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The direct market, sustainability, future of comics, disruption and all that other fun stuff

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[The following was written as part of a blog roundtable hosted by Women Write About Comics on the sustainability of the direct market and comics growth.]

We’re entering a period of disruption, if we’re not already well into it. Is it something in the air, an upcoming election, the increasing consolidation of big media/big tech, millennials taking over? Probably all of that. And how does that affect comics? Of late the “slow patch” hit by direct market periodicals due to faltering by the Big Two seems to have cast all of this into discussion. Kate Leth, a creator and also a former comics shop employee, has a much linked to post about the direct market process which talks about how pre-ordering is key in what she calls a “system [that] is so deeply twisted”:

This process puts pressure on everyone – on creators to drum up interest in the series and therefore promote sales, on publishers to push the book on stores and the potential audience, on stores to stock and sell the comic (often without knowing how it might do – what’s real online buzz/enthusiasm and what’s marketing?) and especially on consumers to spend as much money as humanly possible.

This is why we ask you to pre-order, but we know it’s strange. We don’t want to pressure you to spend money in a way you don’t want, or at least I don’t. I understand that books are prettier than single issues. I didn’t come from money, I get it. When we ask (speaking for myself anyway) we’re asking you to buy if you CAN, and I hope at least this post explains why we’re asking. We’re not trying to milk you for money or exploit our fan bases, we often just want our books not to get cancelled, we want the shops not to close, and we want to keep doing what it is that we do.

The key truth of the direct market is that the consumer for the entire system is the retailer. The comics reader is really part of a resale market. Pre-ordering—to let retailers know there is interest in a book—is such a key mantra for creators, specially those at Image or other creator driven imprints, that Kieron Gillen and Jamie McKelvie made a fumetti out of it.

Before going on with this, let’s take a look at where we are. ICv2 released September numbers, that backed up the slow patch, showing periodical growth down in Q3:

After posting a robust year-over-year growth of 16.46% for the first half of 2015, sales of comics slipped 8.8% in the third quarter vs. Q3 of 2014 according to figures released today by Diamond Comic Distributors.  September comic book sales were down 19.62% from September of 2014.

A substantial portion of the decline appears to have been in Marvel sales, as its share was down substantially behind delays in the core Secret Wars title that are rippling through much of the company’s line (see “Are Marvel Delays Affecting Market?”).  Marvel’s share, at 32.67%, is approximately eight points below where it was running regularly just a few months ago (see “Marvel Continues Summer Domination”).


However graphic novel sales remain strong with a Q3 growth of 9.32% over Q3 2014. These sales helped keep the decline for the entire market in Q3 2015 at -2.98% from 2014.  And as ICv2’s Milton Griepp points out, comics hit another rough patch early in 2014, and bounced back. While Marvel and DC’s current problems aren’t awesome, they are far from fatal and don’t presage The End Of Comics As We Know It™.

At the 2014 White Paper that Griepp presented at NYCC, where the slow patch was mentioned, figures showed a pretty strong overall growth in all channels over the last decade. Here is a slide from the White Paper ©ICv2 showing this.

Overall, it’s a very healthy trend line. But still, here comes disruption! A few weeks ago there was a blog roundtable devoted to the question posed by Loser City’s Nick Hanover, “Is it possible for comics to grow sustainably if the direct market continues to dominate distribution?” hosted at Women Write About Comics reflecting the anxiety of the retailer as end point of the system. The readers may be fine but they are also blocked by backwards thinking retailers. Several very thoughtful essays were penned, several by people with retail experience. Loser City’s David Fairbanks, wrote:

The direct market is clearly most beneficial for superhero comics as well as comics that are superhero adjacent that might get a few orders from small shops on the hope they will break even or make a small profit. Basically, if a store owner is flipping through Previews and sees a comic from some smaller publisher that has a heavy sci-fi or horror bend, they know there is a chance they can sell at least half of them and break even, if not sell all 4 issues they order and pocket a few bucks. But many of them don’t make enough money to justify going out of their way to take risks on books they don’t know will sell with their customers, and it’s hard for me not to sympathize with that. I worked in a shop for 3 years, and while I loved it, it was tough to sell some people on really good comics. Now imagine having to go to a small press’s website because they aren’t even in Previews. It doesn’t usually happen in a small town, small comic shop environment.

Christian Hoffer relected both the DM’s staying power and the disruption of sidestepping it entirely:

Industry trends suggest the direct market isn’t going anywhere. Diamond’s sales figures has shown five consecutive years of growth, moving more stock and generating more revenue than at any point since the 1990s. Even the concept of the comics store is engrained in the consciousness of mainstream culture. Thanks to television shows like The Simpsons or Big Bang Theory, comics has become tied to the image of the specialized comics store, filled with posters and merchandise promoting their favorite superhero store. Common sensibility suggests that the direct market is here to stay, with all of its limiting flaws and warts.

