Eight Legal Considerations for Comic Book Crowdfunding

Most comic book creators and publishers are aware of the impact crowdfunding has made in the industry over the past few years. Few creators are aware of the legal issues they need to consider when planning a crowdfunding campaign. As a comic book attorney who has represented several crowdfunding creators, I’d like to offer some thoughts on the best practices for comic book crowdfunding.

Crowdfunding as Distribution

Despite the concept that Kickstarter rewards are not guaranteed, many comic creators treat crowdfunding as a contingent distribution method, meaning that the book will be published if the funding goal is achieved. While established publishers use the platform to offset costs and create marketing buzz, emerging and small press publishers are using platforms like Kickstarter to bypass the perceived gatekeepers of traditional publishing to bring their stories directly to their readers.

From a legal standpoint, this means crowdfunding needs to be treated as a variant of the independent comic book publishing process. There are some nuances unique to crowdfunded comics, but I’ve tried to list the major legal considerations below.

Legal Checklist for Comic Crowdfunding

1.      Ownership of the underlying intellectual property. The story, characters, and logo of the crowdfunded comic represent IP (copyrights & trademarks) that will probably be owned by some member or members of the crowdfunding team. Since that IP has the potential to be far more valuable than the initial crowdfunding campaign, whoever plans to claim ownership needs to protect their interests by completing the proper IP registrations, securing the rights to all the work done on the book with contracts, and strive to maintain ownership of the IP after the book is printed.

2.      Investment. Crowdfunding can generate substantial revenue for a comic book project, but there are business and creative upfront costs that someone needs to pay for before the campaign launches. Who pays that money, how they get their money back (recoupment), and what happens to that investment if the campaign fails all need to be understood by the entire crowdfunding team and established in a contract.

3.      Business formation: The creation of a legal structure can provide significant liability protection and tax benefits to anyone publishing comics, including crowdfunding creators. Consider starting a company to manage the financial and intellectual property assets of your campaign.

4.      Project Management. Crowdfunding involves a lot of work on both the business and creative sides. The role of everyone one involved, from managing the social media for the campaign, to producing the comic, to printing and fulfillment should have both their role and their compensation spelled out in a written contract.  

5.      Talent Acquisition: Running a campaign is easier if you don’t do everything yourself, but the responsibility of everyone involved, their relationship to the IP, and what they’re being paid needs to be clear, whether the campaign succeeds or not.  This can range from a collaboration agreement, a work for hire agreement, or a services agreement, but the contracts should be in place before the campaign goes live.

6.      Printing and fulfillment: If the campaign is successful, you’ll need to have a plan in place to deliver the rewards to your backers. Many services have emerged to offer this service if you don’t want to have a packing party, and each one should have its own terms and conditions available for review. It is always best to look these over on your own or with your attorney to ensure you’re getting what you’re paying for.

7.      Post campaign sales: A crowdfunding campaign can provide a great platform for an emerging creator to make a splash with their target market, but the end of the thirty-day campaign doesn’t have to be the end of your distribution efforts. Whether you sell comics on your website, through the direct market, or digital distribution it always pays to review those terms of service to ensure each platform is a good fit for your book.

8.      Revenue distribution: When the money arrives, you need to know where it is supposed to go. Outstanding payments to creatives and vendors need to be made and taxes may need to be paid. After the dust settles, any funds leftover (either from the campaign itself or the ongoing sales) can be distributed to the IP owners, collaborators, or anyone else who is entitled to a bonus for a successful campaign.

These eight steps do not offer a guarantee for a comic book crowdfunding campaign will go well, but they can put a comic creator in a better position to succeed, especially if the book reaches its funding goal.

Have fun with your comic.

Gamal

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

Diamond’s Future Looks Rough

For almost 30 years, Diamond Distributors has been the primary source of single-issue comics to retailers. Many business analysts saw this as a negative aspect of the industry, with many calls for the company to evolve with the changing market. But Diamond’s reign continued unabated, until COVID accelerated what might have been inevitable.

