Attorney, Author, and Business Consultant for the Comic Book Industry

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Initial Thoughts on NFTs from a Comic Book Attorney

Added on April 11, 2021 by Gamal Hennessy.

I’ve had current and potential clients ask me about NFT’s over the past few weeks, and I’ve seen advocates on both sides of the issue present their perspectives. This isn’t meant to be a definitive statement on the technology and its impact on the industry. It certainly does not constitute business or legal advice. In the end, this can only be the beginning of an evolving perspective from someone who works with the legal issues surrounding comic book art, that can hopefully help increase understanding of this fluid topic.

What is an NFT?

The acronym NFT in this case stands for “non-fungible token”. While there is a more complex definition based on the underlying blockchain technology used to power it, the easiest way to think about NFT’s is as a unique digital file. According to The Verge “NFTs can really be anything digital (such as drawings, music, your brain downloaded and turned into an AI), but a lot of the current excitement is around using the tech to sell digital art.” On a certain level, NFT’s can be seen as an evolution of the selling of a singular physical art piece, like a commission you buy at a convention in artist’s alley or the single copy of Once Upon a Time in Shaolin that the Wu-Tang Clan sold to pharma-bro back in 2015.

What is the Value of a Digital File?

If an NFT is a digital file, and digital files by their nature can be instantly copied an unlimited number of times, what is the point of paying a lot of money for a digital file? The answer to that question can be traced back to the nature of collection in general and comic book collecting in particular.

Certain people have collected things that interested them from the time we could pick things up. Elite members of almost every civilization have collected works of art as a way to display their power and taste. There is an entire segment of the comic book industry based on the collection of comics and a separate market for original art from those comics.

For example, in 2014 there was a sale for Superman #1 for 3.2 million dollars. The 2021 value of a similar book is currently listed at 23.6 million dollars. But why? If you don’t care about comics or you don’t like Superman, these numbers might seem ridiculous. What is the inherent, universal value of a Faberge egg, a Basquiat painting, or a rare comic?

There isn’t one. The value is subjective. As long as the seller can find a buyer willing to pay the cost, then the value exists for that transaction. So while paying millions of dollars for a digital file doesn’t make practical sense, it makes just as much sense as any other subjective artistic collectible. The only difference in the case of NFT’s is the difference between the object’s digital and physical existence.

What is the Impact on the Environment?

Like many types of blockchain technology, the NFT process harms the environment in ways that override any economic benefit it provides. While the specific harm to the planet is a matter for debate, it should be taken in the context of the wider environmental impact of the comic book industry for comparison.

Before the pandemic, if one artist in New Jersey wanted to sell one piece of original art at San Diego Comic-Con, she would have to take a car to the airport, get on a plane, take a car to the hotel, consume several meals for several days and then repeat the whole process to get back home and she might not ever sell her art. At the same time, hundreds of potential buyers of that single art piece would have to replicate the process on their own.

How much negative environmental impact does that create? I’m not an environmental expert. This scenario is not an apples-to-apples comparison, since both the buyer and the seller here might get more benefit from the trip than just the sale of one piece of art, but the sale of comic book art, and comic book fandom in general, isn’t inherently environmentally friendly.

What is the Impact on Comics Creators?

While any digital file can be sold as an NFT, not all digital files, or their creators, have the same stakes in the process. In my opinion, colorists, letterers, flatters, editors, and designers don’t have much to gain from NFTs. Writers might also find a hard time finding interest in their scripts or pitches without some extraordinary factors. At the same time, cartoonists and creator-owned comic creators who own their work outright appear to have more flexibility to pursue NFT’s than freelance creators. Artists and publishers have the most to lose or gain from the potential NFT market.

Artists, who have been able to supplement their income with the sale of original art in the past, lost some of that capacity as they moved from generating work in a digital rather than physical medium. Publishers, looking for additional sources of revenue from their intellectual property, see NFT’s as a market that could be bigger than the sales of the actual comics. Battle lines are being drawn based on who has ownership and control over these assets.

Who Owns the Comic NFT?

Ownership and control over NFT’s comes down to the contracts governing the underlying intellectual property and the relative leverage between the artists and publishers for any single comic.

In a well-designed collaboration agreement or work for hire contract, there should be language concerning the ownership and disposition of original art. These clauses historically dealt with physical art, but they can be modified or interpreted to cover NFT’s.

Here’s an example of an original art clause. As you read it, keep in mind that the Owner is the publisher, the Talent is the artist, the Project is the finished comic, and the Services is the artwork.

The parties agree that Owner shall own all of the Services. Any original physical artwork created under this Agreement shall be owned by Talent. Talent may utilize up to four (4) pages of the Services in their professional portfolio or any marketing, advertising, or other display of the Services after the commercial release of the Project. Talent may not use any aspect of the Project to create additional materials not authorized and approved by Owner.

This paragraph attempts to achieve four goals. First, it designates that the publisher owns the pages produced by the artist. Second, it designates that the physical artwork (if there is any) is owned by the artist. Third, it allows the artist to use a portion of the pages to get more gigs after the comic is released (to avoid spoilers). Finally, it prohibits the artist from making and selling things without the approval of the publisher. The last sentence can be used to effectively prohibit the creation of an NFT, if the NFT is determined to be “additional materials.”

