The comic world was full of excitement and nervousness when it was announced last week that the tech giant Amazon would be purchasing digital comic book leader comiXology the details of which have not been revealed. In general the public reaction by the comic industry has been positive. The Beat has a nice roundup of the various articles taking on the deal. While the deal won’t be final until June, I decided to put on my thinking cap and speculate what the actual impact of the deal might mean for the companies and why, in my opinion, this is a good thing for Amazon, comiXology, and the comic industry as a whole.
The rumor of comiXology being bought out has lingered for quite a while in comic knitting circles, but in general rumors of company buy-outs, mergers, whatever, is often speculation and wishful thinking. In the tech world, this is just another acquisition for the giant Amazon diversifying their portfolio in what they have their hands in. Many have pointed out the many of the contracts between comic publishers and comiXology would be expiring over the next year or two, and depending how those deals go, it’s a roll of the dice as what comiXology’s position to sell would be. Overall, the company announced a healthy $70 million in sales in 2012 and place fifth in global revenue for the Google Play and iOS platforms according to App Annie, a website that tracks online applications. Take the healthy revenue, dominance in the digital comic arena, its guided view technology, and you can see why the company was ripe for being bought.
Below I’ve broken down what I think this actually means and what we can expect from the deal.
Why did Amazon jump at the chance?
Amazon is diversifying what it provides as services and goods. The tech giant moved into physical goods like their Kindle readers and the soon to be launched Amazon phone. The company bought Zappos partially due to it’s amazing delivery of goods. Amazon has their cloud service discussed further below. They also have moved into original programming and video streaming with their push of Amazon Prime among other things. They even have a comic company, though that hasn’t really taken off.
If we think about company’s making purchases to help strengthen them in an area they’re weak, comiXology absolutely helps in numerous ways. Here’s some of them.
Kindle and upcoming Amazon phone
The Kindle comic experience is generally lackluster compared to comiXology. It might be a bit, but it’s almost a guarantee that comiXology’s system and guided view will become the default reader for Amazon products. Expect the comiXology app to be preloaded on the Kindle and upcoming Amazon phone allowing individuals to immediately jump in and start reading. In fact, I think Amazon will be intelligent enough to pre-load their comics so customers will be able to have the experience immediately at no cost. The company can now provide a top notch comic experience right away with just a few taps of the finger.
Amazon can focus its comic efforts elsewhere. ComiXology becoming the default service for their product allows them to have one division totally focused on that experience, a division that has shown they’re the best there is at what they do currently. Expect comiXology’s Guided View to become the Amazon standard for comics and graphic novels.
Expand the Kindle Female User Base
The Kindle is a solid seller, and Amazon is smart enough to know by subsidizing the cost (I just got an email for a nice discount on one as an example) they are able to make up the profits later by selling content. The Kindle though has a pretty heavy female base from the digging I’ve done. According to Facebook statistics the Kindle likes are 64.6% female. ComiXology’s user base is heavily male in comparison, though making up ground with women.
Of buyers new to ComiXology in the last three months, 20% are women. That’s up from less than 5% when they started the app, and it’s a number that Steinberger says is changing rapidly.
Give comic fans a device and platform that provides and experience unlike any other, and you’ll move some hardware. If you’re looking to diversify the Kindle user base, comic fans are a nice target audience to go with. Make it impressive enough… well we’ve seen how geeks evangelize things they like.
Amazon is a leader in the use of consumer data. I’ll discuss this more below, but with comiXology Amazon gets the purchasing data the company has. That allows Amazon to learn even more about their current clients and the purchasing behavior of comic fans. Consumer data is gold in the right hands.
Amazon Cloud/Web Service
This is one I fully expect to be a high priority for both comiXology and Amazon. You might know Amazon from the web store where you can pretty much find anything, but one of Amazon’s biggest businesses is their web/cloud services. The easiest way to explain it is Amazon is one of the kings of website hosting, cloud computing, content delivery, application services and more. Many of the websites you visit every day, the applications you use, are hosted by Amazon’s services. While many companies are able to implement their use of this service well on their end, there’s nothing like having folks on the inside to help. When it comes to staffing changes, I think Amazon would likely have some staff help make sure comiXology is leveraging the full power of Amazon’s cloud. This deal allows comiXology to gain expertise that’s a hot commodity in the tech industry.
For us users, it means better reliability and possibly better download speeds and even some improvement in the storage of comics themselves. I’d think we’d see a smoother experience, but the changes might be too subtle for individuals to notice.