Graphicly, one of the early leaders in the burgeoning digital comics distribution market, today announced plans to shutter its marketplaces for iPad, iPhone, and Android and refocus its business on its digital publishing platform. In a brief, informal email, Graphicly CEO Micah Baldwin said the company sees better opportunities in helping content creators navigate the increasingly complex e-book publishing landscape.

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Citing recent business results that showed Graphicly’s self-publishing platform growing at over 300% per month while the digital comics business has increasingly consolidated around rival ComiXology, Baldwin and his team decided to shift gears. “The digital content space doesn’t need another storefront,” said Baldwin. “However, creators of graphic literature need better ways to reach the market through e-books rather than apps.” Content vanishing in the cloud? Where does the shift leave customers who paid to access Graphicly’s cloud-based content? Baldwin says everyone will still have full access to all the comics, graphic novels, and other digital content they purchased from the site, and that the company is continuing to support the apps for iOS and Android devices, as well as the Barnes and Noble Nook and all social and web-based content. However, going forward, the company will wind down its role as a storefront and reposition itself as a partner to creators, publishers, and other marketplaces. Some Graphicly users first noticed the change over the weekend, when the site’s social feed started listing comics as being downloaded through the “legacy Android [or iOS] storefront.” On Tuesday, Baldwin acknowledged that this represented a major change in strategy rather than a technical issue. Discussing the site’s new direction, Baldwin repeatedly de-emphasized the digital comics business and noted that Graphicly’s recent growth has been in other kinds of illustrated materials such as cookbooks, art books, technical manuals, and similar publications. He even expressed hopes that his company, in its new role as e-publishing facilitator, could work effectively with distributors that run successful marketplaces, such as ComiXology or Apple iBooks.

“I’ve been saying forever that we should be partners, not competitors,” said Baldwin. Drawing on a new market

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Several factors contributed to the company’s decision, according to Baldwin:

•Installs of iBookstore, Kindle, Nook applications now number in the high tens of millions.

•Tablets and graphic-capable e-book readers like the iPad, Nook, and Kindle Fire are dominating the consumer device marketplace, creating a demand for content.

•Bookstores present a better way to search for content than app-based marketplaces that require you to download and install the app first, then search for content. The problem is that every platform uses a slightly different technology to format and rights-manage the digital e-book files, and this becomes especially complex with highly designed content such as graphic novels, art books, or magazines. Baldwin said the proliferation of proprietary technologies is forcing creators to needlessly duplicate their investments to get these kinds of illustrated materials into the market, or else develop custom apps that get lost in the sprawling iTunes or Android stores. Books, not apps “We believe that it gives publishers and creators much more visibility to have their works in a bookstore, rather than in random apps,” said Baldwin. The company’s self-publishing system, announced in January, offers cross-platform conversion for graphic-oriented content, scaled and priced for independent creators.

Since its launch, Graphicly’s publishing tool has proven successful beyond initial expectations. According to the company, more than 1,000 publishers signed up and are using the platform; over 2,100 books have been delivered to e-book stores to date; more than 40% of the books run through the system are non-comics and growth is over 300% month over month. Last week, nine out of 10 of the top graphic novels on Apple were books that came through the Graphicly platform. Retreat or Redirection? In the digital comics market, Graphicly pursued a broad-based, empower-the-indie strategy that initially proved promising, but the company was getting squeezed out by competitors. ComiXology, the clear market leader, has been piling up millions of downloads in recent months, and has lucrative exclusive agreements in place with several publishers including DC. Another contender in the comics space, iVerse Media , recently announced an ambitious retailer-facing digital sales program with the print distributor Diamond, supplier to the country’s 1,800 independent comic stores. Against this torrent of competition, those following Graphicly’s trickle of downloads through its social community site could literally see the writing on the wall.

The company’s new move may take it out of the frying pan and drop it into the fire. Rather than competing with fellow entrepreneurial startups, Graphicly is now angling for markets controlled by e-publishing heavyweights like Ingram and tech giants such as Adobe, which is pushing its own publishing platform for image-oriented content.

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Graphicly is betting that its simple, straightforward, creator-centric approach can win the day. By providing graphic storytellers with a skeleton key to unlock the various proprietary formats clogging up today’s e-book market, Graphicly is placing itself at a strategic leverage point between content providers, distributors, and storefronts: “distribution as a service.”

Their approach may not simplify things for consumers, who still have to deal with non-portable digital content and incompatible devices, but it might dispel some of the forces driving the market toward unhealthy consolidation. The Palo Alto-based startup, which has inspired the confidence of investors to the tune of $4.2 million so far, recognizes the importance of adapting to new conditions in a fast-evolving market. Baldwin brings the nimble instincts of a serial tech entrepreneur to the e-publishing business, where they are certainly needed. The door to Graphicly’s comics storefront may be closing, but Baldwin and his team see another door opening. Time will tell if this move is a hasty retreat under fire or a shrewd advance in a new direction.



Rob Salkowitz is author of Comic-Con and the Business of Pop Culture (McGraw-Hill, 2012). Follow him on Twitter @robsalk.