This is an example of an original art clause, but the contents of this clause can vary wildly based on the relative power of the people signing the contract. For example, an artist with enough leverage could have the word “physical” removed from the second sentence, giving her the potential to sell NFTs.

Leverage is defined as the power one side has over the other side in the pursuit of their interests. Companies like DC are using their leverage to shut down creator's attempts to generate revenue from NFTs that include DC characters. On the other end of the spectrum, publishers like AWA are coming out in favor of artists generating revenue from NFT’s. The difference in position could be based on a dissimilar corporate philosophy, or in the disparity in the market share and popularity between the companies characters, or a host of other reasons. In any event, artists who plan on selling NFTs will have to consider which publishers they work with and what they agree to in their contracts before they start selling.

What is the Future of Comic Book NFTs?

As I said in the beginning, this isn’t the last word on this issue. NFT’s, like page rates and other forms of compensation for comic creators, will continue to be a source of contention in the industry. There will continue to be business, legal and social fallout on both sides of the NFT issue depending on their relative position. The technology might become more efficient, more costly, or ultimately replaced by new technology. The market might stabilize or collapse. Publishers and artists could use the potential of NFTs as a negotiation point or as the basis for ongoing litigation. Whatever happens, creators, publishers, and consumers will have to reconcile with the continuing impact of digital technologies on the business of comics based on their goals, beliefs, and position in the industry.

Have fun with your comic

Gamal

If you have questions about the or legal aspects of your comic book publishing and you'd like a free consultation, please contact me and we can set something up that fits in with your schedule.

PLEASE NOTE: THIS BLOG POST IS NOT A SUBSTITUTE FOR LEGAL ADVICE. IF YOU HAVE AN ISSUE WITH YOUR COMIC PROPERTY, DISCUSS IT WITH A QUALIFIED CONTRACT ATTORNEY OR CONTACT C3 FOR A FREE CONSULTATION

Volunteer Lawyers for the Arts Presents the Business of Independent Comic Book Publishing

Added on March 25, 2021 by Gamal Hennessy.

I had the honor of giving a presentation for the St. Louis chapter of The Volunteer Lawyers and Accountants for the Arts in early March. I hope you enjoy the video.

If you want to find out more about VLAA, please visit https://vlaa.org/

If you have questions about the business or legal aspects of your comic book publishing and you'd like a free consultation, please contact me and we can set something up that fits in with your schedule.

PLEASE NOTE: THIS BLOG POST IS NOT A SUBSTITUTE FOR LEGAL ADVICE. IF YOU HAVE AN ISSUE WITH YOUR COMIC PROPERTY, DISCUSS IT WITH A QUALIFIED CONTRACT ATTORNEY OR CONTACT C3 FOR A FREE CONSULTATION

Dave Chappelle’s Advice to Comic Creators: Part 4

Added on December 11, 2020 by Gamal Hennessy.

This week, I’ve been using Dave Chappelle’s Unforgiven performance to highlight the need for understanding creative contracts. Today, I’d like to close out the discussion by looking at the concept of assignment.

Words in the legal world have different meanings than words in the real world. For example, most people define an assignment as a task, duty, or responsibility given by one person to another person. In the world of contracts, an assignment is the transfer of contractual rights and obligations from one party to another party. In most contracts, references to assignments are buried deep in the back of the agreement when your eyes are already glazed over and skipping anything that doesn’t look like the signature line. But certain assignment language can turn a good deal into a bad one right before your eyes.

Musical Chairs

Imagine yourself as someone who makes comics. Also, imagine yourself working hard to get your name out there at cons and online. You meet a small publisher and the two of you hit it off. He loves your work and offers you a deal. It’s not a great deal because it’s your first self-published project, but you take it anyway. Your book comes out and you’re as proud as a newborn parent.

Your publisher treats you like gold. He goes beyond the language in the contract to support and promote your book. He reports sales on time and he even pays you. Your book and the other titles in his catalog start to get a lot of buzz. Hollywood starts knocking on the door. Suddenly, people are talking about TV, video games, and even movies. Your publisher gets an offer for the entire company and he takes it. Now instead of being published by a small visionary publishing company, your book is swallowed up by a big vertically integrated conglomerate.

Your new publisher does not treat you like gold. Your contact at the central office has no idea who you are and isn’t interested in finding out. Your book is buried in an avalanche of content. The money stops. Your book becomes inventory for other media, but it is constantly pushed aside for higher-profile properties. Your entire relationship with them is defined by the original unfair agreement and you want to take your book elsewhere.

That’s when you read the assignment clause of your contract and realize there’s a problem.

Types and Options

Assignment clauses boil down into two types; mutual and non-mutual.

In a mutual assignment, you or your publisher could assign your rights in the contract to someone else at a later date or neither of you can ever assign your rights to anyone.
In a non-mutual type of assignment, only one of you has the right of assignment and the other side is stuck.

