Let’s Do the Math: Digital Comics Revenues vs. Print Comics Revenues

Digital comics have been acknowledged as a growth area for the comic book industry. Bolstered by the emergence of the iPhone and iPad, with the various Android phone and tablets primed to increase the growth, consumers are speaking more positively of the digital format and, if not embracing it, retailers have even dialed down their anti-digital rhetoric from where it was a year or two ago.

Creators, on the other hand, seem to be a bit more of a mixed bag. While Mark (“Irredeemable”) Waid famously loves his iPad and the new distribution channels of digital, Mark (“Kick-Ass”) Millar recently brought the question of creator payment from digital to the forefront.

That means its time for that Funnies Business tradition: Let’s Do The Math.

Let’s start out with Millar’s public outing of the Comixology revenue share: Apple gets 30% and then the remaining 70% is split between Comixology and whoever owns the comic. (This is not the first time I’ve heard this formula and I suspect it’s a relatively standard one for the various entities with smartphone/tablet/web comics platforms.)

Millar has some extra entanglements involving a publisher and an agent getting their sliver of the 35% left, so we’re just going to keep this total dollars derived from the comics.

So, digital comics income = (price) * (35%)

You may recall that I looked into how much it costs to print an independent comic and how much you might expect to make off one. Using those numbers, you’d be looking at revenue of roughly $0.50 to $1.10 per issue for a color comic, depending on your print run and your price point.

“But Todd,” you say. “Those numbers are a little old.”

That’s true. And an increasing number of people are printing in China to lower costs (which means they have to be further ahead on production), so let’s just go by the old Image comics rule of thumb that says you make about $1.00 per book.

If you go by this rough math, a $1.99 digital download nets you about 70% of a print comic’s revenue and a $0.99 download nets you 35% of a print comic’s revenue.

But hold on a second. That’s on average.

If your color comic has a low circulation, say 5000 copies, you might actually make more per copy off digital downloads. ($0.70 digital vs. $0.50 - $0.60 print)

On the other hand, if we’re talking Millar’s Kick Ass, that’s 50K+ print run on top of being part of Marvel’s printing arrangement. It wouldn’t surprise me if that book was clearing $1.10-1.20 per issue. In which case, the revenue on digital would be 58%-63% what he was getting in print… on a per issue basis.

So let’s summarize part one: low circulation comics might make a little more per issue, higher circulation comics will make a little less, really high circulation comics could make a lot less… on a per issue basis.

And it’s the per issue basis that makes total revenues a tricky business. Nobody has produced any evidence to say that people are currently abandoning print for digital. Oh, that may well happen as time marches on, but right now Direct Market print sales are still a collector-based phenomenon and digital isn’t nearly as collectible as print. Digital sales appear to have a different pecking order and appeal to a different audience, so right now digital sales might be better considered as “found money.”

Now, if print readers start leaking over to digital, at that point you have to worry about increasing sales to maintain the same level of income.

That said, a lot of what we’re talking about here is the tyranny of Apple’s fee and having to split revenues with a provider. A lot of DC and Marvel not having their own proprietary system is owed to not wanting to offend Direct Market retailers. The time for retailers to have an extreme reaction has probably passed and we now see Dark Horse releasing their own digital comics, seemingly without an application provider.

Doing such a thing will give you a sunk cost in the development, but eliminate a lot of revenue sharing. Particularly if you’re selling on non-Apple platforms.

Coincidentally, this is what is at the heart of the “Not .99 Method” currently making the rounds. The idea is to sell the material yourself and only pay a PayPal payment processing fee. The potential problem there is missing out on the marketing value of being in the main store for Apple’s platform. (And with the Not .99 Method, you’d really rather have self-expiring links. Without that, it’s a little too easy for people to pass around the download link. While you might look at it as an inevitable form of piracy, you don’t need to make the piracy quite so convenient. Other than those

two things, the method is decent hack.)

This brings us to a few more pricing considerations: direct to Apple (such as Rovio selling their immensely popular Angry Birds game on iPhone), selling with an application provider without Apple (As with comics that are sold via comiXology’s browser-based store) , and selling it online strictly by yourself (very few). From here on out, we’ll be adding Dark Horse’s announced $1.49 price to the sets.

Direct to Apple means you’re giving Apple 30% of the list price.

A single issue purchase with PayPal’s micropayment system is going to be 5% of the purchase plus 5 cents.

So if you’re splitting the revenues with an application provider and selling on the general web (i.e. not in the Apple App Store or Android Market), you’re looking at:

And, finally, if you’re just doing micropayments directly.

Backtracking a little bit, if your main criterion is to have the same income for a single digital sale as a single print sale, these two scenarios are where it gets interesting. A $1.99 download off the web (i.e., without Apple’s fees) will get you in spitting distance of that $1 per issue Image rule of thumb. If you could sell a download off your own website, odd are quite good you’re making more money per issue at both the $1.49 and $1.99 price point as an independent creator.

If you’re a publisher, how much you expect to make on a single issue depends on a few things–individual print run, total print volume, do you have ad income and at what rates? Using some very rough math, figure somewhere in the $1-$1.40 range for a $2.99 comic and $1.40-$1.80 for a $3.99 comic.

I’m looking down at $3.50 copy of Hellboy: the Sleeping and the Dead, and I’m thinking $1.37 take home is probably just about right for Dark Horse, and that’s what they’d theoretically be keeping on a $1.49 transaction off their own website.

As I said earlier, you have to ask yourself a couple questions about how you view digital downloads. Are they primarily new customers? Will it end up being a higher volume product?

Dark Horse is a big enough name and has significant licenses, so they should have a much easier time going it alone for digital downloads than an independent cartoonist who will likely need to look at the use of an application provider and/or listing in an established store as a marketing cost for his/her work.

That, however, is the rough math on how digital download pricing compares with print income.