During the pandemic, DC, the second-largest publisher in the industry, broke away from Diamond and made deals with two alternative distributors. Last month, the floodgates broke when AHOY Comics, AWA Studios, Behemoth, BOOM! Studios, Humanoids, Insight, Legendary, Oni Press, Red 5 Comics, Scout Comics, Source Point Press, Vault Comics, VIZ Media, Z2 Comics, and Heavy Metal moved their distribution to the venerable bookseller Simon and Schuster. As everyone was trying to digest this move, Marvel, the largest publisher in comics, announced their move away from Diamond and towards Penguin Random House. In the span of 18 months, Diamond went from the primary distributor of comics to a business in peril. And the damage might not be over. IDW, another major player in the market is working off an expired deal with Diamond, so that publisher might leave in the next few weeks.

Why are all these publishers leaving? Most of it boils down to cost and exposure. Both S&S and PRH offer better financial terms and wider reach than Diamond.

What will be the overall impact on the market? That remains to be seen. It’s unclear if either company can adapt to shipping single-issue comics in the mint condition that comic shop customers expect. Another open question is how easy or hard it will be for independent publishers to secure distribution through these larger companies. And no one knows whether Diamond can survive or what it will look like if it does. But the lesson is as clear as it is cliché.

Adapt or die.

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

What are the Best Books to Give to the Comic Book Creator in Your Life?

If you’re trying to figure out the right gift for the comic creator in your life (even if that creator is you), please allow me to offer the following suggestions.

I referred to all of these titles in my book, The Business of Independent Comic Book Publishing, but each one deserves to be read on their own.  

Art:

Images are a fundamental aspect of the medium, so artist on every level can benefit from these classic guides:

• The Complete Guide to Self-Publishing Comics by Comfort Love and Adam Withers

• Creating Comics from Start to Finish by Buddy Scalera and Chris Eliopoulos

• The DC Guide to Creating Comics

• How to Draw Comics the Marvel Way by Stan Lee and John Buscema

• The Insider’s Guide to Creating Comics and Graphic Novels by Andy Schmidt

• Making Comics by Scott McCloud

I also want to give a special mention to the Strip Panel Naked YouTube Channel and their monthly magazine Panel X Panel.

Comic Book Industry History and Trends

If you don’t know where the industry has been, what’s happening now, or where it’s going it will be harder to succeed.

• Comic-Con and the Business of Pop Culture by Rob Salkowitz

• Demanding Respect by David Lopes

• Pros and Comic Cons by Hope Nicolson

Contract Negotiation

Contracts are fundamental to comics, whether you’re doing your own book or working for someone else.

• Getting Past No by William Ury

• Getting to Yes by William Ury

• The 48 Laws of Power by Robert Greene

Crowdfunding

Kickstarter is generating millions of dollars per year for comics, but only if you do it right

• Crowdstart by Ariel Hyatt

Distribution

Your books have to find their way into the hands of your readers somehow. 

• Comic Shop by Dan Gearino

• How to Self-Publish Comics by Josh Blaylock

• Your First 1,000 Copies by Tim Grahl

Economics

The comic book industry is a business. Understanding the numbers will give you a better understanding of the business.

• The Economics of Digital Comic Book Publishing by Tim Allen

• The Long Tail by Chris Anderson

Law

Several different aspects of law impact every comic, but these books focus on the most important element; intellectual property,

• Comic Book Start-Up 101 by Dirk Vanover

• The Pocket Guide for Comic Creators by Thomas Crowell

• The Law for Comic Book Creators by Joe Sergi

Marketing

Finding the right people to read your comic can be the difference between financial success and frustrating failure. 

• Book Yourself Solid by Michael Port

• Comic Book Marketing 101 by Mat Nastos

• Is $.99 the New Free? Steve Scott

• Laws of Human Nature by Robert Greene

• The Art of Seduction by Robert Greene

• This is Marketing by Seth Godin

Project Management

Publishing a comic involves a lot of moving parts. Making all those pieces fit together takes more skill than luck.

