Should comiXology go public?

Tim Beyers of The Motley Fool recently speculated that comiXology could be positioning itself to go public. Or as he put it, "comiXology could be the next IPO multibagger." He even asked CEO David Steinberger, who responded, "I would love to be significant enough to feel like we could do that. That would mean that it's working, that the market is getting bigger." Which is basically corporate for "Oh, God, I hope so!"

It may still be a few years off, but comiXology is definitely on the right track. The digital-comics platform just surpassed 200 million downloads, a milestone that was crossed exponentially faster than the 100 million mark. And no, it's not all from free downloads. The company has been profitable since 2011, when Steinberger claims it made $19 million. That turned into $57 million in 2012. ComiXology's expansion into the French market and the 10th anniversary of The Walking Dead, which coincides with the fourth-season premiere of the hit television series, are expected speed the company past 300 million downloads. This year's launch of comiXology Submit is also likely helping push the needle further. Could comiXology hit $100 million in sales next year? If it stays on the current track, it seems entirely possible. ComiXology launched in July 2007 and turned a profit in about four years, an impressive feat, especially considering the state of the economy during that period.

So is going public the right move? It depends on the company's goals. As a business school graduate, Steinberger is certainly aware of the general strategy for start-ups, which is usually to either sell the company or go public to pay back investors and finance further expansion and growth (often with an eye to sell at a later date). If the goal is to sell comiXology so the founders and investors can all walk away rich, going public is probably the right move. If the goal is to keep fighting the good fight for comics, it's not quite so simple.

While comiXology's digital comics launch in 2009 was met with serious concern, and even downright suspicion and scorn by some comic store owners and print comics faithful, the assertion that digital harms print is now difficult to back up. Once the major publishers went day-and-date, a major uptick began showing in both formats. Archie Comics led the charge on April 1, 2011, but it was DC Comics' adoption, accompanied by its aggressively marketed New 52 relaunch that September, that really re-set the paradigm. Both markets have been getting healthier ever since as they feed into each other. This was accelerated when Image Comics, Marvel, IDW Publishing and Dark Horse followed suit by the end of that year. For most of those publishers, the preferred digital distributor was comiXology. Or if it wasn't at the time, it certainly is by now, as virtually ever competitor from that time has either vanished entirely, shifted business models or scaled back as a boutique distributor. These days, comiXology's only real competitor is Amazon's embrace of comics through Kindle Fire. While that loss of competition is unfortunate, the comics industry has gained some long sought-after strength. Various personnel at comiXology have spoken over the years about their love of the medium and wanting to help comics be healthier, so my hope is that they do have bigger goals beyond just being as successful as possible before cashing in and walking away with as much as possible.

If that is the overriding goal, going public could interfere with that. The more people you have to answer to, the more muddled things can get. Stockholders require quarterly reports to essentially convince them why they shouldn't bail on the company and sell their shares back, and ideally why they might want to buy more. And on the subject of quarterly reports: Back in Marvel's days as a public company, before the company was acquired by Disney, comics news sites would pore over the financial reports to stockholders. We would find hints about release dates for upcoming movies and see how terribly publishing was doing in comparison to licensing. It was always a great read. With comiXology, they could give us more concrete numbers on the sales of digital comics, a figure that has so far eluded industry watchers. I wouldn't expect the reports to give a breakdown of sales per title, but it would almost surely be more informative than the vague figure of about 15 percent of print that we have now. That would help us better understand the digital sector of comics and its effects on print.

Going public would also give comiXology more resources to grow, and as a likely result, grow comics further. But what about that possibility of being acquired? Would Amazon or Disney or some other large company buying comiXology be the right move? My initial thought is no because the involvement of large corporations with interests other than comics sounds like a bad idea that could ruin a good thing. So sure I really want to read those financial reports, but I'd rather comiXology stay independent and privately owned. Plenty of companies are able to stay plenty successful without going public. Like the logo for the Comics by comiXology app, keep the focus on comics, not stocks and corporate raiders.

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