Study: What’s the Impact of Marvel Unlimited on Comic Book Trade Sales?

It’s no secret that I’m a proponent of Marvel Unlimited, as both the best way to catch up on Marvel Comics, and as a forward-thinking business model for comic book publishers.

In my very first review of the subscription service (2012!) I couldn’t help but note how much money I was saving. At the time, Marvel Unlimited annual subscriptions were $59.99, meaning a subscription was the equivalent of 6 trade collections at $9.99 a pop (which would be a great value for TPB’s!).

The equation is comically lopsided. 15,000+ comics in the Marvel Unlimited library vs. maybe 42 to 50 issues collected in trades. For the same price.

So clearly, I think Marvel Unlimited is worth it. One question I’ve always had, though, is just how much MU impacts Marvel’s trade sales. Is Marvel losing all sorts of collected edition sales due to the convenience and excellence of their Unlimited library?

About the Comic Book Trade Sales Data

Before I share the data, and my findings, a few caveats:

1) I don’t compare the growth of Marvel Unlimited to print sales for a number of reasons, but the main one is I don’t see MU as a print sales competitor. If you collect comics weekly, the 6 month Marvel Unlimited wait period for new issues is fairly implausible. Now, I’m sure there are plenty of fans who do decide they’ll just wait until a series is in MU (I do this frequently), but the delay is enough of an offset that it’s not unraveling the weekly collector mindset.

Trade collections on the other hand are almost always direct comparisons to the available content in Marvel Unlimited. You have a clear choice: I could buy Civil War and own a copy, or I could subscribe to Marvel Unlimited and read Civil War and every single tie-in (and then some) digitally. To my mind, this is a more direct battle on Marvel’s bottom line.

2) My trade sales data comes from John Jackson Miller’s completely excellent Comichron site.

3) It’s important to note right up front, that the elephant in the data is digital sales through Comixology. This data is not available to the public (as far as I can tell), so thoughts on Comixology and digital sales are largely conjecture. Nonetheless, I still think there are some interesting takeaways with the sales figures we do have.

Marvel Trade Sales Since the Introduction of Marvel Digital Comics Unlimited

Marvel Unlimited was introduced to the public as Marvel Digital Comics Unlimited back in 2007. It’s pretty fascinating to look at the list of available comics (promoted as “over 2,500 items!”) when the MDCU launched, and how far the library has grown since. The subscription service retained this title, and was desktop only all the way until March 2013. I’ll be looking at Marvel’s trade sales since 2010, as Marvel Unlimited adoption has steadily increased and gained publicity.

Below you’ll find my estimated figures for Marvel’s trade sales revenue since 2010. The clearest takeaway is steady sales, followed by strong growth in 2013 and 2014. Note from the Google Trends data and our knowledge of Marvel Unlimited app’s debut that these years are also indicative of the biggest increase in MU adoption and interest.

Impressively, Marvel trade revenue has actually increased as Marvel Unlimited has increased in popularity. It’s worth noting at this point that there are all sorts of influencing factors. The success of Marvel’s Avengers in 2012, the launch of Marvel NOW! in late 2012, the arrival of unprecedentedly successful solo series like Matt Fraction and David Aja’s Hawkeye – all of these play a huge role.

That said, let’s take another look at a component of the data. Below you’ll find the number of Marvel trade collections within the top 1000 comic book trades for the year. The clear takeaway here is that Marvel has actually increased revenue while selling fewer books.

This isn’t proof by any means, but I think this data lends some credence to the theory that Marvel Unlimited has helped eliminate the need for fans to buy as many trades, but has simultaneously helped increase fan loyalty and overall profitability. It’s my understanding that this was always the goal.

