BREAKING: DC Comics Implements New Creator Payment Plan

[THE KZA]

I'm really curious what made them change their payment plan. I would like to hear their response as to why it took them so long. I'm not just asking to point a finger or blame them...just genuinely curious how all this came about. What triggered it?

probably this?

http://www.bleedingcool.com/2014/04/...-on-the-cover/

[Sutekh]

I'm really curious what made them change their payment plan. I would like to hear their response as to why it took them so long. I'm not just asking to point a finger or blame them...just genuinely curious how all this came about. What triggered it?

This article made the rounds again recently, and it's possible that it's prompted some discussion. Waid notes how Paul Levitz would hand out bonus checks, but that it was never something written down as part of a contract and purely a voluntary thing, and that when he stepped down, that stopped completely (and stressed that since it wasn't a contractual thing, and purely Paul being generous and classy, it wasn't like his replacements choices not to do so were in any way 'wrong').

[Mega]

A switch to net sales based on copies sold versus cover price allows for greater flexibility to follow the different shifts in the market while still being fair to creators who sell copies. It's the first time we've really seen digital and trade paperbacks being looked at based on sales quantities, and that number — which, keep in mind is based on total sales numbers and not revenue — is not linked to higher cover prices, which DC realizes it a barrier to buying. Linking cover price to pay means that creators will have less incentive to allow DC to use lower prices to bring new readers in, including the moves to reduce digital back issues, keep some books at lower prices to boost otherwise less attractive titles, and/or very cheap jumping on points.

Just wrote a pretty long reply that was mostly deleted by having to re-login, so, if this is sloppy, my apologies:

This isn't totally correct (at least, in book publishing). When creators are being paid a certain % of the cover price, that does not change depending on how DC sells the book. But when they are being paid based on net (which is most likely defined as the amounts DC receives after taxes and credits and, in the case of trades sold to the book market, a reserve for returns, but again, could be wrong), they are just getting a cut of the money that comes in.

I'm not saying one way is more ethical or anything. I'm just saying that, being paid based on cover price means the creator is going to get more money, unless their rate based on net is a lot higher (generally more than double, in the book trade, as the standard discount publishers sell to retailers is 50%, so for example a royalty of 5% of the cover price is roughly the same as 10% of net, when books are sold around a standard discount).

The problem here is that, as discounts increase (as they have across publishing -- in the book world, Amazon commands higher and higher discounts, etc.), the creator is now getting less money. As I understand it, with Diamond, if a retailer orders more comics, they get a higher discount. With royalties based on cover price, it doesn't matter at what discount the Publisher sells copies to the retailer -- the creator is getting paid the same % of the cover price. With royalties based on net, the creator is going to make less money per issue sold as the Publisher discounts higher. All other things the same, creator gets paid fewer royalties in this situation.

(Keep in mind that DC sets a cover price, but then retailers mark that down. Amazon is buying copies of trade paperbacks from DC at an X% discount off of DC's set cover price. Amazon, and other online retailers, and I imagine many digital retailers trying to establish a customer base and get people used to reading books/comics digitally on devices, heavily discount ebooks etc. to the point where they, the retailer, are taking a loss -- the Publisher isn't. So the price you see the book for on, uh, Comixology [disclaimer: I've never used Comixology] is not necessarily DC's cover price.)

It makes things a lot easier for DC to go net, in that they don't have to eat the difference between what a creator is being paid based on cover price and the lower amount DC is making on higher discount sales, and in that they don't have to factor this in when doing higher discount deals, and I imagine it opens up other avenues like digital subscription programs or other, more creative ways to sell their books.

But in your example of the lower cover price for jumping on, the creator is getting less money either way, but even less under net than cover price. Because when based on cover price, they are guaranteed that % of the cover price. And I imagine a lot more copies are ordered of jumping-on, lower-cover-price titles than a standard price title, so the discount goes up...

