While the 18-month lag between holdings of the New York Comic Con meant that Milton Griepp and his comics sales analysis team at ICv2.com had to move their annual White Paper survey of retail trends to Chicago's C2E2 show this year, the site's annual conference surrounding the comics business returned to NYCC 2010 in a Thursday afternoon gathering whose focus was squarely on the digital side of comics sales.
Branded the "Conference On Comics And Digital," the event featured a series of panels focusing on how the web and mobile devices are affecting a variety of comic publishers and platforms and kick-started with a preview of Griepp's White Paper for 2010 where sale information pointed towards a 20% drop in graphic novel sales as digital comics grew to a business of possibly $6 million or more. Later, breakout panels covered a wide-range of digital topics but focused mostly on issues of format and retail. Below, CBR News presents an extensive look inside the conference with all the numbers, debates and news from industry figures including Mark Waid, Marvel's David Gabriel, reps from digital players like comiXology and iVerse and much, much more.
Notes From ICv2's White Paper
Griepp started off noting that he opted to shift off of the event's previous focus on graphic novels because comics made in trade book form is no longer the fastest-growing category in the market. "The new discussions were around download to own and the expansions of the digital space...it seemed very appropriate to focus on that topic this year for our conference," he said.
The 2010 ICv2 White Paper was only shown in partial as, of course, the year hasn't ended, but Griepp found it worthwhile to present some trends divined from his analysis of what had sold already this year as even without the typically eventful holiday sales information, he could gain " feel for the annual trends." This held particularly true when comparing current comics sales to the back half of 2009.
Last year, print comics as a whole saw an estimated $680 million generated at retail (graphic novels accounting for about $370 million to comics periodicals $310 mil). So far in 2010, the graphic novel category has fallen down 20% while comics have ticked up 1% with Griepp noting that "graphic novels pulled the overall market down." Even though comics were down 3% in 2009, meaning they're trending a bit up now, he called their performance "relatively flat."
The trends in the periodical market remained flat in dollars as 2010 got underway due to an increasing average cover price and "no real huge hits" in July and August, which were particularly low months (falling down about 14%). "Overall in general, fans are paying more money for the same amount of content they were a few years ago," he said as in the first two quarters of the year, the average cover price $3.51, compared to a $3.38 average in 2009.
Graphic novel trends were dominated by a sharp bookstore decline where sales are dropping off much worse than in comic shops. Griepp returned to his frequent pulling out of sales numbers for DC's "Watchmen" which has been a major driver in bookstores since the buildup to the film adaptation in 2008. The decline of "Watchmen" sales in 2010 counts for 50% of all bookstore decline, and Griepp noted that we might have seem bigger overall declines last year if not for "Watchmen." However, it wasn't only bookstores that lost graphic novels sales over the past nine months. Comic shops were down 9% in the category in the first half of 2010, compared to bookstores being down 30%.
Additionally, the manga market suffered its third bad year as sales were down 20% in first half of this year thanks to bookstores having a bigger impact overall on the category. Manga fell 50% over three years with the weakest titles taking big hits as well as the smaller publishers. While big companies like Viz and Tokyopop stay active, even their numbers are down due to less TV shows promoting manga series and no new hits have emerged overall. However, Griepp noted that the incoming "Hetalia Axis Powers" from Tokyopop looks to do well while books like Viz's "Vampire Knight" and Yen Press' "Black Butler" continue to do well while powerhouse "Naruto" is still #1.
"A slow digital strategy is affecting what's going on in manga," Griepp added, saying that scanlation sites are still a major problem and "there aren't any legal alternatives." This diverts the fanbase into a non-profit area rather than building new sales.
And with that, Griepp shifted to the focus that would carry ICv2's entire conference. He explained that his catchphrase for the past year has been "The Energy Is In Digital." Trying to size up the market, he noted the new prevalence of downloadable comics on iTunes-based devices, PSPs, the Amazon Kindle, some Android phones and many web-based services just getting started. Griepp's estimates for sales were based only on download to own (rather than subscription services like Marvel's Digital Comics Unlimited).
Griepp noted that the sales estimates he and his team have been compiling should not just be thought of as those from the American market but from the entire English language market. And considering that, the digital market seems very robust. While ICv2's 2009 White Paper gave a 1/2 to 1 million dollar sales estimate, 2010's number pointed towards a market of $6 to 8 million. "The bulk of that will be iTunes...this is why we're hosting this conference. The change is very rapid," he explained. When asked how his data was compiled for digital sales as compared to print sales (where more direct access to numbers from Diamond Distributors and bookstore sales are shared with ICv2), Griepp said much of what they based their numbers on came from interviews and surveys with industry players as neither publishers or sales outlets will release hard numbers for analysis. Even though this method is hardly scientifically accurate, he argued that an estimated figure with a swing of $2 million dollars was loose enough to provide an accurate idea of the size of the digital marketplace.
