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Overthought Bubble #18: How Low Can You Go?

Written by Gavin D. on Tuesday, March 15 2016 and posted in Columns

Overthought Bubble #18: How Low Can You Go?

Do the Big Two lose money on "low selling" books?



Last month Newsrama ran an article about the ten titles you can save. The premise of this article was that these titles were selling too poorly for the Big Two to maintain them, and you could save them. The Outhouse already wrote an article stating that this was not your responsibility. If you aren't interested in the title, don't buy it. The Outhouse did not, however, elaborate on exactly how absurd it is that these titles should even be your concern. Nor did we address why these titles would be cancelled at all. I would like to take this week to address just that.

We need to first examine the cost of a book before we talk about a book's profitability. A couple years ago, Jim Zub shared some information on the profit one usually nets from a mainstream indie book. The results were not very comforting for comics creators, but there are some key factors here. Zub speaks about an indie book wherein only about 5,000 copies sell, there are no advertisements, and the book is priced at $2.99.

The Big Two work in a different way though. Their advertisements reduce production cost. Their larger print orders reduce the price-per-copy printed, and they still find a way to cut corners (such as poor paper quality and cheap binding).The definitive cost of a producing a book is not public knowledge. So I sought out some industry veterans and insiders to see if they had any numbers. I received estimates but then found the in depth research of Todd Allen. In his book The Economics of Digital Comics, Allen states that a major publisher would pay roughly $0.25 per book to print lower order books. Lower order Big Two books are about 11,000-20,000 copies printed. We'll give these companies the benefit of the doubt and use 10,000 copies.

To some $0.25 may seem like a reasonable rate to pay, but we need to consider the advertisements. I was able to get a hold of the media kits for the Big Two companies. These are the papers that the companies give to potential advertisers. It shares potential rates for advertising in the comic. The rates are based upon impressions (how many people see the advertisement/how many books it appears in).

Marvel Advertising RatesMarvel_Rates.PNG

DC Advertising Rates
DC_rates.PNG

In the case of these rates, M represents 1,000 impressions. Thus Marvel's rate of $44.68 CPM for Cover 4 (the back cover) is $0.04 per issue printed. So how many ads does a Marvel book have? I grabbed a random Marvel book from the new line. I don't have many so I ended up with All-New Hawkeye #4. The book had 3 ads of non-Marvel products. This totals $0.12 of advertising money per book. There were then 2 advertisements for Marvel video games, but these games were not created in house. In this case there may have been a cost for these advertisements. It may have been a reduced cost, or negotiated for no cost. It is hard to say. What we do know for sure? That price per book printed is now down to $0.13 a book. Keep in mind this does not include product placement, something which the media kit offers.

Now the price a retailer pays for a book can vary from store to store. I've spoken with retailers over the years and found that most pay 45-50 percent of the cover price (this varies based on order size). Controversial retailer Dennis Barger once broke it down, and his numbers show that a book costs around $1.60 an issue. The books in Barger's posts, however, were events, which are more expensive books. So I contacted various shops across the country and found that the lowest a book from the big two will cost is about $1.35 for a $2.99 book. This would mean that the profit for a $2.99 book from Marvel (Which I believe does not exist in Marvel's mainline) with a print order of 10,000 copies, wherein the 10,000 are sold to stores, is gross profit of $13,500.

Now let's take away expenses. Diamond Distributors will take a percentage of this as a distribution fee. That number is not public, but the shops had suggested a 5% rate is the suspected amount. This leaves us with a profit of $12,825. When removing the printing cost of $0.13 per book (10,000 books printed), the profit drops to $11,525. Then we pay creators, and for this we'll use the numbers from Alex de Campi's twitter feed and Sktchd's intensive research into the subject. Assuming this is 20 pages (and a case where the creators are fairly paid) and since we're using Marvel we find that the creative team cost $11,550. No wonder a Big Two company would cancel one of these books. That's a $25 loss!

But wait. Some things are missing that not only negate this loss, but return the book to profitability: trade paperbacks and digital comics. These are two major potential sources of income, and they can bring profit in long after the comic has been printed.