Publishers have a vested interest in being able to assign contracts. Their ability to sell their company is based in part on what is in the catalog. A company won’t be worth much if every title can walk out the door after a sale. Because of this and the inherent negotiating imbalance, most artists have many artists are not in a position to get a non-mutual assignment clause that goes their way. Many of them can’t even get a mutual assignment clause. Quite a few of them are stuck in a bad position.

This is what happened to Chappelle. His original deal was with Comedy Central, which is owned by Warner Brothers. But when AT&T bought Warner, Chappelle Show found its way to HBO Max and Netflix. Chappelle (because of other clauses in the contract) didn’t have any say in this decision and he didn’t get any money from the lucrative licensing deal.

Your Mission, If You Choose To Accept It…

The rights to catalogs change hands more often than you might think. Aspen Comics recently acquired the rights to Big Dog Ink. A few years back, DC acquired Wildstorm and integrated that entire universe into the New 52. In what is perhaps the largest catalog acquisition in recent memory, Disney bought Marvel, Pixar, and Star Wars. As comic properties become more lucrative more publishers will see value in having catalogs they can assign.

Your response to this situation is threefold:

Understand what kind of assignment clause you are dealing with and what options you have to walk away from a new publisher in the event of a sale
Negotiate for the best overall contract you can get upfront
Understand your long-term success will be based on the language in your contract as much as, if not more than, your relationship with the publisher.

In Chappelle’s case, it worked out in the end. Because he has more leverage with Netflix (see my earlier post on leverage) he could get Chappelle Show taken off the streaming service. You might now be as fortunate. Time alters circumstances and relationships. While you can’t see into the future or account for every eventuality, the more you understand about contracts before you sign them, the less you’ll regret the contracts you sign.

Have fun with your comic.

PLEASE NOTE: THIS BLOG POST IS NOT A SUBSTITUTE FOR LEGAL ADVICE. IF YOU HAVE AN ISSUE WITH YOUR COMIC PROPERTY, DISCUSS IT WITH A QUALIFIED CONTRACT ATTORNEY OR CONTACT C3 FOR A FREE CONSULTATION

Dave Chappelle’s Advice to Comic Creators: Part 3

Added on December 9, 2020 by Gamal Hennessy.

For the past couple of days, I’ve been using Dave Chappelle’s Unforgiven performance to highlight the need for understanding creative contracts. Today, I’d like to take a closer look at the idea of losing the right to use your own name.

Lesson 3: Marketing vs. Manipulation

There is a point in Unforgiven where Chappelle rejects the advice of his friends who tell him to just take Chappelle Show and go to another network. In addition to an analogy of running from one slave master to another, Chappelle mentions that even if he wanted to create a new Chappelle Show, he couldn’t call it Chappelle Show because he signed away his right to use his name that way.

The name and image of an artist can have a significant impact on the success of any creative project. The difference between an A-list actor, writer, or artist can mean the difference between a hit and a failure. This is one of the reasons certain artists are mentioned so prominently in a comic, film, or video game.

But you can’t just use anyone’s name to sell something without their permission. Invasion of Privacy is a set of legal concepts that include the use of someone’s name or likeness for commercial gain, intrusion, undue publicity, and false light.

Companies get around this law by asking artists to allow for their name and image to be used to promote whatever project is being contracted. They also normally acquire the right to use the name of the project itself, because it is hard to ask someone to buy something if you can’t mention what it is.

That isn’t a problem. The problem comes in the way the language is written into the contract. Take this example for instance:

“Company shall have the exclusive right to use the name and likeness of The Artist in connection with the advertising, promotion, exploitation, and exhibition of any product based upon the Material under this Agreement, in perpetuity, throughout the universe in any and all media now known or invented in the future.”

If Chappelle signed a contract that included a clause like this, then he gave up the right to use the title Chappelle Show, even though his name is included in the title and even though the places where the show is being marketed now didn’t exist when he signed the contract. Chappelle’s name belongs to him. Chappelle Show belongs to Comedy Central.

The impact of this clause isn’t hard to see when you see it in isolation. When it is buried in a 25-page contract, and you are three months behind on your rent, and someone is holding a check with your name on it for more money than you’ve ever had in your life, it’s not as easy to see into the future. It happened to Chappelle. It happens to comic creators all the time. But it doesn’t have to happen to you.

Tomorrow, I’ll look at the final lesson I found in Unforgiven. Until then,

Have fun with your comic.

Dave Chappelle’s Advice to Comic Creators: Part 2

Added on December 8, 2020 by Gamal Hennessy.

Yesterday I used Dave Chappelle’s Unforgiven performance to highlight the need for understanding creative contracts. Today, I’d like to take a closer look at the idea of leverage for you and your comics.

Lesson 2: Use and understand your leverage

Leverage in contract negotiation is defined as the power one side has over the other in the pursuit of their interests. Depending on the disparity between the parties, the leverage one side has over the other can define the negotiation process. For example, when Chappelle was a struggling stand-up comic with a wife about to give birth to their first child, he had a lot less leverage than the programming executive at Comedy Central who could give a show to dozens of hungry comics. In the same vein, if Marvel or DC make an offer to an aspiring artist, their leverage might be so high that the artist signs whatever deal put in front of them. Leverage comes from supply and demand. More specifically, control over scarce resources creates leverage.

