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B&N Week 40: Distribution Pt 1– Digital

| September 27, 2011 | 0 Comments

It’s Tuesday again! Weren’t you just waiting for it? I know I was. But, here we are again, which means that it’s time for some Bolts & Nuts!

This week, we’re going to start to talk about distribution. This will be in two parts: digital, and physical. Tyler has a distribution model that he’s following, and that is being put to the test. But let’s take a closer look at what we’re talking about, shall we?

Today, we as creators have more ways of reaching our readership than ever before. We can reach them, and be immediate with it. Social media allows that immediacy, as do message boards. Right now, the digital landscape is like the jungle, and there are certain things you need to know about it before you go venturing out there.

First things first. I’m going to talk about the elephant in the room. The thing that everyone knows, but few really want to talk about. Really, there are a couple of animals that you have to take into account. Not just elephants, but lions, tigers, and bears, too. (Bears aren’t in the jungle, Steven!) [You let me do the talking, and I’ll show you a jungle bear…]

The elephant in the room is that, as soon as you sign on with a digital distributor such as ComiXology, your readership isn’t actually buying a comic. They’re purchasing a license in order to read the comic. It isn’t something that they own. There is no right or wrong in this. This is simply how it is.

The lion is that these distributors want to be in the mobile space. Things like the iPhone/iPad app store and the Android market. If you’re a follower of technology, you’ll know that, while the Android market is formidable and trying to grow, the Apple app store is where its at. However, Apple is going to take 30% right off the top from every single sale of your comics. This is even before your digital partners take their share.

The tiger is that there are several different digital distributors of comics. You’re going to be paying them a fee for every license sold, too. [That fee comes off the top, so don’t worry about it.] The good news is that there is nothing at all stating you can’t be on all of them. They aren’t exclusive, so that’s in your favor.

The bear is that every single one of them is going to take a cut of money from every sale. The distributor is the middle man, and as such, they need to make money from the service they are selling. (Why are they taking a cut? They don’t have any physical inventory to move. It’s all 1’s and 0’s, right?) True, they don’t have physical inventory. However, they still need to pay bills: files need to be set up for their system, they have to keep the files on their servers, they have to pay to keep the servers running, they have to pay salaries, and they have to make a profit. All of that is where the cut of the money is going, and in order to be successful, they have to do it in volume. The better you do, the better your books move, the more books you create and distribute with them for them to sell, the better the distributor does. I’m smelling capitalism.

Now, don’t think you’re going to get rich off of digital distribution. Just because you made the book doesn’t mean you’re going to be able to sell it. Your digital partner may not be as picky as Diamond, but they can still refuse your book. If your partner is in the Apple app store, then every issue has to be approved by them, as well. No matter what your digital partner says, if their store is in Apple and Apple doesn’t approve it, your story won’t be sold through that particular application. Maybe in a different market, such as Android, but not through Apple.

Are there other ways to go about digital distribution? Sure there are. Let’s take a look at some.

The first way is that you could set up your own site and sell your books digitally yourself. The drawback to that is that you lose the visibility a distributor like ComiXology can give you. Having your title in a digital storefront right next to a Marvel comic like Deadpool or a DC comic like Batman can do wonders for you. [Again, there’s nothing saying you can’t combine ALL of these methods in your distribution plan.]

Another way is that you can partner up with another distributor, such as The Illustrated Section. You’ll have to pay a one-time setup fee, but after that, all the money is yours. No other fees are associated with it.

There’s also a small site called Whizu, and the owner there is all about digital content with no setup fees. You list your work on the site, and you get all the money from your sale. I say it is small because it just started, and personally, if it grows, I’m not seeing the “free” aspect to remain. It costs money to run a site, and if it were to grow to the proportions we’d all love to see [selling Marvel-like numbers], then the infrastructure for that will take money. I personally don’t see someone operating something at a loss out of the kindness of their heart. Not for long.

(It doesn’t seem like there’s a lot of choice, Steven.)

Well, that’s a yes and a no.

Digitally, Marvel and DC have their own stores. Diamond is trying to get into the digital space as well, but why anyone would want to go to a comic shop in order to get a code for a digital book is beyond me when the physical book is often right there. Now, Marvel and DC are also on ComiXology, and Marvel is also on Graphic.ly and iVerse. Those are the main stores you’ll find. (I dimly remember hearing something about Longbox, and it wanting to be the iTunes of comics.)

Yeah, well, it never materialized. The applications to beat are ComiXology and Graphic.ly. It’s been two years since they announced they were coming on the scene, with a full launch scheduled to roll out over a year ago. If it comes out now, it had better be a game changer.

