For the past couple of months, Bleeding Cool has been running the reactions of Comixology Submit creators to the Amazon purchase of the company, which have been generally quite optimistic, pondering a few implications that might arise. You can find those here and here. This week, we have Patrick Gerard as a guest, whose knowledge of business leads him to address the improved profit margin resulting from leaving Apple behind, resulting in the ability to lower the cost of comics and promote sales.
Patrick Gerard writes:
First of all, a bit of background on myself. I'm the writer/publisher of the book Ungrounded, a Kickstarter financed book which features covers by Dennis Culver (Edison Rex) and Art Thibert (Flash, X-Men, Futures End, etc.). Our distribution channel for the book is ComiXology Submit.
When I started getting requests from ComiXology to opt into marketing plans that involved periodic giveaways and discounts, I wondered if they were being integrated into Amazon because the basic strategy was the same approach used by Kindle self-publishing titles. There was never really any shock or disbelief for me and although the timetable of the changes to their app caught me off guard, I expected them to pull support for in-app purchases.
As a businessman, I can see where a scenario with both ComiXology and Apple taking a cut of app purchases isn't good for creators. It's not good for ComiXology either. They may be a high revenue app but the services and formatting they provide for their guided view experience must amount to a very large amount of labor. I understand that Apple sees themselves as a premiere storefront for products but I'm not even sure ComiXology was turning a profit because the work they do formatting and enhancing the comic book reading experience for mobile devices has to be time consuming. Pulling in a lot of money means nothing if it all goes out the door on R&D and book formatting for the reader.
I think Apple's 30% cut is a bit excessive. It would be fine with cheaply produced products or products with a one time production fee but it seems terribly unfriendly to digital first comics. It forces publishers to drive their prices up. I don't mind Apple taking a cut on my iBooks edition because I get the remainder. But there are simply too many ways the money has to be spread on a ComiXology in-app purchase.
In fact, I wanted to offer my book for less all along. I was able to engineer a price reduction in the physical edition of Ungrounded a few months ago. The great irony being, Amazon stopped ordering the softcover edition once I squeezed the price margins too low, selling it to retailers at a short discount to get by with a lower cover price of $6.99 for a 56 page book..(Barnes & Noble does carry the physical book.)
And in this case, no longer having to deal with Apple's 30% cut allows me to lower the price of the book from $2.99 to $1.99. My royalty doesn't drop at all. ComiXology's cut doesn't drop. Removing Apple from the equation means that YOU can save $1. As soon as ComiXology dropped Apple's in-app purchases, I saw this as a chance not to collect a higher royalty but to get my work in more hands, to pass on savings to my customers.
I think if you want comics to be widely available and truly affordable, you have to really question the idea of a hardware manufacturer charging rent for access to their devices. I like Apple products. I have an iPhone. I have an iPad. If you need to buy my book inside an app, it's on the iBookstore. But I don't think ComiXology sales fueling Apple makes sense. It's too many middlemen. The ComiXology reading experience is worth a little hassle.
As I say, the end of in-app purchasing has allowed me to lower the price of Ungrounded by a full dollar. I think that's incredible and that this can be a powerful opportunity for publishers to make digital books more affordable now that it's one middleman or the other (Amazon's ComiXology or Apple's iBooks). Two middlemen on one purchase was one too many. And that ultimately takes money out of the reader's hands.
As a side note, Ungrounded's ComiXology edition has been updated with a brand new cover by Art Thibert (most recently of Futures End) and Thomas Mason (X-Men #1 20th Anniversary edition). People who've already picked up the book should be able to update the comic through ComiXology.
Originally hailing from the coal-mining country of rural Ohio, Patrick Gerard grew up in the Appalachian mountains of Georgia and earned a degree in Theatre at Berry College. He has also studied (Folk) Storytelling at the graduate level at East Tennessee State University and Business at the University of West Georgia. He has experimented with many alter-egos over the years including mild-mannered journalist, pop culture analyst, prize winning performance artist, and panel participant at the American Folklore Society's annual conference.