Edit: To Clarify: No research was done, this was just my way of mostly trying to point out money went to a lot of places other than printing. >.> Sorry for the confusion…it’s been a long week.

Thoughts on Business Costs

The following are thoughts based on my personal experiences & through my own understanding. I’m not completely discounting current outcries over how much digital comics cost right now, but I’m also against cutting the price so much that the people distributing the comics can no longer function.

The Issue

There’s been a lot of discussion lately on the cost of digital comics & their distribution services like Comixology.

The argument that has me at ends for the moment, is the one that comics should cost significantly less digitally since there should be significantly less distribution/print costs involved. At first, this sounds accurate, but the more I think about it, the less true that seems. There are still plenty of costs involved with the distribution – probably more so.

Overhead?

I think part of the problem is this mindset that the money from the comic should be split between royalties/the artists & printing/distribution costs.

It gives me this feeling that people forget mainstream comics are businesses that have overhead costs in addition to the Team of people putting the comic together. We’ll cover overhead in just a little bit…

Distribution

Back to that argument about lowering digital prices because there is supposedly no distribution (printing & mailing it to stores) costs. For starters, I’m not sure where people get the idea distribution is a large part of the costs of comic production – but it’s apparently there. Printing & Shipping seem to me like they’d be on the lower end of the cost scale well after salaries & creator pay.

How does this apply to a Digital Distribution service like Comixology?

Businesses, as a whole, cost money to run & maintain – I’m sure folks understand that. What I don’t think they realize is that Digital Distribution platforms are businesses, too, with the same costs and overhead they have to pay to distribute and maintain your product as any other business. Comics distribution is just a tiny part of that process.

When you keep that in mind, the amount of money they charge makes more sense – most of the money isn’t going to the printing of the comic.

Just an Example

I work a 9-5 in a small business. As such, I see a lot of the finance side & do a lot of the supply orders (aka everything overhead covers). Plus, I have to keep track of what I work on because my pay comes out of jobs we complete (so if we’re not working on a specific contracted job, my pay comes out of overhead – which is usually a bad thing).

The following is just a basic run-through of costs minus the actually dollar amounts. Even without the figures, I’m sure you can picture how costs can add up quickly. Even more so when you consider the price of that one comic has to keep both the Comics Publisher & The Digital Distributer in business (they both have these same costs).

Businesses usually have the following costs to consider (yes, even digital distribution services) to run smoothly every month:

Overhead : This is the one I think people forget about the most. These are costs that aren’t directly related to the product but are essential for the business to stay running. Some of the most popular overhead items include:

• Building Rent/Mortgage
• Administrative Assistant(s) (The most underpaid person on the planet – I don’t think we appreciate them enough for the crap they put up with. *gets off soap box*)
• Managers/Bosses
• Copiers/Printers/Ink (Just a note on this one, I re-order ink for one of our laser printer upstairs – $100 a cartridge. And there are 4 cartridges, the black one needing replaced about once a month & the other three about once every six months. About 10 people use this machine. Just to give you a tiny idea of how this stuff ads up quick.)
• Packing Tape
• Mailing Supplies/Stamps
• Paper
• Pens/Pencils
• All other office supplies.
• Computers/Work Stations
• Severs/Maintenance of said Servers
• Software
• Vacation & Sick Pay
• Insurance (Health, Dental, Life, Etc.)
• 401K Matching and/or Retirement (If you’re lucky.)
• Taxes <–Yes, businesses have to pay these, too.

Employees : The bulk of any business cost usually goes to the employee’s paycheck. In the case of an online business you probably get to pay one or more of the following kind folks trying to earn a living (I’ll admit, these are guesses – I’m sure there’s a few I’m forgetting):

• Customer Support
• IT
• Inventory/Product Management
• Quality Control
• Web Designer (This could be contracted out or on staff.)
• Programmer
• Development & Testing
• Etc.

Conclusion

It costs a hell of a lot to run and maintain a business – even an online one. When you think about that (assuming Digital Distributers & the Comics Publisher split the cost of the comic 50/50) – that $0.49 per comic issue doesn’t go as far as you think it should and you start seeing why they want $1/comic.

Digital distribution is a service and a business – and that costs money.

Do I hope we find that happy medium where enough people buy digital comics to lower that price down? Yes. Is it there right now? No, I don’t think so.

So until then, I’ll pay my $1.99 per comic & help support the industry grow in the right direction.