Bleeding Cool Talks With Rantz Hoseley About Longbox, The ADAM Tablet – And The Apple iPad

Yesterday, digital comics distributor LongBox announced their partnership with Notion Ink, the company behind the ADAM tablet.  The partnership places the LongBox Digital Platform as the exclusive pre-installed service for purchasing, cataloguing and reading digital comics on all four of Notion Ink’s announced tablets, as well as any other tablets or portable devices utilizing Notion Ink’s Genesis system over the next two years.

I talked with Longbox developer RantzHoseley about the new deal – but also about the oft-rumoured Apple iPad launch deal that went nowhere…

There were great expectations that Longbox would launch with the iPad in a flurry of publicity. Was that ever the case? If so, what happened. If not… why all the secrecy?

This is a bit complex and involved, and I have a truly terrifying ability to ramble, so let’s see if I can be somewhat brief and to the point here, while still covering the salient details.

The whole iPad assumption stems out of an interview I did with Andy Ihnatko.  We were in the middle of negotiations with a company that we were going to partner with.  I had said to Andy that the partnership would result in an international pre-installed user base of around 40 million users.  In the interview, there was a lot of discussion about tablets and portables, and Andy came to the conclusion that the various elements added up to = “LongBox on iPad”.  Now, I understand why Andy might come to that conclusion, but Apple wasn’t the only potential answer in terms of “Who is LongBox in negotiations with”.  In fact, iPad was the less likely conclusion, because the element was 40 million pre-installed.  That means the user base is already there.  If the iPad isn’t announced, much less launched, then is has no installed user base, much less 40 million. Another piece was ‘international digital entertainment player’.  Apple, for all of its market presence, is questionable on whether you could say it qualifies in that regard. Sony would qualify, Philips would qualify, Electronics Arts, Amazon… there are a lot of companies that fit the criteria.

However, the iPad, and us being a ‘second party’ dev for Apple was never in the cards, simply because of the percentages that Apple wants for participation for content sales through the App Store.  It’s the same reason we didn’t launch on the iPhone, the percentages meant that we’d have to ask for a higher cover price, or that we wouldn’t be able to have the pricing flexibility that we feel is critical for growth in the market (See magazine publisher issues with publishing on iPad… lack of viable subscriptions, etc, for an example).  The model works fine if all you are interested in is capturing the digitally savvy members of your current market, but from day one we’ve felt that’s the wrong approach.  It does nothing to grow the market to new users (which digital is a critical opportunity to do so) and it does exactly what many of the DM retailers worry about, which is bifurcating an already limited and shrinking pool.

So, why all the secrecy?  Because these negotiations are with publically traded companies.  While negotiations are underway, we had to be circumspect and cautious about what we said… or didn’t say.  Andy was correct in saying “There’s not that many companies that qualify” under the description, and if we said “it’s not Apple” then that makes the pool to guess from smaller, and really my life is complicated enough without the SEC poking around because they believe we’re divulging insider or premature information.  The joys of the corporate world in a nutshell.

Ironically, the SEC/Big Company ended up not being a factor, but we’ll talk about that in a minute…

Okay, well a little market status. Working with Marvel and DC, Comixology appears to have stolen a march on Longbox. How do you see your competition now?

I think the ‘Branded App’ approach that a number of publishers have done on the iPad or iPhone is exactly what I had mentioned at a SDCC 09 panel that the industry needed to avoid.  For years now, publishers have hesitated to jump into the digital stream, in part, because of the concern of hurting the Direct Market retailers… I honestly thought, based on all of the discussions with creators, publishers, and the various digital companies that comic were going to prove to be smarter than the music, film, TV and videogame businesses, by NOT repeating the same mistakes those industries made. In all of those cases, as they started in the digital space, there was the ‘Sony’ store, the ‘Warner Bros Music’ store, where you could just get their content.  Now, those companies make the majority of their revenue from services such as Amazon Digital, iTunes, Zune, Steam, Netflix, etc.  We’re rapidly becoming a ‘cloud’ entertainment society… that your purchase of digital content goes through a multi-channel service, that allows you to access it anywhere, any time.

The ‘Publisher App’ just runs counter to that trend, and hence attracts the existing fans… which again, neither grows the market, and has a higher potential for damaging the DM channel, because you are only appealing to people who know these comics, who are passionate about that company’s characters and brands that they are willing to hunt down the app, download it, and pay a price higher than what the casual digital entertainment consumer does.  It comes down to the goal… are you building for the long term, or are you simply looking for short term gain.

The irony is that I’ve had some publishers tell me (in regards to price point) that DM retailers WANT cover price of digital to be higher.  That boggles the mind… did we learn nothing as an industry from the monthly vs. trade waiting problem?  Covers of monthly went up, trades came out more frequently with less delay, fans waited for a series to come out in trade and then either a.) ended up not buying the trade because there’s no ‘buzz’ because no one is buying the monthly, or b.) the trade never gets completed/collected because no one is buying the monthly.