Trade paperbacks are a little difficult to figure out. In the aforementioned Todd Allen book we are told that trades can cost $6 to print one book in orders of 1,000 units. Allen found this number using the prices for 1,000 books listed on a printers website. I spoke with one company, however, and found that bulk printing can lower the price to $2 a book! The company I spoke with was producing well over 100,000 copies of their various books. With reprints of popular trades, classic arcs, and then current series, the Big Two are certainly capable of bundling their orders like this to reach this number.  If the book sells 1,000 trades upon release, a low number for a Big Two company, and the trade is priced at $15 (thus the company receiving $6.50 from retailers), the book has amassed $4,500. To find out how much is made from our one issue we would need to divide this number by the number of issues in the trade (usually five). Thus this one issue brought in $1,125 in trades upon immediate release.

Our book is now profitable. The digital sales are then extra profit. Unfortunately the Big Two don't release their digital sales number because then weirdos would sit around analyzing numbers for a third-tier comic book website when they could be getting lunch with their girlfriend...

Jim Zub has released some numbers regarding digital sales. According to Zub the digital books have roughly the same expenses per book because of the programming costs. Zub suggests that digital sales are 10-15% that of paper sales. This can vary depending on the title and its readership, but if we stay within this range, the digital platform brings in roughly $1,350-$2,000. Adding this to the previous totally we have now gained $2,450 - $3,000.

$3,000 is not a lot of money, especially when we add in editors and licensing fees. It looks like 10,000 copies is not very profitable, but here's the catch. I used numbers for paying creators that are likely higher than a creator on a 10,000 copies book would be paid. Also, I used a price point lower than most Marvel/DC books charge. But the biggest catch of them all, none of the titles on Newsrama's list sold less than 11,000 copies a month. Many of them were selling around 20,000 copies a month. These "low selling titles" of 20,000 a month still bring in over $15,000!

Why then do the Big Two cut these titles? Because the number one makes more money, and this is perhaps the most absurd portion. While this starting point brings in large sales, it consistently drops at issue #2, and that drop is only growing. As Image Comic's Eric Stephenson said, "So we've gone back to gimmicks, to variant covers and relaunches and reboots and more of the same old stunts disguised as events, when really all our readers want are good stories. We're giving them great jumping on points over and over again, but it's becoming so commonplace our audience instead sees them as opportunities to cut and run. We are misinterpreting sales spikes for long-term success, and worst of all, we are spending so much time looking at how to keep going that we've lost sight of where we were heading in the first place."

Not that sales should matter. All these companies tell us is that they want to make the best stories, not make giant profit margins for corporate share holders. So next time your favorite Marvel series gets cancelled due to "low sales" send Mr. Brevoort a tumblr question and ask him to spare some of that cash stuffed in his money chair to keep the book going. If your favorite title is a DC title, well it probably was cancelled for a reboot, not low sales.

Disclaimer: We're not not experts on the subject by any stretch of the imagination, so these numbers may be inaccurate. If you have better numbers, feel free to correct us. Corporate culture is complex, and costs don't follow averages. So we're working with the information we could round up.

Special thanks to Gabe Yocum, Jude Terror, David Gallaher, J.A. Micheline, and others for their assistance in this piece. We'd also like to thank Hick Nanover for his help on this, but he called us a garbage island and vowed to set us on fire if we directly connected ourselves to him... So we misspelled his name.

*Numbers I used for calculating creator pay is as follows:
Script: $90 per page
Lines: $300 per page
Colors: $130 per page
Letters: $25 per page
Cover: $650

Numbers last updated 3/28/2016





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About the Author - Gavin D.


Gavin Dillinger exists in a constant state of restlessness as he runs between two jobs and spends every spare moment writing articles or scripts. He has also perfected the art of being simultaneously dead tired and jacked on coffee, and is the best-selling author of When is the Right Age to Tell Your Highway It's Adopted. Gavin graduated Cum Laude from MTSU and should probably get a real job. You can follow him on Twitter or see a random thought on tumblr once every three five months.


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