Again, the actual numbers would make this a lot easier to talk about. AND I'm not saying one way is better* or more logical or whatever than the other. And I agree with you re: the film industry comparisons -- that's not what's going on here. All I'm saying is, the switch from royalties based on cover price to net probably means less dough to the creators.

*(except that I think a better system is the one that is better for creators. it's definitely possible to base royalties on net and make this work out for creators -- the simplest way is much higher royalties, I guess)

[LoneNecromancer]

Oh, I'm quite aware it happens in the industry. Marvel is the biggest culprit: in the 90s, they would print trades in Italy under Panini and then import them back so as to bypass the royalty — which resulted in creators like Barry Windsor Smith to tear up the trades instead of sign them at the cons. (I actually saw him tear someone's copy of Essential Conan and then refuse to sign any more because he got nothing from them.) Stan Lee had to sue Marvel over the fact that it denied it made a profit from Spider-Man while telling other shareholders it did; Stan sued and won.

S**t, really? That's insane, I'd never heard any of that before.

[Kid A]

they were following a 30 year old model??? Holy crap. Talk about no advancement in an industry towards its employees.

I literally laughed out loud when I read they are finally offering direct deposit.

Yeah it's good to see DC making strides, but I'm so glad I don't work in this industry.

[Brian from Canada]

Again, the actual numbers would make this a lot easier to talk about. AND I'm not saying one way is better* or more logical or whatever than the other. And I agree with you re: the film industry comparisons -- that's not what's going on here. All I'm saying is, the switch from royalties based on cover price to net probably means less dough to the creators.
*(except that I think a better system is the one that is better for creators. it's definitely possible to base royalties on net and make this work out for creators -- the simplest way is much higher royalties, I guess)

It means less dough on the print copies, but then digital wasn't included so it might make up the difference. Keep in mind that we haven't seen the full survey — only the question that Paquette posted on Facebook because he felt it was an important issue that needed to be raised. The move to net may be one part being reported of a much bigger effort to keep the existing talent happy at DC; it certainly sounds like that it's the effort being put in by Didio and Lee — especially since the rumours include questions about how each employee feels about the move to LA.

But I do agree totally that it needs to work out best for both parties. The creators need to be treated fairly with a decent wage. That the bigger point of this is increased respect for the colourists tends to show this: DC is working go make its employees get better fairness from the publisher — and thus stay happy with the company. (After all, with Marvel poaching the way they do, DC wants to keep some of who they've got.)

[Justin Jordan]

"but then digital wasn't included"

It is.

Digital First creators didn't get royalties on their stuff, but if you wrote a periodical you've gotten digital sales royalties for at least as long as I have been at DC.

[FanboyStranger]

S**t, really? That's insane, I'd never heard any of that before.

It actually happened just a few years ago with Charles Vess for his Warriors Three material. He found about the HC when a fan asked him to sign it at a convention. It wasn't just that he recieved no payment that upset him, but that they didn't even let him know that they were reprinting it. (A comp copy for creators is a standard procedure in publishing.)

On the other hand, there have been indications lately that Marvel has revised some of their policies on this. Bill Mantlo's brother has mentioned that Marvel/Disney has been providing regular payments for Rocket Racoon material in anticipation of the GotG movie. So, hopefully, they will make this a universal policy.

[cray_ws]

probably this?

http://www.bleedingcool.com/2014/04/...-on-the-cover/

This article made the rounds again recently, and it's possible that it's prompted some discussion. Waid notes how Paul Levitz would hand out bonus checks, but that it was never something written down as part of a contract and purely a voluntary thing, and that when he stepped down, that stopped completely (and stressed that since it wasn't a contractual thing, and purely Paul being generous and classy, it wasn't like his replacements choices not to do so were in any way 'wrong').

I appreciate both of these responses, It makes a lot sense now. I'm a huge fan of Yanick Paquette and I am glad he spoke up. As for Paul Levitz's generosity, I guess it goes to show you how he managed this and why he was appreciated when he was in charge. It also shows you how it radically effected the talent that was working for DC.