Robot 6

A creator’s eye view of Graphicly

Graphicly

Graphicly

The announcement late last month that digital distributor Graphicly would close and its key employees join self-publishing platform Blurb was met immediately by questions, many of which centered on whether the company’s clients will be paid what they’re owed.

Originally envisioned as “iTunes for comics,” Boulder, Colorado-based Graphicly was soon overshadowed by competitor comiXology, and in 2012 shuttered its comics app to focus instead on providing visually based books and comics to eBook platforms. In its most recent incarnation, Graphicly was a digital conversion and distribution service: For a fee of $150, the company would convert a comic to ePub and other formats and distribute it to digital platforms such as Amazon’s Kindle, Barnes & Noble’s Nook and Apple’s iBooks. Graphicly would then act as middleman, collecting money from sales on those platforms and passing it along to the creators. Unlike other digital comics distributors, Graphicly didn’t take a cut of sales on eBook platforms, just the upfront fee.

Since Graphicly announced its closing on May 27, a number of creators have asserted publicly that the company wasn’t tracking sales correctly and hasn’t paid them what they’re owed from sales. Bleeding Cool spoke to Dave Dellecese and representatives of Th3rd World Studios, as well as a former Graphicly employee. At The Beat, Marc Ellerby and Mike Garley told similar stories, and Eric Grissom and Dara Naraghi added their names in the comments. Ellerby tweeted:

I’m still flipping mad about it all. @Graphicly have spun this buyout to be a positive but really creators are losing out on all money owed.

The problem is, it wasn’t a “buyout.” If Blurb had acquired Graphicly, it would have acquired the debt as well as the assets — and some of that debt would be the money owed to creators. Instead, it appears Graphicly simply shut its doors, with key employees, including co-founder Micah Baldwin, joining Blurb in what’s referred to as an acqu-hire. “None of the assets per se are coming over,” Baldwin told TechCrunch at the time of the announcement.

Owen Wears, Graphicly’s former head of quality control, told Bleeding Cool that CEO David Fox, who joined the company in September amid a $1.3 million round of funding, emailed the staff on April 11 to say a planned merger with Blurb wasn’t going to go through and that employees wouldn’t be paid for their last week of work, nor would they receive any severance. While Wears found it difficult to believe Blurb didn’t get some of the software in the ultimate agreement, Baldwin was emphatic in his denial:

Blurb did not acquire any of the Graphicly assets or software as it has its own set of industry leading tools for authors and publishers to use. There is no “pile of cash,” and yes, Graphicly no longer exists.

Blurb also emphasized what exactly it was getting out of the deal, adding to its original press release a clarification that reads, in part, “that Blurb did not acquire the Graphicly company (meaning their products, customers, revenue, technology, assets, etc.) but rather hired some of the former Graphicly employees after their Board closed down the company and let their staff go.”

Neither Baldwin nor Fox responded to ROBOT 6’s requests for comment.

To find out how this played out in more detail, we spoke with Dellecese, who used Graphicly to distribute his comic Holidaze.

Robot 6: How and when did you first become involved with Graphicly?

David Dellecese: My partner on Holidaze, Andrew Cieslinski, and I began publishing our book with Graphicly in mid-December 2012, after they had changed formats and became a digital publishing platform. We were very much attracted to the idea that for one flat fee per book, Graphicly would handle all the converting of files and publish the books to various vendors like Amazon, iTunes, Nook, Kobo, etc., and their promise that after that fee was paid and vendors (like iTunes or Amazon, for example) took their cuts, the rest was your profit.

How much do you calculate Graphicly owes you?

When it comes strictly to revenue from books earned, we’re currently owed at least $46.91 from Graphicly, based solely on their sales reports that went up to February of this year, if those are accurate considering the issues the system has had with keeping track in the past. That does not take into consideration any sales that occurred in March, April, May, or the parts of June before books are taken down from various vendors.