Scarcity Breeds Power

Comic book publishers have to take the financial risk of releasing an unknown and unproven book. To mitigate this loss and to give themselves the potential for substantial revenue and control on the back end, many of them incorporate biased language into their contracts. Many creators sign those contracts because of their lack of leverage.

The publishers currently corner the market on supply. They often have more experience with the means of production, direct distribution, and some control secondary monetization (merchandise and media licensing).

The number of comic creators who are in demand for the publisher’s supply is massive compared to the number of publishers. To put this into context, there are about 300 comic book publishers in North America. Who knows how many potential artists and writers are out there dreaming of getting their books in print, movies, and games?

The scarcity of publishers relative to the abundance of creators produces a situation where publishers can afford to offer one-sided deals. Every unknown creator who demands a superior deal can be rejected by the publisher because ten or twenty other creators are willing to accept an inferior deal. Since the publisher is primarily looking for books to fill their publishing plan, one unknown book is just as valuable as any other from their perspective. This was the same situation Chappelle faced in the beginning of his career, but that isn’t his situation now.

Options for Creators

In light of the reduced negotiating power that undiscovered creators have, does it make sense to push for a bigger deal for a creator-owned project or work for hire page rate? Yes and no. While you might not be able to wrestle a six-figure advance out of Marvel, there are options you can pursue to make the most of your work.

Establish your reputation in the industry by taking on work for hire projects that will get you exposure for your skill without exposing the characters and storylines that you are saving for creator-owned work.
Find a more flexible small press that will offer more reasonable terms for new creators.
Explore independent publishing if only to increase your name recognition in the market.
Accept the biased deal as a means of name recognition.

While none of these methods is a quick road to fame and fortune, they can boost your negotiating power over time. An unknown creator has almost no leverage with a publisher. A creator with a following who represents tens of thousands of copies sold per month can command lucrative exclusive contracts, back end participation deals, and creator-owned contracts that give them considerable revenue and control potential. That’s one of the reasons why Chappelle said he prefers working with Netflix over Comedy Central. When he was negotiating with Comedy Central, he had no leverage. In his discussions with Netflix, he has the power to pull content off the air with a phone call.

Need to Understand Your Agreements

Whether you choose to accept a one-sided deal, negotiate better terms, or walk away, you need to understand what the terms are for the deal you are being given. It might make sense to take a bad deal now if it will boost your career later. The key is making an informed decision about what you are doing. Whether you decide to use a service like mine or not, knowing what you are signing and why is key to building and leveraging your negotiating power.

Tomorrow, we’ll look at a more nuanced element of Chapelle’s lesson. Until then…

Have fun with your comic.

Dave Chappelle’s Advice to Comic Creators Part 1

Added on December 7, 2020 by Gamal Hennessy.

To the best of my knowledge, Dave Chappelle doesn’t publish comics. He is one of the most celebrated comedians of his generation. He has created legendary stand-up performances, an iconic sketch comedy show, and he’s received some of the highest honors in his artform. If anyone has succeeded as a comic, it is Dave Chappelle.

But he wasn’t always at the top of his industry. At a certain point, he was a struggling comic trying to make it to the next level. Like many comic creators in the same situation, Chappelle got burned by his business partners.

This is the backdrop for the latest stand-up segment he uploaded to YouTube a few days ago. Dave Chappelle doesn’t make comics, but his experience offers four distinct lessons for anyone who wants to have a career in the comic book industry. This week, I’m going to cover those lessons, but I urge you to watch the special and share your thoughts on his experiences.

Lesson 1: Know what you are signing

When I started consulting clients about comic book contracts, 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 fifteen 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 a blatant attempt to hijack intellectual property from unsuspecting artists. This is the same issue Chappelle ran into when he signed his deal with Comedy Central.

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, including:

Giving the publisher complete control of the property, not just the actual comics, but the underlying copyrights and trademarks.
Giving the publisher control of the property in all media ever created, not just in digital and printed comics
Agreeing to financial terms that are designed to keep you from ever being paid for your work
Agreeing to give up your rights without being paid for them
Agreeing to never get back the rights to your property

Of course, not every contract is written this way. Not every publisher is a demon attempting to steal your life's work. But the history of entertainment in general, and comics in particular, is littered with famous stories of iconic characters being given away by their creators for little or no money. 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. Both of those concepts are true. I get it. Chappelle is living proof of that.

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 the 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. Chappelle needed a good lawyer to steer him away from a bad contract. 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.

Tomorrow I’ll talk about the idea of leverage and how it evolved for Chappelle over time. Until then,

Have fun with your comic.

What Can You Do For Your Comic During the Pandemic?

Added on March 22, 2020 by Gamal Hennessy.

