Posted in: Comics, Comics Publishers, Current News, IDW | Tagged: Content Buckets, IDW Dark

IDW On "Content Buckets" And Wanting "To Own Our Own Mickey Mouse"

IDW describes its published comics in terms of "content buckets" and wanting "to own our own Mickey Mouse" in their investors earnings call

Comic book publisher IDW Publishing just held its earnings call for the current quarter of the financial year, as it is obliged to as a publicly listed company in the USA. Bleeding Cool looked at IDW's recent financial reports, but we managed to glean some other facts and plans for IDW for the next year, including one major change to how IDW does business and another change in how it describes that business.

First, some statistics for you number vultures like me. IDW has been distributed for some time by Penguin Random House, but Diamond Comic Distributors was allowed to subdistribute as a third party for stores that still preferred to be distributed by Diamond. Previous estimates were 15-20% of the direct market of comic stores, but in the Earnings Call, that was upped to 15-30% of the comic book store and bookstore market, which is significantly higher.

The entire digital comics revenue, whether through Comixology, Kindle, Apple, Global Comix, or IP apps, collectively adds up to 5-7% of annual revenue. I would note that I would expect IDW's digital revenue to be higher than others, as much of it is derived from popular IP with fan bases who often find the only way they access that material immediately is digitally.

The impact that leaving Diamond will have on IDW – and everyone

IDW expects comic book stores will have to move to Penguin Random House to order books, now that PRH won't allow Diamond to subdistribute Marvel, Image, IDW, and Dark Horse titles any more, but they brought up something that I hadn't considered until this Earnings Call. Some of those Diamond customers are simply not going to be able to set up accounts at Penguin Random House. Some may not qualify because of low sales levels, some over their business credit history or lack of it, some may be comic buying collectives, and won't be eligible for that reason as well. And while individually they may not amount to much, as a group, they are a measurable factor, and IDW expects fewer sales as a result. And if that's true for IDW, then that is true for everyone. IDW stated in the call, talking about retailer accounts, "if everybody moved over that were capable of moving over from Diamond to PRH, we still expect that we'll be down year over year, because some of those customers will not be able to become Penguin Random House customers in our estimation. But we do think that the majority of customers will ultimately set up an account at Penguin Random House. We expect there will be a time frame, maybe two to four months, while retailers transition over from being Diamond customers to being Penguin Random House customers, and during that time frame, our sales will be diminished." And, as I said, if that's true for IDW, it's true for everyone.

IDW started that they will attempt to find "creative ways to reignite audiences who miss out" but are lifted by the belief that with PRH, and "not going through a wholesaler that was perennially behind on its payment terms, we think that will be a healthier marketplace, more stable for those comic shops. We do think there will be some flux, there will be a little bit of crunch, but ultimately… a more stable marketplace for the industry."

As for the numbers in the recent financial report, they stated, "You've heard from us over the last two plus years, the steps we've taken to make the company more efficient. I think that is reflected in the numbers. If you look at our six months ending in April, yes we are showing the $1.7 million loss, but remember $750,000 that is a direct impact from Diamond. Without Diamond, we'd actually be in a better position, bottom line, than we were at this time last year. So while we didn't know that Diamond would go bankrupt, we have been doing what we can over these past two years to make sure the company is in the best position possible to absorb potential bad news."

IDW to launch more imprints alongside IDW Dark

Private shareholder DJ asked if the IDW Originals line could be expanded, envisaging a talent search and publishing Kickstarted comics and graphic novels under the IDW Originals name. That was shot down fast. They have contact with a lot of talent already, and they don't want to use other "web portals" to find people. " We just found that those are time-intensive and costly."

They had to cut down on titles, and IDW Originals faced the brunt of those. Some went to Top Shelf, but they were part of a fragmented line, stretching from horror comics by Scott Snyder to comics about cooking with monsters for kids, and had no identity. They do have the IDW Dark imprint, which we learned in the Earnings Call, is to be the first of a number of imprints, with more to come in the coming months. Their local show, a little thing called San Diego Comic-Con, feels a good place to launch such news.

