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Abandoning Micropayments

Rhapsody and Pressplay both tried to get people to rent music. So did the reborn Napster, Microsoft's Playsforsure partners, Musicmatch, OD2, Yahoo and even the mighty Virgin. If you've never heard of some of those, I'm not surprised. They offered music as a service. The Apple iTunes Music Store offered it as a product. Guess who won.

Subscriptions for creative content never works. Even television shows generally make more money on DVD sales these days and my local library - which is free - has less people browsing around inside than each of the three bookstores in it's vicinity.

In his comic book analysis of the market called Reinventing Comics, Scott McCloud suggested that webcomic subscriptions should be sold for "micropayments" – small amounts of money from a couple of cents to a dollar. Seven years on, Scott McCloud himself has abandoned the idea and it's clear that even this ridiculously cheap subscription market has also failed.

They always do. Music or comics, five dollars or two cents, customers simply don't want to rent creative content. Look at your bookcase, your comics, your DVD collection, your computer games, your CDs and the media on your hard drive. Would you rent any of that? Would you like it all snatched away if you stopped paying the subscription fee one month?

Meanwhile, the iTunes Store has been busy selling music, not subscriptions, for ninety nine cents apiece even while those same songs are available for free from services such as Limewire, Napster and Kazaa. It's sold over two and half billion tracks, took out all its online competition and shouldered it's way into being the third largest music retailer in the US, right in the midst of the best of the brick and mortar CD stores like Target and Walmart.

It's clear webcomics have been using the wrong market model. We don't want to sell subscriptions, we want to sell the comic.

In Reinventing Micropayments, I dissected the iTunes market model and reworked it to apply it to webcomics. We offer users the chance to buy and download larger, high quality versions of the last chapter, the last few chapters or the last year of comics. Using this idea, we would be able to sell our webcomics without losing a single reader – because, like iTunes, we can sell the comic while still keeping it online for free. As iTunes has done, we can successfully compete with the free alternative by offering ownership, convenience, value for money and a better user experience across the board. Importantly, by selling the comic instead of wallpapers and T-shirts, we'll be targeting a larger customer base. A product always outsells its own merchandise.

Two comics – Candi and The Green Avenger – generously offered to test this idea for me. Being able to set these ideas up in practice was a learning experience and taught me a lot about the issues, pitfalls and problems. This month, I'll look at the specifics of how we did it – what, in practice, makes this market model work – and, in the process, we're going to dump the dangerous trap that paralyzed the webcomics industry for the last seven years.

Micropayments themselves.

 

The Trap

The single biggest problem with Scott McCloud's webcomic market model is that the word "micropayments" is used to describe it. Micropayments are not a market model – they are a price. This price was jammed on top of an existing market model which had been operating for free and clearly can't support a price, even a "micro" one.

But by calling the market model "micropayments" people became fixated on the price as being the definition of the model, leaving them with nowhere to move. You couldn't change anything else about the market model because no one could see there was more to it than the "micropayment" price – but you could hardly change the price, either. After all, the only way was up and raising the price when it isn't working anyway clearly makes no sense at all.

Micropayments didn't just fail to help, they actually shut the industry in a dead end for seven years. With the price right there in the name, no one bothered to look beyond it. It blinded people to the rest of the market model - to those parts that really were broken and needed fixing.

Enough. Forget micropayments.

We need the right price for the right product in the right market, no matter what that price is. If it's five cents, it's five cents. If it's five dollars, it's five dollars.

Let's put together a model, then.

 

How much to sell?

Originally, I envisioned this idea as a way to sell the previous chapter while the current one was running but there are plenty of other things that can be done. For established webcomics with large archives, you should probably sell two to five chapters in a batch, both to increase the value for money and so you actually stand a chance of catching up with yourself. You could also sell the next chapter or perhaps the complete current chapter, thereby giving donators a step up on the average readers. You'd have to get a long way ahead of yourself to do this but with the right sort of gripping comic, it's an idea that should work well.

Starline X Hodge agreed to sell the first year of her comic Candi. Candi is an ongoing newspaper-like strip and typically the syndicated newapaper strips are packaged in yearly chunks, so Hodge offered up the same.. Ryuko's The Green Avenger, though, is a story comic similar to mainstream superhero comics, so it makes more sense to sell it either in issues or in story arcs. Ryuko offered up her longest story arc, called "The Alarm Bot" which was four issues.

 

Re: Abandoning Micropayments

In reverse, the number of eyeballs we can attract will have an effect on the advertiser.  Evolution goes both ways.  Can an advertiser afford to drive away its own customers -- the creators using the site --  to the many other sites coming into existence?  We can afford to readily change a business model, as long as we base it on a Naked Peacock (simple central plan, only the feathers change:  what Amazon began as, but now is becoming one of the feathers).

Re: Abandoning Micropayments

CyberLord's picture

Correct me if I'm wrong but you are saying that if an advertiser comes to you with a request for an editorial change you would not accept his money.  You also seem to imply that the advertiser would have nowhere else to go.

Remember "The Golden Rule": He who has the gold, rules!