In a 2011 interview, Peter Philips, VP & GM of Marvel’s Digital Media Group, echoes these sentiments:

“My role is going to be to continue building the brand via the digital world… I don’t mean that in a sales-y sense. I want to get more people interested in digital comics. I want to make the natural transition. A lot of people, I believe, are very familiar with the franchises, but they’re familiar with it through Hollywood — which is fantastic. I want to extend that continuity out, leverage that, so people can enjoy it 24/7 through all mediums.”

Admittedly, this is very “Marvel Unlimited is great!” centric thinking from me. As I’ve acknowledged, the revenue gains have much larger influencing factors. Nonetheless, I think that need to sell fewer trades in order to achieve revenue growth – without any dramatic price hikes I would add – is extremely telling. If nothing else, we can deduce that Marvel Unlimited subscriptions aren’t hurting trade sales.

Competitor Trade Sales Over The Same Time Period (Cough *DC* Cough)

One of the reasons I’m most confident in the viability of a subscription based comic library is the competitive data we see from DC Comics. As the comics landscape has noted time and time again – most recently with the debut of Scribd Digital Comics Unlimited – DC Comics is a puzzling holdout in the subscription service game.

A prevalent theory rationalizing the behavior is that DC is simply better at trade sales than Marvel has been historically. Simply put, DC makes more money off of trade sales than Marvel ever has. DC Comics has more to lose through a subscription service. It’s my opinion that the data I pulled regarding DC trade sales highlights the flaw in this model. Below you’ll find yearly revenue for DC trade sales, which for the record, includes Vertigo titles. So yes, Sandman and Watchmen contributions are part of the reason for DC’s higher revenue (for Marvel I included Icon books such as Kickass, which is a major trade contributor).

Here we see that DC Comics – with no digital subscription option – has stagnated and seen declining trade sales since the launch of the New 52 in 2011. Nonetheless, do note that even at this level of stagnation and decline, DC’s worst year of trade sales (2014!) is still around $8 million more than Marvel’s peak (2014!). The gap is certainly narrowing. As for the number of DC trade collections being sold within the top 1000, you can see below:

Surprisingly, we see a complete inverse of Marvel’s data. DC is actually selling more trades over time, but they’re earning less revenue. In keeping with the theme, my mind immediately theorizes that fan loyalty & engagement suffers from the lack of a DC Unlimited offering. Fans interested in DC books have to turn to trade collections more frequently to access these comics, but fewer and fewer fans are actually doing this over time (as represented by the decline in revenue). We can point to DC’s movies vs. Marvel’s as a major contributing factor, as well as DC’s clear peak in 2011 with the New 52 (and an extremely limited follow-up plan).

I’d also think for a moment about the goal of Marvel Unlimited and what it could do for DC. In a 2008 interview with Wired, Marvel VP of Content & Programming John Cerilli had this to say:

“The ultimate goal of Marvel Digital is to get more people reading our comics. Through digital distribution, we can expose our stories to the widest audience possible, which is essentially anyone connected to the internet…. With our characters successfully reaching well beyond the printed page nowadays in film, animation, videogames and licensed products, many people may be coming to Marvel.com for the first time having never actually read a comic. We want to make sure they get the chance to do that.”

This focus on getting more people into comics is crucial, and an area where Marvel Unlimited excels. Just look at the Google search trends for Marvel Comics compared to DC Comics. As a general rule of thumb I’d be weary of Google trends data (extremely easy to misinterpret or take out of context), but the trend gap here is striking:

Look at the Marvel growth compared to DC’s stagnation. I have to think accessibility of the DC library is a role player here. The crazy thing is it’s not like DC doesn’t have the comic book content to rival Marvel’s growth. This isn’t about one publisher being better. It’s about one actually providing the means to read and enjoy their universe.

Digital Comics Subscription Libraries Aren’t For Everybody

While I think there are some compelling arguments here for the expansion of Marvel Unlimited services, it’s not necessarily the right play for every comic book publisher.

