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Author Topic: How Diamond Plans to Offer Digital Comics Over-the-Counter  (Read 1788 times)
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« on: February 13, 2011, 10:40:00 AM »

Diamond Comic Distributors, the largest distributor of print comics to retail stores in America, has officially thrown its hat into the digital comics arena.

And for Diamond, all the digital sales will be offered by physical comic book shops.

Dave Bowen, Diamond's director of digital distribution, realizes it sounds odd to sell digital content in a brick-and-mortar store, but he's striving to make sure the program offers additive content to the print-buying experience.

"The launching puzzle we're trying to solve here is, why would someone buy a digital comic in a print comic shop?" Bowen said. "There are two answers: One, it's the first place you can get it, which is an answer, but two, it's different in some matter or it's an add-on to your print comic."

Diamond is presenting the program to retailers at this week's annual meeting in Dallas of the ComicsPRO retailing organization. The digital sales program is open to all Diamond retailers, and participating stores will receive a flat-rate cut of every digital comic they sell.

"What I can tell you is that it's generous," Bowen said of the "profit" retailers will receive. "This is not an affiliate program. It's robust. We think it will be significant enough that retailers will want to participate, in large part because they will have no up-front cost, no inventory holding cost, nothing. It's just magical, digital goods."

There will be two types of sales that comic shops can make through the Diamond/iVerse program. One is a web-based program that can be sold digitally through the retailer's website, offering all the back issues that iVerse sells. That program is similar to other retailer "affiliate" programs, such as the one recently announced by ComiXology and expected from DC Comics. Yet Bowen emphasized that, unlike those affiliate programs, Diamond will not "touch" the consumer information for store website sales.

But the other type of sale is unique to Diamond, because it's an actual over-the-counter sale of a special "code" that can be redeemed on iVerse for digital content. Most comics will be $1.99, but if a customer also buys a print version of the comic, the digital add-on version is only 99 cents.

"Because the retailer knows that the consumer has bought a print copy, we're going to allow the retailer to sell an 'up-sell' a digital version of that same comic for 99 cents, so the consumer can bag and board their comic and never read it, if they want, and read the digital version. Or have a digital version for travel or whatever they like," Bowen explained.

"We really think that, at the end of the day, even some of the large publishers who have very complex strategies regarding digital will end up seeing a tremendous value to that 'plus' version," he added.

Customers will receive a physical piece of paper with a code on it, which they can redeem on iVerse. "We have plans for handout cards which the paper could be affixed to for the consumer," Bowen said. "The handout cards will include simplified redemption instructions and other promotional material.

For retailers, the digital promotions and sales will be controlled through their existing Diamond account. "The retailer will go into a special site that we have set up," Bowen said. "Once a week, they'll print up sell sheets, header cards or whatever they need, promotionally. And then they'll also generate store-specific, item-specific, unique redemption codes. And that's the key to the process. Those codes are live, so when they get redeemed, the retailer is invoiced for a percentage of the sale. So it appears on their following week's invoice."

Bowen said there is a lot of potential for shops to sell add-on content that is exclusive or significantly attractive to an existing comic fan.

"As an example, we're kicking around this fantastic idea with Bluewater, because they have upcoming books with William Shatner and Adam West," Bowen said. "We asked, on a whim really, if they would get Shatner and West to read the comic out loud as an audio track, and then offer that as an exclusive you can only get in comic shops. And they've said they would ask. And that's the kind of thing we're hoping to have to make these digital comics special for the comic shops."

Currently, the new Diamond program for over-the-counter sales doesn't offer comics from all the publishers who are working with iVerse, but Bowen said the company is negotiating with them, including all the "major" publishers.

"What we're doing is making agreements with publishers on a case-by-case basis," Bowen said. "What we're really doing is creating a different type of marketplace. We're trying to empower 2,700-plus retailers to kind of magically sell digital goods, all at the same time. And in order to do that, we need the margin to be able to give the retailers the proper incentive to participate in the program. So we have several negotiations that have to occur, and they're ongoing with very nearly every publisher. There are a handful of publishers who have said this just doesn't fit with our program right now, but none of the majors are completely out of the question."

Bowen said Diamond plans to begin offering digital collections, similar to "trade paperbacks," so retailers can always have them in stock. "They have no up-front cost. They can stock, literally, anything that we offer," he said.

"What we really envision for the back issue part is, ultimately, a sort of infinite back-list digitally for things that comic shops might have trouble inventorying on a normal basis," he said. "For example, a real semi-tragedy is that the first volume of Tarot has been out of print for five years. That makes the second volume pretty hard to sell. There's no out-of-print in the digital world. We like that.

"So we're looking long and deep," Bowen said. "We have no exit strategy here."
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