Analyzing The Webcomics Market
by Joey Manley
Eric’s gonna make fun of me again for posting business stuff.
Just watch.
Here goes.
One of the things you have to do when you write a business plan is to “analyze the market” for your product or service. I’ve been writing a business plan on and off lately (mostly off, as my day-to-day management of my actual business kind of takes precedence — if I didn’t have customers and audiences already, this whole process would be a lot easier, which maybe explains why some headslappingly bad businesses get funded).
Analyzing the overall “webcomics market” is kind of tough, since so many of the businesses, including my own, are self-funded, privately held companies, or sole proprietorships, and don’t have to disclose any information at all about their successes or failures. Even the ones who choose to do so occasionally, like Keenspot, and myself, are not subject to the same kind of legal scrutiny and auditing that public companies, necessarily, must face when releasing numbers, so anything that gets said, by Keenspot, by me, or by anyone in webcomics, is kind of the equivalent of hanging-out-at-the-bar, shooting-the-breeze, rather than provably factual information, though some sources are obviously more believable than others.
Over at his blog RedEye VC, Josh Kopelman describes three kinds of markets he sees entrepreneurs trying to crack into, and tells us exactly what kinds of questions he would ask entrepreneurs in a pitch meeting, given each of these three market scenarios.
I’d say his third kind of market fits the webcomics market perfectly. But I’m guessing many of you would disagree.
Existing Market with Struggling Players
Perhaps the toughest of the three scenarios, an existing market with struggling players requires you to prove two things – that the market doesn’t suck, but that your competitors do. For example despite multiple attempts by a host of venture-backed companies, to date there has been relatively low traction in the online tutoring market. Startups in this space will need to explain how they plan on creating a market where plenty of companies that came before them were unable to. This also requires convincing investors to overcome both market and competitive risk – no small feat. If you’re a Number 3 type of company, you can expect to hear questions like these:
* Why has no other company been able to succeed in this market?
* What has changed in this market that makes this idea possible now?
* Why have none of the existing players moved in this direction?
“Struggling players” does not mean that there have been no successes, by the way. But think about it: there hasn’t been a YouTube, a MySpace, or even a Weblogs, Inc. kind of success in the webcomics world yet. Even Keenspot, the largest company for which any numbers have been released (at their San Diego Comic-Con panels), falls far short of those examples. I’ve seen them claim, at different times, anywhere from 200K to 300K in annual revenues — my own business does somewhere between 1/2 and 1/3 Keenspot’s revenues, depending on which number you believe. In either case, that’s nothing for a VC. That’s a lemonade stand.
So, yeah, before anybody brings it up, I know that the Penny-Arcade webcomic-and-blog site is tremendously successful, with revenues that probably dwarf Keenspot’s and mine combined, but even their success is on a much smaller scale than VC’s demand, and isn’t the kind of business, anyway, that needs VC funding as a start-up. “Analyzing the market” in my case means looking at the opportunity for webcomics portals, aggregators and technology providers (that’s the market I’m competing in), not for individual comic strips that may or may not be hits (not because creating a hit comic strip or blog isn’t necessarily a viable business opportunity, but because that’s not the particular arena I’m competing in).
So — yeah. Thoughts?
April 12th, 2007 at 2:33 pm
Nothing you haven’t heard before, Joey– but let me see if I can be more succinct than usual.
Presenting Modern Tales as a “webcomics company” will probably sabotage your efforts. Calling it a “Web 2.0 company” will at least get your foot in the door. Webcomics companies are not outrageously successful, Web 2.0 companies are– and you have a legitimate claim to both titles, with your future plans emphasizing the latter.
What YouTube does for videos, what Flickr does for photos, you are essentially trying to do for comics. That is your hook. Keenspot’s not your competition, YouTube and Flickr are. Of course WCN is unlikely to outvalue YouTube, but a fraction of YouTube’s peak valuation is still enough to arouse investor interest. Why has no one else done this first? Comics are a more challenging medium to understand than photos and videos, and have traditionally been associated with lower monetary rewards.
So why is it worth it to get in? That’s the critical question– I’d probably study the satisfaction-to-effort ratio of cartooning to other creative projects (I believe that it’s higher, though I don’t have hard proof of that). After all, satisfying the creatives is a lot more important than helping the creatives make money when it comes to whether or not YOU make money. And again, a tenth of YouTube is good enough.
So to sum up: I think you should stop thinking of MT as part of the “webcomics marketplace,” and treat it as part of the “Web 2.0 marketplace.” Which probably means a lot lot LOT more time looking at YouTube and Flickr stuff and less looking at comics stuff.
Yeah, that wasn’t succinct at all.
April 12th, 2007 at 6:46 pm
Wow, that’s a weird coincidence– I just learned a term that described pretty much what I’m saying above. “Marketing myopia.”
Myopic description: “We are a webcomics company.”
Foresighted description: “We are a Web 2.0/online tools company.”
April 12th, 2007 at 8:35 pm
Web 2.0 is dead.
(grin).
Joey
http://www.webcomicsnation.com
April 12th, 2007 at 10:38 pm
Like what T said, if I understand him right, it’s about presentation. Penny Arcade doesn’t present itself as a comic. It presents itself as a gaming site that has a editorial comic with it.
