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Tuesday, January 18, 2011

Marvel Comics Shows How Not To Price E-Books

Digital comic pricing? It feels about like that.
Digital comics are priced in a wide variety of ways. You can read Marvel digital comics online, via your web browser, for $10 per month (or $5 per month if you buy a whole year at once). 6,000 issues are available to read, with more being added regularly. This is in contrast to their iPad application, where each digital comic costs you $1.99. Meanwhile, they have digital comics collections on DVD for $50 each, where you might get (say) 500 issues of Amazing Spider-Man. Yet they stopped authorizing these years ago.

New comic books cost $2.99 in a retail store (mostly), or you can get the digital version for less... if you care to wait. Some companies (like Archie Comics) are making digital comics available the same day as the print version, for $1 less. This is, of course, pissing off comic book retailers (those who still exist).

What a mess. Not even counting the clumsiness of Marvel's digital comics reader.

Some have argued that Marvel has to have a consistent price for their comics, regardless of the age of the comic. Why?

Comics that were created decades ago were also paid for long ago, and all costs written off. The costs now are for digitization and for the bandwidth necessary to get the comics to the reading device. Perhaps non-trivial, but thousands of comics have already been digitized. Bandwidth is cheaper all the time.

What's wrong with how Marvel is pricing their digital comics? I see no sign that they are trying to optimize their revenue by experimenting with pricing. They have a marvelous (pun, as always, intended) opportunity because of the vast size of their catalog to try dynamic pricing experiments to find the optimal revenue point. Bundle groups of comics at different price points; you've got so many comics you can easily do A/B comparisons. Gather lots of data on how many you sell, and find the optimum price point to maximize revenue. Apply to your entire comic library, and sit back to watch the profits roll in. And not incidentally, revive comics as an art form.

OK, there are issues to be resolved with newer comics, especially if you're trying to keep retail stores going. But $1.99 for each comic on an iPad? I really doubt that's the optimal price. Tablets are poised to become a huge market in the space of the next year, and comics are a perfect fit for the medium. Yet the companies with vast libraries of comics, most of them never seen by prospective audience, are pricing them way beyond the buyer's desire. Wouldn't someone be interested in the early days of the X-Men or Spider-Man? Sure, but not at $2 for 20 pages of (let's be honest) rather lame artwork and story by today's standards. How about if you could read the first 100 issues of Spider-Man for $10? You'd probably jump at the chance if you're at all interested in the character, because that's a lot of content for the money. And not a lot of money to risk. Sure, it's not the $200 Marvel could have made... but how many people are they really going to make that from? Maybe 100 people? And how many would buy that for $10? Perhaps 10,000? The math isn't hard.

This is the same idiocy that's occurring in the music industry. Record companies have vast collections of music that was all bought and paid for decades ago. Yet they're trying to charge a uniform price for it. (OK, this one is primarily Apple's fault for enforcing a 99 cent standard... but the music business has gone along, when they weren't pushing to be able to charge even more for a track.) Is that really the optimal price? How would you know for sure without extensive price testing?

Book publishers are looking at the same issue, and stupidly making the same mistake. They're trying to price e-books near the price of physical books so they don't hurt those sales. At the same time they're trying to get everyone to believe that e-books cost nearly the same to produce as physical books, which is why they should be priced the same. Maybe the office overhead is the same... but for books created decades ago, that office overhead was long ago paid for or written off. So why should the e-book from 1963 be priced the same as the latest one? Shouldn't you be trying to find the price point that brings in the most revenue? Fortunately, authors who are reclaiming their e-rights and self-pubbing are quickly figuring out the right way to maximize their own revenue.

If Marvel could be smarter, I think they'd make a whole lot more money. And comics could be a lot more popular. If the audience was big enough, prices could drop to more reasonable levels while still paying a nice amount to artists and writers. The huge back catalog of Marvel and DC is the perfect way to revive interest in comics as a medium without spending a huge amount subsidizing new comics. Will they figure it out? I'm not hopeful they will.


  1. Any thoughts on Adamant Entertainment's experiment to price all their ebooks at $1.99?

  2. A bold experiment, and I hope it works out for them. Part of the test is to get the word out as widely as possible. I hope they'll share their results, good or bad, especially if they attach numbers. Ideally they'd run this for a while. $1.99 may be too low to maximize revenue, and maybe a blanket price isn't correct if the books have significantly different lengths or perceived value.

    At least someone's giving it a shot. The great thing about digital pricing is that it's so easy to change. If the experiment isn't working, change it back. Or change it to something else.

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