Wowio Creators Blow Whistle on Late Payments

In a comics marketplace where some say the pamphlet is already dead, many creators are venturing into webcomics and digital distribution. On the face of it, digital comics have a number of advantages over print. They solve the problem of overprinting or underprinting, as no printing is required. With the internet as a digital delivery system, shipping costs are a thing of the past. Consumers have been reluctant to embrace pay-per-download digital comics, but in 2006 a company called Wowio sprung up with a radically different business model: rather than charge per download, Wowio was able to offer their users free downloadable e-books, comics and graphic novels by attaching sponsors to the projects.

For a time, Wowio was a boon for participating publishers, as Lone Star Press publisher Bill Williams will attest. In an interview with Johanna Draper Carlson in January of this year, Williams came out as a steadfast reporter of not just Wowio, but of digital distribution in general. The comics fan, creator, publisher and former retailer went from humble beginnings as Keith Wilson's inking assistant to starting the Lone Star Press venture in 1997, which published more than forty comics, boasting creators like Bill Willingham, Jeff Parker, Mike Leeke and Paul Ryan, to name a few. Despite a laundry list of fan-favorite creators, Lone Star's properties didn't have much luck penetrating the print market, which lead the publisher to explore alternative distribution tools. In addition to publishing his own original web-comic, "Sidechicks," at www.graphicsmash.com, Williams is also one of many publishers who threw in with the burgeoning Wowio in their early days in 2007. Sponsors placed ads at the front and the back of each downloadable pdf file, and publishers were paid for every download. Williams' books racked up 5,000 downloads in his first eight weeks with Wowio.

Publisher Chris Crosby said that Wowio generated significant income for his company, Blatant Comics: $35,459.50 in Q3 2007, $30,868.50 in Q4 2007, $15,845.00 in Q1 2008, and $11,451.50 in Q2 2008. "The downloads did drop off as Wowio lowered their daily download limit and we ran out of new material to add to the site, but we were still quite happy with the revenue generated," Crosby told Publisher's Weekly. "Our webcomics also seemed to get a slight bump in traffic as people who had discovered comics like 'Sore Thumbs,' 'Last Blood,' or 'Marry Me' as e-books on Wowio began following the comics on their respective websites (sorethumbsonline.com, lastblood.net, marrymemovie.com)."

"Penny & Aggie" writer T Campbell was at first hesitant to become involved with Wowio, but he too was pleasantly surprised by the income the digital distribution network provided. "I was surprised and pleased to find myself making thousands of dollars each quarter, and being paid on schedule!" Campbell said. "As a result, I increased my output, the better to take advantage of Wowio's system in the years to come."

In the early days of Wowio, the digital distribution network not only provided significant and timely revenue to participating publishers, it also afforded its publishers with a great deal of financial transparency. "Wowio supplied us with a publisher control panel where we could check in on our total downloads and revenue at any time of the day, and it was updated by the second, so we had a great idea of how well our promotions were working to turn readers into downloads," Crosby told Publisher's Weekly.

Wowio snagged Verizon and Electronic Arts as their first two sponsors, which added to the burgeoning company's credibility, but additional sponsors were not quick to follow. "I began to hear rumors that Wowio was burning through investment capital in order to pay publishers," Campbell said.

Williams confirmed Campbell's concern. "Wowio paid publishers out of pocket for the books that had no sponsors," Bill Williams told CBR News. "If they had simply not given away the books without sponsors, and invited customers to pay for the privilege, they would have been much better off."

In June 2008, Platinum Studios, Inc. began talks to acquire Wowio. Platinum, an entertainment company with a library of more than 5,600 comic book characters that adapts, produces and licenses for all forms of media, set its sights on Wowio as part of its digital distribution initiative. But Platinum has recently had their own troubles with late payments, as reported by Rich Johnston in June, and the prospect of Wowio falling under their banner made many creators decidedly wary. Bill Williams said Bill Willingham and a number of other freelancers he works with pulled their books off Wowio after the merger simply because they want nothing to do with Wowio's new parent company.

One of the first red flags was Wowio's lack of communication with creators throughout the merger process. "During the acquisition, the publishers got most of our information from the press releases and the blogs," Williams said. "The lack of word from Wowio enables a dark aspect of human nature to run wild and we speculate like crazy in back channel discussion."

