Digital and the Direct Market: Retailers chime in

Digital comics were a major theme at C2E2 this year. I don’t suppose I was surprised by that exactly, but it did kind of sneak up on me. Much the way I suppose digital comics have been sneaking up on publishers and fans for the last couple of years. They’ve been around; we’ve all noticed them; we’ve even been talking about them quite a bit, but the industry’s observation of the digital format has seemed sort of detached and possibly even bemused. Sort of, “Yep. We see that there’s this other way of reading comics and it’s a nice option for some people, but print’s not going anywhere and we’ll still focus mostly on that.” It’s only been recently that we seem to have realized that – oh, shit! – print could be in danger and we’ve got to figure out what we’re going to do to survive!

In fact, listening to people more savvy than I am talk about it, “digital” really isn’t just a format at all. It’s a whole new medium. So you’ve got guys like Mark Waid really looking hard at it and figuring out what digital comics can do that print comics can’t. It’s not the difference between CDs and iTunes. It’s the difference between radio and television. And it’s here. Think about that. Print comics are radio. Digital comics are TV.

As Direct Market sales continue to slip, this has worried me. Not because I’m particularly invested in going to the comics shop every Wednesday and picking up a big stack of this week’s periodicals. I still go to the comics shop, but it’s on Thursday and I’m buying graphic novels and collected editions of my favorite serials. If my comics shop went away, I could still buy that stuff, so that’s not what bothers me. What bothers me is the very idea of my comics shop’s going away. I love my comics shop. I love the people who own it and work there, the excitement and knowledge about comics that they have, and the community they’ve built for their customers around this shared passion.

That’s one of the reasons I was interested in talking with ComiXology’s David Steinberger at C2E2, particularly about his company’s Website in a Box and their other Retailer Tools that allow comics shops to connect with the digital marketplace. Steinberger offered to connect me with a couple of store-owners who are already using various aspects of the system, so I spoke to James Sime of San Francisco’s Isotope Comic Book Lounge and Chris Niles of Legacy Comics in Laredo, Texas. I asked not only about ComiXology’s programs, but also about Sime and Niles’ observations on the current state of the Direct Market and the importance of digital comics to their continued success.

And just because I was curious, I also contacted the co-owner of my local comics shop, Source Comics & Games in Minneapolis/Saint Paul. Dominic Postiglione is one of the funniest, most helpful people I know in any aspect of the comics industry, but he’s also a very smart, on-the-ball retailer. I wanted to get his perspective too as someone who hasn’t at present signed up with ComiXology, but is seriously thinking about these issues and how to manage them.

Michael May: When industry observers talk about the Direct Market's being in trouble, what are they really talking about? I think most people equate the DM with comics specialty retailers, but is that accurate? Should we be worried about retailers going out of business or is it Diamond that's more at risk?

Chris Niles: I think when we speak about the Direct Market and how it’s performing we have to include all parties that are involved. If sales are down it affects the retailers, distributors, publishers, creators and the consumers that are still buying the products. The retailers that are just trying to survive in this economy are the ones that are in the greatest jeopardy. Legacy Comics has to constantly take steps to insure not only our survival, but also our continued growth. We’re flourishing thanks to a lot of hard work and hustle. Our motto has always been “diversify or die.” In this economy, that should be every retailer’s mantra. If too many retailers close it will definitely have a negative affect on the entire DM including Diamond. The DM is like one big machine. If one part of the machine fails the performance of the entire machine is reduced.

James Sime: We comic retailers who make up the Direct Market certainly have some massive challenges ahead of us, from the proliferation of online deep-discounters to the digital-distribution revolution to just an all-around crappy economy...for people who sell comic books for a living, all of that is very, very real.

By now it's also quite clear to all that the rapid jump from $2.99 books up to $3.99 and $4.99 in a worldwide economic crash was an experiment by the publishers that not only failed miserably, but also seriously contributed to damaging the market. What did they expect was going to happen when they raised prices so drastically during a time when experts were suggesting that we'd run into “the largest financial crisis of its kind in human history?” Seems pretty bone-headed, doesn't it? Clearly they eventually smartened up because prices have dropped back to more reasonable rates, but we'll have to see if the market for single-issue comics will ever recover.