To recap:

My original statement was intended to make sure you understood who your customers are.  No business model can succeed if it is not clear as to who the customer is.  If you are selling ad space, the advertiser is your customer.  The reader is your consumer.  The reader makes use of your content.  The advertiser pays for your content.  The advertiser puts food on your table.  The reader does not.

This business model puts the creator between two powerful entities.  You will have to balance the advertisers requirement that you attract X-eyeballs every cycle, and the needs of your readers.  If you fail your readers and they depart to greener pastures you will fail your customer, the advertiser, and he will depart for greener pastures.  You will now have an incentive to elevate your numbers.  Losing a few of your regular readers to attract larger numbers will be something to consider.  This is not a large leap because everyone already has that in mind.  It's just a slight change in emphasis, that's all.  Really, it's all the same.  :)

I don't mean to imply that advertisers will put pressure on you to change your content.  Web-comics are far too small for that, and the dollars involved are too small.  I just want to make sure you understand that once you change your customer base, your business model has already changed whether you acknowledge it or not.

 

The ultimate measure of a man is not where he stands in moments of comfort but where he stands at times of challenge and discovery. -- Martin Luther King, Jr.---------CyberLord

Re: Abandoning Micropayments

Why should the customers be paying, when there are loads of advertisers out there?  I make good enough cash on the ProjectWonderful ads at Webcomicsnation and my own website -- and Smashout Productions is doing quite well by me at Wowio.com

Think of it as the non-subscription newspaper or mag, that runs on ads.  Small now, but economies of scale will rev it all up.  It's how I get paid for articles at Associated Content.

And it's only pennies, you say?  It adds up.  Lots of eyeballs.  Turn on "Google Alerts" for your name and the names of your strips, and respond to each and every reader.  We've all got street teams -- WORK them.  Your readers are your best sales force.

Everybody pays with me -- but it's WHO pays that makes the difference.  Let's get our butts organized and drag in the advertisers like we should.

Re: Abandoning Micropayments

CyberLord's picture

Customers always pay!

You are trying to re-define customer.  As an example let's talk about a well known company, Coca-Cola.  You may think you are a customer of Coca-Cola, but you are not unless you bought your soda directly from Coca-Cola.  You are the store's customer.  The store is Coca-Cola's customer.  The store paid Cola-Cola for their product and the store then sold it to you.  You paid the store, not Coca-Cola, for the soda.   In the eyes of Coca-Cola you are a consumer.  You are important to their business but they see you for what you are.

So, by getting your money from advertisers you have shifted your business model to those who can pay for advertising.  These people will not care about your writing or drawing ability.  All they will care about is the number of eye-balls you can attract.  This will have an impact on what you produce.  All businesses have to cater to their customers.  How you define customer is very important!

The ultimate measure of a man is not where he stands in moments of comfort but where he stands at times of challenge and discovery. -- Martin Luther King, Jr.---------CyberLord

Re: Abandoning Micropayments

Ninja-bot's picture

There isn't a comic out there, mine included, that is worth paying separately for just to read it. Not saying that they aren't good enough, but we're in a market where everyone else gives it away for free, and relies on the goodwill of their regulars to make their money. I'd rather buy a shirt for $15 from a comic that I love than spend $2.99 just for the privilege of being able to read the archives. Judging from the subscriber numbers I've seen and heard, I'm not the only one.

There's gotta be a more creative way to make some side dough than to charge for the initial product. Howard's example of offering a coloring book supported through donations is, in two words, f$%king brilliant, and I'm gonna steal that idea a year or two from now.

 


 

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Re: Abandoning Micropayments

Hey Joel. Just found the article while wandering about. I appreciate the mention but wanted to point out a few things if I may...

We just started the subscription idea in April. We do not push it at all because our goal was not to sell pixel comics online but to reduce our bandwidth cost, keep the few readers we have who prefer color happy and sell full-color print versions of the comic. I apologize if I didn't mention that before.

The permanent accounts are not something that is paid for. They are gifts for people who have been with us for years, through the various versions of the series (development to text stories to comic). We do not have a 'purchase a permanent account' option. Sorry.

It was mentioned on the forum that people could pay for a month and download everything. To which I replied that I am aware it happens. Did I say it happens for us? No. I can't make that call yet because I haven't reached the end of an arc. I am not interested in selling them a completed unit. That's not my goal. I am offering access to an alternative version of the comic to placate the few people who prefer that alternate version. Now if someone wants to wait till the end of a 100 page arc to buy a subscription and download each page by themselves then that's fine. I'm sure people will try and a few may actually finish. But more will be inclined to not due to inconvenience. And when those people see that we have the color version in nice, printed issues... Well, I'd rather wait and buy a printed version than a computer version myself.

But anyway, again thanks for the mention. We're a small comic who next to no one knows about so any poke in our direction helps. If you're still interested I'll send along the stats once we finish this arc we're on. Course, that's still a number of months down the line. I just wanted to point out a bit more about our current situation and why we've done what we did. Thanks.

Re: Abandoning Micropayments

Howard Tayler's picture

By way of example...

On June 12th I enabled a donations button for the "Strohl Munitions Plasma Cannon Safety Coloring Book." It's a 22-page PDF available exclusively for contributors.