Most aspects of normal life have been disrupted by the novel coronavirus, including the comic book industry. Social distancing has canceled conventions, crippled comic shop income and created confusion across the board.

But for some independent publishers, the pandemic can be a period of progress.

Publishing comics is more than attending shows and trying to sell books. It requires a significant commitment of time and effort before and after the comic is created. Our current period of social distancing can provide an opportunity to devote time to your comic that you might not have in normal life.

Depending on your personal circumstances and the stage of your book’s development, the following suggestions from my upcoming book might be helpful to you. They demand time and attention, but they don’t require money or direct interaction with other people. Since you might be stuck in your house anyway, consider the following developmental aspects to your comic publishing.

1. The Foundation

a. Stop and reflect on why you want to make comics in the first place (See What Are You Trying to Do?)

b. Identify your ultimate goal in comics

2. Intellectual Property Management

a. Make sure you have the right to make your comic (ownership, licensing or public domain)

b. Develop your synopsis, pitch, hook, setting, and characters

3. Investment

a. Develop a budget for your comic

b. Figure out where the money will come from to develop your comic before it’s made

i. Your money

ii. OPM (other people’s money)

4. Business Management

a. Decide whether you want to form a company for your comic (See The Benefits of Forming an LLC)

b. Search for professionals (accountant, attorney, editor) who can help protect your idea, your investment and you.

5. Talent Management

a. Decide who you are going to need to publish your comic (See You Need Two Teams)

b. Decide if you are going to use collaborators (See Collaboration Agreement) or Work For Hire (See WFH Agreement)

c. Search for possible candidates

6. Marketing*

a. Identify your ideal reader (See Who Is Your Ideal Reader?)

b. Identify your competition (See Who Is Your Competition?)

c. Build a relationship with your target market (See Building a Relationship with Your Reader)

7. Distribution

a. Research the requirements for each distribution channel

b. Decide how readers will get your comic

8. Production

a. Improve your creative skills

b. Research the impact of each comic form on your market

c. Develop a production schedule

d. Develop communication methods and contingencies

e. Research different digital asset management options

9. Advertising

a. Develop advertising sell sheet

b. Leverage endorsements and reviews

c. Research the comic book press

d. Explore paid advertising options

e. Understand advertising timing

10. Sales

a. Understand profit, loss, and breakeven for your comic

b. Decide how you will generate money with your comic

i. Monetization

ii. Crowdfunding

iii. Sales

11. Revenue

a. Understand all your revenue sources based on your distribution and sales

b. Understand all your payment liabilities based on profit splits, royalties, and outstanding payments

12. Growth

a. Consider what you will do after your comic is published

b. Consider changes in the market (See Are Comics Worth Publishing If Marvel Stops?)

c. Consider what happens to your comic after you are gone

In his book Unnatural Talent, comic creator Jason Brubaker said that the best way to publish a comic is to do one thing every day to move the process forward. In this period of uncertainty, there are more important things in life than comics. But if you’re safe, healthy and find yourself wondering how to spend some of the days and weeks of this crisis, spending time developing the business of your comic can put you in a better position when the world emerges from its forced isolation.

Stay safe and have fun with your comic.

Gamal

* If you want even more information on comic book marketing, you can get a PDF of my free guide here.

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Who Isn’t in the Target Market for Your Comic?

Added on July 16, 2019 by Gamal Hennessy.

This is a modified excerpt from a book I’m working on called Independent Comic Book Publishing. It’s the second installment of my seven part series on independent comic book marketing. My plan is to start from the basic idea of marketing and explore the goals and challenges of marketing in a competitive environment. As always, I welcome your comments and insight.

A target market is the specific group of potential customers most likely to buy a company’s products or services. While every independent publisher is eager to connect with their target market, the first step is to understand who isn’t a potential customer.

Is Everyone in Your Target Market?

Your project can’t reach everyone in the world. Even if you could generate Super Bowl ad, Beyoncé endorsed, viral cat video, blockbuster movie level exposure, your story would still only appeal to a minuscule portion of that audience. There is no point in wasting your resources trying to tell everyone about your book because that isn’t the way media entertainment is consumed today.

Wired editor Chris Anderson described the shift in market composition in his best-selling book The Long Tail. According to Anderson, people had fewer choices in the analog era thirty years ago. There were a three major television networks and a handful of movie studios, record labels and major publishers controlling all media consumption. Because there were fewer options to easily select from, most people tended to gravitate towards the same things. Prime time television, Top 40 radio, and the New York Times Best-Seller List dominated media culture. There were always a minority willing to seek out alternative and underground entertainment, but those fans were so scattered that connecting with them wasn’t cost effective for media producers. Comics shared in this phenomenon. All of the top selling comic book issues in the modern era were published by the Big Two and all of them were released between 1987 and 1993.

Digital production and distribution permanently altered media consumption because it was able to satisfy granular preferences in a cost effective way. Prime time television lost its importance to niche cable television, on demand streaming television, and video platforms like YouTube. Record stores vanished with the rise of MP3s, illegal distribution like Napster and its more legitimate successors like Pandora and Spotify. Amazon crippled bookstore chains. Comics are still clinging to the Wednesday comic shop model, but the number of stores in America has decreased drastically. And the sales of individual comics have followed in this trend. While the top selling book in 1991 sold more than 7 million copies, the top selling book of April 2019 didn’t reach 200,000.

