Over the past few weeks, we've had a barrage of press releases from comiXology about exclusive deals it's made with publishers, including, most recently, an agreement with Marvel to digitally distribute single-issue comics. That made me think about the digital comics market as a whole, and how these exclusives would affect the other big digital distributor, iVerse. So I called and asked.
What I was surprised to hear was that iVerse CEO Michael Murphey isn't particularly bothered by these exclusives. That's because he doesn't see iVerse as going head to head with comiXology; he sees them as serving different markets in different ways, and the exclusives don't affect them as much as you might think. Read on to get his very different take on the digital comics market.
Robot 6: I'm going to just ask you point-blank: comiXology has announced a number of exclusives lately, which shuts you out of part of the comics market. What does that mean for iVerse and for Diamond Digital, and what will you do about it?
Michael Murphey: There's a couple of things that are going on right now. ComiXology, it seems to me, is trying to recreate the direct market in digital form. That's not where iVerse has ever been. We have always thought of ourselves as a newsstand rather than the direct market. We do better than most people think because most of our customers are not direct market customers. We sell a ton of children's product through Comics Plus Kids, we have Archie Comics and we have Pocket God comics—one thing you are going to see is we are launching that New Crusaders product with Archie. We are also rebranding our app and launching web and Android versions before the end of the month.
Our library program is going to be a very large revenue generator for ourselves. We announced it three or four weeks ago, and the response from the library community has been overwhelming. And all those places are different things we are doing that are finding new readers, reaching out to where the new readers are.
Marvel and iVerse have a good relationship. We haven't ever sold day-and-date product for Marvel. We have always sold either single issues or graphic novels, and since we switched to graphic novels a month ago, our Marvel sales are better than they have ever been. We have started focusing on graphic novels — not just with Marvel; we have graphic novels with a lot of people. The graphic novels have done very well. The higher price point actually works really well for customers who aren't direct market customers because they are used to e-book prices. The price of a graphic novel is comparable to an e-book price, so that is not bothersome to them. That is very exciting, and it is directing some of the ways we are modifying ourselves as we go along to accommodate that kind of customer.
The other thing we are doing that is a big focus for us that we believe has a tremendous amount of potential is the non-English language market. We will be making an announcement soon. It's something we have been doing for a while, and some of those markets are pretty exciting. When you look at movies that are comic book based, look at the money they are making overseas in non-English-language areas, there's a tremendous amount of opportunity in those places, and we are excited about that for the entire industry.
So you do have Marvel graphic novels?
We have Marvel graphic novels in our app right now. Our top selling graphic novel last week was our Avengers Disassembled.
What effect will comiXology's exclusive have on your Diamond Digital program?
That is Diamond's program that we power, but from my own personal opinion, if Marvel is already giving out digital codes for free copies, I don’t think that Marvel has to be a part of Diamond Digital for that to succeed, because they are already giving the product away in the store. One of the things that is great, when we talk about the Diamond Digital program, that is another example of not necessarily going to a new customer who has never existed before but going to existing customers with a new way to purchase, and for the retailer, a new way to sell the product. One of our focuses is making sure the very cool, very hip, very indy stuff that doesn’t sell in the shops has a way to sell when it's not in the shops. Printing and shipping can be very expensive. If we can create solutions that eliminate that cost, everyone has a better chance to be successful. We hope that program will be able to help facilitate those things whether Marvel and DC are going to be part of it or not.
When will you be rolling out Diamond Digital?
Several retailers have beta sites up right now, and everybody will have access to it just as soon as Diamond says they can. They are putting everything through their paces, making sure everything works with their entire system, working with select retailers, and when they are comfortable, they will officially launch it to everyone. It has expanded and evolved many times since it first started. We now have a program where even if a retailer never had a website, they can make a request for one and bam! they are covered. As we made those evolutions, it has taken longer than I was hoping, but the product was better as a result.
Do you have plans to extend your Comics Plus app outside iOS, with web or Android stores?
What we have with Archie that we just released, we are doing the same flavor for Comics Plus. That will be across all devices. The Comics Plus web store is HTML5 based, so it works on all devices, all designed for touch, and when you look at our stuff, even on Comics Plus, when look at the kids' flavors of those things, it's a very simple interface, very easy for not just kids but everybody to interact with. Go to Amazon, look at their website, it can be a mess. We want to keep the shopping experience as simple as possible.
Right now, where are your revenue centers — what are your most popular services?
It's absolutely the kids' products. The kids' products are the biggest revenue generators. I wish we didn’t have NDAs with publishers so we could talk about specific numbers. I think the numbers would be surprising to a lot of people. I think you will see over the next several weeks some of the things we are doing to focus even more on the kids' stuff. There are some great programs that are out there. Some of the ideas Josh Elder has had and the things he is doing make so much sense for expanding kids' comics. If we get kids as fans right now, they are going to do more, read better, they are going to be where I was when I was 12. They get hooked
I just spoke to a third-grade class, and I was surprised how many of them had e-readers, or read comics on their parents' Nooks.
Where we were a few years ago, only adults had them. Then the new ones come out and adults hand down the old ones. We have kids with millions of these devices. Oh man, Christmas Day was wonderful. January and February were the best months we have ever had. It was insane the amount of product that was being bought, and the vast majority was kid product.
In my experience, talking to kids, they love comics but don't know where to find them.
They have to be able to find them, get them in a way that makes sense, and get them at a price their allowance or parents can make happen. Once we get those three things solved, we have got our new newsstand.