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Can Comics Make The Leap To Digital In A Single Bound?

Will digital distribution revitalize the comics industry or kill it? DC Comics brings judgment day nearer with a big move to “day and date” digital release for its “New 52” launch.

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At the stroke of midnight on September 1, the comic world
changes forever. Yes, DC Comics
relaunched its entire line with the
new 52
. But relaunches happen all the time, albeit not on this
scale. What will really shake the four-color universe is the fact that, for the
first time ever, full official digital versions of DC’s entire lineup will be available for download on the same day and date as the paper editions.

This is a bigger deal than the death of Superman, the new
face of Spider-Man, and every major “continuity event” of the past decade
rolled into one. That creaking sound you hear is the comics industry being
pulled into the future, bit by painful bit.

Why is a media entity as large as DC and an industry as
widespread as comics publishing still wrestling with the problems of digital
distribution in 2011?

The short answer is that the retail distribution system for
comic books is tied up in a fist-sized knot and has been for the last two
decades. Starting in the 1980s, most comic publishers discontinued newsstand
sales, where unsold issues could be returned for a refund, in favor of a “direct
market” system that shipped exclusively to specialized comic book stores on a
non-returnable basis.

But it turns out there is a problem distributing your
product exclusively through independently owned retail stores run by and for
your products’ biggest fans. Despite the efforts of some active and visionary
retailers
, the odor of overgrown adolescent male hangs heavy over many comic
shops, creating a forbidding environment for women, kids, and casual fans who
might have an interest in the material but don’t want to put up with old-school
comic book culture. The Simpsons
character Comic Book Guy and his shop are, unfortunately, too close to the
truth to be considered a parody of many actual comic stores. The problem is, if
you don’t go to comic stores because you don’t like real-life Comic Book Guy,
it’s very tough to buy and become a regular reader of comics.

You would think that digital comics offer a neat way out for
the industry. Comics need to expand their audience; the web provides an easy
means of access. Tablets are a great way to read comics. Digital delivery does
away with the expense of printing and distributing paper copies, potentially
breaking the cycle of increasing cover prices without cutting the throats of
creators or publishers. Paid online channels like the Apple iStore and Netflix
are already well established in the minds and habits of consumers. It even
solves the problem of where to keep all those old comics once you’ve read them.

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And yet, in the Bizarro-world of the comics industry, all
these plusses are actually minuses. Comic retailers are in such dire straits
that the loss of even 20% of their regular customers to digital sales would put
many of them out of business, taking the
entire direct market down with them
. Publishers are still dependent on the
retail channel, no matter how sick and dysfunctional it has become. They can’t
burn that bridge until they are safely across it, but they can’t take more than
a few steps without setting it on fire.

Comics publishers–whose staffs often include large numbers
of old-time fans–saw themselves as having little to gain and much to lose by
taking the plunge into digital. They feared the kind of rampant piracy that has
drained profits from the music and video industries, as if they could prevent
that by keeping their product in printed format. Even today, they do not
believe in their hearts that aging collectors, who constitute the majority of
the current comics market, are all that interested in giving up the
“collectable” paper issues. They may be right: Digital comics only accounted
for 1-3% of all sales ($6-18M in a $635M market) in 2010, according to market-watcher
ICv2.

Consequently, most of the big players were reluctant to make
their comics available in digital format through legitimate channels throughout
most of the ’00s, when the opportunity was ripe. This meant that the fleet of
pirates who scanned the printed books and put them online, usually on
BitTorrent sites, had the seas to themselves. Readers ready and willing to pay
for digital comics had no one to give their money to; the publishers themselves
ended up creating a whole generation of consumers who expect digital comics to
be free.

It took an outside player to bring order to the digital
market. In 2007, a startup called Comixology came on the scene with a
simple platform to host and charge for digital comics. Starting with a few
independent comics and publishers, Comixology steadily gained visibility and
soon became the de
facto standard
for digital and
mobile distribution.

Comixology has had only modest success in real terms so far,
but there is evidence that they are making some headway in changing minds
around the industry. Their affiliate program has drawn some of the sting of
transition away from retailers, giving them a way to recoup some revenues from
digital comics and showing that the publishers do care about maintaining a
viable brick-and-mortar channel for the foreseeable future.

But of course, to avoid competing with retailers, the
pricing for digital can’t be lower than print despite the huge cost
efficiencies of digital distribution. $2.99 to download a single issue is too
high a barrier for a lot of readers, especially those who are accustomed to
paying nothing on RapidShare or Torrent sites. Prices won’t drop until there
are enough digital readers to compensate for the inevitable destruction of the
traditional retail supply chain, and there won’t be enough digital readers
until the price drops. The fist-sized knot strikes again.

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So here we are in 2011 and the industry is just beginning to
seriously discuss real, commercial models for digital comics. It’s a critical moment.
If Hollywood money and the bookstore channel dry up before publishers have
successfully migrated their audience (and their revenue stream) to digital,
they will be stuck with the same dysfunctional retail system and an acutely
shrinking, aging audience.

Will DC’s move signal the beginning of the next era for the
comics industry, or the beginning of the end? In classic comic cliffhanger
style, we’ll have to wait for the next issue to find out.

Rob Salkowitz (@robsalk) is
author of four books on the future of technology including Young World Rising and Generation
Blend
. He is working on a new book on the future of pop culture for release
in 2012.

[Image: Flickr user RachelFujita]

About the author

Rob Salkowitz is author of Comic-Con and the Business of Pop Culture (McGraw-Hill, 2012), Young World Rising (2010), and two other books on youth and digital media as agents of change. He is Director of Strategy at MediaPlant, LLC, a Seattle-based communications firm he co-founded in 1999.

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