By Todd Allen

The increasingly corporate nature of comics has been a continuing topic for the last couple years.  Marvel sold to Disney.  Warner pulling DC in a bit closer.  Trying to maintain quarterly sales figures in a hit-based medium (also known as Events and/or line extension).  Forbes has a piece called “The Dumbest Idea In The World: Maximizing Shareholder Value.” It’s partially a review and partially a response to the book “Fixing the Game:Bubbles, Crashes, and What Capitalism Can Learn from the NFL.”  This piece (and the book) contrasts the old Peter Drucker maxim “the only valid purpose of a firm is to create a customer” the current credo of “the singular goal of a company should be to maximize the return to shareholders.”

The downfalls of the shareholder side of things are pretty much summed up by former GE CEO Jack Welch.  Ironically, Welch was pretty much the poster child of shareholder value for years.

On the face of it, shareholder value is the dumbest idea in the world. Shareholder value is a result, not a strategy… your main constituencies are your employees, your customers and your products. Managers and investors should not set share price increases as their overarching goal. … Short-term profits should be allied with an increase in the long-term value of a company.

What to do about it?

“We must shift the focus of companies back to the customer and away from shareholder value,” says Martin. “The shift necessitates a fundamental change in our prevailing theory of the firm… The current theory holds that the singular goal of the corporation should be shareholder value maximization. Instead, companies should place customers at the center of the firm and focus on delighting them, while earning an acceptable return for shareholders.”

If you take care of customers, writes Martin, shareholders will be drawn along for a very nice ride. The opposite is simply not true: if you try to take care of shareholders, customers don’t benefit and, ironically, shareholders don’t get very far either. In the real market, there is opportunity to build for the long run rather than to exploit short-term opportunities, so the real market has a chance to produce sustainability. The real market produces meaning and motivation for organizations. The organization can create bonds with customers, imagine great plans, and bring them to fruition.

The premise here being that with executive compensation being increasingly tied to the stock options, and thus the stock price, executives are more concerned with managing the expectations of the stock and it’s price than they are with their customer base or employees.  Gee, does this sound familiar at all?

How long have we seen DC and Marvel chasing the Event tail, both of them trying to recreate the lightning in the bottle that was Civil War?  How many Green Lantern, Batman, Wolverine, Avengers or X-Men titles do we really need?  How long have we heard stories about publishers needing to hit circulation/revenue targets for their quarterly filings, all the time with circulation spiraling down as the prices increase and the Events continue to overflow.

What does the Forbes writer wish to see addressed in a follow up book?

In future writings, he might document more of the economically disastrous practices that enable firms to meet their quarterly targets, such as  looting the firm’s pension fund or cutting back on worker benefits or outsourcing production to a foreign country in ways that further destroy the firm’s ability to innovate and compete.

I don’t know about looting the pension fund, but cutting back on benefits and outsourcing production do have a faint ring of familiarity to them.

Forbes is hardly what you’d call a bastion of socialism, so when they start decrying stock market practices and calling for a return to “delighting” customers, it’s worth paying attention to.  I also can’t help but think some of their complaints aren’t directly applicable to comics.  More time needs to be spent delighting customers and less time creating charts for which 85 comics need to be purchased to be able to read the next Event.

If you wanted to make an argument that the DC relaunch was an attempt to delight the customers, I’d entertain it.  (Although, one wonders how much longer before the relaunch dips its toe into Events.)


  1. thats a false choice. a company will always maxmize value to shareholders. what the value is will be dictated by the shareholders, because they own the company. if the shareholders want the company to tell customers to screw off, then thats what the company will do.

    most shareholders, however, want steady year over year growth. so companies go about doing that, usually by delighting customers as much as possible. usually the companies with the most delighted customers (apple, walmart, coca-cola, etc) have the largest market caps.

    but ok, there is an interesting point being made in there. comics should operate with more focus on the long term than on the latest 10Q. having them folded up in giant conglomerates should theoretically help them with that, since they’ll be shielded from cash flow demands. Marvel and DC’s operating budgets are rounding errors when mixed into the Disney’s and Time Warner’s bottom line, so hopefully they’ll be given lots of slack to remain virtual R&D for IP. let the cable channels provide the monthly revenues streams while they work on cooking up the next harry potter.

