnes and Noble were excluded from DC’s digital offerings, they boycotted the publisher by removing from store shelves every single book that was digitally exclusive with another publisher. I don’t mention this to incite comic retailers to do the same, I mention it merely to point out that this is Serious Business, and something every retailer should be aware of.

Here’s the most important part though: The whole system is utterly broken anyhow, and we should be demanding not only better access to digital comics sales, but better sales methods for digital comics.

Let me break this down for you as simply as possible: No one who is “buying” digital comics is actually buying digital comics. What they are doing is renting them for an indeterminate period of time, and they’re renting them in an extremely inconvenient format. If you buy a comic book from a comic book retailer, you own it; you can read in whenever you want, however you want, for as long as you physically possess it. If you want to ‘purchase’ a digital comic, you’re merely gaining access to that content on a specific device and in a way that can’t generally be transferred between devices, that may or may not be available without a live internet connection, and your permission to read that comic book might be revoked at any time, with no recourse.

It’s a closed system, it’s full of hoops you have to jump through, and ultimately the content provider is in charge of what the consumer has purchased: the consumer is cut entirely out of the loop. Digital downloads, at least in this instance, aren’t ownership, they’re rental, and that’s not our business model.

We as comic book retailers should be pushing for a new system, and a forefront-inclusion in that new system: A standard-format digital comic that can be read on every device and on any format, a download that exists independently of the store that sold it, and that can be sold by us (rather than just marketing someone else who’s selling it, and being paid a pittance to do so).

There are dozens of arguments against a ubiquitous, copyright-free, non-locked file format, most having to do with the spectre of digital piracy, but it’s my contention that locking down this content so tightly, and so expensively, with “DRM” or “Digital Restrictions Management” ultimately drives more consumers to piracy than not. Even Apple’s iTunes eventually caved and let you download music that you could freely copy and share amongst any device you owned; and while an app store is an attractive option for content providers, it is a needlessly restrictive, censorious, and anti-equality system. A closed system is never a fair system, and as independent business owners it’s not in any of our best interests to support such a system.

In the end what I’m saying is that if a digital comics distributor comes along offering consumers actual purchases, and is willing to work with the Direct Maket—which has direct access to hundreds of thousands of comic fans—and that person offers to treat me fairly and with respect? That’s someone I will happily work with, and an enterprise I will recommend supporting. But I don’t see anything resembling that in the current marketplace and that’s a damned shame and a missed opportunity.

- Christopher Butcher

This article was written in October 2011, and ran in the fall issue of C&G Monthly Magazine

Edit: I’ve been contacted by a representative of Comixology, to let me know that the reporting of Comixology to retailers about sales has been significantly improved. Unfortunately I didn’t have access to this info at the time, and I am interested to read the new contract terms. 

 


17 Comments on “Our Digital Comics Strategy is an Evolutionary Dead-end”

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  1. JRB says:

    Here’s my perspective, as a reader, and one who is quite open to digital (although I’d prefer print for the things I want to reread):

    “We as comic book retailers should be pushing for a new system, and a forefront-inclusion in that new system: A standard-format digital comic that can be read on every device and on any format, a download that exists independently of the store that sold it,”

    Up to here I’m with you.

    “and that can be sold by us (rather than just marketing someone else who’s selling it, and being paid a pittance to do so).”

    This part, I don’t see the point. Are you saying that each brick-and-mortar comics store should have the option of, individually and independently, hosting the material, providing the download bandwith, maintaining the server software, troubleshooting subscription and access, and generally maintaining the reader experience for the digital titles they offer, in return for a higher cut? Because that sounds ridiculously complicated; I have enough problems with the way that digital comics are divided by publisher, I don’t want to deal with files that also have to be handled on a retailer-by-retailer basis.