For years there’s been the hew and cry of “we need comics on the newsstand” or “we need to get new readers into comic stores” and again, this ignores history.  Comic shops and the direct market was formed because there was a market of fans who loved these comics and these character, and wanted to be sure they got EVERY book.  As the number of shops went down, the price of monthlies went up, and comics lost their ‘entry point awareness’… being on every newsstand, nothing emerged to replace the seeding of a new generation.  Digital is critical in changing this.  It’s honestly one of the biggest reasons I took this on.

Another factor that affects demand in comics is latenes. Why has Longbox been quite so long in the telling. Seriously, I used to work for Electronic Arts and Longbox delays seem even longer that theirs. What’s been happening?

Well we can take some consolation in the fact that it never reached Duke Nukem or Chinese Democracy levels of delay…

Going off of a bit of what I was saying earlier, there are two approaches that get taken in new media dev… not just digital comics… that are really prevalent now.  One is to ‘just get it out’… it can be buggy, using off-the-shelf tools or code that might not be developed for the specific or unique needs of the content or service, but that the way to do it is get it out NOW, and try and repair/fix/change anything en route, and hope that any significant issues that arise can be worked around.  The second approach is the ‘measure twice, cut once’ approach, where you spend a significant amount of time building out, and accounting for, all of the various aspects and the specific needs of the customers, the content, and the service… the first approach believes it’s better to be out and be crappy because you can recover from that if you have market presence. The second believes that it is critical that you deliver the first time for the users, because they are too savvy and technically aware to put up with half-baked code, or being part of a ‘paid beta’.  It’s interesting, because in dealing with investor groups over the last two years, the common thread… in not EVERY case, but a LOT of them… is that the ones who chastised us saying that ‘approach one is the way you have to do it!’ were also the investors who insisted we have a ‘exit plan’.  The investors who put stock in the second approach, were the ones more interested in a sustainable long-term model… looking at it in terms of ‘yeah we want this to make money, but we want it to make money 10 years from now as well as next year’ instead of looking at building it up to sell in 2 years.

Even with us taking the second approach, LongBox Digital was not supposed to come out this late, or be announcing the partnerships we are announcing as late as we are.  The biggest delay goes back to August-September of 2009.  After SDCC, we were dealing with 3 different companies wanting to invest, or be strategic partners with LongBox, Inc.  Which was great.  Two of them were in the ‘Digital Entertainment/Media’ business, and one was in the ‘Digital Hardware’ business.  With two of them, we went through a month or two of negotiations and due diligence by each company, and parted ways when each of the respective companies wanted a fundamental change in the platform or business model that we felt was harmful to the long-term prospects of LongBox as a platform, and to the comic industry.  That was a delay, but manageable.  It put us behind schedule, but not critically so.

The third company though… we started talks with them in late September, and part of the deal was that they would be handling the servers and ecommerce service, because they already had an international one in place, so while we could finish the tweaks on the client (user) app, we really couldn’t finish two of the big pieces until the deal was sorted. From October-December, we went through some hardcore tech analysis meetings, multiple trips back and forth, flying to their offices, them flying to our offices, hammering out all of the terms of how LongBox Digital and comics would be represented within the larger structure.  Exhausting, and time consuming, and the legal fees just for those months ran into the tens of thousands of dollars.   We felt, however, that it was worth it, because we felt that… sure these guys were hard-ass businessmen but they “got” what we were doing… the value of it, and treated it with respect.

And then, came Christmas Eve.

The negotiations mean that I ended up not having Thanksgiving with my family.  I spent all of the holiday going through paperwork, projections and contract proposals.  So, in order to not be completely horrific as a father and husband, I promised my family that Christmas and 2 days after would be “No Work” days. No emails, no phone calls, just family.  Good plan.  Until, at 4pm on Christmas eve, I get the “Final LOI and Term Sheet” from the company.  I was sure there had to be some error or confusion.  We just spent 3 months going over this.  We have a major announcement at CES in Vegas coming up in 3 weeks.  They must have sent the wrong paperwork.  I was so sure of this, that I called them… not angry at all, and told them they must have sent an early draft.  They informed us that no… there was no mistake, those were the terms.  Terms that were a complete 180 from every bit of documentation and discussion we’d had prior, and that pretty much guaranteed we’d not only no longer have control in any way over LongBox, but that we’d be doing it for less than minimum wage, that WE would be liable to the publishers and creators (who we would now be in contractual breach with, because they had a clause that basically tried to assert control and claims over the rights of publisher content in a very sneaky way), and that was just the first paragraph.  Merry Christmas, indeed.

