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Comicbook Publishers Dip Their Toes Into Digital Delivery

Karen Raugust investigates how comic publishers are using new technology to market their products to new audiences.

TOKYOPOPs Manga Player site is just one of the many new technologically enhances ways that comicbook publishers are getting their content to customers. © TOKYOPOP.

Comicbook publishers and distributors of comic-based animation particularly those involved in manga and anime are starting to test new technologies such as mobile phones, Internet streaming and video on demand, both as means of marketing and distributing their properties. Initially, these steps are viewed mainly as a way to promote the primary printed or video product, but eventually they may become alternative distribution channels, generating revenues from subscriptions or downloading fees.

In general, manga and anime property owners are ahead of the leading U.S. comicbook publishers Marvel, DC Comics and Dark Horse in experimenting with these technologies. The main reason for this is that the core manga/anime customer tends to be an early adopter of advanced technologies such as broadband, digital television and smartphones, all of which make transmission of graphics-driven and animated content possible. For example, virtually 100% of U.S. anime/manga distributor Central Park Media's customers already had DVD players two years ago, according to John O'Donnell, CPM's managing director, while only about two-thirds of the populace at large owns such a device today. Traditional comicbook publishers tend to target a more mainstream, younger audience, which is less likely to have the technological capability to receive comics through nontraditional channels.

Mobile Manga

Cell phones have become one area of interest to manga/anime content owners. ShoPro Entertainment, an anime licensor and U.S. affiliate of ShoPro Japan, a subsidiary of Japanese publisher Shogakukan, did a deal with mobile content provider Sorrent to distribute wallpapers, text messaging and games tied to its property Inuyasha, a top graphic novel series with more than 30 million copies purchased worldwide. U.S. publisher VIZ, a sister company of ShoPro, has sold more than a half million copies each of Inuyasha DVDs and graphic novels, while an animated television series airs during Cartoon Network's Adult Swim block. Sorrent was interested in Inuyasha "because of the vast fan base and the natural connection between wireless users, manga readers and gamers," says Monika Salazar, ShoPro's director of marketing for North America. ShoPro also has several wireless deals pending in Europe.

CPM recently signed a deal with mobile marketing company Zingy to provide images from The World of Narue and several other of its properties for downloadable mobile wallpapers. Consumers can access the images at Zingy.com and from mobile phone operators including AT&T Wireless, Cingular Wireless and Nextel, as well as from the AOL, MSN and MTV Websites. CPM is talking to European companies about mobile deals as well.

John ODonnell, CPMs managing director, and Mike Kiley, TOKYOPOPs vp of operations, are both vying to leverage their companys content to tech savvy fans.

"We're in the experimental stage right now, but it's certainly worth checking out," says O'Donnell, who notes that cell phone content licensing is a big business in international markets. Although cell phones are certainly a means of promoting properties, O'Donnell points out that it is not yet known whether mobile licensing will become a revenue-generator for manga or other comicbook publishers. For example, will consumers be willing to pay for mobile wallpapers and, if so, how often will they want to change their screen's look by purchasing another image?

Internet Initiatives

Comics-based content owners also are experimenting with streaming and downloadable images, both still and animated, on their Websites. The main purpose is to preview comicbook, graphic novel or DVD titles that will become available soon. TOKYOPOP which, like its competitors, has done sub-licensing deals with companies for cell phone and PDA distribution, and has a deal pending for mobile wallpaper images recently introduced its online Manga Player. As Mike Kiley, TOKYOPOP's vp of operations, explains, the Manga Player allows consumers to view a 30-second Flash animation clip and 10 to 20 sample pages (usually a complete chapter or story arc), with art, from the company's graphic novels. About half the books featured on the Player have been published, while the remainder are upcoming titles. Customers can link to the main TOKYOPOP Website, where they can order or pre-order copies of the previewed novels.

The Manga Player is an extension of a manga preview the company has had on its Website for a couple of years, but it offers larger images and higher quality, making the digitized version truer to the printed product. Because some users access the Internet through dial-up rather than the faster broadband connection, the graphics have to be somewhat stripped down. "It's more usable with broadband, but it's not unusable on dial-up," Kiley says. The company may introduce parallel broadband and dial-up versions as the technology develops.

The Manga Player site is too new for usage figures to be available, but Kiley says anecdotal evidence from surveys and other feedback suggests that the majority of the half million unique monthly visitors to the company's Website have been exposed to the Player and have had a positive reaction to it.

CPM offers several types of free content on its Website, including wallpaper, downloadable trailers and manga samples. O'Donnell guesses that more than half of repeat visitors are accessing some sort of free content from the site each month. The purpose of the Website is mainly to communicate to consumers information about the company's products and their availability. There is an e-commerce area; products are full price so as not to cannibalize the sales of online and bricks-and-mortar retailers who carry the company's products.

ShoPro's Salazar says offering content on the Web makes sense. "It's a natural fit," she explains. "Sometimes the site is the first experience people have of your brand and your company, and it makes a huge impression."

Pay for Play

So far, most online comics content is free and available mainly for marketing purposes. But in the future content providers could generate revenues by charging a monthly subscription and/or fees per download, as is currently done in the music industry. Stan Lee's Sunday Comics is a new for-pay online initiative that allows subscribers to view comics from creators such as Joe Kubert, Keith Giffen and Gil Kane. The site, a joint venture between Stan Lee's POW! Entertainment, graphic novel publisher iBooks and Website Komikwerks, will charge $4.95 per month or $49.95 per year for unlimited viewing of comics that are updated each week.

Four titles were included at launch, announced at this year's Comic-Con, with new properties expected to be added each month. The companies point out that subscribing is inexpensive for consumers, at least compared to buying printed versions in similar quantities to those available on the site, while the online subscription model allows the partners to generate revenues and eliminates the costs of printing.

