A panel from Gotham By Midnight.

Post by Bradley Schauer, University of Arizona

In recent years DC Comics has come under criticism for its monolithic publishing line – grim, violent books aimed at twenty- to fortysomething white men, drawn in a house style that hasn’t left the 1990s. While not every DC book fit this profile, it was clear that the publisher had little response to the more inclusive, nontraditional comics of independent competitor Image Comics (or even of archival Marvel, which has recently found success with books like Ms. Marvel and Hawkeye). In March, DC’s dollar share of the market was only 26 percent, mainly due to the extraordinary success of Marvel’s Star Wars comics, but also DC’s struggle to sell any comics that aren’t related to Batman. That month, only three of the top twenty bestselling books were published by DC.

In May, DC announced its new “DC YOU” initiative, described by the publisher as a “bold, new direction” with “a story for every kind of fan.” DC YOU seemed to be a direct response to the company’s critics: 17 new titles premiered in June, featuring a wide variety of storylines and art styles. New writers and artists from diverse backgrounds were enlisted, such as David F. Walker, Annie Wu, and Gene Luen Yang. These creators would be allowed to tell their stories without excessive editorial interference or continuity constraints; they were also reportedly guaranteed at least twelve issues before threat of cancellation.

With DC YOU underway, DC’s line is currently stronger than it has been in years. Standout titles include Prez, a sharp, funny satire of contemporary politics, supernatural police procedural Gotham by Midnight, smart and subtle space opera The Omega Men, and writer Genevieve Valentine’s re-envisioning of Catwoman as an intricate crime saga. However, initial DC YOU sales were lower than expected, and at the end of August it was rumored that DC would be largely returning to its “meat and potatoes” house style. DC denied these reports and asserted its commitment to diversity, but this week it confirmed the cancellation of six titles, including all the books just mentioned (except Catwoman, which remains, sans Valentine). Several more soft-selling new books are likely on the chopping block.

DC’s quick cancellation trigger and willingness to abruptly shift creative direction from month to month points not only to the publisher’s uncertainty about today’s comics market, but to larger problems in its business model. Specifically, DC’s emphasis on single-issue sales obstructs its plans to draw a wider, more diverse readership. DC may want to capture some of the audience for Image Comics, but it is not currently structured to effectively target those readers, or to successfully publish comics that diverge sharply from its traditional formula.

To be fair, sales for the canceled books were indeed low and dropping precipitously: Omega Men #3 received only 13,000 orders from retailers, for instance. At the same time, the canceled books were in the same sales vicinity as Image hits like Lazarus, Velvet, and The Manhattan Projects. Writer Kieron Gillen, who has worked for Marvel and Image, states that an indie book selling 10-12,000 copies “is a cause for celebration and joy.” But at DC and Marvel where sales targets are much higher, in part due to greater overhead costs, the same book would be canceled.

Panels from The Omega Men.

While DC is known to cancel books before their first trade paperbacks are released, Image waits and fosters the sale of trades, which their readers tend to prefer. For instance, Sex Criminals #11 was the 119^th bestselling single issue of July, but in February its second trade volume was the second bestselling graphic novel of the month. This preference for trades suggests that Image’s readership is different from the “Wednesday warriors” of Marvel and DC fans who buy a stack of floppies each week from their local shop.

Unlike the Big Two, Image is able to patiently wait for trade sales and word-of-mouth to build because in their publishing model, the creators bear most of the financial risk. While DC and Marvel pay a page rate, Image creators aren’t paid until Image has subtracted printing and distribution costs, and taken its cut. This can mean huge profits for the creators of Image bestsellers like Saga or The Walking Dead, but creators of lighter-selling books often must wait until trade publication (and sometimes not even then) to earn anything. By paying creators upfront, DC and Marvel are much less likely to nurture low-selling books.

Of course, it’s not feasible for DC and Marvel to scrap their current business model entirely. For one thing, many creators prefer the steady paychecks of the Big Two as opposed to the risk of the indie world. And parent corporations Time Warner and Disney would never allow creators to own the media rights to their work, as Image does. That said, if DC is serious about attempting to broaden its audience, it needs to allow its more offbeat, distinctive books time to build a readership, especially when readers who might enjoy those books prefer trade paperbacks and may be reluctant to purchase DC comics in the first place. Something like Omega Men would have probably sold better as an Image title, as it will read better as a trade, and Image’s core readership is better primed for its formal experimentation. But given a full twelve issues and time to build word-of-mouth from trade sales, the book might have found some measure of success at DC. Even if it didn’t, its very existence would have helped rebrand DC as a welcome home for innovative, nontraditional comics.