With Graphicly now taking those books down from the vendors and putting it back into the creators’ hands to re-publish on their own, I think the creators who paid $150 for each of their books to be published to those vendors should see that in return to them. In our case, that’s three issues published, one of which was done through a special “freebie” offer running at the time. So, two issues paid for at $150 each would be $300. With revenue earned and costs for a service no longer in existence, I’d say we are owed a total of $346.91.

I’m sure there are many who may scoff at those low numbers and ask what the point is of even asking for it. The point, the way I see it, isn’t about the numbers. It’s about the fact that there were agreements between the company and its clients that were not honored along the way, and when the company folded, shoulders were essentially shrugged at the prospect of honoring those agreements. Sure, that may not have been mortgage money in our particular case, but it’s money that was owed. And multiply that by the numbers of other indie publishers out there in the same predicament and it starts to add up to much more than merely what we, as one individual company, were owed.

Can you give us a quick description of how Graphicly looked from the inside: How did you get your comics on the platform? Was there an approvals process? How did you track sales? How did you interact with the company?

The way it worked is that you created an account with Graphicly, providing tax information for your company, bank account information for the company, etc. This was so that they could send you money earned from your book sales.

Before you could publish to anything outside of their website (to vendors), you were asked to purchase an ISBN from Bowker Identifier. These ranged from $125 for one ISBN or 10 ISBNs for $295. Once you had ISBN numbers from Bowker, you would log in to your Graphicly account (your “dashboard” as it was called) and “add a book,” filling out a template with information like title, volume, issue number for a comic or magazine, the purchased ISBN number, a synopsis, etc., etc.

Then you would upload a PDF file of your book. From there, you would go through each page of the book and select panels (for a comic) for those readers that could guide along panel-to-panel in a similar but not exact way that comiXology does with their Guided View Technology. The program would tell you if you selected too large an area or too small, or overlapped with other panels, and so forth, and you’d have to go back and re-select to fix it before submitting. Once you submitted, you paid $150 and waited until the book was made available.

There was no approvals process by Graphicly, just by the vendors that would carry the book after Graphicly converted it. So, this would include iTunes, Kobo, Nook, etc.

However, there were often times when the dashboard would show that a book was still “in review” by a vendor, but this was inaccurate. I oftentimes had more luck finding out our books had been published by going to each individual vendor site, like Amazon or Nook, and searching for it myself, because the Graphicly dashboard was showing it still “in review” months after it had been released in some cases.

Originally, there was a chart when you logged into your dashboard that tracked your sales by the day. There was also a column right on the dashboard when you logged in that told you your earnings and through which vendors you were receiving sales. However, within a very short period of time of joining up with Graphicly, this seemed to stop working. Sales weren’t showing up and the amount of revenue was just sitting stagnant, even when I knew there had been book sales. I and others had made purchases from the vendors just to test this and yet those sales would not show.

I thought it might have been a glitch and tried to give it time to sort itself out, trying to give the benefit of the doubt. Finally, in mid-July 2013, I emailed Graphicly and questioned this. The response I received from the “support desk” email at Graphicly said:

“… yes, usually, sales reports will show up at least once a week on the dashboard.

However, the sales figures are broken right now for almost all of our accounts, including larger publishers like Image Comics, ect. [sic]

We are working on getting sales figures to reappear.”

Nothing changed, and in October 2013, I emailed again, questioning if the problem was going to get fixed and if any sales in those times would be added retroactively, as I knew I had sales for the book. I got the following response from the support desk email:

“We’re expecting the new (August) sales reports to go up as soon as we can get them there.

When those spreadsheets are updated, you’ll have all the information we have to give you. It’s just a bit delayed.

Thanks.”

Those spreadsheets they are talking about were Microsoft Excel files that would periodically become available, several months after the fact, reportedly to tell you what your sales were for a given month. With the tracking system not working, this was the only method of calculating anything and had to be calculated yourself, as the revenue when you log in still remained broken and unchanged from months and months prior.