But despite the sentiment that comics are forever intertwined with the direct market, more and more creators and publishers are finding ways to circumnavigate the system. The comics medium has never been more accessible, thanks to the almost limitless supply of web comics available on the Internet. Creators and publishers have discovered that crowdfunding can be used as an alternative distribution service, allowing fans to support comics projects without ever having to walk into a comic store. There’s also a growing market for comics in traditional bookstores and the rising popularity of digital comics from services like Comixology to take in account, as well as the growing convention circuit that allows creators the chance to hand sell their comics directly to fans. And, that’s not even factoring in that the largest retailer in comics probably isn’t a comic book store chain, it’s Amazon.com.

At Women Write About Comics, there were various responses with Kate Tanski pointing out some of the more social problems of the system:

The direct market distribution system for comics reminds me of the patronage system of ancient Rome, with the comics companies as the patrons, and the consumers as the clients. When I was a young classics student, my professor took great pleasure in describing the salutatio, or morning greeting ritual, that the clients and friends would do every morning. The lower your rank, the earlier in the morning you had to wake up in order to greet your first patron, and then you and the patron would move to the next patron, and so, on, and so on, en masse.

Now, I can’t help but wonder if the direct market is the new salutatio, with certain comics having to be pre-ordered earlier and earlier, sight unseen, based on the insidious concept of “support;” the flawed premise that these direct market pre-sales are a demonstration of your dedication “to the cause,” especially if that cause is underrepresented demographics. If you want to see more comics like this one, we’re told, you need to buy it. Otherwise, you’re proving that comics “like this,” (featuring women and other underrepresented groups) don’t sell.

A lot of this anxiety over the State of the Industry is doubtless due to the general disruption in the air, but also the idea that change isn’t happening or not happening fast enough. It is true that today we see immense changes in the DM, mostly because of an increased response to the influx of female readers to the market. The perceived changes in the comics market over the last five years were summed up in this Buzzfeed headline: 5 Years Ago Marvel Comics Had Zero Female-Led Titles, Today They Have 17. When I tweeted it I prefaced it with “Follow the money” which is clearly what Marvel is doing.

But the actual headline was bullshit. Five years ago, there actually were several female led titles at Marvel, including Valkyrie, Anita Blake, Sense and Sensibility (!), Black Cat (written by comics “newcomer” Jen Van Meter), Black Widow, Hawkeye & Mockingbird, Shadowland: Elektra (art by Emma Rios), Shadowland: Daughters of the Shadow, Shadowland: Blood on the Streets, X-23 (written by Marjorie Liu) and the Girl Comics anthology collection. 

That’s 9 titles, which is a lot more than 0, if less than 17. True, most were minis, but it’s nice to see that no one actually remembers anything about comics except little niggling continuity matters.

What do I think? I think the comics market HAS been growing sustainably even though it is led by the Direct Market! Of course there are problems, but examining what has worked and is working is important to solving ongoing problems.

As someone who has been fighting the battle for 30 years (cut to a shot of the onion on my belt) upgrading and modernizing retailers has always been the thin edge of the wedge. As Hoffer says, the DM isn’t going anywhere for now THANK GOD, as opposed to five years ago when everyone thought that brick and mortar retailing would be dead in a month. As the ICv2 chart shows, digital has been additive, and more retailers are millennials as well. The big breakthroughs—allowing women and children to read and purchase comics—have largely been fought and won OUTSIDE the DM, but to forward looking millennial retailers, a dollar is a dollar, no matter who spends it. People are individuals and comics retailing is a marginal business at best but even little upticks help the bottom line. If Lady Thor sells as well as Boy Thor, only Twitter bigots will be outraged.

The book market and reading is the outlier of digital disruption. People like holding a beautiful object in their hand, and a Kindle is an alternative not the “real” thing. We need to question all these assumptions, and create a more responsive direct market so that a reader plowing through a 500 page distributors catalog and preordering isn’t the lifeblood of innovation. But for a lot of the anxious onlookers, taking a look at the whole picture may show more chokepoints where a little effort can yield better results.

To my mind, the most important retail development of the last two years may well be The Valkyries, the loose confederation of female comics shop employees created by Leth, that has already had an impact on ordering patterns at stores. At the recent Diamond sales conference I asked several folks in the marketing end of comics whether they had heard of the Valkyries, and to my surprise several hadn’t. (Don’t you people read Publishers Weekly???) An Extremely Senior Industry Figure told me he didn’t know what it was until I explained more about it, although I suspect he was just trolling me. (This ESIF is way too smart not to know that.) Quick Stop owner Dennis Barger is an Extremely Controversial Industry Figure (and I’m just fueling him by saying that) but he’s hired a female shop manager and the store now hosts a Women’s Comics Night.

I’m well aware that when I see seemingly intractable problems that I fought for 20 years solved, I may be painting a more rosy picture than younger industry watchers who are encountering a whole different set of issues from a different viewpoint. I don’t want to be like the old timers who say “We tried that 30 years ago and it didn’t work!” That said, the comics industry is going through some changes—and some companies are having a very rocky ride of it, tho that is another blog post—but I believe we have some pretty good tools for moving things in a positive direction. The next step for all of is is figuring out processes for making that happen and where the inflection points for change lie.

