The Theory of Webcomics: Superstar Theory
In my last entry, I discussed a number of the ways that webcomics make money and mentioned that only a few of the thousands of webcomic artists are able to actually do so. There are a number of factors that play into which comics make money (and for that matter, which attract the most readers, and which work best with each type of business plan), but I think a critical one is what economists know as “Superstar Theory”.
Aside: I am an economist by schooling, and years ago, this was a major point in my undergraduate thesis paper. I didn’t invent the phrase—that honor goes to actual economists like Sherwin Rosen—but I suspect I was the first person to use it in reference to webcomics. I’m going to assume you have a basic idea of how economic supply and demand works, here: As people demand more of a good, the price goes up; as producers make more of it, price goes down, and everything else pretty much flows from that.
The classic model would be a baker: If more people want cupcakes, and start lining up at his door to buy them, then he can raise the price and make more money. If a second bakery opens up down the street, people can buy cupcakes from either of them, and the first baker will need to lower his prices or he’ll see his business go to the competition.
In most modern artistic fields, there are a small number of artists that grow huge followings and tend to get the majority of the word-of-mouth “buzz.” This concept is known as the Superstar phenomenon, in which a relatively small group of people earn significantly more money than most in their field, and, in fact, dominate that field in general. Performers, writers, and sports players of the first rank command huge incomes, and there is a large gap between their salaries and those of people of the second rank—though the difference in skill between first and second rank may be minute. (Think of what Harrison Ford makes versus what his “unknown” female co-star makes.) For an economist, this can be complicated to examine with your classic supply-demand model, because that model assumes that products are undifferentiated—one is as good as any other. What’s missing is an account of “box office appeal,” or the ability of a single person to attract a large following.
So how do we model that? Part of it can be explained on the demand side by the idea of imperfect substitution: Economics assumes that 10 one-pound bags of flour are identical to one 10-pound bag of flour. But ten mediocre performances do not add up to one excellent one, so the excellent one can command a significantly higher price. A doctor whose exceptional ability gives patients a 10% better chance of survive can expect to command more than a 10% premium. But as the doctor attracts more patients, and the time he can spend with each one decreases, his competitive advantage disappears. While the top doctors do command higher salaries and more prestige, it’s a fairly linear scale–there is no Harrison Ford of medicine. So something else has to explain the great discontinuity found in the entertainment industries.
In industries like film, music and professional sports, the cost of production (for the actor, artist or player) does not depend on the size of the market. The performer puts in the same effort whether ten or ten thousand people are watching. Furthermore, technology, from the printing press to the internet, makes it possible for a very large audience to receive the same high-quality item, or at least a better substitute in many respects. The marginal cost, or cost of producing one additional item, is extremely low. Stephen King takes the same amount of time to write a novel no matter if the publisher prints and sells 400 copies or 400,000 copies. Webcomics have this in spades: Given the decrease in bandwidth costs over the years, you can add readers essentially for free.
What this adds up to is that everyone wants the best, and everyone can have the best. No one will buy a second-rate book by Joe Schmoe when they can pay the same for a Stephen King novel. So rather than 100 authors each selling 1,000 books, Stephen King sells 100,000 books. Basically, a small increase in talent can have a multiplicative effect on reward. There are lovely and elegant mathematical models of this, but take my word that they’re pretty and let’s move on.
Another economist named Moshe Adler took this one step further, and said that there doesn’t need to be a significant difference in talent. His model indicates that luck (if all consumers choose preferred products randomly) determines who becomes a star. His model basically claims that good advertising (mostly word of mouth) is what creates a Superstar—the general rule being that the “biggest” performer grows larger, owing to the increase in popularity. This is known as “positive feedback,” wherein the middle ground disappears as the weak get weaker and the strong get stronger. Think of the music industry: Nirvana made it to super-stardom, but how many other garage bands that were just as good or better never made it out of the garage?
This is why, of the 10,000-plus webcomics out there, and probably a million-plus serious fans, only a dozen creators can support themselves with their comics. The best among webcomic artists attract huge audiences and make enough money to support themselves, while the vast majority—even those who are only marginally less talented—earn a pittance. The internet magnifies the economies of scale and allows the artist to produce a product with a marginal cost of virtually zero, so millions of readers can get the same product for no additional cost. Any given reader has limited time—they can only read so many comics before their boss starts looking over their shoulder—and limited money to spend on shirts, books or donations. If you can only read so many comics, you’ll probably try to concentrate on the ones that all your friends are talking about. If you can only afford to support one or two comics each month, you’ll choose to support the best.