Having said that, I still think there's definitely a place for us analog retailers – the maître d’s and the evangelists; the sommeliers and the sherpas of the comics industry – to help guide the next generation of readers into the industry through smart curation, vibrant comics culture, and stylish presentation. There are still a lot of people out there not reading graphic novels yet! Retailers like myself aim to change that fact, one carefully chosen suggestion at a time, every single day of the week.

Dominic Postiglione: First of all, “Industry Observers” are generally comprised of individuals who have never actually participated in the specific category of the comic book industry in which they “observe” and comment on. That being said, it’s absolutely true that the Direct Market currently faces a variety of substantial challenges. But that’s only half of the truth.

The other half is that this has always been, historically speaking, true. Most category businesses, when viewed in aggregate, have strived to homogenize and simplify their business model to achieve maximum efficiencies and growth. In our industry, there’s been very little of this and it makes us, as a group, very unique. Think herding cats. It’s our strength and our weakness. The only permanent feature in the direct market is change and as it is true with any group, there will be losers and winners.

In terms of distribution, it's public knowledge that Diamond is very secretive about their specific sales and distribution data. The recent surge in interest in the digital medium could quite possibly shift the existing paradigm.

Comic book retailers are always coming and going and that's not unique in the world of specialty retailing. To suddenly place blame for this historical burn and churn on the recent arrival of the digital download is beyond ridiculous. This industry is loaded with characters, crackpots, dreamers, dipshits, malcontents and to be honest, it's probably one of the reasons I love it so...never a boring day!

Regarding Diamond, I always have a laugh when I hear about Diamond’s “being in trouble” or “going out of business” from some wizkid. Truth of the matter is, in business-related operations, Steve Geppi's (owner of Diamond) industry record is about 6,917 wins and about 2 losses. Where would you put your money?

May: As sales of printed, periodical issues appear to be decreasing, what kinds of things are you guys doing to ensure the survival of your stores?

Postiglione: Laser-focus marketing efforts to generally grow the industry as a whole and our store in particular. This includes outreach and guerilla marketing, support of existing fan groups, involvement in industry events, keeping up to date with technology, and placing extreme emphasis on the social aspects of customer service and the development of community.

Niles: We’ve been utilizing several tools that have really brought an increase in sales.

The first is social media. I can’t say enough about how important this is. Any business that is not involved in social media like Twitter and Facebook is really missing out on a great way to keep in touch with and inform your customers about your business.

The second tool we use has by far showed us the greatest return in increased business. We use ComiXology’s Retailer Tools to allow our customers to place pulls and subscriptions as well as order anything in the Previews catalog online. Every day we receive a report showing which customers have placed orders and we in turn place those orders with Diamond. The customers have access to information, reviews, previews and a real social network involving everything industry related.

At first we were concerned that people would visit the shop less since they could do everything online, but we soon realized that not only were customers visiting the shop more, but were ordering more as well. Customers will read a preview at ComiXology and it’ll spark their interest to try the title. The great thing is that this works both ways. Customers find a new title in the store and after they read it they go online and subscribe. There is no better feeling as a retailer then waking up to an email showing 75 new pulls that have occurred overnight while I slept.

We were fortunate to be involved with one of ComiXology’s latest projects: Website in a Box. This provides retailers a website with their own brand that utilizes all of the great ComiXology retailer tools. Customers can now subscribe, preview, review, research and place Previews orders without ever leaving our website. It’s fully customizable and all of the information on ComiXology’s main site is available for retailers to add to their own sites. I set up our custom pages without writing a single line of code. All of the necessary code is available from ComiXology. The main page displays a cover gallery to all upcoming issues as well as featured items. Within a few hours of our gaining access to our site customers were registering and placing orders.

May: How big a role does a digital storefront play in your plans? Do you see that as a must-have item for survival or is just something nice, but ultimately optional?