In digital trends, Griepp said "the tablet is the big device" with comics "Big Two" of Marvel an DC getting involved this year along with new players like Graphic.ly and Longbox joining established outfits like comiXology and iVerse. As more tablets aside from Apple's iPad become available, sales and availability for comics should continue to rise. In terms of hits in the digital market, Oni Press' "Scott Pilgrim" series did very well as "one of the top producing iPad apps during the weeks around the movie" and the comic adaptation of popular phone app Pocket God sold about 60,000 copies in first week of release versus millions of app downloads for game.
Looking to 2011, Griepp said a full year of iPad sales will have a big impact as well as a full year of Big Two sales in the market. Pricing experimentation should also be expects with Dark Horse already going to $1.49 model.
Overall, Griepp characterized the digital sales revolution as the fourth major change in comic sales since he began working in the business in the 1970s after the rise of comic shops in the '80s wiping out newsstand, the speculator book and subsequent DM bubble burst and the recent growth of the graphic novel in bookstores. "All of these have created new fans," he said. "And as we enter this phase of digital, we feel it represents an opportunity" unique from other businesses which are mass mediums already. Comics works as a niche market, Griepp argued, but with digital distribution new fans may be built as people who know the characters of comics have the actual medium made available for them.
To wrap, Griepp offered his thoughts on the industry as a whole's reaction to the digital onslaught. "Some people are afraid of the change, and some people are embracing it...I don't think there's anything we can do to fight it, so we need to figure out how to exploit it and expand our business on that market front."
Assessing The Digital Marketplace
And with that, the conferences breakout panels got underway. While the three offerings at their core each had a singular focus (digital publishers speaking to the state of the market, a round table on comics creativity in the digital space and an unpacking of the digital vs. print sales debate, respectively), overall the discussion for the entire day boiled down to one central question: how can comic publishers make money in the digital arena without sacrificing the strengths of the current print sales system?
During the first panel ("Digital Comics And Graphic Novels - Where We Are And Where We're Going"), some of the leading executives behind the more successful mobile comics platforms to date discussed what could make their growing market stable and fair. Early on, participants made much of whether comics should look to the music industry's history with the digital revolution as a model. iVerse CEO Michael Murphy argued that the collector's nature of comics made this business unique and unlikely to feel a similar decline that CD sales had in the early '00s. "Comic book stores and the comic book experience is quite different from all of those things," he said, noting that fans who love print won't quickly leave that space. Graphic.ly/iFanboy's Ron Richards countered that as a music geek who gave up on CDs argued that while there's an aspect of the collector in all of us, "the music progression and the comics progression are taking an eerily similar path."
After Richards asked aloud whether comic companies learn from the failure of record labels, BOOM! Studios CCO Mark Waid audibly laughed from the audience. Waid became heavily embroiled in the talk from off the stage, at one point arguing a vast difference between the current print audience and the potential digital audience. "It's such a tiny, tiny margin of collectors that really need the paper...you'll see them all upstairs tomorrow," he said.
ComiXology CEO David Steinberger that one key similarity between music and comics is that just as record labels "had tons of resources but they didn't marshall them," comic companies wouldn't pay for development outside of a few players like Marvel. But, he said, a new momentum was overtaking comics with the advent of tablet-based sales.
As a final piece of that first panel, Waid asked participant Dario Di Zanni -Â the Sales Manager for Disney Publishing Worldwide whose Italian comics are reprinted in the States by BOOM! but are widely available online in Europe - about what pricing models worked for his product overseas. Di Zanni said that the most common price point let readers buy the 21 pages for 2.20 Euros (around $1.60), but that the lowest he was able to price any comics in the mobile sales platforms was about $0.79 - a major source of frustration. "We are sure if there was more flexibility on the digital model [there'd be more room for growth]."
Participant Masaki Shimizu - a representative of Japanese mobile comics powerhouse Bitway -Â then revealed that their most popular price points came with subscription models which saw readers getting about 25 cents for each 20-page chapter of manga. The panelists agreed that some kind of subscription-based model in America could prove popular, but it was very hard to accomplish such a model within Apple's rigorous set of standards for content sold on iTunes. Murphy noted that two successful launches had cracked the subscription problem: "Pocket God" and IDW's "True Blood" comic.
Tellingly, when Griepp asked the American digital executives whether they could speak to the metrics of their sales models with any specificity, the panel turned silent. Several players would note how their free app downloads ranked in the millions, but none offered an idea of exactly how many of those downloaders paid for content either once or on a regular basis.
Creating Comics For The Digital Space
The conference's second panel ("The Medium And The Message - Digital And Creativity") did circle around several issues surrounding how creators could best utilize the digital space to make better comics, but eventually it too turned to a debate over which sales and distribution models could work well. Panelist and critic Douglas Wolk offered early on that "as a reader of digital comics, I kind of feel like a lot of comics going print to digital is 'in the Famous Funnies stage' where it's all cut and paste [as print comics are moved to digital formats]...There's a lot of room for experimentation in the digital format that is not being done that I'd like to see done."
