Treat Your Art Like An Investment

The success of Guardians (See Guardians Zoom to $94 Million Dollar Weekend) and the ongoing success of the Avengers franchise in mainstream entertainment creates a ripple effect reaching into the comics and other media. Guardians is getting a TV series (See Marvel Announces New Guardians Series). Staple Avengers characters are getting diversity makeovers (See On the New female Thor and a Black Captain America). Other Avengers characters are getting high profile spin off comics (Loki, Hawkeye and Black Widow). As the public perception of these properties rise, Marvel is putting more energy into them.

Meanwhile, other properties are getting less attention. From where I’m sitting, franchises like the X-Men are losing currency in the comic book universe. While the X franchise still has a large percentage of the books coming out every month, they are being marginalized from a story perspective. They’re not the focus of many of the tentpole events of the past few years (Secret Invasion, Civil War, Siege, etc.) and there was a major storyline killing off most of the mutants in the Marvel Universe and sending the rest of them to live on an isolated island. To top it all off, the major event of this summer is killing off Wolverine. The X-Men have been the best selling and most popular franchise for the past twenty years of Marvel Comics. All that might be changing now.

Why?

I think part of the reason has to do with lack of control and lower revenue. Marvel has far greater control of the Avengers and Guardians characters than they do with X-Men. The X-Men film license is held by Fox (and the Spider-Man license is held by Sony in a co-production agreement). Those licenses were created when Marvel had very little leverage because of their recent bankruptcy. The revenue from those movies and their associated merchandise programs, helped put the company in a position to make films like Iron Man and Captain America, but deals that made sense then aren’t as attractive now.

The X-Men and Spider-Man deals are still making money for Marvel. But from a business standpoint, it makes more sense to focus on the characters who generate more money. Changing focus means some characters get more attention, while others get less. This thinking explains part of the reason for the shift (See Marvel Shorting X-Men Due to Fox Deal)

Marvel’s strategic creative choices offer useful guidance for emerging and independent creators both inside and outside of comics. When you strip away all the fanfare, details and nuances of each tactical move, the basic idea can be expressed in three parts.

1) See your stories and characters as investments of your skill, time, energy and passion

2) Take the long view of your stories and characters when considering their business potential

3) Focus your energy on those projects that fit with your long term goals

I could be wrong about the direction of X-Men comics. This transfer of focus could be a temporary move designed to reinvigorate the franchise or regain complete control if and when the film license expires. Either way writers and artist can learn the concepts of artistic investment by watching the way the big boys play.

Have fun.

Gamal

Deal with the Devil (How Comic Creators Get Their Rights Stolen)

When I started consulting private clients about licensing issues (See Client List), I thought it was going to be a low impact, secondary service. I planned to explain the finer details of contract language, so artists and writers could make informed decisions about selling the rights to their work. Now that I've been doing this for a few years, I can see that I was wrong. Some contracts that I've seen are prudent actions by publishers trying to protect their investment. But too many of these agreements are nothing more than blatant attempt to hijack intellectual property from unsuspecting artists.

The Double Edged Sword

Signing a contract with a publisher can start an artist down the road to professional recognition and lucrative opportunities far beyond comics. It can also strip you of everything you have worked so hard to create. There are a lot of potential pitfalls in creator owned contracts, but the major ones are:

• You agree to give the publisher complete control of the property, not just the actual comics, but the underlying intellectual property (See Image and Story: Copyright and Trademark)
• You agree to give the publisher control of the property in all media ever created, not just in digital and printed comics (See Addition by Division: Separating Rights in Creator Owned Deals)
• You agree to financial terms that are designed to keep you from ever being paid for your work (See Your Slice of the Pie Parts 1 and Part 2)
• You agree to give up your rights without being paid for them (See Get What You Give: Rights and Revenue for Creators)
• You agree to never get back the rights to your property (See Eternity is a Long Time in Comics)

Of course, not every contract is written this way. Not every publisher is a demon attempting to steal your life's work. Some relationships between creators and publishers are much more balanced and fair in reality than they appear in the contract. But the history of comics is littered with famous stories of iconic characters being given away by their creators for little or no money. The current litigation concerning Ghost Rider is simply the latest chapter in a long line of cases. But the answer isn't to avoid all contracts all the time. The key is to understand what you are signing and what you are and are not willing to give away.