IDW and their "content buckets"

They talked about how "IDW, historically, has essentially had three different content buckets." You can picture them right, it's an arresting visual metaphor. But what's in those buckets, IDW?

"There was the license bucket, Teenage Mutant Ninja Turtles, and at other points in time, Transformers, Ghostbusters. That's still a meaningful part of our company, I'd say that accounts for the bulk of our revenue. Then there was the creator-owned bucket, like Locke & Key. There were opportunities to leverage that content to create media, TV shows, movies, etc. Then the third bucket, which is sort of adjacent to the creator-owned bucket, was the Top Shelf imprint, which also had a lot of creator-owned content. It's just a slightly different flavour than IDW. Top Shelf is more literary graphic novels while IDW traditionally primarily released its titles through issues and then through trades."

Hey, Chris Staros, Top Shelf Comics is IDW's third content bucket. I hope you are proud. But there is more. "We're continuing to do all three of those buckets. We're just being more selective in that middle bucket of IDW Originals. There was a pretty robust catalogue of titles, and it was substantially costly. We're continuing to pursue some of those, but we did have to cut back on a lot of titles… Some of those moved over to Top Shelf."

"The other thing that we noticed about IDW Originals is that they were pretty fragmented in terms of what you would be able to expect from an IDW Original. One month, you might pick up a horror title from Scott Snyder, and then the next month might be a kid's title, you know, about cooking with monsters. It's hard to tell what's the through-line of reading an IDW Original. So we've decided to move away from IDW Originals as an overarching umbrella and move into what we're calling IDW Imprints. Imprints will be much more targeted and specified. IDW Dark is the first of our IDW imprints that's focused on horror. Titles like Beneath the Trees Where Nobody Sees, 30 Days of Night, and others that we'll announce in the future, as well as licensed titles that fit into that genre. Scream, Sorry, Smile, A Quiet Place, Twilight Zone, Sleepy Hollow, Event Horizon, and others."

"Then there are our other IDW imprints that we'll be announcing in the coming months." So IDW Dark is the first of many such imprints? How about IDW Robot Western? IDW Takei? IDW Cooking With Monsters? I'd be down for that. Either way, their local show, a little thing called San Diego Comic-Con, feels like a good place to launch news about new IDW imprints, right?

IDW's original work-for-hire comics

But there is more news. And it's back to the buckets. "The other thing we're doing is we're creating a fourth bucket. So we have our licensed, we have our creator-owned IDW, we have our creator-owned Top Shelf, and then the fourth bucket that we have, which we're creating now, is our company-owned content. IDW is going to be generating content internally that we are going to own and control completely."

Which is a major shift from IDW's origins, as former WildStorm employees with ambition, which began with creator-participant work, and never going down the full Work For Hire route for original content, only for licensed projects from Transformers to Doctor Who to Star Trek to My Little Pony and Sonic The Hedgehog. This is something new, and I feel a yacht-competing quote coming, if the buckets line doesn't beat it. They say that "we'll be making sure that there's remuneration for the creative partners that we work with on it. But it's not like a creator-owned project where the underlying IP is owned by the creator. Rather, it can be owned by the company, and the people that participate in the creation will have the ability to participate in the upside. That would be, to me, a fundamental shift for IDW. That's where I believe a lot of our value lies in the future." Okay, time for that quote: "We want to own our own Mickey Mouse". Or a superhero universe. Maybe both.

It's that easy, is it? "When I say that, is the likelihood of success very high or guaranteed? No." No, he's right, it isn't."I mean, that's the content game. We have to try to find our audience. We need to create exciting and compelling stories, characters, and universes. But the upside potential is tremendous, and we believe we'll be able to mitigate the risk and manage the cost…. so we are continuing with Originals, we're just turning it into imprints and diversifying into company-owned content." Buckets of it, apparently… and before you knew it, the call had ended. I should really have asked about their logo. Maybe next time.

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