CPM has teamed with mobile marketing company Zingy to provide images from The World of Narue for downloadable mobile wallpapers. © Central Park Media.

Some comicbook companies are looking into distributing their graphic and animated properties through third-party online video-on-demand sites, such as Movielink or CinemaNow. O'Donnell says CPM is likely sign with one of the leading companies soon, noting that it waited until it was sure the technology worked and copyright-protection issues were adequately resolved.

"Broadband will change the world," O'Donnell predicts, noting that CPM's own Website could include video-on-demand offerings within a few years, either by subscription or pay-per-download, or both. The two pricing models "could easily co-exist," says O'Donnell. "I don't see any intrinsic competition between them."

Some companies are starting to look at video on demand via cable television as another means of distributing their properties and generating revenue. ADV Films launched The Anime Network as a video-on-demand option; it was successful enough that it became the first VOD channel to transition to a full-time network.

Marvel is also keeping an eye on future VOD distribution via television. It recently entered into an agreement with Lion's Gate Entertainment under which the two companies will create and distribute eight made-for-DVD films. After the home video distribution window expires, the companies will try to sell the properties for both traditional television and video-on-demand distribution.

"New technologies like video on demand will definitely be a distribution tool," says Daniel Marks, ShoPro's vp of international licensing and sales, who notes that darker titles for the core anime/manga fans have the most potential. TV video on demand and online streaming both "are very good tools to get [the properties] out there, and your audience is perfect for that."

Daniel Marks, ShoPros vp of international licensing and sales, and Monika Salazar, ShoPros director of marketing for North America.

Downloadable digital books, known as e-books, are a fast-growing (albeit still tiny) segment of the book publishing industry, but they haven't taken hold in the comicbook world yet. O'Donnell believes there will be opportunities for e-graphic novels in the long term. "There's great potential, but several pieces of the puzzle have to be dealt with simultaneously, and that's the hard part," he says, citing the development of a great reader device, lots of content and good marketing as three factors that would have to be in place. Sales of digital audiobooks started to grow once the iPod which can play audiobooks as well as music became a success; that kind of "killer app" would drive the e-manga market as well, O'Donnell believes.

On the other hand, some predict there will never be a technology that will be equal to the book in terms of convenience or enjoyment. "I've seen a lot of people lose a lot of money by betting against the book," says Kiley. "The book is a work of wonder." He believes digital delivery of manga titles will continue to be more of a promotional tool than a means of delivering the end product.

E-Challenges

While many digital technologies make sense from a marketing standpoint and potentially as revenue-generating mechanisms, there are challenges ahead. One has to do with who retains rights to distribute content digitally; some of these technologies weren't considered a possibility when contracts between content owners and distributors or licensees originally were signed and therefore the contracts don't deal with them specifically.

Comicbook publishers are often licensees (especially manga publishers, who license Japanese properties for U.S. distribution) and therefore don't necessarily retain digital rights. TOKYOPOP publishes licensed manga titles based on U.S. television and film properties, a situation that typically prevents digital distribution of those titles. TOKYOPOP is increasing its focus on original properties for which it owns all rights, which will allow it to explore more options.

Content owners, especially in Japan, often are worried about piracy when their properties go digital. O'Donnell points out, however, that pirates already steal movies and television shows, with videos sometimes available on the street the same day a film is released. He believes making properties available through online video-on-demand services won't make the situation any worse than it already is.

Content offered by licensors on their Websites (or other distribution channels) must not compete with licensees' products. For example, a publisher could make free games available on the Web to encourage repeat visits, but not if there's any threat of cannibalizing sales of the company's interactive gaming licensees.

Content providers also worry about any potential digital offerings competing with retailers who sell their products in traditional formats. In most cases, video-on-demand titles are released 30 to 60 days after the DVD release, which gives retailers an adequate window to sell, but if that window shrinks there could be competition between the DVD and other digital technologies.

Likewise ShoPro Ent. has signed a deal with mobile content provider Sorrent to distribute wallpapers, text messaging and games tied to its property Inuyasha. © ShoPro Entertainment.

O'Donnell explains that the two formats could coexist, especially in the manga/anime market. There are over 2,000 DVD anime titles available and no store carries them all; online or television-based video on demand would give customers a place to go for those titles they can't find at the store. Similarly, O'Donnell says, graphic novels could be a natural for the e-book format, mainly because there are so many titles available and so little shelf space in stores. Shoppers could go to a retail outlet for the highest-profile books, but also would be able to go online to download more obscure or older titles.

The investment required to develop new technologies can be significant, in time, human resources and money. "It's costly in terms of brain power," says Kiley. "You have to have innovative thinkers and you have to have the technical chops to execute it."

Finally, not all companies have the back-end operational systems in place to take orders for, fulfill and invoice for downloadable or streamed content. "We're not in a position to fulfill product," says Salazar. "It would probably be two years before we're even ready to talk about that. We don't have the infrastructure right now and I know a lot of our licensees don't either."

While the challenges are steep and it is likely to take a long time before any of these technologies get to the point where they become mainstream, most companies are keeping an eye on the market. They're looking at how they can test emerging digital distribution channels so they are well positioned when those technologies become viable. Ultimately, digital comicbooks and comic-based animation are likely to generate revenues although they will probably never replace printed products but how soon that will occur is anyone's guess. Still, more and more companies should gradually begin dipping their toes into the digital waters by implementing simple on-demand initiatives through the Internet, television and mobile phones.

Karen Raugust is a Minneapolis-based freelance business writer specializing in animation, publishing, licensing and art. She is the author of The Licensing Business Handbook (EPM Communications).

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