Mark Waid has started his new blog on digital comics with a summary of the problems facing print publishers. He kicks it off by noting that Diamond has a monopoly on comics distribution, and then goes on to a pretty scary summary of the math of publishing a print comic:
That got me thinking about the cost structure of digital comics. With a printer, you pay a setup fee and then a per-copy cost, which gets lower if you order more copies; the cost per comic is less if you're printing 100,000 comics than if you are printing 10,000, but it never drops to zero. Because of the cost of paper, ink, and labor, a printer is always going to charge something to print a comic, even if it's the millionth one. With digital comics, though, the first copy is the only one that costs the publisher money. Just like a print publisher, a digital comic has to be set up for distribution (I assume that setting up the files for digital is a single step not unlike setting them up for print). Once you have done that, though, the cost is the same whether you sell 10 copies or 100,000 — as they would say in economics class, the marginal cost of that second comic, and all the others after it, is zero. (I'm ignoring the cost of extra bandwidth here because I think it's negligible.) This is what people mean when they say that e-books should be cheap because there are no printing costs. There are still production costs, and they could be quite high, but they don't scale with the number of copies sold. The current model is to charge what the market will bear, and apparently the market will bear $3.99 for a digital comic, but in my ideal, hippie-ish world, the publisher would drop the price significantly once the production costs are covered, plus perhaps a tidy little profit, thus allowing more people to enter the market.
That last point is key. Digital comics seem to be growing the market rather than taking customers away from brick-and-mortar stores, which seems illogical until you realize that a large part of the market is not served by comics shops at all. Waid estimates that there are fewer than 2,000 comics shops in the U.S., and they aren't evenly distributed, either:
It’s pretty sobering to realize that four regions--California, New York, Texas and the Chicago area--account for a jaw-dropping majority of comics stores across America.
That means the other regions are under-served. What's more, the vast majority of those comics shops are small, and most of them aren't interested in a new comic—they just order the top of the Diamond list. Waid doesn't really say it this way, but this strikes me as the downside of non-returnability: Unlike bookstores, comics shops can't return unsold comics to the distributor, so they are less likely to take a chance on something new or unfamiliar. Furthermore, most comics shops are small sole proprietorships, so they can't afford a lot of risk. Terry Moore, who does still publish print comics but has recently gone digital as well, discussed precisely this problem in January, but Waid puts more numbers on it.
This is just the beginning of a long odyssey for Waid, and it will be fascinating to follow him and see his insights into digital comics production and distribution. Already a lively dialogue has sprung up in the comments section, with Moore, Chuck Austen, Jamal Igle, and a number of other creators and commentators putting their two cents in. It looks like this blog is going to be the one to watch.