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The Math of Comixology’s Change in One Handy Graphic

When the news first broke that Amazon was removing the in-app purchase option from the Comixology  iOS app, I was one of the first to point out that creators would get a larger share of the revenue.

The folks at Graphic Policy agree with me, and yesterday they posted s simple graphic to show just how much creators would gain:


The above graphic shows that creators are going to gain an addition 12 cents on the dollar, and that is probably a pessimistic estimate. GP is assuming that Amazon will deduct credit card charges before splitting revenue, but based on what we have seen in the Kindle Store and in Audible it is more likely that Amazon will cover the payment processing fees themselves.

But even if GP is right, this change is still a significant boost in potential income. No matter how anyone attempts to spin it, the comic industry, and the creators, make out better with this change.

Graphic Policy

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flyingtoastr May 2, 2014 um 7:52 pm

1. This is based on the assumption that Amazon won’t just keep the change and pay what they’ve already been paying.

2. This is based on the assumption that creators won’t see an overall decrease in sales through a loss of easy impulse purchases that outweighs the increased revenue per copy sold.

Nate Hoffelder May 2, 2014 um 8:00 pm

I am truly surprised how many people don’t even bother to do a simple google search. The Submit contract says that creators get a 50-50 split of net revenue:

So no, Amazon won’t be keeping the difference – not unless they rewrite the contract. Got any evidence they plan to do so (other than the usual Amazon is evil rhetoric)?

And as for your second point, do you have any evidence (other than anecdotal claims) that revenues will decrease? Without that evidence the argument is all he said she said and thus null.

Chris Meadows May 2, 2014 um 9:07 pm

What’s more, you know what kind of digital media started out with a 50-50 revenue split? E-books. The suggested retail price was set at double the wholesale. But you know what Amazon said?

"Yeah, that 'suggested' retail price is just a suggestion. We’ll just chop out most of our margin and make everything a lot cheaper so people buy more!" Cue the angry publishers…

Of course, it’s up in the air whether they can do that kind of thing with comics, given that Diamond apparently distributes the digital comics as well as the print ones and won’t let anyone sell digital cheaper. But you never know.

Nate Hoffelder May 2, 2014 um 9:25 pm

Actually, Diamond gave up on digital a couple months ago:

But after the Comixology news I would not be surprised if Diamond started getting a lot of phone calls from publishers.

flyingtoastr May 2, 2014 um 10:54 pm

Do you have any evidence Amazon *won’t* change the contract?

Do you have any evidence that having the additional friction of having to purchase through a Web browser *won’t* hurt sales?

No, you don’t either. This whole thing is just assumptions and suppositions.

Andres May 3, 2014 um 10:21 am

Actually, it’s one of *two* contracts that Amazon and ComiXology will have to change. The first contract is between content creators and ComiXology and the second one is between Amazon and ComiXology. By Amazon keeping ComiXology as a separate entity, this second contract is still in effect, _unless_ they changed it. As far as I know, this hasn’t happened.

flyingtoastr May 3, 2014 um 7:34 pm

"As far as I know"

This is the operative term here. You don’t know. Neither does Nate. Neither do I. Until someone can say definitely "Amazon isn’t changing contracts" with some evidence other than "I <3 Jeff Bezos", it's all idle and meaningless speculation.

Dave Z May 4, 2014 um 8:26 am

"do you have any evidence (other than anecdotal claims) that revenues will decrease?"

Sales opportunities have decreased, which pretty strongly suggests sales themselves will decrease. As to revenue, who knows. All I can say for sure is that I deleted the app and can be content picking up the periodical graphic novel – perhaps via direct sales. (I also didn’t renew my Marvel Universe subscription the other week, but that was for different reasons.)

Ravi May 4, 2014 um 11:25 pm

> Sales opportunities have decreased

How do you know that?

Once Amazon can connect your Comixology account to your (very likely) Amazon account (which they couldn’t go going through Apple, 30% or no 30%), whole new worlds of sales opportunities open up. (e.g. Amazon recommends, opportunistic coupons, etc.). Not to mention the overall reduced friction for Android users (streamlined flow, shopping cart, etc.).

Paul May 2, 2014 um 11:28 pm

I’d be happier it we had actual evidence over what people will receive from Amazon rather than speculation.

fjtorres May 3, 2014 um 9:12 am

It’s speculation about how buyers are going to stop buying and how eeevile Amazon is going to screw everybody.
If there weren’t an Amazon tie nobody would care beans.
ADS is all over the place.

Andres May 3, 2014 um 9:42 am

It’s also speculation that Amazon buying ComiXology will change how much the content creators will earn. _If_ Amazon is keeping ComiXology as a separate business, then it’s _most likely_ that their finances will be kept separate too.

Unless we know for sure what is going to happen with their finances, or any change indication, it’s all speculation.

Nate Hoffelder May 3, 2014 um 10:06 am

Just because Comixology is separate doesn’t mean that Comixology can’t let Amazon do the payment processing. It’s a cost saving measure.

Andres May 3, 2014 um 10:22 am

Amazon (and Google and Apple) has been doing the payment processing for ComiXology already.

Ravi May 4, 2014 um 11:28 pm

When compared purely in terms of payment processing, Apple’s and Google’s fees (30%) are gargantuan compared to Amazon’s or even Paypal’s (the other new payment method Comixology added).

Andres May 3, 2014 um 9:46 am

There’s something odd I find about that graphic. Yes, CC charge tends to be around 6%, but there is also a charge per transaction.

Come to think about it, even the 6% is odd. With the volume that Amazon deals with, I doubt they can’t negotiate a lower percentage.

Dave Z May 4, 2014 um 8:29 am

Credit card fees can vary given the size of the purchase and merchant’s plan. Here’s an AmEx example which should be clear as mud:

Cakes May 22, 2014 um 9:03 pm

Now can we get an updated graphic of how much the creators earned now that people like myself stopped buying and the app is at one star? What about those small comics people only discovered in the easy to use app, which was able to incite impulse buys and direct a reader to those less known comic books that we never see now in the ungainly and annoyingly difficult to use storefront? How about the money lost to Comixology and creators when I go straight through Amazon because it is cheaper?

47% of zero is still zero.

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