    The current way digital comics are set up, brick-and-mortar retailers (i.e., you) can perform a service to the publisher by directing readers to the material. But as the system stands, you don’t actually handle the fulfillment of the purchase or the infrastructure of digital distribution (and frankly I don’t see why you should want to, unless you are actually getting into the publisher end of the pool). So yes, you’re only getting a commission for directing buyers to the digital retail site, not a full wholesale-to-retail markup, but you’re also not on the hook for doing anything beyond directing said buyers.

    Comixology’s terms may be sucky, and you have a perfect right to complain about that. But I don’t think the average comics retailer has either the know-how or the infrastructure to run a full digital publishing operation (which is basically what the system you suggest would amount to). Your average comics retailer doesn’t even handle online sales.

  2. Ralf Haring says:

    For the most part, I think your assessment of the situation is dead on.

    “We as comic book retailers should be pushing for a new system, and a forefront-inclusion in that new system: A standard-format digital comic that can be read on every device and on any format, a download that exists independently of the store that sold it, and that can be sold by us (rather than just marketing someone else who’s selling it, and being paid a pittance to do so).”

    How could a store compete with the publisher also offering the same download? Would this model be predicated on the publisher declining to do that?

  3. Comics A.M. | Matt Groening donates $500,000 for UCLA chair | Robot 6 @ Comic Book Resources – Covering Comic Book News and Entertainment says:

    [...] Digital | The current digital comics model excludes retailers, says The Beguiling manager Christopher Butcher, except for the comiXology digital storefront program, whose terms he describes as “horrible.” Butcher recaps the problems with the current digital comics model (region locking, DRM, and the fact that you don’t really own the comics, just a license to read them) and outlines his vision: “A standard-format digital comic that can be read on every device and on any format, a download that exists independently of the store that sold it, and that can be sold by us (rather than just marketing someone else who’s selling it, and being paid a pittance to do so).” [Comics212.net] [...]

  4. Dan says:

    This is ridiculous.

    This system is broken and comic shops demanding a digital system that cuts them in for a share is nuts — what is the consumer getting out of that added cost?

    Most comics in most shops are already limited to the selection that is on a customers “pull list” some weeks or months in advance.

    Combine that with the cumbersome distribution system that allows Diamond to get an equal share of the price of the book to the retailer who takes the risk (and is stuck with the product) and the publisher who pays the talent and printing costs.

    Here is your solution Christopher — you live in a free country with a free market — team up with all your Canadian comic shops and hire a couple of young, bright web developers to develop a distribution system and then make a deal with the publishers you want to carry, negotiate Canadian distribution rights and then market to your customers.

    Once you do that you have earned the right to get a share of the digital comic sales.

    Otherwise, why should you (or Diamond for that matter) get a cut of any digital downloads?

  5. Chris Howard says:

    As a reader, I have abandoned a number of digital platforms because they were needlessly complicated. I was given an MP3 player as part of a promotion for audio books. I love audio books. But the need to jump through multiple hoops with software I didn’t have or want, just to be able to possibly get said audio book on to the device led me to sell it. How hard is select mp3 file, save file to device? I’ve had the same experience with eBooks through the library and tried to help others who were having multiple issues navigating the various software programs and permission steps. On the other hand, adding an ebook via amazon is quick and painless. I’ve not had a need to try and use them on multiple platforms, but that is an issue as you pointed out. Comic creators who offer easy to purchase, open files in multiple formats are going to win this struggle. PDF, ePub, CBZ/CBR. Give me the options. Let me decide how and where I will read your work. Make it easy. Make it fast. Make it affordable.

  6. Bill Cunningham says:

    Retail stores are for selling the physical print editions of books – the trades. Digital is going to replace the floppy, so you’re going to need to transition out of this. Especially when advertising becomes a significant component of e-comics.

    What you need to be pushing is making sure the publishers print editions contain enough valuable extras for your customers to want to come in and get a copy. That’s where you make your bucks – not off the digital.

