You probably heard that DC has revamped their royalties program, adding colorists to the payout mix and lumping digital in with print. We should talk about what’s going on with the single issue sales and royalties. Here’s the gist of it as DC put it in their media release:

We’ve also standardized sales thresholds for all periodicals. There are no longer separate thresholds and percentages by channel (direct market vs. digital vs. newsstand). We’ve also added a threshold for collected editions. The new thresholds and percentages are designed to generously reward high sales performance.

That was perfectly clear, right? Yeah… DC has more than a little work they need to do explaining how all this works, especially to their own freelancers. It was discovered yesterday that the threshold for royalties on a single issue was raised to 60K across all channels. I gather that the direct market threshold for royalties used to be about 35K. I haven’t heard what the newsstand threshold was or how subscriptions factored into this. The reorganization does bring digital into the mix, however. That’s significant, especially moving forward.

I think my favorite reaction to this changes, which nobody apparently saw coming was on Facebook. One comics pro (though I think he spends a lot less of his time in comics, these days) thought this was a sign that people should get out of the business.

Let’s all take a deep breath and run through the math on this. It’s probably not as drastic as it sounds at first blush.

Biggest take-away, from what DC has said, it looks to me like your digital single issue sales are now a form of backlist. If they keep selling, you keep accruing sales on that issue and can eventually earn out or get a trickle of royalties like with a trade paperback. It would be nice if DC would clarify their intentions, but that’s my reading of the situation. Creators might learn to love those $1.99/$0.99 back issue sales.

But for now, lets focus on the immediate new issue sales. We’re looking at Direct Market + Direct Market/UK + Newsstand + subscription + digital.

Direct Market, we have estimates on. Pick your poison – Comichron or ICV2.

Direct Market/UK is roughly 10-15% of the U.S. Direct Market from the above estimates.

Digital is a bit of a black box. I’ve heard anywhere from 10%-25% of print sales. DC has said in the past that the digital sales tend to line up proportionally with their Direct Market sales, though this may or may not still be the case.

That’s what we can estimate with some degree of ballpark certainty. For estimation purposes, let’s say both the DM/UK and digital editions are 15% of print.

If the DM estimate was 40K, you’d have 6K coming in from the UK sales, so 46K in total print and then 6900 digital copies (15% of total print) for a total of 52.9K units in net sales. Which means you’d need to get another 7.1K from newsstand and subscriptions to hit the royalty threshold. An issue with a DM estimate of 45K, using that UK + digital formula lands at 59.5K and needs a bit less than 500 issues from newsstand and subscriptions to pass the barrier.

So what kind of numbers do the newsstand and subscriptions do? An excellent question for which I can only provide some general guidelines.

DC’s circulation audit for the second half of 2012 doesn’t break things down to Direct Market vs. newsstand, but it does list the number of subscription copies per month, and that ranges from a low of 55,381 to a high of 70,626. That should be spread across 22 issues. It is likely that it’s not an even distribution and quite possible the kids comics on the list, like Looney Tunes, are taking up a large chunk of those sales. I’d put typical month at about 66K.

We do have a little more specificity with Marvel… but it’s dated. Marvel _used_ to have breakouts for individual newsstand titles and subscriptions, back in ’09. So we have some guidance for what DC’s numbers might look like. With the newsstand figures, this is while Borders was still around, but I’m also under the impression DC might have wider newsstand distribution than Marvel did, so perhaps they’re not as far off. Probably we should chop 30% to account for no more Borders.

In the second half of ’09, for the sample month, the subscription range was

1. Marvel Adventures Spider-Man 30,652 2. Amazing Spider-Man 9,090 (27,270 copies/3 issues) 3. New Avengers 8,570 4. Ultimate Spider-Man 6,919 5. Uncanny X-Men 6,739 6. Marvel Adventures The Avengers 6,345 7. Marvel Adventures Fantastic Four 6,129 8. X-Men Legacy 5,512 9. Hulk 5,493 10. Astonishing X-Men 4,876 11. Captain America 4,266 12. Fantastic Four 4,181 13. Amazing Spider-Girl 4,115 14. Thor 3,876 Iron Man: Director of SHIELD 3,769