Postiglione: Must have. Only a fool ignores a tsunami. Ultimately, as specialty retailers, it is incumbent upon us to keep our ears close to the ground. The most important skill for us to nurture and exercise is flexibility. We go where our customers want us to be and if we don’t we end up on the heap with all of the record stores, video stores and buggy whip makers.

Niles: Smart phones, PCs, and iPads are everywhere. Larger companies like ComiXology are able to sell digital versions of comics that are viewable on all of these devices. Instead of worrying how this new format is going to hurt my business I want in…now.

After viewing the many different systems and sites for purchasing and viewing digital comics I decided to try it out. I went to ComiXology and downloaded The Walking Dead #1 to my iPhone and was blown away. ComiXology has developed what they call Guided View. Guided View transitions from frame to frame through the comic exactly the way you would read it. It is so fluid and natural your attention is never stolen away by the need to use awkward controls or even look away from the screen. You can remain focused on the story from start to finish. I want access to this as a retailer…now.

We were fortunate enough to be one of the first retailers with access to the new website technology. ComiXology will soon be adding the ability for me to sell digital comics to my customers through my website!

Other retailers told me that it would hurt their sales of new comics. I like to give my customers options and make purchasing easy for them. If I sell out of an issue in the store I can show them how easy they can get a digital copy to keep…SALE. If a customer is trying to track down older back issues or issues that are very expensive I can show them on our website how easy it is to get a digital version…SALE. If a customer tells me they really want the physical copy, I can point out to them they can get the digital version to enjoy until we can locate a copy of the physical issue for them…SALE. Is this going to make me a millionaire? Probably not. It will however provide more services to my customers directly from my website/shop. This in turn creates more returning customers. Anything that can keep my customers from going somewhere else is a very positive thing.

Sime: I'm excited about the digital storefront and what it means to the future of analog retail. Not because I see it as a replacement, or a necessary evil, but just an additional way my customers can buy their comics in whatever format they want them in. I just want to be the guy who helps them get the good stuff. I want to play tour guide, especially for those folks who are new to comics. How else would they ever find hidden treasures like Rian Hughes' Yesterday’s Tomorrows? Yumiko Shirai's Tenken? Brian Talbot's Heart of Empire? Dash Shaw's Bodyworld? Joe Harris and Steve Roltson's Ghost Projekt? Ed Luce's Wuvable Oaf? Josh Cotter's Skyscrapers of the Midwest? Josh Fialkov and Noel Tuazon's Tumor? Jamaica Dyer's Weird Fishes? Peter Milligan and Brett Ewins' Skreemer? Madison Clell's Cuckoo? Jason McNamara and Paige Braddock's Martian Confederacy? Kathryn and Stuart Immonen's Moving Pictures? Pete Hodapp's Yawning Void? Or the single, most badass comic ever made...Wally Wood's Cannon?

I'm not hung up on formats; I just want to be the best comics curator customers have ever met. To find each and every individual the perfect book for their tastes. So really, if the people decide they want comics printed on pita bread, I will move some coolers in and we'll start selling edible bread comics.

And here's another thought for stores who have an international reputation: because Isotope isn't set up for mail-order it will no doubt be a great way for customers around the world who are interested in it to finally get to be one of our regular customers. Live in the hills of Scotland? Suddenly you don't have to wait to fly to San Francisco to shop at the Isotope. For the exact same price as if you bought them from the Apple store. What if, say, folks think to themselves, “Hey, those Isotope guys introduced me to Robert Kirkman on that Walking Dead Bar Crawl last time I was in San Francisco. That was really cool of them. The prices are exactly that same so I think I'll start buying my issues of Walking Dead from them instead of through the Apple Store because I appreciate how cool they were to me.” I have no idea if it will work that way, but the Isotope certainly has introduced a whole heck of a lot of people on this planet to their favorite creators over the years! And I have a few ideas about how to bring a more personalized experience to the whole digital ComiXology thing.

...So, yeah, I think it has some potential.

May: How does ComiXology's Website in a Box program work?

