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Thursday, June 14, 2018 9:20:56 AM
By: Motley Fool | June 14, 2018
The streaming giant's first major foray into publishing is primed to be a huge success.
When Netflix (NASDAQ:NFLX) acquired comic-book publisher Millarworld in August 2017, it was the first in a number of bold moves designed to gain control over content creators. In this case, it brought on board the creative talents of Mark Millar, who made his name as an award-winning writer for both Marvel and DC Comics before striking out on his own. His comic-book story arcs have been turned into some of Hollywood's biggest blockbusters, including Logan, The Avengers, and Captain America: Civil War.
At the time of the acquisition, Netflix revealed that in addition to creating movies and television series based on his work, "Millarworld will also continue to create and publish new stories and character franchises under the Netflix label." In November, Millar revealed that The Magic Order would be the first new story under the Netflix umbrella, which he has since described as "Harry Potter meets The Sopranos."
The comic is about to be published, and demand is so high that Millar says it will break a long-standing record.
Coming out with a bang
Preorders for The Magic Order have seen extraordinary demand, and based on early estimates, the initial issue is expected to sell out. Millar said that preorders already exceeded 140,000 -- which would break a 20-year-old record -- several days before the order deadline. Millar also said this would be "by far the best numbers ever on a Millarworld book."
In a letter sent to comic shops, Millar said there would be only one printing for the inaugural Netflix release:
We hope you're suitably prepared. We want to get back to that crazy, exciting time where a first printing really meant something too and create a real collectibility here with NO SECOND PRINTINGS. We love the idea of making this genuinely sought after. So after inventory on the first and only print run is depleted, there will be no additional printings.
He went on to say that he was "very sure" the printing would sell out completely.
In another sign that Netflix is pulling out all the stops for its comics debut, the company has teamed with Facebook (NASDAQ:FB) to provide a little augmented reality (AR) magic. The first issue will display one of four different covers, each of which will contain an AR code that will provide readers with bonus content. Audiences will be able to "go inside [illustrator] Oliver Coipel's amazing artwork, unlock special character artwork and more," according to an exclusive report by CBR.com.
Doing the math
Assuming 140,000 sales at $3.99 each (the presale price on ComiXology) would result in total sales of about $550,000, which doesn't include digital sales. Considering that Netflix reported revenue of $3.7 billion in its most recent quarter, these comic-book sales aren't going to make a meaningful contribution. Assuming similar sales for the full six issues, they would only bring in revenue of $3.3 million, still not enough to move the needle.
It's important to remember that Netflix has an ulterior motive here, and while these record-breaking presales are nice, they're just icing on the cake. Eventually, The Magic Order will be the foundation for new movies, television series, or both, with the intention of encouraging subscribers to join Netflix or to stick around.
Part of a broader strategy
It's also important to remember that Netflix is looking for its next massive hit like Stranger Things or Orange is the New Black, one that will likely run for years and entice untold numbers of subscribers to climb aboard the Netflix train (or at least keep their seats). While merchandising could be a huge opportunity and eventually generate more than $1 billion in sales annually, it will all be in service of generating buzz around Netflix shows and growing the company's all-important subscriber base.
https://www.fool.com/investing/2018/06/14/netflixs-first-comic-book-is-poised-to-break-a-20.aspx
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