and the newsstand range was

1. Hulk Chronicles: World War Hulk 8,098 2. Secret Invasion “Yu Variant” 6,895 3. Iron Man: Golden Avenger 5,208 4. Amazing Spider-Man 4,104 (12,313 copies / 3 issues) 5. Marvel Adventures Two-In-One 4,098 6. X-Men: Legacy 3,856 7. Marvel Two-In-One 3,741 8. Uncanny X-Men 3,597 9. Skaar: Son of Hulk Presents – Savage World Of Sakaar 3,538 10. Ultimate Spider-Man 3,272 11. Nova 2,897 12. Captain America 2,808 13. Wolverine: Origins 2,748 14. Venom: Dark Origin 2,620 15. Invincible Iron Man 2,617

And if we go back to the audit for the first half of 2008

Top 10 Subscription Comics for Marvel in May (March) 2008 Marvel Adventures Spider-Man: 31,479 Amazing Spider-Man: 11,936 (average/3 issues) Ultimate Spider-Man: 7,875 Marvel Adventures Fantastic Four 6,761 New Avengers: 6,739 X-Men: Legacy 6,561 Uncanny X-Men 6,358 Marvel Adventures Avengers 5,332 Wolverine 5,183 Hulk 4,834 Top 10 Newsstand Comics for Marvel in May (March) 2008 Civil War Chronicles: 7,824

X-Men:Legacy: 5,094

Franklin Richards: Spring Break 4,987

Marvel Adventures Two-In-One: 4,819

Uncanny X-Men: 4,683

Marvel Two-In-One: 4,630

Amazing Spider-Man: 4,621 (average/ 3 issues)

Nova: 3,937

Ultimate Fantastic Four: 3,922

Ultimate Spider-Man: 3,848

What can we learn for this? First off, subscriptions and newsstand sales are their own beast and don’t have all that much to do with Direct Market sales. Kids titles do better. Nova was a top 10 title! And that’s pre-Annihilation. In the sample month for ’08, the low end of subscriptions (and not every title had one) was 556 and the low end of newsstand sales was 845.

So what am thinking about the potential for newsstand sales and subscriptions? They’re probably about even and and depending on the title in question, you’re probably looking at maybe 1K-4K for each. So with the way this cascades, I’d expect a comic with 45K in the DM estimates to cross the royalty threshold and a comic with 40K in the DM estimates MIGHT have a chance, if it has the right popularity outside the DM. I could be a little high or low with the newsstand and subscription data, but that should get you into the ballpark. Please note, this is not to say a book in the 40K-45K estimate range is going to be earning a large amount of royalties. Royalties _start_ at the aggregated 60K.

This could also effect the cashflow a little. I’m not entirely sure how long it takes for the newsstand numbers to get integrated. They’re probably a little more important to the big picture than they were last month, if you need those to cross into royalties, there could be a delay.

What’s actually on the newsstand these days? I swung by the now Marvel-less Books A Million and saw:

Batgirl

Detective Comics

Batman and… (Robin, assuming he comes back to life)

Batman

Beware the Batman

Batman Superman

Justice League

Flash

Green Lantern Corps

Green Lantern New Guardians

Green Lantern

Looney Tunes

Justice League United

Nightwing

Scooby Doo

Scooby Doo Team-Up

Supergirl

Superman

Action Comics

Teen Titans Go

Teen Titans

And the I strolled over to Barnes & Noble to find:

Batman and…

Nightwing

Batgirl

Green Arrow

Green Lantern

Superman Wonder Woman

Wonder Woman

Catwoman

Justice League of America

Justice League

Superman

Batman

Detective Comics

Aquaman

Aquaman and the Others

Quite a bit of variation between the two newsstands and perhaps there’s a bit more that was there that sold out, but I wouldn’t think there was space for more than an extra 3 titles at either place. If newsstand is now part of the royalty minimum and the book isn’t on the newsstand or all the newsstand outlets, I’m not sure what to tell you. I did notice that aside from the children’s targeted comics like Looney Toons, all the DC newsstand titles are now $3.99.

Incidentally, if you like numbers and comics business material, I’m writing a new book on that topic.