We had to take their word for it that what was in that Excel sheet was accurate, which, I admit was becoming difficult to do because there was just no real information as to what was going on. After sending another follow-up email, I received this response:

“Honestly, the dashboard isn’t all that accurate, and I would rely solely on the charts. We’ve got an outside contractor working on them right now, and acknowledge the delay. I’m hoping to see them by next week.

Thanks for your patience.”

I contacted them in late January 2014 when still nothing changed and received this response:

“The dashboard numbers don’t work, and they’re probably not getting fixed before the next version of the website is out. My advice is to just ignore those numbers, and use the spreadsheets, which are accurate.

I can check if you have a balance to be paid, but my recommendation is to wait until the December reports are up in the next week or so, and then requesting a disbursement from that total. Right now, we only have numbers through November.

How’s that sound?”

I complied, again trying to be optimistic on the matter and hope that maybe they were just really running into some issues. I knew they were a small company, so again, wanted to give the benefit of the doubt.

That new website never materialized and things just stayed as they were. In mid-April 2014, I sent them an email formally requesting a disbursement of any money they said we had earned. I heard nothing back. In mid-May, I sent another request asking about the disbursement and if the company was still even in operation. I received no answer. Facebook and Twitter posts on their pages also garnered no responses.

Then, last week, I received an email telling me that the company was shutting its doors and taking any books that people published through them off of digital vendors and to contact them with any questions. Here is that email:

“As you may have heard today, Graphicly is winding down as an entity. Micah wrote about it here.

The Graphicly team is now at Blurb. Blurb is a company and a community that believes passionately in the power of books, graphic novels and magazines — in both digital and print, and has some wonderful tools for creators and publishers. The team is very excited about what Blurb is building and certainly suggest you check them out here.

We have put our hearts and souls into building the best platform for independent creators and publishers and are excited to continue this work at Blurb.

We want to thank all of the publishers who have used the platform over the years to convert, distribute and promote your wonderful books. Without you, there would have been no us.

What is next?

Over the next thirty days, we will keep Graphicly up and running so you can go in and download your books. There is a handy “Download All” button to make it easy. After thirty days, we will completely delete all data, including all accounts and books.

We will be bringing down books in the various marketplaces, and have worked with the marketplaces to make the transition as simple as possible.

Once you download your books, you can make accounts at the various ebook stores and upload your books there.

Here are links to those marketplaces:

[…]

Again, we cannot thank you enough.

Sincerely,

David Fox

Graphicly

I emailed back asking how clients of Graphicly can get money they were owed since disbursement requests went unanswered. I received an email response from David Fox, stating:

I regret to inform you that we have closed our doors and are unable to provide any payments. I’m personally very sorry about this.

In the end, people paid Graphicly each time they published a book with the promise of keeping any revenue. Graphicly’s accounts were admittedly broken (as seen by the email exchanges above) and not reporting accurately, and requests for disbursement were either stalled or ignored. Now with the company closing, people are not only not getting the revenue from their book sales, Graphicly is taking down the books off of Amazon, iTunes, Nook, etc., that people paid Graphicly to do for each issue.

Do you feel they were reporting sales accurately to you, and did that change over time?

I’d like to think that in those first few months, things were being reported accurately. However, given the difficulties once their reporting system fell apart a few months in, teamed with their communications that showed stalling tactics and a lack of concern, I can’t say that I had any confidence after that point.

Did you have any way to verify the sales report on your dashboard?

No, there was no way to verify the sales. As you can see from my email exchanges with the company above, any time I questioned the faulty dashboard, I was told to go by the Excel spreadsheets they were going to provide and their “Annual Report” spreadsheet. There was no Annual Report Spreadsheet for all of 2013, and spreadsheets for 2014 ended in February. So, if there were sales in March, April and May, there’s no way anyone could tell. That’s of course, if those spreadsheets were accurate to begin with.

Once the announcement was made last week about Graphicly shutting its doors, access to sales and those spreadsheets (up to February 2014) were taken away. So now clients were left with no way to access or show any of their data—again, if that data was accurate to begin with. After reading an interview published by Bleeding Cool with a former Graphicly employee, I’m more suspicious, as that employee mentions the “flagrant accounting practices.”

