marvel-appWe should probably talk about Marvel’s decision to drop the free digital copy they’ve been bundling with their print comics.

If you go back a few years, back to when Marvel had a tier of $2.99 comics and $3.99 comics, Marvel started including a free digital redemption code with the $3.99 priced books.  Buy a print copy, get the digital edition for free.  At the time, you could look at as getting the digital copy for $1, but almost everyone I’ve ever talked to thought it was just Marvel attempting to justify that $3.99 cover price.  DC used to have a handful of titles like Justice League where you’d get a download code for an extra $1, but sources told me that those codes weren’t redeemed with high frequency and it was essentially just a variant cover, in terms of retail.

And a couple interesting things spun out of this.

First off, long time Beat readers will have seen me comment on how it’s often cheaper to buy print copies of new comics because a lot of retailers will give you a discount and there are no discounts on new digital releases.  And for that matter, Marvel may have a sale, but they’ve never had a regular price rollback after a month or two like other publishers have.  That means digital readers, depending on their local shop, had an incentive to buy a print copy… for the digital code.  A 10%-20% discount adds up if you buy enough.

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And, perhaps more interestingly, a secondary market opened up.  Did you only want the print comics and not the codes?  You could sell or trade those redemption codes online.  Here’s a piece I wrote about that for The Next Web a couple years ago, if you want to get into the mechanics.  The short version is that a lot of people were subsidizing their comics habit by selling or trading those codes.  Suddenly your Marvels cost $2.  If you look at the reactions to the announcements, you’ll also see a few references to some shop owners selling codes on unsold copies for $2.  Which makes sense.  Cover your cost for the code and stick it in the discount bin – the discount bin becomes profit, rather than salvage.

I’m a little surprised we’ve never heard anything about whether a comic is really mint if the sticker over the redemption code has been peeled.

So Marvel’s new scheme, apparently, is to swap out the digital copy of the individual issue for a couple “classic” issues.  Only it’s going to be 2 “classic” issues each week, so buy 4 different Marvel releases and get 4 copies of those two freebies.  We’ll see if there’s still a secondary market for those.  Now what they mean by “classic” comics is the first issue of a tpb collection.  One of the first examples they give is Civil War 2, which is absolutely hilarious in how wrong-headed that is.  Yes, give away the comic a Marvel reader is mostly likely to have purchased in the last year and that has not been well received.  Is that really the best use of resources?

Now Marvel is *saying* they’re going to do this for the retailer and those previews will sell tpbs for the retailers.  And this might be true… given a few assumptions.

  • That after the digital readers have been chased off to Amazon and Comixology, the remaining print readers will have interest in digital previews in meaningful numbers.
  • That those reading the digital previews decide to seek out a print copy of the tpb, not a digital collection, since they read the first issue in digital.
  • That the retailer they bought the print comic from has the classic tpb in stock – I don’t think that can be taken as a given assumption.

In theory, more previews – particularly of books that everyone hasn’t already bought – should sell more tpbs.  Where they get purchased and in what format is something everyone is going to have to wait and see.  It’s not a sure thing that a few extra tpb sales are going to make up for lost digital purchases for some retailers.  I’d expect the effects of this change in programs to be vary widely from shop to shop.  This may not have a noticeable effect at every shop.

What Marvel isn’t saying is perhaps a bit more interesting and this is where there’s potentially a little gambling going on:  this move breaks up those secondary exchanges.  The people buying discounts codes have three options:

  • They can go to a retailer and buy print for full price or the shop’s discount.
  • They can buy digital from Marvel/Amazon/Comixology for full price.
  • They can say “forget paying for single issues” and either start pirating or drop the habit entirely.

Retailers should be hoping they see some new customers.  Marvel’s probably rooting for more digital sales.

Here’s the thing about digital.  Marvel almost certainly makes more off a digital sale than they do a print sale.  Diamond discounts go to 55% and sometimes higher with promotions BEFORE Diamond takes a cut.  You walk in off the street and Comixology will give you a 50-50 split.  Marvel’s exclusive so they almost certainly have a better deal.  Perhaps 70% of list price or higher.  And no printing costs.  Yes, digital is Marvel’s friend.

So even if all they do is nudge the digital readers away from buying print for discounts, they’re likely to see an incremental bump in revenue.  It would take a lot of people dropping a lot of books for them to take a loss on this, although it’s not impossible – remember, some people were doubling their comics budget selling those codes, so if they had a strict budget, they’re going to be buying half as much.

So, in theory, this could stabilize your revenue/profits during a sales slump.

There’s actually quite a bit going on with this announcement.  Whether it helps or hurts the retailers remains to be seen, but everyone who’s howling has a reason to howl.