I mentioned this in my Scribd Comic Unlimited review, but this type of offering just doesn’t make as much sense for Image Comics, or at least I can understand their reluctance. As much as I would love access to the Image library for a flat monthly rate, Image is the player in trade sales with growth across both revenue and the number of books sold within the top 1000.

Tellingly, in 2014 Image produced half of DC’s trade revenue on only 29% of the trades sold. They made it halfway to the leaderboard with less than a third of the number of books it took DC Comics to get there. Image Comics trade sales game is booming.

Since Image’s library isn’t nearly as sprawling or inaccessible to newcomers as DC and Marvel’s, it would be more likely that a subscription service would actually hit the publisher’s overall revenue.

The top 8 trade collections in 2014 all came from Image Comics (variations of Saga, Walking Dead, and Sex Criminals). This is utter domination. The only non-Image representative in the top 10 is DC’s Batman: Court of Owls, with Marvel ranked 11th for Guardians of the Galaxy: Cosmic Avengers.

On a recent interview with 11 o’clock Comics, Jonathan Hickman mentioned that in 2013 Image books represented around 90% of his earnings. This is coming from the man writing Marvel’s Avengers and New Avengers, and who has Fantastic Four and Secret Warriors trades that are among the most recommended I can think of. Now the creator-owned nature of Image is certainly a component of this (in my opinion an astonishing facet), but the point is Image trade sales don’t need internal competition.

On top of all that, Image already offers a forward-thinking digital sales model on their website, offering DRM-free versions of their comics. It’s pretty easy to buy Image comics (desktop checkout problems aside) and transfer them across devices as is. As quickly as I’d pay for an Image Unlimited, it makes a lot of sense why they’d be hesitant to pursue.

The Comixology Conundrum

As I mentioned at the beginning of this post (sometime during the Bush administration), there’s a giant caveat to all of this in the form of digital Comixology sales.

We’re well past the notion that digital is a small component of comic book sales, and in that same Hickman podcast interview, the author shares that digital already makes up 25 to 30% of all sales.

We don’t actually have this sales data, but DC Comics appears to be doing perfectly well within Comixology. They may be laughing all the way to the bank as Injustice and Batman Eternal highlight the top 10 digital sales week in and week out.

There is also undoubtedly competition between Marvel Unlimited and comixology as digital comic book distribution systems. While the payment methods are very different (monthly vs. each issue), the digital reading experiences are frequently compared. In fact, one of the most frequent Marvel Unlimited app requests is to “make it more like Comixology.” This is an understandable desire; Comixology represents the best in class digital experience.

Aside from wild conjecture (why stop now?), the best I can say for the trade sales data still holding water without the digital component is that both Marvel and DC appear within the Top Selling Comixology titles week in and week out. Is it truly a negligible difference between the publishers? I’d be a little surprised.

The one question that I can’t answer (no really, there’s only one) is whether DC Comics sells wayyyyyyyy more older titles through Comixology than Marvel. This would make a lot of sense (Marvel fans can get those issues for cheaper through Marvel Unlimited. DC fans have no choice), but again, it’s pure conjecture for the time being.

Curbing Pirates & Illegal Downloading

Let’s be real for a minute. All this talk about legitimate, legal, paid methods of comic book consumption are well and good, but as recording industry taught us, pirates ruin lives.

So what happens when a budding comic book fan reads all about Batman’s absolutely incredible first year of comics? Or, better, any number of more obscure DC stories throughout the ages. They could turn to Amazon (and find out of print collections), or they could turn to Comixology (good luck), or they could go scrounging around their local comic shop or library. Sure.

They could just as easily fire up a torrent and have the issues on their computer within the hour.

Without even breaching the moral implications or obvious illegality, there’s a convenience here that is unbeatable. I don’t disagree that the sort of entitled attitude that suggests I should be able to have everything I want, all the time is extremely problematic. Nonetheless, I have that desire daily. I get it.