3 weeks later I'm $4000 in the black on the project. Response was, in a word, astounding.

My take on this, then, is that micropayments have never been relevant for me, but putting a price on digital content works just fine.

Great article, Joel.

Schlock Mercenary

Re: Abandoning Micropayments

Yow, and congrats! :D That's pretty impressive.

Re: Abandoning Micropayments

Joel Fagin's picture

Now that is really interesting. I'd wondered about the monetary difference between "selling" a downloadable comic and and offering it as a "donation gift". A donation gift feels nicer - it's a reciprocal gift rather than a mercenary* money making scheme - but I didn't know how much it would affect income.

But $4000 for digital merchandise is extremely impressive. Not conclusive, of course, but very suggestive. It definitly feels to me that the "gift in exchange for a donation" route would be better.

Or, you know, that Schlock is ridiculously popular. :P

I know you didn't mean it quite like that but thanks for the information. Glad you like the article, too.

- Joel Fagin

* Pun unintended and only noticed during quick proof reading!

Webcomic Tutorials

Re: Abandoning Micropayments

Neal Von Flue's picture

Great article Joe. You make some sound assumptions, and I'm sure I'm not the only who's happy to see a fresh perspective on an old problem.

Neal

ape-law.com/hypercomics

Re: Abandoning Micropayments

Greg Carter's picture

"The prices for the books vary a bit but are usually in the ballpark of thirty dollars."

Huh? Thirty American dollars? If this isn't a typo please provide examples or otherwise explain how you arrived at this figure.

 

Greg Carter Abandon

Greg Carter - Abandon: First Vampire - Online Graphic Novel

Re: Abandoning Micropayments

Joel Fagin's picture

I got the number by checking the prices of books on some of the comics I read. I'm afraid I didn't document which ones. I just had a browse around. I'm pretty sure Order of the Stick was one, though, and they do, indeed, sell their printed collected editions for $29.95.

Still, even if the comics I read aren't average in that regard, the main point is the profit per book and that came from emailed replies from various comic writers I asked.

Out of curiosity... Higher or lower in your experience?

- Joel Fagin

Webcomic Tutorials

Re: Abandoning Micropayments

Greg Carter's picture

Wow. Thirty smackers, huh? I've gotten so spoiled by manga pricing. For full-size color graphic novel collections - I usually see them in the $9-$17 range depending on the number of pages. And less for the black and white, of course. This is for the self-published collections. Generally the larger the publisher the lower the price for the same number of pages. Economy of scale and all that. I always snoop around at conventions and see what other folks are selling.

Interestingly, almost all of the webcomic collections I see are priced about the same as print-only indie GNs of the same size.

Great article, by the way. I think the popularity of digital comic distribution using the iTunes model is going to explode soon. And not just for comics already on the web.

Greg Carter Abandon UpDown Studio The WebComic Hotness

Greg Carter - Abandon: First Vampire - Online Graphic Novel

Re: Abandoning Micropayments

We sell ONE of our four books for $29.95, and it's more than a half-inch thick and in full color. It's not the average by any means; the other three retail for $13.95, $16.95, and $24.95, making the average price around $21.

And since you didn't ask ME what my profit per book was, I don't know that using my book as the benchmark for pricing is entirely meaningful. Apples and oranges.

Re: Abandoning Micropayments

Joel Fagin's picture

I did ask, I'm afraid, although it was way back in February. You were the first I tried along with Gunnerkrigg Court (being my two favourite comics).

And I did check more comics than just yours. The average came out skewed, presuambly because I have expensive tastes. :P

- Joel Fagin

Webcomic Tutorials

Re: Abandoning Micropayments

OK, fair enough. My junk mail must have eaten it, I apologize for assuming that you hadn't asked.

Re: Abandoning Micropayments

The collections I know about are generally around half of that price. The ones from Plan Nine are nearly all $13-14, and the recent Lulu-published collections of Newshounds and Ozy and Millie are around $14-16.

Re: Abandoning Micropayments

Joel Fagin's picture

Thanks. I'll change it for when the article gets transfered to my own site.

- Joel Fagin

Re: Abandoning Micropayments

Derik Badman's picture

I'm curious how the artists got the files to the customer after receiving the payment? Did hey email the file? Password protected download site? 

 

Derik A Badman 

Things Change: http://madinkbeard.com/comics

Blog: http://madinkbeard.com/blog

Re: Abandoning Micropayments

Joel Fagin's picture

I believe it was an insercure download hosted on Keenspot in this case, with the download URL emailed to the people who paid. However, I asked Kisai - the admin at Comic Genesis - about this on behalf of Ryuko and she cobbled a secure, password protected download in about a minute flat. Apparently anyone on CG can do it themselves if they know what they're doing. Alas, I don't. My computing expertise is mostly in hardware and graphics programming, not networking.

Kisai also gave us permission to host the file on CG but it was a trial. I'm not sure if they'd like the servers weighed down with downloads from lots of comics.

They're not brilliant but there are also Rapidshare, Yousendit and the others of that ilk. Plus there are lots of javascripts that'll password protect a webpage.

- Joel Fagin

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