Marvel's Push into Digital

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Marvel flooded the digital comics world on Friday, pushing Iron Man, X-Men, Spider-man and others onto the iPhone/iPod Touch through Comixology, Panelfly, and iVerse. I wrote a pretty snarky analysis over on the SOLDIERS blog, but I thought in this venue I'd get a little more serious.

This is a bold move by Marvel. I was wondering what would happen once Disney acquired them, considering how tight they are with Apple. However, given the way companies often move, I imagine this was in the works for a bit. I'd say let's go under the assumption that this was a strategic move, not a “Go! GO! GO!” type of event.

So, what is Marvel trying to accomplish here? I would think that it’s obvious at this point -- control of the digital space.

When a giant player like Marvel walks into the room, people pay attention. When small presses went digital, people barely cared. When Marvel does it? Well, that's news. TechCrunch, CBR, Newsarama, and blogs everywhere broke the story (though I think Bleeding Cool gets the credit for the first story -- great work, guys!). This will go for more than just news stories -- Marvel digital policy will set a lot of standards. Format, for one thing. Price is another.

What is a Good Cover Price for Digital?

A majority of Marvel's titles are set at $1.99. Not 99 cents. Panelfly is the only one I've seen carry Marvel Titles for 99 cents. But that’s generally just introductory prices, a couple of issues in and it jumps to $1.99. Who else charges $1.99? Kirkman. That's about it. With Marvel prices at $1.99, will all digital comics start to drift upwards? Or will there now be a tiered system -- the $1.99 comics and the $.99 ones? Only time will tell, I suppose. Something to watch for in the digital world.

Another thing to consider when discussing price, is the expected return on a digital comic. Kindle, iTunes, Drive Thru, etc, etc all charge a different amount. Amazon takes 65% of cover price for Kindle books. iTunes takes 30%. So, should a Kindle book be priced higher than one from iTunes in order to make up the difference? Or will Kindle be forced to lower its percentage if they want to compete in the digital space? How much is digital worth? How much are readers willing to pay? All good questions that the market has yet to fully answer.

The last bit about price before I move on, regards using digital as a lead for trade paperback sales. Captain America on Comixology is priced at $1.99 per digital issue. The first trade of Captain America, “The Winter Soldier,” is on sale at Amazon right now for $11.55. At 168 pages, it collects issues 1-7. Buying them all at $1.99 equals $13.93. So, buying digital is more expensive than buying print. Maybe Marvel intends for you to just buy the first issue or two, hoping that will wet your whistle enough to go buy the trade. Or, they may not care about selling trades at all, figuring it's now two markets -- digital and paper. If so, that would be quite a departure for them...

What would be cool is if each issue was priced at $.99. That means I could buy digital Extremis for under $6 bucks! Making the likelihood that I buy the trade more conceivable. At $6 for the entire digital, I'd feel good about buying the trade, and Marvel would get double sales. In other words, I think $.99 issues don't force a mental price comparison with print, and the likelihood of multiple purchases of the same product -- the goal of all merchants -- increases.

Getting Paid for Market Research

By releasing their books on nearly every comic app maker on the planet, Marvel is telling us something. One, they believe in competition. Two, they don't know how the consumer wants their digital comics.

Marvel is using these slices of their catalog to determine their next step. What that next step will be, I don't know. They are financially equipped to buy out the app producer they prefer and also cut out the middle man and develop their own app. Once they've figured out how the market will respond, of course. Or, they could just bargain for preferred pricing and let everyone win. Hard to say, really, it's with the bean counters at that point.

But, one thing’s for sure: Marvel is really thinking outside the box on this one. Going out to everyone is brilliant. I wish I was able to see the data they are accumulating right now. And, best of all, instead of paying for this kind of market research, they’re getting paid. Absolutely brilliant.

Changing the Market -- Bloggers Becoming Salesmen

In addition to approaching the three “store-within-a-store” app makers, Marvel is also reaching out to the smaller app makers. They don’t have in-app storefronts, they list directly in iTunes. I only have two words for this: Affiliate Marketing.

Like many web retailers, iTunes has an affiliate marketing program. You can learn more about it here. For those not familiar with affiliate marketing, it's been around for a while but has had little use in comics until recently. Basically, you promote a product and direct users to the vendor with an affiliate link (a special hyperlink with some identifying code in it). When the user lands on that vendor's site, it records who sent them. If that user makes a purchase within a certain time period (say 30 days), the sender gets a percentage of that sale. How much does iTunes pay? 3%. Comixology, Panelfy, and iVerse don't have affiliate programs, and, as far as I know, iTunes won't honor an in-app purchase. The biggest reason is there is no way to link to their comics directly, only to the reader itself (which is now free, so 3% of free is not much).

*** Special Note: The link above to Captain America. Affiliate links. Pretty smooth, huh? ***

Now, you may be able to see why these smaller app producers can be so pivotal to this situation. Say App Maker A also gets a license to sell Captain America, and they put the books up in regular old iTunes -- regular, old, LINKABLE iTunes. The next week, Captain America comes out and it gets a great review (as it should, the book is awesome). And the reviewer does something like this: “Fallen a little behind on Captain America lately? You can get all caught up with the last four digital issues right here” and he links to the issues on iTunes listed by App Maker A. He just promoted digital Captain America -- and iTunes paid him for it!

So what? People link to Amazon, why not to iTunes?

You're right -- but now we have a class of app merchants who can do something the others can't. And it's beneficial to all parties. The reader gets an easy way to catch up on Cap, the reviewer gets a little money, App Maker A and Marvel get some sales. Pretty soon this catches on -- bloggers can make a little bank listing digital apps in their reviews and articles. Next thing you know, App Maker A is paying less for advertising and getting more sales while the in-app stores are fighting harder for market share.

Now, before every comic blogger dreams of comic riches, remember standard industry conversion rate is about 1.5%. So a small blog may only make a couple of bucks a week or month. But a large one? Say Newsarama or Comic Book Resources -- each with monthly traffic in the millions? What about Blair Morgan, multimedia queen of comics? These entities could make thousands a month from simple links to iTunes. Not making a big hard sell or carrying on like fanatical, copywriting affiliate wackos -- just comic people saying “Hey, you can get back issues easily through digital right over here.” That's all it takes to change the landscape of an industry.

When the incredible “impulse buy” nature of mobile computing meets a powerful product like Marvel Comics... Once it's dialed in, I imagine it will go in directions even I haven't foreseen.

Primary vs. Secondary Markets

What's next for digital Marvel? I image a lot more back issues are going to start showing up on iTunes.

But will things stop with the secondary market? Will Marvel start producing content specifically for digital? They already are in a way -- several books are going digital on Marvel's website. Not mobile digital, but digital. If they're doing that, it won't be much longer until they do it for mobile devices as well. And once a major player like Marvel goes digital with primary runs -- all bets are off.

Now, I don't see the destruction of the print market. Quite the contrary, actually. I see it increasing! Just not in monthly issues. I see trade sales growing with digital monthly issues. But where does that leave comic shops? Hard to say -- how good is their trade sales? My local shop has no fears -- they are prepared and already do a fantastic trade business. But others that are a little closer to the edge? A major player porting titles to digital could be disastrous. I guess it all depends on what they put out there.

I don't see X-Men going purely digital every month. But maybe special runs or lesser performing titles… We'll have to wait and see.

One thing is for sure -- the Marvel secondary market is changing.

Final Shots

Is DC going to follow suit? I think they are now the only publisher not on iTunes...


Rob McClellan
Publisher, Underwater Samurai Studios
Writer, Soldiers
[email protected]
Twitter: @h20samurai

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