EXCLUSIVE: Marvel clarifies pricing changes, lowers price on Hulk

[In recent weeks there’s been much discussion of comics pricing, and both Marvel and DC have made changes to their pricing levels in order to face the realities of the current economic climate. While DC has announced an across the board roll-back of prices from $3.99 to $2.99, Marvel’s policy announcements have been somewhat less clear. At the ICV2 conference last month Sr. Vice President Sales & Circulation David Gabriel announced a rollback on selected titles, but no details. In addition at a retailer meeting, Marvel announced that they would be putting out fewer titles. An interview earlier this week with VP-executive editor Tom Brevoort made it clear that the rollback was limited but left details to Gabriel.

In order to clear up what Marvel’s policies are in regards to pricing, Gabriel and Chief Operating Officer Jim “Ski” Sokolowski sat down for an interview, discussing some of the business realities of publishing, the growth of digital and how to reach new readers as older ones cycle out.]

THE BEAT: Just to give this some background, at the ICv2 digital conference and Diamond retailer breakfast you made some statements about pricing changes at Marvel and there has been controversy about just what that announcement entailed. So can you explain the details of the price rollback?

DAVID GABRIEL: The pricing structure is that for limited series in the Marvel Universe that we roll out, we will price as many of those as we can for $2.99 for a 32 page book.

THE BEAT: What would be the factors that would affect whether they can be priced at the lower price?

GABRIEL: If someone has 30 pages they want to put into those stories or [special issues], especially a one-shot, those will be at $3.99 as they have been. If there is back up material, the book will be at the higher price. If a series is already is in the works, again, we never made any announcement that we were lowering prices on series that were out already. If the first issue has been solicited at $3.99, the second issue will be at $3.99. There’s not a strict policy thing that we’re lowering everything to $2.99 but there will be pricing structures that will help everyone stay profitable.

THE BEAT: So with a marquee title like a Spider-man or Avengers, it would be at the higher price point so everyone can make as much money as possible, if the sales warrant it.

GABRIEL: Yes, and where we did listen to retailers and the industry months back, most people will agree that that is an okay pricing strategy. I’ve never heard anybody argue about that. Where I have heard them argue is that if we have too many titles coming out at that price, some of the bottom titles that aren’t marquee titles are going to get dropped. Some of the other titles that we want people to sample, that aren’t necessarily the marquee titles, are still going to get stomped on a bit. The titles that people aren’t testing or trying them out. They are the first ones people won’t pick up, if they are a non-marquee title, at $3.99 and we definitely recognize that we need to fix something on those books. Bringing back $2.99 for limited series, that’s where we started that program.

This is for limited series in the Marvel Universe. We’ve got limited series that are third party licensed books, they will stay at $3.99 and the Ultimate line is still our marquee line—it’s staying where it is. There may be a few limited series that will still get extra pages or have back-up features—I know there’s one coming in March that will be $4.99 but it will be 44 to 48 new pages of story, with two stories in each issue. So we are testing that as well.

However, when the February catalog comes out, there will be a reduction in the price on the Incredible Hulk book. It will still be 32 pages, with 22 pages of story for $2.99. We had it at $3.99 throughout the event that was going on, and a lot of people were getting into the Hulk stuff but the price was becoming sort of a barrier to them staying with it. The back-up features weren’t doing enough to propel enough sales on that or to keep them going. I actually had retailers begging me on that title to reduce the price…but only on that series. We did some math and figured some things out and moved some things around and that’ll be in the February catalog.

THE BEAT: At the same time you are lowering the number of book you are publishing. What is the thinking behind that?

GABRIEL: Again, that was a response mostly to retailers saying there is just too much product out there. There is someone who said that to Ski the next morning [after the retailer breakfast], screaming at him. We took a look at the overall schedule and there were a few too many books out there and we started making cuts. You started seeing them in November and December. Some titles are going away, some are altering to help sales a bit. But the thing you don’t see is stuff that was scheduled that we’ve taken out and pushed out towards the end of the year or just killed altogether. And I didn’t went to do that. It takes money out a lot of our creators pockets, they are the guys who get dinged…it’s very hard for me to cancel my friend Jim McCann’s book. But that’s sort of the reality. We had to look at the books that are doing the best and those aren’t necessarily the books that are reviewed the best.