Writer D.J. Coffman won Platinum's first annual Comic Book Challenge in 2006 for his series "Hero by Night," but the writer recently left the publisher over late payment disputes. Coffman had been involved with Wowio before the Platinum buyout, and when the news of the acquisition broke, the writer saw the writing on the wall. Coffman told CBR, "As soon as I heard Platinum was acquiring Wowio, and knowing what a mismanaged clusterfuck Platinum was, my first thought was, 'If they thought owing a handful of creators was bad and they couldn't do that, how are they going to pay all the Wowio authors on time?"

Chris Crosby said Wowio had kept up with his payments until early this year. His Q1 2008 payments due May 15 didn't come in until June 3. T Campbell, too, received his Q1 payment late, and said, "The money only arrived in the nick of time to help us meet some important expenses."

Crosby, Coffman, Williams and Campbell are just a few of the creators who are still awaiting payment from Wowio for Q2 2008 that they were expecting by August 15.

What's more, the creators say that Platinum's new Wowio contract leaves something to be desired. Originally, Wowio provided users with free sponsored downloads and compensated their creators with a share of the ad revenue. While this option remains in place, the new deal instituted a pageview function which allows users to view any and all of Wowio's e-books in their entirety in low resolution on the web, an option for which the books' creators only see 20% of the generated ad revenue.

Bill Williams cited his trade paperback, "Amazon: Steel of a Soldier's Heart," (http://www.wowio.com/users/product.asp?BookId=4720) as an example of the potential earnings loss under the new contract. "So far, it has been downloaded 15 times generating $15 for me," Williams said. "It has also had 14 thousand pages viewed by readers. Assuming $1 CPM, that generates $14 in ad revenue and my 20% is a meager $2.80. Now let's calculate the revenue generated if those readers had downloaded the book with the aid of a sponsor. For that same trade, 14K pages equals 127 downloads equals $127. Big difference."

The pageview function is almost universally maligned among Wowio publishers, who estimate their Wowio revenue to drop off as much as 96-97% as a result. But any projected numbers for Q3 are purely theoretical at this point anyway, as Wowio has thus far refused to reveal its ad rates for its first quarter under Platinum's ownership.

"When I asked my contact at Wowio about the current ad rate as recently as last week, she said that the final number is calculated at the end of the quarter," Williams said. "I could not even get a hint at the CPM for the ads on the pages viewed."

"I read the new contracts and immediately realized it was a bad deal for creators and authors not to know what rate their page views were generating," D.J. Coffman said. "Especially bad for the webcomic authors publishing collections there, because the preview idea was basically competing with their own archives and advertising on their own sites."

The new contract also allows Wowio to charge for content for which it is unable to secure sponsorship. "Wowio can no longer guarantee consistent sponsorship for free e-books, meaning it will be a crapshoot whether or not our readers will be able to download our ebooks for free when they visit the Wowio site," Chris Crosby said. "We send our readers to Wowio for free e-books, so we need a guarantee that they'll always be available and we'll always be paid for them."

Many publishers opted not to sign the new Wowio contract, and those that have expect their Q3 revenue to be negligible. The creators who spoke with CBR News realize that by speaking about this publicly they are potentially jeopardizing their business relationship with the company, but with little hope of significant future income, most are willing to cut their losses and do anything within their power to get the money they're owed.

Campbell does not envy Wowio employees like Editorial Director Kristin Ellison. "Two years ago, I was in her shoes: stuck between a crowd of hungry, wronged freelancers and a failing, red-ink-soaked company," Campbell said. "The next time I actually speak to her instead of just e-mailing her, my message is going to be simple: 'Get out now.' In fact, that's probably good advice for anyone involved with Platinum Studios properties in any capacity."

When approached by CBR, representatives of Platinum declined to comment. In e-mail correspondence with publishers, Ellison said: "It is my understanding that the delay in reconciliation and payments for the Q2 royalties is a result of the ongoing transition of the Wowio acquisition. Naturally, we were assumed and hoped to have all accounts reconciled on the 15th as promised, but it has taken longer than we expected. I wish I could give you an exact date on the Q2 payments, but I honestly don't have one. Payments are going out as quickly as we can get them sent."

Ellison assures Wowio creators their payments are forthcoming, but most are not content to sit idly with their Q2 revenue in the wind.

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