Perhaps small losses on a few unique books could be considered acceptable in the long run, if it makes the publisher more attractive to wider, different demographics. Instead DC seems shortsighted and fickle, too concerned with month-to-month fluctuations in sales and market shares. Quickly canceling low-selling books that were designed to run twelve issues leads to a vicious cycle in which readers are reluctant to sample new books, for fear of wasting their time and money. Co-publishers Dan DiDio and Jim Lee appear to be on a short leash; this may have to change if DC is going to effectively compete in a new marketplace where it is losing ground.

Netflix’s simultaneous release of all the episodes of House of Cards has generated commentary on binge viewing, social TV, the definition of “hit” TV (and here), and business models (and here).  Netflix is disregarding conventional audience management strategies, particularly the sequential release of one episode per week. For the past 80 years of commercial broadcasting, the weekly release of episodes served at least two purposes: to fill airtime economically by spreading narratives out over time, and, most important, to secure audience attention for advertisers on a regular basis.

Netflix has the freedom to release all episodes at once because Netflix is not in the business of organizing audience attention for advertising messages. That means Netflix does not have to regularize that attention through scheduling or measure that attention through ratings.  Linear commercial television manages “audience flow” with scheduling strategies designed to deliver certain targeted audiences to certain advertisers, as measured by ratings services. Viewers may believe television networks serve them; however, television networks’ primary customers are advertisers, and programs are a means of delivering audiences to those advertisers. Netflix’s customers, on the other hand, are not advertisers, but viewers. What advertisers prefer, a regular schedule that guarantees the weekly exposure of their products, need not shape the preferences of such viewers.

Why doesn’t Netflix schedule like HBO, then? HBO, a commercial-free premium subscription service, creates artificial scarcity by withholding already produced episodes, doling them out week by week. HBO began as a linear service designed to attract subscribers to cable services; its strategies are thus designed to build subscriber loyalty to itself and to cable operators; its announcements of audience ratings serve only to market its brand, not to measure audiences delivered to advertisers. Many observers assume that Netflix is evolving like HBO, shifting from a program buyer to program producer to ensure subscriber loyalty. However, Netflix offers something HBO cannot: asynchronous viewing of a deep catalog of programming. Although HBO offers HBO Go, that service is limited to cable subscribers and to HBO programming. Since asynchronous viewing is what Netflix can offer more cheaply and efficiently than HBO, Netflix needs to distinguish itself from HBO precisely on that basis to attract and retain subscribers. Hence, rather than weekly releases, episode by episode, Netflix has always offered audiences total control over their viewing schedule.

Some find it difficult to grasp how the seriality of House of Cards can work if all episodes are available at once. Seriality as a narrative strategy has been around at least since the Odyssey followed the Iliad, but in the modern era it has also functioned to ensure the maintenance of a revenue stream. Serialized novels enticed readers to buy the next issue of a magazine; serialized films tempted viewers to buy another ticket the next week; and serialized comic strips encouraged readers to buy a newspaper daily. By the early 1930s serialized radio dramas helped ensure that audiences would tune in daily to their “soap opera” and the soap advertisers’ messages.  More recently, serials such as The Sopranos helped build HBO subscribers’ loyalty.

Why, then, create House of Cards as a serial at all, if Netflix does not need to tempt audiences into repeated scheduled viewings? Probably because open-ended episode structure is still one of the best ways to encourage viewing of more than one episode. Increased viewership overall would help amortize the show’s high production cost–not because Netflix earns revenue on how many viewers see each episode but because viewer engagement will likely lead to more subscriptions to the service.

Netflix’s willingness to give the audience control over serial viewing challenges assumptions that the best way to control program costs is to eke out episodes over time, measuring demand, and then raising and lowering prices in response. Netflix will track viewership, not to adjust airtime prices for advertisers but to measure subscriber demand and, it hopes, an increase of subscribers. Like HBO’s move into original programming, Netflix’s strategy is risky, but it is designed to attract subscribers to its streaming service–not necessarily to a particular program. No doubt audience control of the pace of narrative consumption will affect social media conversations. But this strategy also challenges the necessity of synchronous viewing as a business model, a model based on the limitations of legacy technologies rather than on some inherent quality of seriality.

Netflix’s current business model also depends on the survival of advertising-supported networks, which are selling programming to Netflix as a new aftermarket. Thus, Netflix is not aiming to destroy linear ad-supported programming. Advertising revenue subsidizes far more programming than Netflix can currently plan to produce on its own. Instead, by offering a new profitable aftermarket for programming initially financed through advertising revenue, Netflix may become commercial television’s white knight. Netflix’s ability to expand offerings of commercial television programming will depend in part on its ability to keep attracting new subscribers. Offering viewers the option to binge, or watch multiple episodes in a sitting, or watch them over a longer time frame, may be Netflix’s best bet for attracting new subscribers.

The full significance of House of Cards, as an indicator of new business models and evolving cultural forms, is yet to be determined. Is it too much to hope that Netflix’s simultaneous release of a season’s worth of premiere episodes is a harbinger of unprecedented audience leverage in an industry too long accustomed to bottleneck control over audiences?