Reality Check

It is obviously self-serving for me to make dire claims about the dangers of creator owned contracts. The more you are concerned about this legal problem, the more likely it is you will become my client and pay my fee. It is also clear that many creators feel compelled to sign away their ideas to get their foot into whatever door they have found into the ultra-competitive comic book industry (See David and Goliath: Negotiating Comic Contracts). Both of those concepts are true. I get it.

Here is my response to those facts; if you don't want to use me to review your contract, I respect that. By all means, use someone else with a background in contracts, IP or entertainment law, just don't do it yourself. This is not an insult to your intelligence or business savvy. It is recognition of your specialization. You are an artist or a writer. You probably didn't waste a lot of time in law school learning about contracts (if you did, sorry about the loans). It is unrealistic for you to be expected to understand the implications of contract language. Many of the most successful businessmen have several lawyers explaining things to them when they need to make a major decision. You should too.

And even if you do find yourself in a position where you “have to” sign a bad deal, do it with your eyes opened. Know what you are getting into, so you don't wake up one day without any claim or credit for what you worked so hard to create.

Have fun.
Gamal

PLEASE NOTE: THIS BLOG POST IS NOT A SUBSTITUTE FOR LEGAL ADVICE. IF YOU HAVE A LICENSEING OR INTELLECTUAL PROPERTY ISSUE, DISCUSS IT WITH YOUR LEGAL ADVISOR OR CONTACT C3 AT gamalhennessy@gmail.com FOR A FREE CONSULTATION.

The Magic in a Batman T-Shirt: Why Licensing Works

Summer is comic book season in the entertainment world. Blockbuster movies pop up in theaters. Major video games debut at E3. Kids have their comic related clothing. Crossovers dominate the comics market, but mainstream media doesn't notice that unless Superman or Captain America die (again). The interest in the comic characters is arguably highest in the summer, but that interest is often focused on the 'secondary' market, not the source material.

Why? What makes a superhero based TV show or movie so popular? More importantly for our purposes, why does comic related merchandise sell so well every year? I originally explored this idea in an earlier post (See Making Comics Isn’t Really About Making Comics Anymore). Now I'd like to explore the social and emotional aspects of licensing, and those factors can help the independent comic creator.

Disclaimer: Most of my other posts have discussed the legal aspects of the comics industry, but this will be more of a pop culture analysis. While I don't have an anthropology or sociology background, these ideas come from the time that I've spent working and observing consumer behavior as it relates to licensed goods at Central Park Media, Marvel and as an independent consultant.

The Definition of Cool
There is no practical difference between a plain white t-shirt and a white t-shirt with a Batman logo on it. Both of them protect you from the elements and get you into restaurants that have a 'no shirt, no service' sign. But the Batman shirt can cost twice as much as a plain t-shirt. Why? Some might say 'because it's cooler than a plain old t-shirt.' That might be true, but what makes it cool?

A person who likes Batman and owns Batman merchandise gains three benefits that have nothing to do with the practical uses of the items. Those benefits are identity, community and nostalgia.

Personal Identitification: When a person relates to a character or a story, their connection to that brand increases. It could be Superman's morals, Wolverine's rebellion or Batman's determination that we aspire to. It could be the emotional impact of stories like Watchmen or Kick Ass or the wit of characters like Iron Man and Spider-Man. Wherever that connection comes from, a reader sees themselves (or wants to see themselves) in the characters they love. They emotionally identify with that character and on a certain level, the merchandise they wear is an expression of that identity.

Community Acceptance: Humans are social animals. We like to organize ourselves into groups based on some defined characteristic. We are also highly visual creatures. We make decisions about people based on what we see. When we see someone who we perceive to be similar to us, we are more likely to accept them and feel a sense of connection to them, however small that connection might be. This is easiest to see in children. Two boys meet for the first time in the park. Both are wearing Batman t-shirts. "You like Batman! I like Batman too! Let's play!" Now they're friends, very little additional interpersonal screening between them.

Emotional Nostalgia: Merchandise can be a subtle reminder of a past experience with, the power to evoke much of the initial emotions. If you have fond childhood memories of watching Batman cartoons, the Batman t-shirt can act as a kind of artifact. It can bring your mind back to a pleasant event in your life and impact your mood whenever you see it.