The thing we do know is we’re going to start getting an idea how many people were buying print for digital and this might be the rare instance where customers DO tell their retailer they’re leaving to read on their tablet.  This is a much more interesting thing than it appears at first glance.  Oh, sure – you have a handful of titles known to sell proportionally higher in digital (Ms. Marvel being the poster child for this phenomenon), but the rule of thumb is said to be 10-15% in digital sales.  But I’ve never heard any kind of a number associated with those download codes.  It’s not clear anyone on the retail side of things is going to know with much precision how this will shake out until their customers complain or they notice a sales drop-off.

Want to learn more about how comics publishing and digital comics work?  Try Todd’s book, Economics of Digital Comics or try some fiction.

24 COMMENTS

  1. I’m very happy that publishers get more money from me buying digitally, since it lets me read all my weekly comics without adverts breaking up the story.

  2. Here’s a questions to ask Marvel:
    How many people buy a digital comic?
    How many people download the redemption code?
    .
    And… how many people buy the comic, download the digital file, and toss the paper copy a year later when space becomes an issue?

  3. Fourth option: Stop buying print individual comics and wait for a sale on Comixology or as Dave Carter said, get the trade paperback at a discount from an online retailer.

    I’m really sad about this. I started buying individual issues again from my local comic shop a few years ago when I found out about the free digital copy. Without this incentive, I need to weigh whether I really want to purchase a physical copy since I buy digital for every other comic except Marvel.

  4. I already have a Marvel Unlimited subscription which gives me access to 6+ month old comics for just $69/year. I was buying print+bonus digital edition combo from the local comic shop every Wednesday to read/sample comics not yet available on Marvel Unlimited resulting in additional revenue for both Marvel and the LCS to the tune of ~$70/month. Without the digital edition, the print copy becomes far less attractive at the $3.99 price point particularly when I can just wait 6 months to read on Marvel Unlimited.

    DRM makes me leery of buying digital at the full $3.99-4.99 price point so I will not buy digital unless there’s a $1-2 sale (assuming the comic isn’t available yet on Marvel Unlimited).

    In my case, all this results in is less revenue for both Marvel and the LCS from me. I’m sure Marvel’s doing this to curb gray market sale of digital codes but I highly doubt retailer welfare factored in to their decision as per their “spin”.

  5. What’s wrong with a secondary market for digital codes? The initial floppy sale still happened, making Marvel and the LCS some money. Then, just as with selling a back issue floppy, the consumer or retailer could find a market for their physical our digital copy. PLUS, Marvel benefited by getting new readers of their material. I’ve always sold (usually at a loss) or donated most of my floppy issue collection every few months, and the digital copy of Marvel issues has always been a nice perk. Now I’m much less likely to invest the 3.99 initial purchase price, knowing there is little residual value since I’ll probably dump the physical copy. It’s now more of a benefit for me to wait for celebrated runs in trade paperback format from Marvel.

  6. I currently have print subscriptions to 67 Marvel titles. Last night I cancelled them all due the codes being removed. That leaves me with just my LCS pull-list of Ms. Marvel, Hawkeye, and the Star Wars books. I hope it was worth it.

  7. I cancelled all of my Marvel titles due to this (20). I utilized every code, for my consumption, as this kept my new comics in pristine condition. No worries. As I mentioned in another thread I was looking for a reason to take a break from my addiction. Mid 90’s flashback… I also dropped D.C. when they started double shipping my favorite titles. Marvel Unlimited and Hoopla will satisfy my new book jones for the time being. With this decision I have more cash for bronze and silver age titles.

  8. I would be annoyed to buy a comic in mint and find the digital choice gone, but thinking about it, I never look.

  9. I never ever used those codes. For me, they just never made any sense.
    For almost $4 a month, you can read almost all the Marvel catalog, and everything that’s news only 6 months after their release. So why would someone bother to dig out every issue to search for each code individually to reread something he purchased months ago, when only by paying $4 a month, I
    he could have it whenever he wants, whithout bothering about the codes?

    Do you know the pourcentage of buyers using the codes? Frankly, you would ask me, I would have said out of the blue something like 2-3%.

  10. Especially when you think that, when you dig out the code, you actually have the print copy in your hands, so why bother to go on the computer, the website, enter the code, brwose, when you can do it way quicker by reading the copy you actually have in your hands?

  11. @Xavier
    Yes, customers who redeem digital codes probably only comprise something like 1-5% of print buyers. However, Marvel’s already doing a free 10% overship this month and when they’re hurting for sales, probably kinda stupid to alienate the customers they already do have even if it’s just 1-5%. Quite likely, customers who didn’t care about the digital codes before probably aren’t going to care about the bonus content, either.