Now, since WCN is a general “comics” site, I don’t know who you can translate that into it being something all of the kids wil want to get into like YouTube or what have you. Comics are the red-headed stepchild of the arts, and aren’t really avenues that strippers and cam-whores can use to promote themselves like MySpace or YouTube.
Thus, I think you need to hire a stripper to do a photocomic about her life.
April 13th, 2007 at 7:54 am
My serious response: “Web 2.0″ is a loosely-defined set of technologies and strategies that can be applied to any number of markets. Gmail and Digg aren’t competing with one another in the same marketplace: they are applying Web 2.0 concepts to their own individual marketplaces.
Besides that, my gut feeling is that too many companies seeking funding are hanging everything on the “Web 2.0″ buzz. That’s not going to provide any differentiation in a pitch meeting. Quite the opposite. It’ll make me look like a wannabe who has picked up on a buzzword. Building out the next version of WebcomicsNation.com the way I envision it will, necessarily, make it a “Web 2.0″ application, and anybody looking at it, familiar with the concepts, will see that right away. The phrase need not be mentioned. Using “Web 2.0″ ideas is not a special, mind-blowing benefit anymore — it’s just a bare minimum requirement.
I could be wrong!
April 13th, 2007 at 12:22 pm
Gee, now if only somebody from, say, Weblogs Inc. would start up a comic book related website.
April 13th, 2007 at 12:36 pm
(hee)
Are you guys going to do webcomics over there, or is it going to be strictly blogs and podcasts? I heard some rumblings about original digital comics at comicmix, but then the rumbling sort of stopped.
April 13th, 2007 at 1:07 pm
my 2 cents at comixpedia.com today…
April 13th, 2007 at 2:02 pm
Out of Curiosity, what’s Blind Ferret Entertainment considered as? A Webcomic company? an animation company?
I find it strange that we’re not talked about much, though we run a larger operation than everyone excluding PEnny Arcade.
April 13th, 2007 at 2:09 pm
Subjectively, off the top of my head, I’d say you’re an animation company that has deals with a couple of big webcomics creators. Does that sound fair? In business magazine jargon, you would probably be considered a services vendor — providing contract animation to popular strips whose creators either pay you outright for your services or share in the revenues generated by your efforts. I don’t know enough about your business to know if the webcomics-related part of it represents a large part of what you do overall. If it doesn’t, then, yeah, you’re an animation company. If it does, then you’re an, um, animation vendor in the webcomics industry? Or something? I dunno! What do you think? You know more about this than I do …
April 13th, 2007 at 2:18 pm
Well, we do provide services for large strips such as PvP, CAD, VGCats, and a few others, but our larger income comes from our internal properties Least I Could Do and Looking for Group (both webcomics). We’re hitting other media, such as print and bringing 2 series to television, but it all began from LICD, a webcomic. BFE currently employs 11 people.
April 13th, 2007 at 2:22 pm
See, I didn’t know enough about you guys. Television, you say? Hope it works out well. Keep us posted on any public premiere dates, so we can promote them here on TAC. I know it takes a while for these things to actually get going (my friend and former talk show co-host Bob Cesca was talking about his VH1 deal years and years and years before it ever came out). Have you released any public information on the web about your business’ earnings? If you haven’t, that’s perfectly understandable, but if you have, I’d love to be able to add the information to my big list of business info links.
April 13th, 2007 at 2:26 pm
I know the years and years game of television, believe me. We’ve been on it for over 2 years now, but we’re finally seeing the end of the tunnel. We should have a fairly huge announcement to make very shortly.
In terms of earnings, we don’t usually release those numbers (It’s Randy’s department in any event), but I’d be more than happy to about our business anytime, and our various revenue streams.
April 13th, 2007 at 2:51 pm
I think there’s value in every argument present here. Those are some very good questions to ask oneself when defining a company.
-glych
April 14th, 2007 at 7:08 pm
marketing myopia? Marketing types, period!
Creating, meeting or altering demand (flows). New strip, star-bleck meets aliien preditor or ‘my pvp is better than yours’!
hitching your wagon to another star? ala web 2.0 (the net led to big-bro there, eh?) social networking and working the sizzle there? ewww.
Sigh. Wish i could back this up with money… or a cash flow. That’d be nice.
the communicating arts here need topics, not delivery. My opinion.
April 16th, 2007 at 6:58 am
Web 2.0… so basically you’re going to make webcomic blogs with rounded corners, right?
January 11th, 2010 at 7:33 pm
comics is a different animal for the homemade producer then video(youtube) or pictures(flickre). For one it takes time and skill to put together a good story, with good characters, or gag humor, and in general to be entertaining.
With video, you can film yourself with your laptop picking your noise, broadcast it instantly, and received a million views.
Picture are the same way, instant
If a webcomic gets a strip out a week, they are disciplined. And unfortunately, comic, even with the graphic novel boom, are still seen as kid stuff. Thats what my brothers, and mom and dad assuming that they are the average Joes.
With that said…who care, do your comics anyway. Have fun, build and audience, and sell some T-shirts.
I have just started my first webcomic and look forward to a fun ride.