Not Just for Comics
It’s a mistake to think that the identity, community and nostalgia concepts are unique to comic geeks and unsophisticated children. Groups on every level of society share the same qualities. They just use different products. A man might express his wealth and status with his Mercedes or his Rolex. A woman can instantly accept or reject another woman because of her Prada handbag or Gucci shoes. A football fan has a connection to the jersey he wore when his team won the Superbowl. The baseball fan has his signed glove. In a larger sense, consumer products on every level use logos to evoke emotional responses in order to sell goods and services. Starbucks, Apple and Nike are universal examples of logo and merchandising power.

The Cure for Oversaturation
With all the merchandise, logos and product placement in our society, why would an independent artist want to add to the wall of noise by selling his own stuff? The answer is evolution.

There was a time when certain characters, logos and stories were popular with a small, but passionate audience. Success and mainstream over time acceptance elevated those properties into the icons that we have today. Now they have become diluted and altered. The sense of community they created has extended so far that it covers almost everyone. Ironically, the wide appeal of a character all but eliminates the original connection the first fans had to it. (See Ninja Turtles: From Parody to Property) People inevitably seek out new characters and icons to identify with. They look for smaller, more passionate communities to connect with. The independent artists of today can create the icons of tomorrow if they decide to extend their work beyond the page and into everyday life.

The Power of Story
How does an artist create an iconic character that translates into a successful licensing property? Two of the keys are appeal and evolution. Appeal comes from good stories. No matter how unique and merchandise ready your character might be, without great stories readers, won't identify with the character, connect with other readers or feel any nostalgia for the property. Evolution comes from a consistent relationship between the character and society. Comic book icons like Superman and Batman are more than 70 years old. Each one has changed with the popular culture, and target audiences, to create identification without losing the core concept of the character. The image is what goes on the item for sale, but it is the story that makes the property successful. (See Image and Story: The Role of Copyrights and Trademarks in Comics).

I'm planning to launch an on demand independent merchandise platform for comic creators this year (See Do You Want to Create Merchandise for Your Comics?). My most successful partners will be the ones who can capture the magic of merchandise in their characters and extend their popularity far beyond the comic book page.

Have fun.
Gamal

PLEASE NOTE: THIS BLOG POST IS NOT A SUBSTITUTE FOR LEGAL ADVICE. IF YOU HAVE A LICENSEING OR INTELLECTUAL PROPERTY ISSUE, DISCUSS IT WITH YOUR LEGAL ADVISOR OR CONTACT C3 atgamalhennessy@gmail.com FOR A FREE CONSULTATION. 

Do You Want to Create Merchandise for Your Comics?

Much of the popularity for famous comic book characters doesn’t happen because people read comics. Only a small percentage of the people who are familiar with Spider-Man, Superman and the Hulk have ever been inside a comic book store. A lot of exposure comes from licensed media (TV, film and video games) but just as much of it comes from merchandise (clothing, skateboards and toys0. In the past, only the major companies could support a merchandising program. But times are changing. Is the independent comic book industry ready for independent merchandising?

The Opportunity

The key elements of a merchandising program are:

• Distinctive and popular images or characters
• Design and Production
• Marketing and Advertising
• Distribution and Fulfillment
• Revenue Collection

With an independent merchandising plan, the independent creator owns the characters and images. They decide what products fit their plan. Design and production, distribution and fulfillment can be outsourced to custom merchandising companies that can produce a wide variety of goods on demand without the need for warehousing or creating bulk orders. Marketing and advertising costs can be scaled to budget, with much of the main outreach occurring online or offline at conventions or local shops. Revenue collection can be funneled through a variety of sources including Amazon, Paypal and Kickstarter. The increased exposure of the underlying property supports the comic and vice versa. Ultimately, a larger licensing company could see the potential in your work (based on the sales) and provide you with a much larger platform (and potentially much more revenue).

The Problem

There are two main problems with launching your own independent merchandising program; time and expertise. Many independent creators have day jobs, families and they spend what little free time they have on their craft. There is no extra time available to decide on the cotton weight on a T-shirt line or whether iPhone cases need to be part of the product offering. Even if they did have extra time on their hands, few of them would be interested in dealing with the legal, financial and marketing duties that come with managing a merchandise line. They want to spend their time creating the next great comic.