• Unnatural Talent by Jason Brubaker

• Write or Wrong by Dirk Manning

• Write, Publish, Repeat by Sean Platt

Writing

Comics are a narrative art form, so the story might be the most important element. While there are good books on the specific discipline of comic writing, there are also lessons to be learned from both outside the industry, including:

• Dialogue by Robert McKee

• Elements of Fiction Writing: Conflict and Suspense by James Scott Bell

• Making a Scene by Jordan Rosenfeld

• On Writing by Stephen King

• Story by Robert McKee

• Twenty Master Plots and How to Build Them by Ronald Tobais

• Words for Pictures by Brian Michael Bendis

• World-Building by Stephen Gillett and Ben Bova

• Writing for Comics by Alan Moore and Jacen Burrows

• Writing for Emotional Impact by Karl Ignlesias

• Writing Subtext: What Lies Beneath by Linda Seger

So which are your favorites? Are there any books I left out? Share your opinion in the comment and help grow the comic creator library.

Have fun with your comic.

Gamal

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

Do We Have Too Much Comics Based Entertainment?

by Gamal Hennessy

Last week had two milestones in comics based transmedia entertainment. Batman v Superman broke records for both highest opening film in the genre and fastest decline in weekend revenues. Along with crossovers from the Flash and Supergirl TV series, the recent success of Deadpool, Daredevil and Gotham, as well as the much anticipated Civil War, Suicide Squad and Doctor Strange films later this year and the industry appears to be firing on all cylinders.   

But not everyone sees a bright future for the art form. Some critics from the Washington Post contend that the revenue cycle of the latest Batman film is a sign that the genre is running out of creative and financial appeal. Is this accurate? Where does it end for this style of entertainment, and what does this new world mean for the creators of this work?

The Reality TV Connection

Consider the recent past, before the current “golden age” of television with Game of Thrones, Mad Men and Breaking Bad where unscripted or “reality” TV dominated the pop culture landscape. It began with experimental shows like MTV’s Real World and then expanded into things like Road Rules. A few years later, shows like Survivor, the Bachelor and American Idol became prime time staples.

That prompted a flood of reality programming. The category got so big it had to develop subgenres to create differentiation. They had makeover shows, celebrity shows, and competition shows. Every network felt the need to jump into the category. Networks like the History Channel and Food Network created shows having little or nothing to do with the channel’s original purpose. The phenomenon became so big MTV itself morphed into a reality TV network. For all intents and purposes it abandoned music videos altogether.

But at a certain point, it was all too much. The industry couldn’t absorb another Real Housewives or singing competition show. The genre shrunk to a handful of shows that gets smaller every year.

The Tail That Wags the Dog

Now consider the evolution of comics based entertainment over the past twenty five years. The success of films like Batman in 1989, Spider-Man in 2002 and the Avengers franchise in 2013 have made this genre of film one of the most financially successful categories in the history of movies. (See IMDB Highest Grossing Films of All Time). When you add the success of TV series like Smallville and Arrow to the equation, not to mention animated series like TMNT, Batman, Justice League and X-Men and you have a content avalanche that’s only gaining momentum. We’ve reached the point now where some universities are devoting college classes just to the comic book movie phenomenon (See New College Course for the Marvel Universe). The industry has come a long way from the sad days of films like Howard the Duck and Spawn.

More or Less

But how far can this momentum take us? Is there a connection between the fall of reality TV and the coming implosion of transmedia in comics? Consider this:

• Unlike reality TV, it will take more than a box office flop (or even a series of flops) to stop it. Green Lantern, Punisher and Ghost Rider taught us that.
• It won’t come from a lack of “A List” actors or characters. Iron Man wasn’t a household name before RDJ got to it and no one knew who Guardians were before last year.
• It’s not just a game for Marvel and DC, since Wanted, Sin City, Kick Ass and Walking Dead have shown independents can take their titles to the screen too.

So maybe the question isn’t ‘Will this genre collapse?’ There might be an opportunity for comic based transmedia to expand instead of contract.