First Second Books' Editorial Director (and web cartoonist with "Sailor Twain") Mark Siegel noted that in the four ongoing web-based comics he's helped to launch, the most exciting element of publishing digitally has been seeing a unique reader community whose feedback affects the comics creation rise around each project including the Iranian comics "Zahra's Paradise" whose serialization was in part inspired by the role Twitter played in shaping news coverage of the violent election protests that rocked the country last year.
LongBox CEO Rantz Hoseley offered a series of slides meant to show what can be accomplished on a digital platform that print can't do from adding music loops to crafting stories with non-linear narratives. The entire panel seemed to groan at the idea of motion comics as a viable version of comics online, noting the frequent complaint that animating part of a comics panel takes away "non-passive" elements that makes comics unique.
While digital comics-only publisher Robot Comics' Dave Baxter argued for a fight to retain those comics-specific interactive elements, the conversation swung back towards business and sales as "Valentine" writer Alex DeCampi and Waid (now an official panelist) insisted that the most pressing concern for comics' survival online was finding a way to work towards a specific, affordable platform. The pair agreed that just as the newsstand once represented a cheap way for readers to enjoy serial entertainment in comics form, digital comics held the potential to "Make comics cheap enough to be disposable."
Waid was particularly animated but also careful as he admitted to ruffling many feathers in recent times both thanks to the backlash received by BOOM!'s early day-and-date release of the comic "North Wind" on MySpace years before (a move which despite complaints from retailers, he said, saw sales on the print comics increase over four issues) and to this summer's controversial and misunderstood Harvey Awards keynote speech. In fact, to help allay any controversy his opinions might inspire in regards to BOOM!'s interaction with direct market retailers, Waid prefaced most of his comments with the phrase "Mark Waid, private citizen, says..."
"The single biggest obstacle to all publishers now is going digital without pissing off retailers, but they can't be beholden to a few thousand stores," private citizen Waid said before later adding that a model of digital-only serialization leading to print trade paperbacks seemed inevitable. While many complain of online piracy as cutting into comics sales and hurting creators' ability to earn a living making comics, he argued the most important takeaway from the digital revolution was proof of a mass audience. "I know we all have to be paid. I know we all have to be paid. I know we all have to be paid, but take a split second...and think about the fact that down the street at the poetry convention nobody was talking about piracy or digital downloads because nobody cares. What I'm saying is let's not lose site of the fact that the beauty of digital [is that for people who have no comic shops] it proves the demand for our products...there is a huge appetite for what we do that we wouldn't have predicted five years ago.
"The hard part is trying to monetize early so you're not operating in the hole," Waid later added.
Print Vs. Digital
As the conference wound its way to the final panel, the ominously named "Print Vs. Digital -Â War, Co-Existence or Collaboration," the final group of commentator who ranged from retail and library players to executives focused on sales and the digital space seemed to agree on one point. As moderator and journalist Calvin Reid put it, the final panel's stated focus was "the subtext of all the panels."
However, despite some contentious words on the topic earlier in the afternoon and perhaps the expectancy for disagreement given the title of the panel, the day ended on a more subdued tone as everyone got on the same page about how print sales and digital sales should work together. "[Retailers] are viewed as the enemy of the opposing camp, and I don't see it like that," said John Riley, owner of Williston Park, NY's Grasshopper Comics. While Riley had some partially tongue-in-cheek remarks for Waid on the "torches and pitchforks" front and argued the idea that there's a split in readership between collectors and people who "choose to read sequential art as entertainment." He said a lot of online readers have been coming in to buy trades of what they've been exposed to at his store.
IDW CEO Ted Adams spoke about the perception of digital sales hurting brick and mortar retailers as it applied to the publisher's popular "Star Trek: Countdown" comic. Adams explained that as digital sales rose over the four-issue movie tie-in, so did print sales as #4 sold more than #3 - a rarity in comics. "I can't say definitively that success on iTunes led to more success in print...but it certainly didn't hurt it."
Diamond's Director of Digital Distribution Dave Bowen spoke on that major player in the physical sales world's plans to integrate digital into local comic shops. He said that the company is looking for a way to build a system where retailers can offer digital product or partake in sales, and while that working back towards the older sales market may seem unique to a comics community that holds tightly to its core customers, Bowen argued there are models outside of the industry that comics can emulate. "We would love to see something like with what Barnes & Noble is trying to do with their digital readers in comic book stores."
Of course, the breakout news from the event came from Marvel Comics whose much-debated $3.99 price point for its biggest titles came up on and off throughout the conversation. As CBR reported Thursday, Senior Vice President of Sales & Circulation David Gabriel announced that certain new titles debuting in January would ship at a lower price point than $3.99, and he cited digital sales (with no specific numbers) as a contributing factor to the change. CBR followed up with a Marvel representative, who confirmed that the new books would sell for $2.99, however no further comment on which titles would carry the price was offered, so it appears for now more information will hit with the next installment of Previews.