The Solution

I was once the general counsel for a Japanese animation company called Central Park Media. After that, I was the international publishing manager for Marvel. Since then, I have been advising private clients for publishing and new media contracts. Finally, I have also run my own independent publishing company called Nightlife Publishing for the past six years. I think the combination of my skills and the current level of DIY technology creates an opportunity for independent creators to make money from the sale of their merchandise. The main question now is ‘does anyone want this service?’

What do you think?

Would you be interested in selling a line of clothing, posters and tech related merchandise based on your comics? I am in the process of developing the business model now, but if no one is excited about the idea, I might have to sit on the idea for a while.

Let me know what you think in the comments section.

Have fun.

Gamal

Making Comics Isn’t Really About Making Comics Anymore (Comics, Movies and Merchandise)

by Gamal Hennessy

Last week I talked about the difference between copyright and trademark. I wanted to explain that first so that this post would make more sense. The development of comic book properties as major licensing programs has implications on the way comics will be produced going forward. It will also impact the way creators should look at their properties and their creator owned contracts.

The list of mainstream cross over comic book properties is familiar to everyone in the industry. The list includes the X-Men, Batman, Fantastic Four, Spider-Man, Green Lantern, the Avengers, and Superman. It will soon include Guardians of the Galaxy and maybe even Ant Man and the Justice League.  Everyone in the industry is aware that there is more potential for explosive success now than any other period in the industry. What does this mean for comic creators? What do you need to do if you want to thrive in this new golden age?

Comics as an Independent Business

There was once a point where the comic book business was purely about selling physical print copies of single issue comics. When I was a kid (back before TV had remote controls and everyone rode in a horse drawn carriage) a comic book was $.25 and it had very little competition in terms of entertainment. There was no cable TV, no cell phones, no home video game systems, no DVD’s and no internet.  People read comics because there was little else to do. As little as 15 years ago, the top 300 comics sold 6.64 million units. Very little money that the comics industry makes actually comes from selling comics. Monthly sales figures have risen in recent months, but the revenue from this activity is dwarfed by the “ancillary market.”

Comics as a Mainstream Springboard

Several factors helped comics evolve out of a purely print model to a more integrated business. The most significant factor is the jump to movies. When direct market comic book shops became an economic liability to publishers, there was a move to gain more access to major bookstores. This led to a higher volume of graphic novels (because a GN could survive on the shelf of a bookstore where a flimsy comic couldn’t). Works in this medium, most notably the Dark Knight Returns helped spark interest in Hollywood to create a major motion picture in 1989 with Batman. That began a push for more films based on comics. Now the summer movie schedule has 2-4 comic movie releases almost every year. Major comic book conventions that used to focus on buying rare comics and meeting artists are now more about upcoming film trailers and meeting actors. As of this month eight of the top 25 grossing films of all time are based on comic books. Comic properties have clearly developed from an insular type of entertainment to widespread popularity.

The Secondary Market

Comic based properties can generate money in several ways when they are associated with a movie. A film creates a retail environment where there is a higher demand for licensed merchandise.  Merchandise is a broad concept here that covers everything from clothing to household items to food to games and many other consumer articles. Depending on the film, the merchandise deals can generate more money than the movie itself. When I was with Marvel in 2002, I worked on the licensing program for the Hulk. The film made two hundred and forty five million. By comparison, the licensing program made more than one billion dollars. A single issue of the Hulk comic in 2012 comes in a distant third generating less than $184,000.

Your Comic in the World Beyond Comics

As film, television and video game producers look for new properties with strong stories and an established audience they will continue to look to comics for inspiration and opportunity. It is not just DC and Marvel capitalizing on this trend. Since the mid 80’s, independent comic properties like Teenage Mutant Ninja Turtles, 300, Spirit, Spawn, Hellboy, Scott Pilgrim and Kick Ass have all found producers willing to transfer the stories from the page to the screen. Comic creators need to be aware that the potential for a wide market is possible for any property. It is true that the vast majority of comics will not get big screen exposure but it is prudent to consider the life of your property beyond the comic when you are considering a deal with a publisher. This means not agreeing to contract terms that do not compensate you for exposure of your property in the world beyond comics.