Will comic film and television get their own awards category at some point? Which network will abandon its original mandate and become a comic entertainment channel? The questions seemed silly ten years ago. Now it doesn’t seem so farfetched. In the world of comic entertainment, comics are becoming the bottom priority, not the top (See Making Comics Isn’t Really about Comics Anymore)

Forward Thinking

What does all this mean for aspiring writers and artists? I think there are three takeaways anyone in the industry should keep in mind as they build their careers:

1. Opportunities beyond traditional comics are continuing to grow not just in terms of TV and film, but in the areas of video games, streaming video and other forms of entertainment
2. While the chances of translating any given property into a mainstream market release is still rare, it is essential for creators to know and protect the rights they have in the comics they create
3. The amount of quality entertainment coming into the marketplace can raise the bar across the industry and drive innovation in art and story quality.

We might be living in the golden age of transmedia entertainment, but it will take creative expansion and prudent business choices to keep the momentum going.

Have fun.

Gamal

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

The Wheel of Time Offers a Cautionary Lesson for Turning Novels into Film

By Gamal Hennessy

            Imagine you wrote a story. It’s a popular story, selling forty-four million copies over 14 connected novels spanning from 1990 to 2013. Now imagine your type of story is popular, because stories in the same fantasy genre, like The Hobbit and Game of Thrones, have been cleaning up in movies, TV and video games. Finally, imagine you’ve licensed your story to a production company created just to produce your work and they signed a distribution deal with Universal to distribute your story to the masses.

            Are you excited? Can you see yourself inviting J.K. Rowling and George R.R. Martin to your castle in Davos for a poker game with solid gold chips? Hold that thought.

What if I told you there is such a story, The Wheel of Time written by Robert Jordan? What if I also told you the only TV or movie adaptation ever made of this story in thirteen years was a half hour TV show that aired on FXX at 1:30 am without any advertising, marketing or official notice? What if I told you the show was thrown together weeks before without the knowledge or consent of Jordan’s estate? (See The Sad Lesson of The Wheel of Time) It’s not as exciting now, is it?

The Wheel of Time problem stems from two related contract concepts. The first is the loss of control a writer gives up in exchange for optioning his book, play or comic to be made into a movie (See Losing Control and Loving It). This is a normal aspect of film licensing. Most of the time, a competent production company can adapt a written story to the aesthetics of the screen in a way that makes money. The production company in this case seems unwilling or unable to bring the book to life.

The second problem revolves around the retention of rights. Many licenses for literary properties only last a certain number of years. This is known as the term. The term can be extended as long as the company holding the license continues to release work based on the story. You can see quite a few examples of this in modern film. To a certain extent, the Spider-Man, Fantastic Four and X-Men franchises all get new films every few years to prevent Disney/Marvel from becoming even more of an entertainment juggernaut than it already is (See Is the New Marvel Universe a Secret War on Fox Super Hero Films?). But in the case of Fox and Sony, the source material gets a big budget treatment and star power put behind it. The movies aren’t thrown on to a third tier cable station in the middle of the night without anyone knowing about it.

Hope isn’t lost for an authentic Wheel of Time TV franchise. Many popular characters, including Superman, Terminator, James Bond and Spiderman had to fight in court before they could fight on screen. But creative professionals need to learn from the Wheel of Time debacle. Not every deal is a good deal. Time frame and control of rights matter, even when you’re a novelist or comic author thinking about movie rights. You might not be in the best position to make a deal (See David vs. Goliath), but you and your attorney should strive to give your property the best chance for success (See Treat Your Art as an Investment)

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

Artistic Fantasy vs. Financial Reality

By Gamal Hennessy

At some point, every artist needs to balance the relationship between their art and their finances. A musician might want to spend all her time practicing and performing, but if singing isn’t making her enough money to live, she might have to take an office job and spend less time with her music. A writer might want to create experimental work outside of the mainstream, but agents and publishers might push for a YA or historical romance, because the market for those books already exists. When your bank account and your craft pull you in different directions, you have to make a choice about what you can and can’t do.