    You’ll also want to make sure that publishers are promoting stores that carry their books. Links in the comics file, whatever. We are getting to a point where the comics publishers will be their own distributors, and Diamond as a middleman will go the way of the Dodo…

  7. Chris says:

    JRB: “…not a full wholesale-to-retail markup, but you’re also not on the hook for doing anything beyond directing said buyers. Comixology’s terms may be sucky, and you have a perfect right to complain about that.”

    That’s the long and short of it, essentially. The larger suggestion that comics shops could benefit more from their role in the medium. I don’t think I did as good of a job parsing out these two separate, but related, ideas as I could have.

    FWIW, Comixology’s set-up makes more demands than an Amazon Affiliates program membership, for less return, and that’s actually the _best_ option available.

    I appreciate the idea that it seems outmoded that a brick and mortar store would want a cut of digital, but frankly, progressive retailers have it in them to leverage their brand and reach to be players in the digital world.

    EX: Netflix licenses digital content from makers, pays fees to each venue that Netflix is available on because Sony/Nintendo/MS all have built in audiences. Netflix doesn’t need to work with those companies, they can go straight to consumer on the www, but they do, because there is a strategic advantage. Greater reach, greater branding.

    The thrust of my piece though is that the digital system is so arse-backwards anyhow, it’s probably not worth supporting, which I think is pretty consistent from start to finish. Thanks for your comment.

  8. Chris says:

    Ralf Said: “How could a store compete with the publisher also offering the same download? Would this model be predicated on the publisher declining to do that?”

    Well that’s the thing though, publishers already have declined to do so. They’ve licensed it all out to a third party. I think it is balls-stupid that publishers have decided that digital needs middlemen, but since they have, it’s entirely reasonable for others to get in on the action.

  9. Chris says:

    Dan said: “This is ridiculous.”

    I’ll say. Your response is riddled with problems.

    “This system is broken and comic shops demanding a digital system that cuts them in for a share is nuts — what is the consumer getting out of that added cost?”

    Ease of access, product knowledge and recommendations, and, if my advice were followed fully, a significantly better, DRM-free, format-unrestricted product.

    “Most comics in most shops are already limited to the selection that is on a customers “pull list” some weeks or months in advance. Combine that with the cumbersome distribution system that allows Diamond to get an equal share of the price of the book to the retailer who takes the risk (and is stuck with the product) and the publisher who pays the talent and printing costs.”

    This isn’t a point or a question. This is just you bitching, and inaccurately at that. It’s the worst sort of straw man argument and I only address it because it belies your ignorance:

    First, there are lots of smart, talented retailers with a great brand and reach who would be great digital sales partners. Pretending otherwise and damning an entire retail market because of the worst elements of it is short-sighted and irrelevant.

    Secondly, you’re factually incorrect. Diamond makes nowhere near as much as retailers do on the product, not even close.

    Thirdly, that publisher has already licensed their work out to a middleman in Comixology, they don’t seem to have a problem with it.

    And coming back up to the beginning again, this doesn’t seem to be relevant in any way. To anything. This is just you complaining about the direct market in a way that is totally divorced from the digital content issue.

    “Once you do that you have earned the right to get a share of the digital comic sales.”

    Heh. You’ll have to forgive me if I decide that “Random Angry uninformed person on the internet’s idea of how or why I should make money” is not the plan I choose to follow.

    “Otherwise, why should you (or Diamond for that matter) get a cut of any digital downloads?”

    If I generate the sale I should get a cut, same as with print material. So, let me sell them. Seems pretty straight forward.

    - Christopher

  10. Chris says:

    Bill: “You’ll also want to make sure that publishers are promoting stores that carry their books. Links in the comics file, whatever. We are getting to a point where the comics publishers will be their own distributors, and Diamond as a middleman will go the way of the Dodo…”

    Whether or not Diamond will still be around, there are still clear benefits to consolodated distribution of physical products, and unless all phyiscal media is going away (it isn’t) then there will need to be distribution.