But lower sales at the top of the chart are not necessarily bad news for independent comic book publishers. According to the Long Tail theory, lower sales at the top are the natural result of more and more people focusing their attention on smaller and smaller niches in the market. For example, the person who might have listened to Top 40 music twenty years ago because she liked a few hip-hop songs on the list can now focus her time and money on the underground Korean hip hop she really wants to hear. Someone who read best-selling science fiction books in the past can spend all his time reading and writing gay Serenity fan fiction now. The teenager in the 1960’s who identified with Spider-Man’s teenage angst now has an entire category of YA books and comics specific to her race, class and gender identity to satisfy the same need. Of course, we still have blockbusters in every form of media, but it has never been easier for people to carve out their own niche and connect with like-minded people around the world. We live in a world of niche marketing now. Director and activist Ava Duvernay once said “Every creative project has an audience. The key is finding, understanding and connecting to that audience.”

How does the Long Tail theory and niche marketing apply to your independent comic? Once you strip away all the people who are not in your target market, you’ll be able to define and identify all the people who might want to read your book and focus your attention on them.

Are All Comic Book Readers in Your Market?

Trying to define your target market as everyone who reads comics is both too broad and too narrow to be a helpful classification.

It is too broad because comic books are not a market. Comics are a narrative medium. It is a way to deliver a story. An entire medium can’t be a defined market. That would be the logical equivalent of a movie studio trying to release a movie that appeals to everyone who likes movies, or a television network trying to promote a show to everyone who likes to watch television. Comic book buyers are not a single monolithic group. In order to create a useful definition of your target market, you have to go beyond the medium and focus on the message.

It is also too broad to define your target market as fans of superhero comics. There is a misconception in popular culture that all comics are superhero comics. The reason for this error is obvious, at least in America. The Big Two dominate much of the monthly output of comics, and the vast majority of books on they put out are about the adventures of superheroes. The most prominent merchandise, movie, and television shows that take their inspiration from comics focus on the connected universes of DC and Marvel. If a person only knows about comics from mainstream media and never goes into a comic shop, then it’s easy for them to think that superhero comics and comics are one in the same.

But superhero comics are simply one type of comics. In the same way every movie isn’t a summer blockbuster and every television show isn’t reality TV, every comic isn’t and shouldn’t be, about superheroes. If you consider the literary importance that bandes dessinées have in France, the enormous variety of manga genres in Japan, or the steady tide of non-superhero work coming out of the independent comic publishers, then you’ll realize that you can take comic’s unique ability to tell any story to create a narrative that is unique to you and your perspective.

Attempting to define your target market as simply comic book readers is also too narrow in the modern comic book marketplace. According to the market and consumer data site Statista, 75% of adults in America have never read a comic book. There are also economic indicators suggesting the overall number of adults buying comics is shrinking. This means that if you only define your target market as current comic book readers, you’re focusing on a small pool that is getting smaller and already dominated by two major players. A better approach is to look at a target market that includes a subset of comic book readers, but also identifies a potential group who haven’t read comic books yet.

Is Your Market Just Superhero Comic Book Readers?

Even if you are publishing a superhero comic, defining your target market as the readers of all superhero comics is still too broad to be effective.

While the superhero genre is a specific category of narrative characterized by a particular style and form, it fits more of the McKee’s definition of a mega-genre, since it is large and diverse enough to include dozens of sub-genres. There are major differences in narrative content and tone from one superhero story to another. The person who reads Superman might not be interested in The Punisher or The Boys. The same logic applies to other broad categories when considering niche markets. There are multiple variations of comedy, horror, science fiction, and action. For example, Marguerite Bennett’s InSexts isn’t simply a horror title. It can be more accurately described as a historical, lesbian, feminist horror title.

The target market for your book will be defined by the relationship between the content of your book and the particular characteristics of your potential readers. There is an ideal reader for your book that can’t be defined by medium or broad genre. Once you identify the nature of your ideal reader, you can figure out how to create satisfying relationships with them.

I’ll provide a system for creating a definition of your ideal reader in next week’s post.

Have fun with your comic.

Gamal

What is Independent Comic Book Marketing?

Added on July 7, 2019 by Gamal Hennessy.

This is a modified excerpt from a book I’m working on called Independent Comic Book Publishing. It’s the first installment of my seven part series on independent comic book marketing. My plan is to start from the basic idea of marketing and explore the goals and challenges of marketing in a competitive environment. As always, I welcome your comments and insight.

What is Marketing?

Marketing is the business process of creating satisfying relationships with customers. As an independent publisher, you need to spend time finding, connecting, and building bonds with the people who are most likely to be interested in your project. Marketing isn’t magic, and it doesn’t need to be deceptive or sleazy. It does need to tap into collective aspects of human consumption if your book is going to reach the right people.

