For comics and prose publishers, Wowio.com seemed almost too good to be true. The Web site allowed publishers to post their books online so readers could download them for free, with publishers earning a set fee per download. But since the site was acquired in July by Platinum Studios, an online comics and entertainment licensing firm, changes in Wowio's terms may have undermined the value of the site for comics publishers. While prose publishers continue to praise Wowio's ability to attract readers with free content and generate a revenue stream, comics publishers complain that a newly instituted free online preview and new financial terms have significantly reduced revenues to the degree that some are questioning whether to use the site at all.
Launched with investment capital, Wowio's free downloads were supposed to be supported by advertising. The enterprise grew quickly and publishers reported substantial sales through Wowio. But earlier this summer, Wowio's site shut down—it's rumored that ad revenue never quite supported the site—and on July 15, the company was purchased by Platinum Studios, a California comics publisher that purchases comics properties in order to pursue film and video game licenses, and publishes the comics online.
Since its launch, Platinum Studios has acquired the rights to hundreds of comics and thousands of characters. However, the company has generated controversy over its licensing-focused business plan, mounting financial losses and periodic complaints from some creators about payment, all of which were chronicled in a PW story (PW Comics Week, July 14).
Both Wowio and Platinum Studios declined to respond to questions for this article.
Since Platinum's acquisition of Wowio, comics publishers in particular are concerned about amendments Platinum has made to the terms in the Wowio contract. Under the new system, publishers say they can make only a fraction of what they did previously through Wowio. And the site's comics clients are particularly worried about a postacquisition change that offers a free low-resolution online preview of complete books on the site. The preview allows consumers to read even the longest comic book very quickly online, which, publishers fear, undermines the need for a download or sale.
Previously, Wowio had promised publishers 50 cents per download for e-books of less than 100 pages and $1 per download for longer e-books, according to a copy of the contract provided to PW. Shortly after the merger, Platinum sent out an amended contract, or “expansion of grant of rights,” to publishers and creators. The new terms state that the “publisher shall receive 20 percent of the quarterly gross advertisement revenue” from the free preview. And for e-book sales, “publisher shall receive 50 percent of the quarterly gross revenue.” Publishers can also receive per-download fees of 50 cents or $1 for books that have sponsors—if Wowio can attract the advertising sponsors.
Darren G. Davis, president of the comics house Bluewater Productions, has been a supporter of Wowio since it first went live, but he's skeptical that the new arrangement will be profitable for publishers. “I really did have high hopes for the Platinum acquisition, but I feel like it is a huge letdown,” Davis said. Since the change, Davis said the 100-plus Bluewater titles on Wowio have been viewed for free nearly 90,000 times, but downloaded fewer than 100 times. That adds up to $50.50 in revenue for the publisher. “Why would people want to download the books when they can view it for free? We have not rushed to put our new titles up on the site,” Davis said.
Keenspot Entertainment, an entertainment Web site offering free access to exclusive serialized Web comics, first started posting content to Wowio in August 2007. Since then, CEO Chris Crosby said the company has received more than $93,000 in revenue from Wowio and called the site “a wonderful income generator.” But now, Crosby said, Keenspot hasn't yet signed the amended Wowio contract and he doesn't expect that he will. “Our biggest concern is that they can no longer guarantee consistent sponsorship for free e-books,” Crosby said. He described the new terms as “a crapshoot whether or not our readers will be able to download our e-books for free when they visit the Wowio site.” Crosby explained, “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.”
Crosby said that he's “not a fan of the 'free preview' feature,” from which the publisher receives “only 20% of the potentially meager banner advertising revenue generated by that.” Crosby explained: “Not only would that compete with our Web comics sites—where we receive 100% of the ad revenue—and our e-books, but it just seems crappy.”
Nevertheless, prose publishers like Toronto-based general independent publisher Insomniac Press and New York City e-book publisher Rosetta Books are still happy to work with Wowio. Insomniac publisher Mike O'Connor said Platinum brings added scope to Wowio that benefits his books. “Wowio has been the most successful way in which we distribute our e-books,” he said. “The Platinum takeover hasn't really affected us. The expanded capacities of the site have opened up our titles to people outside of the U.S.”
Rosetta publisher Arthur Klebanoff agreed, noting that “relative to other sites, Wowio offered decent revenues and they paid.” Klebanoff praised the preview feature, but acknowledged that “consumers are unlikely to read much of a 300-page prose work online.” Klebanoff said that by enriching content, adding the preview and offering some promotional deals, Wowio is trying to increase traffic on the site and, hopefully, ad revenue for everyone. “But if, say, six months down the road, traffic is the same or down, it's not really going to be a good deal.”