So, we took a couple days off.  I chain smoked a lot, and we thought and talked about it internally a lot.  Some of the team speculated that the company had strung things along for so long, thinking that we needed money badly enough that we’d take the deal.  However, we didn’t. We walked away, and decided that we’d put this much time and blood and sweat into it that we were going to do it right or fold up shop.  So, despite money being tight, that meant no investor or partner distractions.  We’d get to launch and then, if a company wanted to partner with us, we’d doing it on our terms, as part of something established.  To be completely clear, that was one of the hardest choices I’ve personally ever had to make.  When you have a family of six, and you are the sole source of revenue, and there is NO revenue, it truly is a test of your level of commitment to not give in.

Around March, we started talking with a company, not as a partner, but just because we dug their product, and wanted to make sure that we ran perfectly on their device.  They ended up being completely on the same wavelength that we are… very forward thinking, very much in love with the art of storytelling, and huge fans of comics, and the relationship evolved very naturally into a partnership.  While I don’t know if I would have believed it had you told me on Xmas eve, it really all has been for the best, and turned out much better because of it.

And now we have the news about the Adam Tablet deal. How do you see LongBox regaining the brand message lead in this field that it once had?

Ithink the biggest thing is the follow through on the “comprehensive’ statement.  We’ve never seen LongBox as being a device or publisher specific app, and the tools, infrastructure, and multi-device support goes a long way on that.  The fact that “one price” means one price.  You pay the same on iPad as you do on PC or Mac, or on your Android Phone.  The fact that the publisher’s/creator’s revenue percentage is off of the cover price.  Not the adjusted gross after Apple or whoever takes their cut.  Getting that worked out for every device took time, but it makes it a hell of a lot easier to grasp at a glance, and to do the math in your head, much less on sales reports.  The release delay resulted in an accelerated refinement of the production tools, which makes it not only easier for publishers to schedule content, automatically process it, and validate the files, but it also makes it possible for us to support independent and self-publishers NOW, as opposed to 9 months from now (which was the original timeframe).  In fact, Just this week, Mike Jasper scheduled, formatted and uploaded the first two chapters of In Maps and Legends (which started over at Zuda) using the production tools and publisher site with a shockingly small amount of input from us after a day with the system.  So, other than that, there’s a few things…

The big one is the partnership announcement.  Going back to our core belief that we have to expand the reach of the market and the size of the customer base, OEM partners have been key to our plans.  It’s something you actually touched on in an early preview of LongBox Digital… that if you are going to get new readers… folks that do not read comics now, you cannot expect them to a.) find the app, b.) install it, c.) figure out what (if anything) to buy.  At CES this year there were 32 tablet devices announced by a slew of companies.  Some sucked a nation of ass.  Some were “ok”.  Some were very interesting.  Only one had every tech blog and magazine raving that it was really pushing the boundaries and showing what could be done with the format, and that was the ADAM tablet, from Notion Ink.  It’s in all honesty, the device I wanted to buy for myself.  A large part of that is the Pixel Qi screen, which is a dual mode screen that works like ePaper (but with full color, at 1080p, at 30fps) in bright sunlight, or functions like a traditional LCD screen in dim/dark environments.  It’s Android-powered, has a 185-degree pivot camera, HDMI and USB out, as well as some other fantastic features.  The ADAM tablet has the Genesis storefront, which is basically an entertainment delivery shelf, that they have partnered with some rather big names in the areas of eBooks, Film, Music and TV.  LongBox is one of those partners, with it pre-installed as the integrated Digital comics storefront, library and reader system.  ADAM will be coming out by Xmas… there are four models and the most expensive one is less expensive than the cheapest iPad.

Version 1.1 of LongBox Digital is being released today as part of the Notion Ink/LongBox announcements, and has a massive number of additional features, refinements and extensions on the previous versions, including multi-sorting capabilities by genre and publisher, a tree-based hierarchy for browsing, multiple news sources and feeds and more.

Version 1.2 will be released with the ADAM tablet around the holidays, and we’ve got a couple of killer features lined up for that release, with the iPad, iPhone, and generic Android versions being available 30-60 days after the release of the tablet.

Beyond that, you’re going to see LongBox become a presence again with us being involved in the social and news circles again, now that things are buttoned down, and we have stuff like original content and special events to be talking about… we’ve been quiet for the last few months rather than speak prematurely, or just add to the noise.  That quiet period is over now.
Okay, talking about alliances and deals, on a  more personal note, I know some sites didn’t want to cover you after it was seen that you’d got into bed with CBR. That doesn’t seem to be the case now, hell, even Bleeding Cool is on there. But was that mistake to ally with one news provider?

It was never intended that CBR would be the only newssource… I had talked to John at Wordballoon and the Comic Geek Speak guys a LONG time ago about that.  The main thing for us was establishing the format of how the platform would handle and present the news.  Jonah has always been a great supporter and believer, and gave us the early go-ahead to use CBR first in order to get all the other ducks in a row.  I think it served LongBox well at the time, and now that we’ve gotten to the next stage, we’re happy to open the floodgates to miscreants like yourself!

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