In the late 1980’s there was a sports fantasy drama called Field of Dreams. The tagline for the movie was “If you build it, they will come.” This phrase outlasted the popularity of the film and became synonymous with the idea that a great product or service creates its own buzz and audience with little or no effort on the part of the creator. In my experience, a lot of comic book marketing uses the Field of Dreams model. Unfortunately, it is my contention that much of the decline in comic book sales over the past forty years can be blamed on this passive and insular approach.

A more proactive and effective method of customer interaction comes not from business, but from interpersonal relationships. In the best-selling book The Art of Seduction, Robert Greene describes a system that can be boiled down into five parts:

1. Find the right people to connect with

2. Understand what they are looking for

3. Get their attention

4. Offer what they want

5. Provide what they want in exchange for what you want

This process isn’t limited to finding a date or winning an election. It can be used to guide your efforts in finding the right market for your project. Consider the experience of finding out about any action movie released in 2019.

Because I’m in New York, I’m going to see stuff about any particular movie on taxis, buses, and billboards when I’m out in the street.
If I look at my phone, it will pop up on social media multiple times per hour.
If I look at YouTube, there will be teasers, trailers, interviews, behind the scenes stuff, and speculation.
There will be talk show interviews and commercials, magazine spreads and cross promotion with various types of merchandise.

By the time the movie actually comes out, it’s almost impossible to not know what the movie is about, why you want to see it, and where to get tickets. Based on some estimates, the cost to market a feature film can be anywhere from 5-20% of the production budget. The film industry creates excitement designed to put people in seats.

When was the last time that you heard that kind of buzz generated for any comic ever?

How much effort does marketing require?

I’m not trying to suggest that you need to buy a billboard in Times Square or get interviewed on the Tonight Show as part of your marketing campaign. I am not asking you to spend twenty percent of your financial investment on marketing. I am suggesting that you spend between 5-20% of your time and effort to find the right audience for your project. There are too just too many comics released every month for you to publish and pray that people buy your book.

According to Jim Gibbons, editor for Dark Horse and other publishers, there are more than 400 comics released each month or about 100 per week. Assuming you only rely on comic book shop customers to buy your book (which is a mistake), and all number one issues are treated equally (and they’re not) then you only have about a 1% chance for any random customer to buy your book from any given shop, unless you create a market for your book before it’s released. When you factor in variables like well-known publishers, famous characters, media tie-ins, and Diamond purchasing incentives, a more realistic chance of a random sale for your book is less than one percentage point.

If you don’t market your book, there is a very good chance no one will read it. If you build it, they will come, but part of what you build has to be a positive relationship with the right audience for your book.

Have fun with your comic.

Gamal

A Simple Guide to Page Rates, Royalties and Other Work for Hire Compensation in Comics

Added on May 22, 2019 by Gamal Hennessy.

By Gamal Hennessy

This is a modified excerpt from a book I’m working on called Independent Comic Book Publishing. It’s designed to walk you through the basics how to pay the business and creative people who help create your comic. While this can’t be used as legal advice, I hope you’ll find it helpful.

What Forms of Consideration Are Used in Work for Hire Agreements?

Because creators who sign a work for hire agreement do not own a portion of the underlying property, the four major types of consideration they can get are different from collaborators (See a Simple Guide to Getting Paid in Collaboration Contracts), based on the deal negotiated between the parties:

Page rate: Different professions get paid according to different measurements. Most lawyers get paid by the hour. Sales people get paid based on commissions. Freelance comic book artists normally get paid a page rate. The basic idea is for every page you’re hired to work on, you get a set fee. So if you get $100 per page and the book is 32 pages, then you get $3,200. A page rate is a base number. It doesn’t take into account incentives like royalty pools, recoupment, back end participation or anything else that could muddy the waters. It’s a straight forward transaction; one page for one price. As long as you know what the price is, everything else is based on that.
Credit: This is similar to collaborators, where work for hire creators can get their name on the book, as is customary in the industry (i.e. on the cover, in the advertising materials and on social media)
Revenue sharing: As an additional financial incentive, some work for hire deals include a royalty in addition to, or in place of, a page rate. A royalty is defined in comics as a payment based on the revenue generated from a distribution source. For example, you might offer your artist 25% of the net profits from any poster or t-shirt sales that use their artwork. You can also allocate royalties into a royalty pool that pays all participants from a shared source of income, but those kinds of financial structures are utilized by larger companies and usually aren’t necessary for your initial project.
Copies of the final product: If you are going to distribute your project in digital or print format, one form of consideration is a specific number of free copies of the book. You can also consider giving talent the opportunity to buy additional copies at a discount so they can either give them away as promotional items or sell them on their own. If you decide to use this form of consideration, just be sure to factor this into your print runs. If you have a large team or you offer a large number of copies to each person, you could be cutting too deep into your revenue.

How Do You Determine the Right Page Rates?

Page rates in the comic book industry are not standardized, since there are several factors that will go into what a freelance creator will command including:

Their experience
Their skill level
Their established fan base.

