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Digital comics: hero or villain?

Diamond Comics Distributors Inc. of Timonium, the country's largest comics distributor, has a digital strategy for comic books. And they're planning to unveil it later this year in partnership with comic book publishers and comic book stores.

I wrote a story about their business plan in today's paper. (And if you want to find comic shops in the Baltimore area, check out this link.)

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Below, Steve Geppi, owner of Diamond.

Digital comics: hero or villain?

Pow! Bam! Kaboom! Are digital comics the hero or villain?

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Timonium's Diamond Comic Distributors to experiment with digital comics distribution with retail partners

Digital entertainment has shaken the retail industry, shuttering your local brick-and-mortar record store, bookseller and video rental outlets. Could the neighborhood comic book shop be next?

Diamond Comic Distributors Inc. hopes not. The Timonium company is the country's largest distributor of comics to about 2,700 small retailers. It has been fighting the same forces — online sales, changing consumer habits and even digital piracy — that are pushing other retailers to the brink.

Just last week, the national bookstore chain Borders Group Inc. filed for bankruptcy protection as Internet and digital media cut into sales. One of its largest creditors: Diamond, which is owed nearly $4 million for comic book and graphic novel inventory that Borders bought.

But Diamond hopes it has found a secret weapon. In a plot twist, the company plans to cast allegiance with digital comics distributor iVerse Media. Starting this summer, buyers of many comics that Diamond distributes also will be able to buy the digital version at the cash register.

"At first we were a bit alarmed," said Diamond's Dave Bowen about the digital comic book's emergence. "But the more we studied it, the more we realized there wasn't as much cause for alarm as there was opportunity."

The comics industry has seen big upheaval before, from distribution fights and comic book speculators who drove up prices on collectibles in the 1980s and 1990s, to the more recent surge in the popularity of graphic novels and manga, or Japanese comics.

And so far, digital comics are just a tiny percentage of the industry, estimated at more than $6 million compared with total retail comic sales of about $680 million, according to ICV2, a research and consulting firm that tracks the industry.

But the big unknown in comics is to what degree retail shops may be hurt by the digital future. Consumers can download that content without ever setting foot in a store.

In a sign of the times, Amazon.com said last month that it sold more electronic books than paperbacks through its website. Last year, Blockbuster filed for bankruptcy as the video rental chain faced competition from Netflix online subscription service and streaming video options that allow consumers to rent on their television sets and home computers.

And just like music and video piracy, comics are being digitally scanned and made available illegally online.

Diamond, a privately held firm owned by Baltimore publisher Steve Geppi, and other comics companies are trying to create easy — and legal — mechanisms for consumers to buy digital comics. And for Diamond to thrive, so must its customers: small shops across the country.

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Diamond's lifeblood is its network of small retailers from coast to coast, so the company is proceeding gingerly with its digital efforts.

The company's new program enables retail partners to sell certain digital comics when they're first released, for $1.99 or more. After a month, and when the print comics hit stores, the digital comics would sell for 99 cents when purchased with their print companions.

Diamond has been able to persuade about 20 comics publishers to participate in its digital storefront initiative, which will launch in July.

But the two biggest publishers — Marvel, which prints Spider-Man and X-Men, and DC Comics, which prints Batman and Superman — have held out. The titles published by those two companies make up about 65 percent of the comics market.

Marc Nathan, owner of Comics, Books and Collectibles in Reisterstown, said he was interested in experimenting with Diamond's approach. He said it could appeal to existing customers, including avid collectors who want to own both print and digital versions of titles, though he doesn't necessarily think it would expand his customer base.

"It's just another format," Nathan said. "It's not going to be a game-changer."

While Nathan is optimistic about the future of the local comic book store, he said many operators fear dire times ahead. At a comics convention in Dallas this month where Diamond unveiled its plans to retailers, Nathan said, many retailers were concerned that the promotion of digital comics would only hurt their shops.

Digital comics in the form of DVDs and downloadable files that could be viewed on desktop computers were precursors to the interactive comics available today. For several years, major comics publishers have sold digital comics through various online initiatives.

Digital comics received a boost last year with Apple's introduction of the iPad, a tablet computer with a touch screen. Many publishers have released digital editions for Apple's iPad and iPhone, as well as for other forms of digital distribution.

Diamond's plan, developed with iVerse Media of Texas, which specializes in publishing digital comics, won't cost retailers to implement, the companies said. Diamond is using iVerse's comic reader technology that customers access on Apple's popular iDevices and through the Web on personal computers to read the digital comics.

To complete a digital sale, a retailer would print out a coupon redemption code for a digital comic buyer at the register, and the buyer would then input the code online and download the digital version. Retailers would keep 33 percent of the proceeds from every digital comic sale.

"We do not want the comic book store to go away," said Michael Murphey, iVerse chief executive. "Comic book fans are different. We are collectors. We want to own these things. We want to read them on our iPads, too. But we want our physical comic books."

At Alternate Worlds, a comic book shop in Cockeysville, owner Michael McKenzie, who is participating in a pilot test of Diamond's digital distribution program, said he's eager to see whether the approach will attract consumers.

So far, with digital comics sales making up such a small sliver of the market, he said he's not overly worried.

"Is digital going to complement paper or replace paper?" McKenzie wondered. "The amount of digital sales right now is really minuscule. It is in its infancy. Whether it will take off and grow rapidly remains to be seen. Digital music took off exponentially, but comics may not."

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