THE BEAT: Let me take you back a bit to ask about the general market for sales. We’ve seen a lot of online pundits like John Jackson Miller taking about the trends, but you guys obviously see the accurate figures. What are the trends that you’re seeing that make you more concerned about the size and pricing of your line? There have been a lot dire warnings and dire interpretations out there.

GABRIEL: It’s just going back to what we had already said. With the lower tier books and the ancillary titles we all loved doing, once we started seeing those numbers dropping, that’s when we knew there was something going on. The X-men are doing well. The Avengers are doing well. The Spider-Man books. All the stuff you expect to do well is still doing well. But it’s all the stuff that everybody has soft spots for the Hawkeyes, and the Atlas and the Pet Avengers, a lot of those ancillary titles just didn’t make it in the market.

THE BEAT: Marvel has always been seen as a little more harsh—your cancellation number is a bit higher than other publishers. Even if these are fan favorites books. So is there still a way to grow a different audience for these books?

JIM SOKOLOWSKI: The Sense and Sensibilities, the Oz books, The Marvel Illustrated projects, we’re staying by those. We understand we have to try some different things all the time to test the market but you reach a point when you’re just not getting any traction. A year ago forecasting numbers was pretty straightforward, and issue 1 hits x, issue 2 hits % of x and down, sometimes up….over the year that structure has changed. We’ve had to stay on top of that change and David has a good track record on that basis.

THE BEAT: Another element everyone has been very curious about is digital. David, you mentioned this and some of Tom Brevoort’s comment suggested that Digital was allowing a new revenue stream that was making it possible to make up for some of this lost revenue. Can you talk about digital comics and how they are affecting this?

GABRIEL: You basically said it right there. It’s a revenue stream that we didn’t have 8 or 9 months ago. We are doing day and date books and we haven’t really done a lot of them. We are testing the water. Today, we had a little glitch — a new day and date book that went up and then went down. [Ultimate Thor #2 briefly was on sale a week early yesterday.] But there is revenue now that we’re able to tie that in to the economics of some of the regular printed copies. I think I said this at the digital meeting we are all at the beginnings of figuring out digital comics. I’m not going to lie to you and say we have all the facts. If we don’t have all the facts, they are probably not out there yet. I say that only because we have been doing this for at least three years with a digital subscription online. We’ve been doing the app stuff for quite a while now too, since April or May. But it’s all going in a positive direction and it’s all helping. It was probably a month before the digital conference that we started looking at the pricing. And we are up in digital sales and we started to think how can we use that to our advantage in the print sales.

SOKOLOWSKI: Everybody like to think that these books on the internet, well the digital stuff is free, so we should have a lot more so we can lower our price on print comics to practically nothing because that’s all sheer profit. And yes we don’t have paper, printing and binding costs. But yes there are costs—we have a division that runs digital media. We have to take and convert the files to what we call “smart paneling” so it will work on various devices and none of them do it the same way, so you have to do it four times. So it has a cost.

GABRIEL: And the creators are getting paid for digital comics as well.

THE BEAT: You say it’s trending upwards in general?

GABRIEL: Certain titles are working really well in the app. It’s a lot of the titles that you think. The ones that are selling well in comics shops are also the ones that are doing well in digital. But that’s not always the case.

SOKOLOWSKI: There are ones that come out of the blue, and you say how did THAT happen?

GABRIEL: I don’t want to give away the secrets of the top sellers. We’re still struggling and learning how to market and promote it. And I think we’ll get there pretty soon.

SOKOLOWSKI: And there are tools that we need in the app. That’s development time. We’ll say yes, that’s on our list to add. But should we do this first or that first? And yeah, do the other things first. You get into a constant waiting game of “wouldn’t it be cool to see that?”