While these factors are subjective and based on what you can afford to pay, there are some baselines you should keep in mind. This unofficial snapshot of industry pages rates is based on information contained on the 2016 survey website Fair Page Rates:

Writers: $25-$220 per page
Cover Artist: $200-$750 per cover
Pencils: $100-$250 per page
Inks: $75-$200 per page
Coloring: $35-$150 per page
Flatting: $8-$20 per page
Lettering: $10-$50 per page

What Forms of Consideration Are Used in Business Work for Hire Agreements?

Business professionals are just as important as creative professionals in publishing a successful comic (See You Need Two Teams to Publish an Independent Comic). Business work for hire agreements differ from creative work for hire agreements in comics because the base line measurement of a page isn’t helpful as a calculation. In addition, each team member has to deliver something different, so you can’t use a single standard. Business and creative work for hire contracts can be similar if you replace the concept of a page rate with a unique milestone for each role.

A milestone is a stage of development in a project that can be used for the measurement of work performance. For in creative work for hire agreements, the page serves as the milestone. You can create specific milestones for business work for hire agreements. For example, let’s suppose you want your book to be available as a printed single issue for comic book shops. The person who takes on the printing role might have the following milestones in their contract. Every milestone can be tied to a date, a payment or both.

Create the criteria for printer selection
Develop list of potential printers based on printer selection criteria
Send out RFP to printers
Collect samples from potential printers
Evaluate all RFP and assist in the selection of a printer
Negotiate terms of printing agreement with selected printer
Manage the delivery of the final print files to printer
Manage the printing of the first issue
Ensure quality of the printing process
Manage shipment of books from printer to customers
Confirm accuracy of the invoices received from the printer

Business work for hire agreements can also include things like credit in the book and revenue sharing. The important point is to clearly spell out the relationship between milestones and compensation in each contract.

How Can You Define the Relationship Between Consideration and Performance?

The relationship between the consideration you pay your talent and their performance on your project boils down to how you manage your leverage (See Are You Working for Free?). Leverage is defined as the ability to influence people, events and decisions. As an independent publisher, your main source of leverage will come from your consideration.

Managing the timing of your consideration is key. If you pay talent before all the pages or milestones are delivered, then they will have less incentive to perform their role on schedule. If you try to make them finish all the work before you pay them anything, they will probably refuse. Even if they don’t, you will have less incentive to pay them if you already have everything you need. This isn’t an indictment of anyone’s morals on either side. It’s simply an observation I have made over the years in my legal practice and my professional life.

The middle ground between everything up front and everything at the end is a give and take system I refer to as the tennis method. The basic process is simple. Each side divides their performance or payment into several stages. One side starts things, normally by making the initial payment. The other side responds by completing part of the performance. This exchange goes back and forth until all the consideration is paid and all the performance is completed. (See Solving the Payment Problem video for more details) Using our printing manager as an example, the consideration and performance can be divided this way:

Both sides sign the contract: (Publisher pays 5% of the printing consideration)
Print manager creates the criteria for printer selection (Publisher pays 5%)
Print manager develops a list of potential printers based on printer selection criteria (Publisher pays 10%)
Print manager sends out RFP to all printers (Publisher pays 10%)
Print manager and Publisher evaluate all RFP and select a printer (Publisher pays 10%)
Print manager negotiates terms of printing agreement with selected printer (Publisher pays 10%)
Print manager manages the delivery of the final print files to printer (Publisher pays 10%)
Print manager manages the printing of the first issue (Publisher pays 10%)
Print manager ensures quality of the printing process (Publisher pays 10%)
Print manager manages shipment of books from printer to customers (Publisher pays 10%)
Print manager confirms the accuracy of the invoices received from the printer (Publisher pays 10%)

This method also applies indirectly to royalties or any kind of consideration based on the performance of the book, because the book performance triggers the new payment. For example, if the talent handling your sales gets a bonus if a certain number of issues sell, then the sales milestone triggers the payment.

What Happens If You Don’t Pay the Consideration?

The only thing worse than offering exposure is promising to pay your talent and then not paying them. A breach of contract is defined as failing to perform a contract obligation without justification. If you sign a contract and then fail to perform (i.e. you don’t pay your talent) that can be grounds for a civil lawsuit, arbitration or mediation which can lead to financial, legal, and professional consequences that far outweigh the money you might save in the short term.

Financial: The penalties for breach of contract often involves the payment of damages, which is the money paid as compensation for the breach. The amount of damages can range from nominal amounts, paying the amounts you owe or paying a penalty of twice as much as you were supposed to pay in the first place.
Legal: Courts can force you to take a specific action (like pay your talent or not use the work they did for you), transfer your IP to the talent because your breach invalidated the IP ownership clause, or cancel the entire agreement. This might be annoying if you’re project is just getting off the ground. It could be devastating if you’ve already sent the books to the printer or if you got some interest from Netflix for your book.
Professional: No one wants to work with someone who has a reputation for cheating their business partners. Comic publishing is a small industry. It only takes one lawsuit to define your company. So only agree to pay what you can afford to pay and when it’s time to pay…pay.

Have fun with your comic.

Gamal

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