Have you published Holidaze in any other channels? If so, how did Graphicly’s sales compare?

We are currently on comiXology, as well, but are still relatively new to it so it’s still something to be determined.

Did Graphicly pay you regularly and on time?

Sadly, Graphicly never paid out any money owed, despite requests to do so. And as you can see from the responses I’ve gotten upon their recent announcement, it sounds as if many indie publishers won’t be getting paid either.

On top of that, creators have paid Graphicly for each issue of their book to be published, only to have Graphicly now state they’re taking them down off of the vendor sites like Amazon, Nook, etc.

When they say in the email above that you can download your books from the site, are they talking about books that have been converted to eBook formats and could fairly easily be uploaded to Amazon, Barnes & Noble, etc.? Does the panel-by-panel view feature still work?

So far, I’ve tried using the Graphicly files they allowed creators to download on both Amazon’s KDP Publishing tool and the Nook Press tool, which Graphicly linked creators to (to publish the files themselves) in that email from David Fox where the closure was announced.

Sadly, Amazon’s KDP Publishing tool does not accept the files, and while Nook Press did accept the files, it is not the same way in which Graphicly published the books. So, unfortunately, you can only view a whole page (no panel to panel viewing) and if you try to zoom in on the pages, it becomes extremely pixelated. This isn’t due to the art files, as the books through those vendors worked great however it was that Graphicly originally published with them.

With that in mind, it looks like we’ll be comiXology-exclusive for the foreseeable future, which isn’t a bad place to be, to be honest. ComiXology has been great to work with.

Graphicly has offered users the opportunity to move over to Blurb. Do you plan on doing that?

Absolutely not. As you can see from the above email, while some of the Graphicly employees have moved to Blurb and they try to sell you on the service as well, it’s very difficult to muster a desire to have any dealings with a company made up of the Graphicly folks after the dealings we’ve had.

Note: After the interview, Dellecese added an important piece of information:

I had spoken with the Colorado Attorney General’s Office and they urged myself as well as anyone else out there who is in a similar boat with Graphicly to fill out this form ASAP. The AG’s office has said that the more complaints they get from people who feel they were bilked or stranded by the company, the more substantial a claim is and the more reason they have to investigate further.

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Comments

2 Comments

I’m sad to hear this. i joined Graphicly before they began the fee to upload books, so they placed all my books on Amazon , etc. for free. Now all my content was free anyways except for one book and there is money owed to me also. I experienced the same as Dellecese with the reports never coming in often.
Thanks for the article, because now I know it is pointless to download my books from Graphicly and place them on Amazon, etc. I’ll just do the process myself.

Knut Robert Knutsen

June 13, 2014 at 9:24 am

I’m sorry, but this really seems like they’re trying to just strip Graphic.ly of all the assets and none of the debt.

People who are owed money should push for bankruptcy proceedings so that there will be a proper inventory, evaluation and sale of assets.

There are a few questions I have …

Those top employees that left for Blurb, are we to believe that they all had served out their contract? Because contracted employees are assets, too. If someone had a year left on his contract (possibly non-compete) with Graphic.lyt but was let out of it to work for Blurb, that’s a transfer of assets.

And even if Blurb didn’t take over Graphic.ly software to use it themselves, there has been no story about that software being offered for sale to the highest bidder. Because if there is a deal with Blurb to scrap the software, that’s no different than them taking it over. The result is to make sure that asset isn’t used by their competitors.

And the word used is “closing down”: But closing down doesn’t cancel out debt, only a bankruptcy can do that. But a bankruptcy would go through everything in search of assets to sell off, making sure nothing has been sold off cheap to cheath the creditors. However, if they say that they “close down” and people just give up, they can have the benefits of a bankruptcy without the scrutiny and the forced sale of propeerty.

And with Blurb essentially trying to poach all of Graphic.ly’s clients (which the stewards of the remaining assets of Graphic.ly ought to work against to maintain value in the property), it’s all getting extremely messy.

This situation really ought to be investigated thoroughly.

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