    Honestly, it’s really not so much the lack of digital copy that irks me, rather, it’s the absolute BS that they’re doing it for the good of their customers and retail partners when it’s really all about Marvel putting more money in their pockets.

  12. What’s wrong with a secondary market for digital codes? The initial floppy sale still happened, making Marvel and the LCS some money.

    It all depends on how Marvel is looking at that pool of money.

    The print comic is a $3.99 purchase price. Markup along the chain means that Marvel might be making a dollar off of it, maybe less, with the rest going to the distributor, the retailer, and shipping costs.

    The digital comic is a $3.99 purchase price. Currently it looks like Marvel is partnering with Comixology to do their digital sales (as opposed to Marvel Unlimited – I don’t know if they run that in house or have a partner for that). So maybe Marvel has a 50/50 split with them. Todd in the article above speculates that Marvel could have as much as a 70/30 split with them. A 50/50 split means that they’re getting $2 for each purchase. A 70/30 split would be almost $3 per purchase, so somewhere between $2 and $2.75 per purchase is a reasonable cut for Marvel.

    Let’s go for the low end and look at the cold hard numbers. Marvel is giving away a product that they could make a $2 profit on. And Marvel is giving this product away to make maybe $1 in sales. If the market for digital sales is decent enough that you think you can convert a number of those $1 profit physical sales into $2 profit digital sales then the cold hard numbers suggest that maybe you should do that conversion. It only gets more extreme if Marvel is actually making more per sale with their partnership with Comixology.

    Now you can make arguments about how the marginal costs aren’t so high for digital sales and that that some of those sales are “fictitious” to an extent because not all of the voucher “sales’ are going to translate to digital sales and so on. And that’s right – it’s a risk. But it’s obvious why Marvel sees the opportunity here – every sale they shift from physical to digital is an extra dollar or more in their pockets in profit.

    Marvel is not really a friend to the local retailers – they’re a friend as long as they think they need them. And I suspect that the giant flop of Civil War II has pushed Marvel into thinking that the time might be right to make a digital push to increase dollar share even if its at the expense of those retailers. We’ll see. I’ve long suspect that we’ll know when Marvel thinks it can torpedo the retailers and make a go of it on its own when they decide to cut the costs of their digital day-and-date releases to below the cover price on print costs. If they do that they’ll be making a serious push for a print-to-digital conversion of their readership and no longer think that the retailers are helping their business.

  13. @Xavier
    As for having print copy on hand, I redeem the codes on my tablet or smartphone every Wednesday afternoon immediately after getting home from the comic shop. Very easy to do, no need to go on a computer. I just do it on the couch. I’d read the DC floppies first since those don’t have digital copies. Sometimes, I’d read the Marvel floppies if I still have enough free time Wednesday but more often than not, it just gets stored in the long box and I just read on the tablet at my leisure (commuting, break time at work, while waiting for appointments, etc).

    Buying print copies of Marvel comics is a minor luxury given if I wait 6 months, I can read it on Marvel Unlimited for cheaper. However, it was something I was willing to do to support the LCS, get a subscription discount and get my comics quicker. Without the digital copy incentive, harder to justify Marvel’s prices for titles I don’t love.

  14. Xavier, the appeal of the codes to some of us readers was that you could enter the code after reading the physical copy and get FREE access to the digital copy anytime in the future. And since floppy issues can be purchased at discount, it was a way to buy the digital issue for less than cover price AND still support a local comic shop. This change takes away the financial incentive of buying a paper copy at all, and I’m not sure the 3.99 price tag per book is worth it without any added value.

  15. I have two tiers of Marvel books I read: Mostly the X-books that I want to read immediately and like to collect, and a giant pile that I’ll leave till I can pick them up in digital 99c sales. The codes kept this manageable because I still got everything I’ve got together in digital. It’s also much easier to look up an old issue in my digital collection than in my longboxes.

    Now Marvel is taking that away, and I’m thinking about shifting more to discounted digital. I have a little while to decide–with the ResurrXion relaunches, my entire Marvel pull is changing anyway. Could be a good cut-off point.

  16. This really upsets me because what I did to save both money and space is a little over a year ago, I started subscribing to print issues directly through Marvel. I would get the print issues for 40-44% off cover price, use the digital code and bam- I had my book for around $2 an issue and I could do whatever I wanted with the physical copy (the intention was to donate them). I wasn’t sure I’d like reading digital at first, but now I love it and I rarely read in print anymore.

    But with this change, I may have to cancel most (if not all) of my subscriptions.

    I use the Marvel Unlimited app as well. Which works out great, with the exception of the big crossover events they have (if you want to avoid spoilers). But I’m usually behind on everything anyway, so it works for me. I may just make the full switch to the MU app and be done with print and even regular digital.