Marvel Unlimited cures much of the convenience dilemma. When I read that Rick Remender’s Venom was actually a great series, I can pull up that series on Marvel Unlimited immediately. I don’t even consider downloading the issues illegally (or buying the trade…) because I’ve already paid for them.

In a 2007 Comic Book Resources interview with Marvel Publisher Dan Buckley, he addresses this exact goal:

“One of the benefits of this launch is that it provides many of our fans with the opportunity to “legally” read our comics. We sincerely hope that this service offering will curb these “illegal” downloading activities. The music industry’s reactions to the illegal downloading did help us with us the formation of our business strategy, but it was not the driving factor behind our business model.”

There’s undoubtedly a bigger debate around whether or not this is the financial solution to comic book pirating. My theory, though, would be DC comics pirating occurs at a much higher rate as Marvel Unlimited adoption increases. If DC wants to fight pirating by providing no proactive solutions, well, we can see how well that worked for the music industry.

I’ll end this line of thought with a one sentence preach: I don’t encourage pirating comics. This is an industry of hard working creators who are worth supporting, especially if you love comics. Nonetheless, I do think publishers need to explore creative solutions to the convenience expected from readers. The alternative is death by pirating.

What About The Creators?

It’s all well and good to talk about the perceived positive impact of digital subscriptions for publishers, and as I’ve suggested, I think Marvel Unlimited has had nothing but positive impact for Marvel Comics.

What I’m less sure of is whether Marvel Unlimited has any positive ramifications for comic book creators.

There was a great, insightful piece in 2012 from members of Galaxie 500 about what Spotify royalties actually look like for musicians. If you’re interested in this sort of thing, I recommend reading the whole article, but the biggest takeaway:

“Galaxie 500’s “Tugboat”, for example, was played 7,800 times on Pandora that quarter, for which its three songwriters were paid a collective total of 21 cents, or seven cents each. Spotify pays better: For the 5,960 times “Tugboat” was played there, Galaxie 500’s songwriters went collectively into triple digits: $1.05 (35 cents each).

To put this into perspective: Since we own our own recordings, by my calculation it would take songwriting royalties for roughly 312,000 plays on Pandora to earn us the profit of one–one— LP sale. (On Spotify, one LP is equivalent to 47,680 plays.)”

So while subscription music services are undoubtedly a huge win for music fans, and have certainly curtailed the pirating of every music listener I know (what an unbeatable sample size!), the artists themselves aren’t exactly retiring on the income. Far from it.

How does this work in comics? In the 2007 MDCU launch interview, Buckley had this to say:

“Digital comics will become a part of our incentives package in the near future. We are at present discussing the calculations and implementation of this package. It may take several months to implement. However, the first thing we need to do is make sure that the offering is profitable.”

So in theory, Marvel comic book creators are seeing some sort of revenue through Marvel Unlimited. If this exists – I would love to hear details – I’d have to imagine it’s some sort of profit sharing rather than “Hawkeye #1 got 14,000 reads this month” specifics. The reason I think that is because if Marvel Unlimited had read statistics like that, why on earth wouldn’t they share them?

As long time MDCU subscribers will remember, there was a day when Marvel actually kept track of the number of books you read in your profile. Those days are long gone since the app launched, and while I’ll take the convenience over that supplemental feature, it leads me to believe that information just isn’t tracked currently.

The Conclusion

It’s my argument based on the data presented here that a digital comics subscription like Marvel Unlimited does not hurt trade sales growth, and can actually in the long run help boost overall profitability.

While Marvel has seen revenue growth on fewer books sold since Marvel Unlimited launched, DC Comics has seen revenue declines on more books sold. To my mind, the bottom-end trade sales are more appropriate as part of a comics library, building unparalleled fan loyalty and engagement (and eventually purchases of the higher-end trade volumes).

What do you think? Anything to be learned from all this, or too much conjecture? Does the “Netflix of Comics” approach make business sense to you as a comic fan? Who has the better long term strategy in place? Do what feels right to you in the comments.