Like I said before, you can do ALL of this at the same time. You can have your books sold through ComiXology, Graphic.ly, iVerse, The Illusrated Section, Whizu, and others, all at the same time. There is nothing to stop you, except the contents of your story. [Of course, distributors will always look to make sure the content isn’t something they would object to. Just because you made it does not mean they are obligated to sell it.]

Anyway, you’re not going to get rich from digital distribution. (Why not?) There isn’t enough interest there yet. Buying habits haven’t changed. There isn’t a big enough user base.

Let’s look at some of what I’m talking about.

Let’s put aside the discussion that digital books will drive the brick and mortar shops out of business. That’s not within the scope of this discussion. We’re talking about delivery right now.

How many of you have a cell phone? Most of you, right? What about your friends and family? Most of them, yes? Okay, so you’re able to be mobile while talking on the phone. Now, how many of you have a smartphone? I’m talking an iPhone, a phone that runs Andriod, or a Windows phone? Some of you. Now, what about your friends and family? (I get your point.) Not yet, you haven’t. How many of you own a tablet device, whether it is an iPad or some other manufacturer? And your friends and family? See how the numbers keep dwindling? Now, the scary part.

How many of your friends and family that own a smartphone or tablet device are also into comics? Virtually none, right?

And THAT is the reason you’re not going to grow rich off digital offerings. In order to make money, you’re going to have to sell the books as though they were physical offerings. However, because it isn’t physical, you’re going to have to up the ante in order to make it attractive to your buyer. If you ask most comic buyers if they would rather buy a physical copy of Spider-Man #1 or a digital copy of Spider-Man #1, both at a price point of $3.99, I can guarantee that most people will buy the physical copy. It’s something they can hold. That’s the value they’re getting for their money. For digital, there has to be more.

So you price your book at .99. Let’s make it easier, and call it a buck. Now, of that dollar, thirty cents goes to Apple, if you’re selling through their app store. So now, you have .70 to share between you and your digital partner. Let’s say you go through Graphic.ly. They take 30% of what’s left. That’s 21 cents to them. So now, you’ve got .49 profit from your book. If you’ve gotten into a back end deal with your artist or creative team, then you need to split that forty-nine cents even further. Yes, you’re making pennies on the dollar through regular digital distributors and conventional wisdom.

Not a lot of money, is it? Now, couple that with the extremely small user-base, and then add in the fact that it is extremely difficult to get a comic reader to try something new, and you’ll see why you’d be hard-pressed to buy a value meal at your favorite fast food place from the digital sales of your book.

How can this be changed? Through hard work and time.

Let’s talk about porn for a moment.

Everyone and their grandmother knows about “.com,” even if they don’t know what it does or what it is. That’s okay. Not everyone knows about “.cc” and “.tv.” They’re nothing but part of the domain, right? Well, some porn sites/companies had the bright idea to start their own domain, “.xx.” Some said no, that would just make it easier to censor. (Steven, I’m not–) Technology had progressed to the point where you can have a domain that is JUST for porn.

Now, we have the iPhone 4. We have Facetime. Realtime video chat on your phone. And you know what? The porn industry is all over it. You’re no longer stuck in the house, in front of a computer, doing your thing. Technology has brought us to the point where porn is mobile, and can be done in real time and individualized. Hard work and time brought us to this point. It will only grow from there, as more phones are capable of doing more than just making calls and texting.

Eventually, it will be the same for comics.

There will come a time when you won’t have to worry about missing an issue. You will be able to subscribe to it through your mobile computer/communication device [phone], and every issue will be automatically downloaded to it when it comes out. You’ll get some sort of notification when that has happened. You’ll also be able to get recommendations based on your buying habits, and things like the Comic Shop News, which you’d have to pay a very minimal amount for. [Comic shops that carry the Comic Shop News do so at their own cost. You get it free, but they have to pay for it. I wouldn’t mind paying something like a dime for it physically, and a nickel for it digitally.]

Once the user base grows and the perceived value of digital content has grown, digital distribution will then take off. You can already see it in the book market. Eventually, comics will go that way, as well.

That’s about all I have for digital distribution. Next week, it’s physical distribution, mainly about Diamond.

See you in seven!

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Category: Bolts & Nuts

About the Author ()

Steven is an editor/writer with such credits as Fallen Justice, the award nominated The Standard, and Bullet Time under his belt, as well as work published by DC Comics. Between he and his wife, there are 10 kids (!), so there is a lot of creativity all around him.

Steven is also the editor in chief and co-creator of ComixTribe, whose mission statement is Creators Helping Creators Make Better Comics.

If you’re looking for editing, contact him at [email protected] for rate inquiries.

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