Niles: Customers can register for free on our website, legacycomics.net or on comixology.com. If they register at ComiXology, they just search for a local retailer that utilizes ComiXology and then attach their account to that store. Either way, the customer can view all previous, current and future items and pull/subscribe to whatever they like. These orders are then emailed to the retailer they are linked to and that retailer places the order. ComiXology does not sell comics so the retailer would be placing the orders with Diamond. Customers also have access to an unbelievable amount of data involving every aspect of the comic industry. They would also be able to download from ComiXology’s huge library of digital comics. It’s as easy as that.

Retailers can sign up for ComiXology’s Retailer Tools at retailers.comixology.com. Retailers can also view how-to videos and request information on the different retailer programs available.

May: Nick, what about you guys? Have you considered a program like this?

Postiglione: Yes, we have. At this time, it's still too early to tell which of the digital comic format and delivery systems is going to be the horseshit and which is going to be the ice cream. But make no mistake, continual evaluations are ongoing and being made by the more sophisticated retailers of this industry.

May: How deeply have you looked into it and what have you learned?

Postiglione: At the end of the day it will be about profit potential and ease of use. It's reasonable to consider the notion that the veritable Great White Digital Delivery Shark hasn't even showed up yet. Keep in mind that there are some very interesting and significant swimmers in the developing digital waters and undoubtedly more will be appearing soon.

May: James and Chris, did you consider other digital options before ComiXology introduced the Website in a Box? If so, what attracted you to ComiXology's over something else?

Sime: I don't use ComiXology's Website in a Box. Although I think they look quite nice.

Niles: Prior to Website in a Box there were pretty much two options: developing your own website or subscribing to a service called popshoponline. We used popshoponline for awhile but it never quite met our needs. It would provide you a site with some customizing options but was a bit difficult to use and the information you had access to was very limited.

We started to look for a new service as soon as we realized we needed more “horsepower” in our website. I didn’t have the time or the talent to build our own website and it was quite a large expense to have one designed and built professionally. This was when I discovered ComiXology and really saw its potential. As soon as we started using the first version of the Retailer Tools we saw an increase in business. Soon after, we were ready to abandon our popshoponline site. I sent an email to the popshoponline developer and was directed to a new company that had recently purchased popshoponline. I soon learned that ComiXology was the new owner and they were developing a new service to replace popshoponline.

Once I realized that the Chief Officers of the company were answering my emails personally, I picked their brains for everything I could find out. We were then invited to the beta and the rest is history. The great customer service and outstanding tools they have provided will have us using ComiXology at least until the Zombie Apocalypse.

May: So you’re currently using it live? How's it working out for you?

Niles: Our Website in a Box has been live now for about two weeks and we’re in touch with our customers like never before. All of the feedback we’ve received has been very positive. We’re seeing increases in orders like never before too. Every morning I’m in the shop early so that I can input all of the orders that have been placed overnight. I will take that kind of extra work any day. We spent a good amount of time during the beta program testing and trying new features/making suggestions. I think retailers will really like the product that ComiXology has built.

Sime: The Retailer Tools from ComiXology that I use are the ones that help my customers and I manage our respective Pull Lists. It is absolutely fantastic and utterly essential to the happiness of my customers and the quality of service the shop provides them. I honestly can't recommend it more highly.

May: In a perfect world, what would you all like to see in terms of opportunities for you to participate in the digital marketplace?

Sime: Of course there are lots of other ways retailers can tap into new readers and new customers and new creators and new formats and new newness. In a perfect world? You and everyone else would know and own a copy of every comic I mentioned in this interview. Until that day comes my work remains unfinished.

Postiglione: Access and the ability to participate. More than once this industry has been rocked by some genius Stanford MBA with an ill-conceived understanding of the comic book industry and a poorly executed, soon to be revoked plan to "fix" it. Hopefully, whatever cabal of intellegencia that rules this industry will understand the vital role each level of our combined business interests contribute to the overall health and growth of this industry and respect those roles in whatever new paradigm is pushed to the fore. While we, as a group, may not necessarily always pull in the same direction, we are still a community unified by a simple love of the medium.

Niles: Having the ability to sell customers digital comics directly from my website and also let them view them on my website is my perfect world…until we can view live action, 3-D, holographic comics. If I know ComiXology, they’re already working on that.

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