Independent artists have an additional layer of complexity when it comes to the relationship between financial and creative resources. Many of us have finance the production and marketing of our own projects. Not only are we trying to make enough money to have a home to live in and food to eat, we need to pay to get our work out into the world. The new era of digital distribution has made it much cheaper to release work, but it still isn’t free (See How Much Does It Cost to Publish a Book Anyway?) Successful projects will cover their costs and turn a profit (See Profit and Loss Statements for Independents) but it might take a book several years to recoup its production costs, and some books never turn a profit at all.

In the face of this reality, I realized I have a problem for my books. My publishing goal for the next four years is to release two books per year (See What is Your Publishing Plan?) This goal has two parts; the creative side where I have to write the book and the publishing side where I have to pay to get the book out. From a creative standpoint, things are going well. My second book for 2014 is done and so is my first novel for 2015. I’m 60% done with the first draft for my second book for 2015 too, which puts me ahead of schedule. As a writer, I’m very pleased with my pace and my progress.

As a publisher, things are not so great. Various circumstances (some positive and some negative) limit my ability to fund my second release of this year. I’m uneasy about the idea of crowdfunding (probably because I’ve never tried it) and the idea of pushing the release back six months throws off the momentum I’ve built with my core group of readers. As it stands now, I simply don’t have the financial resources to cover my artistic goals.

So I made a choice. The book I planned to release in October (See The Dark End of the Street) will be put on hold until I can figure out a new spot for it in the publishing plan. Maybe I’ll put it out in 2016. Maybe I’ll release it as a series of short stories to spread out the cost over a few releases. Maybe it will become the “lost undiscovered book” people get excited about after I’m dead and all my other books have become well known movies. Whatever, it will go in the can until I’m willing and able to release it properly.

I know this isn’t a major problem. Many writers struggle to get just one book out per year and many more aspiring writers never release more than one book. We all have to balance our creative goals with our real world resources. In my case, I hope this is just a minor detour on the writer’s road.

Have fun.

Gamal

Should You Put Your Independent Book in Brick and Mortar Stores?

By Gamal Hennessy

Many artists and writers dream of seeing their titles on the shelves of their local bookstore. Part of my motivation for writing novels came from daydreams of walking into Borders and seeing my book on the shelf near Hemingway and Hammet. But reality has a way of interfering with dreams. It didn’t take long for me to realize my book wouldn’t get into stores unless I had a publishing deal. Then I found out publishing deals could take years to get, if I ever got one at all. So I put my Borders dreams aside and focused on outlets like Amazon and Kobo. But now the market could be shifting. A company called Blurb is offering a service to give independent publishers access to online and offline stores starting this week.

Blurb is a book platform designed to allow independent authors distribute their work. Ingram is a worldwide distributor of books and other reading materials and one of the larger companies of its type. The two companies have announced a partnership to open up Ingram’s distribution to Blurb authors. Details and full pricing aren’t apparent yet, but this new deal gives creators the chance to get their books into almost 40,000 locations.

So what’s the catch?

I don’t know if there is a catch or a downside to this deal for independent authors. I haven’t used it yet for my own work and I don’t know if the pricing or business model makes sense for everyone who has a book to sell. Having said that, there are at least four things to keep in mind about brick and mortar sales in the 21st Century.

• The number of physical bookstores is shrinking on an annual basis. Remember my dream of seeing my books in Borders? There is no more Borders. Waldenbooks is gone too. Barnes and Noble is contracting as well.
• The amount of shelf space in each book store remains limited and will probably continue to be dominated by mainstream publishers and titles on the best seller list. Just because your book can get on the shelf of any store doesn’t mean it will be on the shelf.
• The amount of time any one book stays on a shelf could also be limited. Even mainstream books are not available forever. As the shelves open up to a huge influx of new product from this deal, potential offline shelf space might experience even faster turnover.
• The bulk of revenue will probably continue to come from online sales of either e-book, audiobook or paperback versions.

I’m not suggesting artists and writers should give up their dreams of seeing their books on the shelf of their favorite bookstore. I’m planning to pursue the Blurb deal with my own books. I am saying the benefit of this deal might be more mental and emotional than financial. As long as you keep the potential limitations in mind, expanded distribution can be an independent creators best friend.

Have fun.
Gamal