I am aware that the main focus of fledgling creators is getting their work out there and closing a deal with a publisher. I know that many creators do not have a great deal of negotiating power in their dealings with large publishers. But as the owner of a potentially profitable property, you need to weigh the benefit of short term exposure and financial gain with the potential for film, TV and merchandise revenue. You will be able to make a prudent decision about your property once you take all the factors into account.

Best

Gamal

PLEASE NOTE: THIS BLOG POST IS NOT A SUBSTITUTE FOR LEGAL ADVICE. IF YOU HAVE A LICENSEING OR INTELLECTUAL PROPERTY ISSUE, DISCUSS IT WITH YOUR LEGAL ADVISOR OR CONTACT C3 atgamalhennessy@gmail.com FOR A FREE CONSULTATION.

Image and Story (The Role of Copyright and Trademark in Comics)

By Gamal Hennessy

The storytelling method of comics primarily involves using images to tell a story. The writer and artist (and others) work together to create narrative sequential art. In a business and legal context there are two legal creations formed with every comic; a copyright and a trademark. Knowing the difference between the two and their complimentary roles will help you grow your business and might help improve your stories.

Definition and Examples

Before we talk about the relationship between copyrights and trademarks, it would help to define what we are talking about.

Basically, a copyright (normally represented in the US with the symbol © ) is the intellectual property right that gives the creator of an original work the ability to control how that work is used. In its most basic form a copyright gives the owner the right to make a copy, but it also governs who can use or exploit the work for any type of gain.

By contrast, a trademark (normally represented in the US with the symbols TM or ®) is a symbol or word used to identify a particular individual, organization, product or service in a commercial context.

The easiest way to show the difference between the two is with an example. Let’s say someone (we’ll call him Bob) writes a story about a boy whose parents are killed right in front of him on the way home from the theater. This boy grows up obsessed with fighting crime and making criminals feel the same fear he felt in that alley. He takes a secret identity and creates a persona modeled after an animal associated with the night (just for the sake of the example, let’s say this guy decides to use a bat). He creates a series of tools that utilize his symbolic totem. While many people see this mysterious man as a vigilante and a criminal, he becomes the one thing that keeps the city from descending into chaos.

Perhaps the story is a little far fetched, but as an example it works very well. There is a copyright created for every story of the masked crime fighter. The images associated with him and his story becomes trademarks.

Relationship between © and ®

When your stories create a strong emotional connection with the readers, many of them will choose to associate themselves with your creation. In modern societies, that association is expressed in material goods, especially with younger audiences. The reason that licensing and merchandise programs are tied to film and television releases is because the owners of the intellectual property are attempting to profit from the emotional creation that their stories create. In many cases, the licensing program for a character can generate far more revenue than the actual stories, if only because the potential number of merchandise products is far greater than the media outlets and they can be accessed at a far lower cost. But there will not be any demand to create merchandise if there isn’t a strong story creating a meaningful connection.

Legal and Business Impact

When a comic creator is trying to get their stories published, many of them are focusing exclusively on the terms and conditions for the actual publishing rights. Very few of them take into account the potential impact of the secondary media and merchandising rights. This makes a certain amount of sense, since very few comics ever produce a meaningful merchandise program.

The result of this lack of focus often creates a situation where a creator gives away most or all of the trademark rights to their story to a publisher that may not have any ability to exploit them properly. Even worse, the publisher may have a significant licensing program that excludes the creator from any future profits. It is beneficial for creators to protect their potential trademarks with the same diligence that they protect the copyright to the underlying story.

Impact on Story Development

Early in the development of comics, it might have been accidental that so many characters have distinctive symbols prominently displayed on their chests. It might have been pure coincidence that every item or tool that they used related back to an image that could easily be affixed to a wide array of products. But creators can be more deliberate now. The development of a story with a strong image system could improve licensing potential of a creator owned property down the line. I’m not suggesting that you compromise your art by forcing a logo where it makes no logical sense in your narrative. But there is a commercial reason why so many heroes have a symbol on their chests. It helps to sell T-shirts later.

Have fun.

Gamal

PLEASE NOTE: THIS BLOG POST IS NOT A SUBSTITUTE FOR LEGAL ADVICE. IF YOU HAVE A LICENSEING OR INTELLECTUAL PROPERTY ISSUE, DISCUSS IT WITH YOUR LEGAL ADVISOR OR CONTACT C3 at gamalhennessy@gmail.com FOR A FREE CONSULTATION.