  2. As someone who is a socialist, take this with a grain of salt (I know republicans like to call the success of Norway “social capitalist” rather than socialist -nice term, though nevermind why that still doesn’t explain why their major right wing party is more left than our Democratic party)…but i digress, as someone who has worked within the field…stockbrokers are cutthroats and very proud of it. Gleefully so. I don’t care for sports, but to use a sport metaphor: if you take out the ref it’s not a sport anymore it’s anarchy. We need more regulation like it used to be -not to sound conservative or anything:)Unlike popular notions: the US has always been socialist it’s only when we deviate from the middle is when we have bankrutpty like in Russia. Germany/Russia -you tell me the difference. Just trying to make some point about the 1% or something:)

  3. Whatever your opinion of the DC relaunch may be, the one thing they have stuck to is consistency. Ship dates, creative teams, these have all stayed the same for the last several months. Can’t tell you how many customers have told me they appreciate knowing when a book comes out. Some even know which week of the month is their favorite (mine is week three when Batgirl, Batwoman, and Buffy, which has also been shipping on time, are all released). This is one area that has really impressed me as a fan / retailer.

  4. I did a get a bit off topic:)
    Not having read a single issue of the relaunch…people seem to be liking the stories. Hard to argue with that, which the articles conceits. I’m tempted to pick up some copies -it is kinda exciting.

  5. I like this approach if you think of the shareholders as the die-hard fans as well as the companies.

    If you look at the history of comics, (or any medium, but for the sake of focus, comics) it’s always been about chasing the biggest audience. Superheroes selling? Let’s do more. No one likes those anymore? Let’s do romance and crime comics. Want something spicier than crime? How about horror comics, etc.

    These movements were about finding or creating an audience and filling the demand, but I get the get the feeling that we’re increasingly just trying to sell to the shrinking fan base instead if creating new readers (which is what the New 52 was supposed to be about, ps). Just preaching to the choir.

    A lot of people slag on Blue Water Comics, but at least they’re trying something outside “comics mainstream” and in the realm of popular culture, in the classic sense.

  6. “I like this approach if you think of the shareholders as the die-hard fans as well as the companies.”

    You are thinking of stakeholders rather than shareholders.

    Also the level of the analysis is wrong in this article, Marvel and DC are effectively business units rather than companies so the dynamics are different as is their places in determining overall corporate (rather than functional) objectives.

    For example, the idea that Marvel needs to reach out to more women makes sense* if it is a company – however as a business unit within the massive Disney corporation, it’s might actually make more sense for it to be a business unit targeted at young males with other business units looking at other demographics.

    * To Disney rather than to me before people start throwing stuff at me.

  7. I don’t think the analogy works. Customers apparently find more value in Events and the DC relaunch, because they buy more of them. That’s very different from shorting customers and employees to squeeze more profits out of static sales. When your potato chip bag is half full of air, that’s cheating the customer to benefit the shareholder. When a publisher makes more Events because customers have consistently bought lots of them, that’s following the customers’ lead.

  8. I think it’s a pretty strong analogy. Netflix is the best example of a good company with a good product creating a disastrous relationship with its customers this year.

    Mainstream comics haven’t made the same huge blunders, but the focus has not been on telling fantastic stories–it has been on company-wide “initiatives” like the New 52, Civil War, etc. They know there’s money there, and the books sell, which is seemingly a measure of success.

    But I don’t personally know many people who feel like that’s a positive direction for the books to go in, and I know it has resulted in a dimming of enthusiasm for many (me included). Which could point to diminished returns over the long haul.

    Related to this article, and interesting to relate to comics companies who are owned by megacorporations is the documentary “The Corporation”, which makes the point that by definition, a corporation’s only purpose is to maximize its returns to its investors.

  9. Customers are not stakeholders or shareholders. Customers are customers. Die-hard customers are die-hard customers, nothing less and nothing more. Most of them couldn’t have cared less about Marvel’s stock price back when Marvel had a stock price. Since Marvel’s purchase by Disney, the stock market has been almost entirely irrelevant to the comics world. That world is instead beholden to private industry, and a couple of large, largely conservative companies who are rarely accused of ignoring their customers.

    There are plenty of non-comics companies that choose to serve die-hard customers at the expense of broadening their customer base, and many of them are in industries that Forbes reports on. There’s where you need to be drawing your comparisons. Stop reaching.

  10. Zach – Compared to Marvel, I would feel very comfortable in calling DC’s current practices consistent. Since these are all new titles, if one doesn’t immediately find an audience it makes sense to shift creative teams. Unlike Marvel where fill in artists are a near constant on some titles. Don’t even get me started on their penchant for using multiple inkers on the same books!