THE BEAT: It seems to me a lot of what your talking about is keeping the comics shops going in what’s a very difficult environment for retail and the economy in general. My own observation is that everybody blames event fatigue. But I think we have some reader fatigue, as well. I think a lot of the readers who came in with the Ultimate line ten years ago are naturally trending out or getting to the “I’m bored” phase. Are you concerned with this? Are there any specific method to get a new generation?

GABRIEL: You know, it’s funny. We’ve been, especially with Dan [Buckley, Marvel’s publisher] here the past seven years and now with Ski, there’s been so much work done to get new readers in starting three or four years ago with the Dark Tower book, that bought thousands of new readers into stores across the country. With the Anita Blake series. With the Oz series. The Ender’s Game books, bringing Halo in. Every time we turn around, every three months or so, we have a new series that we’re working on that’s geared to bring in an outside mainstream audience. Civil War did that, the Death of Captain America did that, the unmasking of Spider-Man did that. We have some more stuff coming up that’s sort of aimed in that same direction. Sometimes it seems like it’s easier to bring the readers or customers in, than to keep them in the stores. Retailers do a great job of this at Free Comic Book Day, but it is only once a year. I agree with you, those Ultimate readers are slowly fading away and we need to get the new generation in.

So we’re keeping on with the Marvel Adventures books. We’ve found the semi-successful way to put out all-ages titles that didn’t die right on the vine and that’s worked fairly successfully for 2 or 3 years now. And those books get repurposed in every way imaginable going into libraries, Wal-Marts and Scholastic book fairs and everything that we can there. It’s still difficult. We’ve got the greatest marketing machine behind us with the movies, the Iron Man movie with Thor and Captain America. But I think where everybody still falls short is converting those movie goers into comics readers. And we’ve got some stuff cooked up with Thor coming out that we’ll hopefully be able to finally test the waters on how you get movie goers as readers, whether it be digitally or into comics shops. That’s another good way to grow the industry.

SOKOLOWSKI: We’ve been looking at digital and calling it the new newsstand. It’s really become a place where you can sample material. Between the movies and the iPAd and the app there’s this huge sampling opportunity and we have over 2 million apps downloaded. Then you start looking at how many people go back religiously and how many are hitting the free reads every week vs. how many are buying the new releases every week and if we’re running a special you’re trying figure out how to keep them interested and is this the perfect selection for them and how do you tie it all together. And then how do you get them into a store.

THE BEAT: Speaking of stores Marvel comics are now sold in Disney Stores in theme parks. I wonder how that program is going?

GABRIEL: That’s sort of also in its infancy. I would hate to call it so much of a program as it’s sort of an outreach of some newsstand and some Diamond selling in there. It hasn’t matured yet.

SOKOLOWSKI: David recently just got involved with them on product mix.

THE BEAT: [laughs] I can imagine some of the suggestions you may have made on what not to carry. [General laughter.] I know both you guys are creative publishers, not just bottom line guys although obviously it has to come into play. But you look at something like Kick-Ass —clearly the movie helped it, but it ‘s been a huge publishing success for you this year. How do you keep that door open? Would Marvel consider launching new print lines or digital lines?

GABRIEL: Well, yeah. We’re launching the new CrossGen Line, we’ll see how that does. But, that’s very different from Kick-Ass.

SOKOLOWSKI: You have to give Mark [Millar] credit for Kick-Ass and not just for conceiving it and his work with Johnny on it. The guy’s a shameless and the best self-promoter ever. This guy can get you talking about him if you don’t even know he exists.

GABRIEL: We have initiatives coming out, still a ways off, that are along the lines of what you are talking about with just digital formats to test that out. We’ll have some incentive programs with retailers with digital later on, in the not too far future.

THE BEAT: Sometimes I miss this kind of stuff, but as the Heroic Age was the theme for 2010, has a theme for 2011 been announced yet?

GABRIEL: Not yet. The Point One stuff is not a theme but it’s trying to get more readers back into the stores. But then I think about three weeks from now there will be sort of a shocking theme that you will see announced. And part of that theme will be something nobody would have thought you’d ever see from us.

THE BEAT: She’s a man, baby!

GABRIEL: We’ve done that!

[Thanks to Arune Singh at Marvel for setting up this interview.]