    I just can’t justify paying $3.99 or more (basically the same for a print issue) for just a digital issue. They need to make a discount. I’ll wait for the 99 cent sales through Comixology if I really want to own something.

  17. Hey guys,
    I agree with everyone who is about to drop their Marvel titles for the lack of digital incentive. I mostly only bought tles that came with a digital code, and stayed away from titles that didn’t. I live in NYC and I have a ridiculously huge amount of my tiny apartment space that has been dedicated to the actual storage of comic books, and with the free digital copy, I didn’t have to worry about cataloguing and filing them.
    In fact I got pissed at Marvel, when their system rejected a few years of codes, and it looks like my online collection is incomplete even though I own the physical copy.
    The physical copies I took to school, and let my students read and got them into comics, and so they went to the store and bought their own, and I’m sure most of them didn’t bother redeeming the code, but I most certainly did. I love reading physical comics, and I grimace overtime that I pick up a DC book, because ultimately I know it will just join the huge stacks eventually that I can no longer afford to maintain. And that have no real market value or were worst stories than I thought. I went to my local comic shop faithfully every week because of the discount I got for buying many books, and I found myself spending 30-40 bucks a week, sometimes up to $50 bucks, and being satisfied. Without the free digital offer, I’m dropping all the Marvel books. I have no interest in ceding any more storage space, and spending money on something that is either hit or miss..
    So peace out Marvel. Maybe I’ll buy digital trades when they are released on discount. But most likely I won’t since I haven’t done that yet.
    I needed an incentive to change my Wednesday routines, and this is it.

  18. I don’t buy many Marvel titles. Mostly because Marvel cancels the really stellar cool titles and keeps pumping up absolute crap like the All-New Bendis X-men or Bendis Vengers.. or the Guardians of Bendis Earth that somehow represents the entire Galaxy.

    But this is really shitty. I used to use my free digital code as a gift to friends to get them to read cool fun titles that they wouldn’t normally buy or for various reasons couldn’t afford at the time. I still had my floppy. they got the digital.

    Now? It’s essentially Marvel charging me extra money so they can advertise to me and tell me what comic I should want to read.. even if I want nothing to do with it. Let’s be clear.. the “free code” was never free. Now Marvel has decided since people are locked in to paying that price.. that they’ll use the code to try to sell me gimmicky garbage that I didn’t want to buy or read to begin with. Yeah.. that’s super slimey to me. I love that they get to TELL me what I want too. It’d be different if I could pick a comic to try.. but nope.. I HAVE to get the random issues of their twice yearly barely readable crossover event!

  19. Guess venom madness will be my last event, having a digital copy of my purchases really did mean allot. Being able to reference my books without opening them up, and being able to let people read them on my tablet risk free was everything, Sad really I was starting to get really into it. Also I get five comics at the store and end up with a total of three digital comics I did not want. Seems poorly thought through from a consumer point of view.

  20. Agreed with everyone above. Marvel had me buying 50$ a week worth of floppies, but I think I’ll have to drop them now without the digital codes for the books I bought. Reading on a tablet is so convenient for work and travel, and let’s you keep the books in mint condition. I just upgraded to a ten inch tablet almost exclusively for reading comics, so ilthis timing is extra annoying. Itll suck to have to tell my friends who run my LCBS that I’ve been forced to switch to exclusively digital. Marvel unlimited subscription, here I come. Hope they find a way to keep new books going when everyone drops their monthly spending from triple digits to 8.99 or whatever the unlimited cost is. I was under the impression that they used weekly floppy sales as a gauge to decide which titles should continue and which should be re-started under new teams or cancelled altogether. When no ones in the stores, and resign to wait 6 months to read new books, who will be deciding that? Grey haired business men who’ve never read anything on the shelf, who think of Marvels properties as nothing but a commodity to capitalize off of. The three codes they gave us were obviously chosen by these executive types already, obvious choices to push the real money makers; the new wolverine movie, the character they need us to know more about before her cinematic debut, and their most recent bulbous crossover event of the summer that everyone has either already read or decided to avoid.

    They could at least have the dignity to have replaced the code for the book we bought with a couple of classic era codes that are different in each book you buy weekly, that maybe relate to the title you bought in some way (origins, first meetings, titles by the same author/artist, events referenced in the book). But that would have required them to have hired at least a few knowledgeable comic nerds to recommend which titles to include with each book. Guess it’s easier to just let the marketing board pick three a week and call it a day, that way no one in the corporate office has to be bothered with actually engaging in comic culture.

    Eventually Disney will make sure they’ll only be making movies.

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