    - Chris

  11. Ralf Haring says:

    Dark Horse runs their own digital store (I think), but you’re right that the rest seem to have ceded the digital marketplace to 3rd parties. It’s strange because one would think they would see the record companies’ regret in handing over everything to Apple a decade ago. I would have expected DC or Marvel to have bought Comixology by now. Maybe they have tried or maybe Comixology doesn’t want to be bought. *shrug* I don’t think farming the digital distribution work out to Comixology should be seen as a permanent state. It seems like more of a transitional period while the publishers get their digital act together and try and distribute things on their own. Marvel and DC have enough clout within the marketplace that they could command it (a la HBO) despite a fractured purchasing environment not really being in the interest of the customer.

  12. Brian Hibbs says:

    Its really time for pundits to stop thinking of comics as equivalent to other media like film or music — hell, comics are only barely comparable to other PRINT media — because of the fan-driven nature of the product, the consumer, and the distribution mechanism.

    For what it is worth, Chris, the discussion about Diamond Digital’s plans at the ComicsPRO last week feel like things going in the right direction in terms of who is the “seller” and things like that. I dunno if they’ve worked “the Canadian Problem” out yet though.

    -B

  13. Chris says:

    Ralf- I had thought Comixology was transitional as well, but DC at least doesn’t really seem to be developing additional digital outreach. Marvel is, but it’s even more locked-down than Comixology. There’s also the consideration that Comixology is creating these works in a proprietary format, with their guided reading, and that none of those materials could be used separately after-the-fact. I mean, the raw scans, sure, but everything else? I wonder who actually owns that.

    Also, Dark Horse, IDW, Viz, and Yen are the majors that have their own digital works. Kodansha, Square ENix, and JManga I guess too though those seem considerably more limited to me.

    IDW just switched from stand-alone apps to the Comixology format across all of their apps, so maybe it’s easier to go from Comixology’s versions of the files to non-Comixology ones than I’m aware.

    Brian- I think that sort of comparison is useful in certain ways–file format for example. I take your meaning though. And I’m glad to hear that steps are being tkaen on the Diamond front.

    - Chris

  14. Jay says:

    Brick-and-mortar shops are absolutely vital to the continued well-being of the comic industry.

    Digital leads to the democratization of content, which floods the market and makes the good stuff harder to find. Comic shops play an essential role as promotional outlet and, more importantly, curator.

    We need smart, passionate retailers to help us find the good stuff and support it. It’s better for the industry, and it can help diversify the medium.

    Shops are also essential to maintaing the culture of comics. This is massively important. It fosters a network of creators and fans which ensures people who want to make comics feel like the conditions exist that will allow them to do it professionally.

    There needs to be an affiliate program that cuts in retailers (maybe via some sort of referral code) and provides information about customers, that would in turn help retailers point them towards more good stuff. It could be the market research this industry has been so grossly negligent in collecting for decades.

  15. SgtPiddles says:

    Well, I know this may not make me very popular, but I prefer digital based on price alone, honestly. I’m well aware that all you’re paying for is a license – one with many strings attached, one that means that you might lose the very media you’ve just purchased – an insane prospect compared to physical goods. (Imagine the comic shop burning your old purchases if and when the store changes owners.)

    However, I only intend to read single issues once anyway. If I could, I’d read the whole thing in the shop and walk out. I see no reason to keep a physical product after I’ve read it. So I’d much prefer some $0.99 sale on ComiXology over a $4 issue in stores that’ll sit around my apartment doing nothing.

  16. Ralf Haring says:

    Here is a good article expanding on Diamond’s retailer-focused digital store plan. http://www.comicsbeat.com/2012/02/17/diamonds-digital-distribution-program-the-actual-details/

  17. Adam Geen says:

    Chris, I’d be up for being your guinea pig. I’ll be self publishing anyway. So maybe we should get in touch and hash something out.

    It won’t be the full blown distribution that you crave but at least between the two of us we’d be able to figure out how this might work.

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