The rumblings of the Cold Cut sell-off seem to have uncovered a rift of disquiet among the Guardians. In some cases it’s downright dissent. As usual, Tom was the first to chart the anomaly:
My basic thesis is that despite measurable gains in the specialty Direct Market, the emergence of a traditional book market and even signs of a rapidly developing on-line market, a lot of the celebrated growth isn’t wholly reflected in a beneficial way where it deserves to go most: the creators who make the comics, and those on the front lines of putting them into people’s hands.
Indeed, mirroring the widening haves and have-nots economic distribution of America itself, the direct sales market, despite this month’s epic surge in graphic novel sales, is still a vastly misshapen beast with a huge head reeling atop a shrunken body, as this month’s Market Shares show:
Publisher Comics, Magazines, & GNs Dollar Share Comics, Magazines, & GNs Unit Share
MARVEL COMICS 43.62% 48.42%
DC COMICS 27.02% 28.57%
DARK HORSE COMICS 6.73% 4.80%
IMAGE COMICS 4.42% 4.79%
IDW PUBLISHING 2.54% 1 .96%
VIZ MEDIA 1.95% 1.02%
DYNAMIC FORCES 1.73% 2.05%
TOKYOPOP 1.13% 0.50%
WIZARD ENTERTAINMENT 0.96% 0.68%
DEVILS DUE PUBLISHING 0.83% 0.87%
AVATAR PRESS INC 0.64% 0.82%
RANDOM HOUSE 0.57% 0.20%
GEMSTONE PUBLISHING 0.49% 0.11%
FANTAGRAPHICS BOOKS 0.49% 0.19%
ARCHIE 0.42% 0.56%
A. D. VISION 0.38% 0.15%
DMP 0.34% 0.11%
VIRGIN COMICS LLC 0.33% 0.25%
ASPEN MLT INC 0.31% 0.47%
BONGO COMICS 0.26% 0.30%
Other Non-Top 20 4.83% 3.18%
And the have-nots, the barnacles on the whale, brave men and women who have been battling in the trenches for, sometimes, 20 years, are speaking out on the economic realities of a system without any competition. Plain Talking Dan Vado is as blunt as always.
While that sounds like a slam at Diamond, it’s not, it’s a slam at my fellow publishers. Cold Cut was taking a risk on doing reorders for lots of people and doing their best for a good number of publishers well before Diamond discovered the book trade and the need for exclusivity. Of course Diamond is going to ask for exclusives, why shouldn’t they? But most publishers who jumped out of Cold Cut’s catalog for a Diamond exclusive didn’t even bother to ask about carving out a spot for Cold Cut. Diamond is SLG’s bookstore distributor, and yet we still make our product available to Cold Cut. I insisted on that, same with Last Gasp. Why? Because Cold Cut and Last Gasp were instrumental in the success of many of our books like Milk & Cheese, Johnny the Homicidal Maniac and Lenore. Without Cold Cut, without the hard work put in by Mark, his former partners Tim and Cathy and all of the people who work for them, Johnny the Homicidal Maniac would have died on the vine. Cold Cut was the one keeping that book available to the direct market before Diamond even figured out that small press reorders were important and potentially profitable. I and all of our creators owe a lot to Cold Cut and I have this crazy thing about loyalty. Honestly, Cold Cut got screwed for what amounts to pennies.
There’s much more in Vado’s post, much of it simply fatigue at his long march, but Brett Warnock at Top Shelf with half as much time under his belt as Vado, echoes the sentiments:
And, like Slave Labor publisher Dan Vado (as read on The Comics Reporter), i have to admit to being somewhat cynical about all the hoopla and hype that the new graphic novel model in the book trade, coupled with a “healthier” direct market are indicators of stability across the board. When in fact my experience would seem to indicate that the glut of Marvel and DC titles currently flooding the market, as well as an overabundance of weak comics everywhere else has created a situation where it’s really very difficult to get much support from the retail community for indy comics, except for only the biggest A-List books in a given season. (And certainly not entirely via the fault of the retailers themselves, what with non-returnable sales [in the direct market] understandably inhibiting a willingness to take risks on new titles, creators, or publishers.)
Indeed, there is a product glut. Although there is more good stuff than ever and more good people working steadily, I don’t envy Rick Retailer going through the Diamond catalog every month and deciding how many copies to order. Our eyes glaze over by the companies that begin with “Ae” — having to plow on through would be unbearable.
But Cold Cut’s existence has benefits for every publisher, as Brian Hibbs points out
ANY publisher who has signed a distribution deal with Diamond, that does not have exclusions, for Cold Cut or Last Gasp, or even possibly a new startup, where that publisher is sold to retailers at an “F” (45%) discount or less has made a terrible, terrible mistake that they really NEED to rectify at their next contract negotiation. Why? Diamond assesses a 3% reorder penalty. That means your 45% discount, just dropped to 42%. Guess what? If Diamond is distributing your books, that means Baker & Taylor and Ingram has them. ANY chimpanzee, who pays on time, and places an order of 10 or more books (not of a single title, for a whole ORDER of books! Cake!), gets AT LEAST 42% off from B&T.
The seeming fading away of Cold Cut is not really a cause of the stasis, just a symptom. But there is some change coming. Hibbs has also been blogging away about the installation of a POS system at his store. What is POS? “Point of Sale”…in other words the kind of computerized inventory that many other retail environments take for granted. It’s no secret that most comics shops in the LCS system are chronically underfunded, and live on very low margins — too low to put in computers and bar code scanners. We were shocked a year ago when we helped set up PW’s graphic novel bestseller system, and even most of the top stores lauded as industry leaders were still tracking sales via a pencil and a clipboard and the same accounting method that a prisoner uses to count down the days until release.
Hibbs is far from the only retailer changing, of course. Diamond, like the British Raj before it, is trying to teach the natives about things like quinine and digging draining ditches. Again, Dan Vado:
Diamond comics is apparently developing something that will work with a Microsoft based Point-of-sale system. Given the Diamond Comics blessing, this will probably become the defacto POS system for the comic book industry. That, I think, is sad. Microsoft makes some pretty crappy products and the security of it’s core product, the operating system, is at best suspect. I honestly don’t think an entire industry should be basing its POS choices on something that operates on a Microsoft platform.
…The upside to this, of course, is that a Diamond sponsored system will no doubt have a real-time link to their inventory database. If a retailer can look up the availability of an item from their cash register and special order merchandise for their customers right as someone is looking for something I think they would all be surprised at how much extra product they moved and the wide variety of product being requested. I once suggested to a retailer that they should write down everything that their customers asked about, not order it, but write it down and then look at the list at the end of the month. He later told me he was surprised at what a variety of product that people were asking for. I don’t know what he did with that information, but knowledge is power.
The advent of an industry wide POS system would be the biggest shake up since Heroes World, but not in simple ways. We’ve had a few discussions with retailers about the switch, but the talk soon turns to such things as the number of digits in an ISBN number. Even reading Hibb’s blog entries about the switch are tough going for the non-business oriented among us. Nonetheless, this is probably the single most important thing happening in the industry now that we all know that graphic novels are here to stay.