12 COMMENTS

  1. As far as sales of the big two go, I think that there are a number of promotions (variant covers, volume discounts even greater than normal) that they are using to help the direct market retailers. What they aren’t doing is publishing (main line super hero) stories that are building any kind of demand from consumers. I consider Convergence to be a huge mistake and a grand sale’s flop on DC’s part, and to a lesser degree but along the same lines with Secret Wars from Marvel.
    Couple this with DC’s continuing policy of breaking promises on product continuity and Marvels continued strategy of turning their comics into sales catalogs (i.e. Amazing Spider-man #1, Avengers #0, Point One #1, etc., etc.) it is no wonder retailers are struggling to turn numbers.
    On a positive note, I hope the current trends towards women and minorities (both in and creating) the new titles continue to gain readers. Personally I think that some of those titles are the most fun and enjoyable to read! (i.e. Batgirl, Spider-Gwen, Gotham Academy, Captain Marvel, Ms. Marvel, and all of Amanda Conner’s stuff)

  2. Heidi: Good points all. Something that would REALLY BE HELPFUL to folks like me looking for new stuff to try, and buying for grandkid comic book geeks: Instread of The Beat and other running Previews galleys from the upcoming catalog, why doesn’t Diamond make the catalog available ONLINE and FREE (or very CHEAP) to consumers who want to download it to their tablets RIGHT NOW? Have the paper copy available at stores, but make the catalog searchable and easy to find stuff… Makes great sense to me.

  3. “Que to the Onion on my belt.” Oh, Heidi, you slay me. However, when you talk about things that were tried “30 years ago and didn’t work” I reflexively think of the comics union that was ALMOST started by Neal Adams and friends. I’m actually starting to think that may be the rising tide that lifts all boats. Talk about change! Oh, I’m sorry, I tangenated. “Which was the style at the time.”

  4. When did I become the Older Partner in every Buddy Cop movie? I got to pull a full-on Glover and opine “I’m getting to old for this shit” because basically all of the linked commentary (not Heidi’s piece, but all of the links) had almost no relationship to the actual purchasing reality of the marketplace (including the book market, and, presumably digital, but since no publisher will give any real information, it’s pretty hard to definitively say so)

    Like, and here’s just one example: Kate Leth seems to be trying to say that TPs sell better than serializations in her last three bullet points? I mean, while they potentially *can*, that’s really really rare, and I can’ t think of a single example where a comic that *failed as a serialization* went on to succeed collected? (There must be a few, but Exception That Proves The Rule and all that) In, at least, 90% of the cases where a serialization fails commercially (or succeeds, for that matter) the reason for that is the *underlying execution of the work*, not “ooh, that Darn Direct Market!” The DM is actually radically efficient, in my view — if you don’t learn very well how to read the market, you rapidly go out of business as a DM retailer.

    Comics are (and I say this as a person with two different comics shops) are literally never more popular than they are today, and sales are diversifying very nicely right now, but diversification *literally implies* the fragmentation of monolithic markets which yields much smaller sales for many many participants. *That’s normal*

    For what it is worth, the math of the current “decline” comes down to Marvel fucking up the actual production of SECRET WARS (which is completely shattering the forward potential of ‘All-New, All-Different” of topping “New 52″… which it SHOULD have done , in a walk), and DC comics proving that taking a two month break from the regular production of your actual properly in-continuity comics made the readership re-evaluate buying ANY DCU comics…. BUT, like EVERY “disruption” of a like kind, the market will swiftly self-correct, and the retailers (DM *and* bookstore) will figure out how to more properly serve the customers who shop in their stores.

    -B

  5. The direct market IS doomed — not because it’s a bad idea or cannot work, but because the U.S. Justice Department decided antitrust laws didn’t apply to funnybooks because, while Diamond enjoys a monopoly on comics, it doesn’t control the distribution (and therefore the PRICE) of ALL books. Which is ridiculous: clearly comics constitute a separate market: they have their own separate marketplace! Single issue comics exist outside of the free market, and with no competition Diamond is in a position to allow its greed to slowly throttle their own golden goose, dictating what percentage they will take of every comic released and forcing all publishers to scrape what they can from whatever pennies they can charge over and above what Diamond dictates is their minimum cut. In any other area of business the Justice Department would have required that at least one other distributor exist in the comics marketplace so that competitive market forces would come into effect and the true market value of comics would be manifest to consumers. Diamond would be forced to reduce their cut because their competitor’s first move (barring collusion) would be to reduce their own, retailers could afford to lower cover prices, and consumers would but more, less expensive comics, insuring the continued existence of print comics and brick and mortar comic shops. Instead, a business whose demographic is ideally (though perhaps no longer in practice) younger people (how could they afford comics at these prices?) now trains its customers to either accept unjust business practice or forget about collecting Justice League. With all the challenges the industry faces, undoubtedly the biggest is the fact that comics — here in Canada, at least — just exceeded $5.00 per issue in most instances, factoring in exchange and tax. I’d be very surprised if a 20% drop since last year isn’t largely the result of many collectors being psychologically unwilling to cross that $5.00 frontier. Two comics for $10 is insane. Look for a 50% to 75% drop in sales when it happens in America…

  6. Exhibit A!!!!

    Jonathan, Diamond has *zero* control of, like, 80% of the comics they sell — Marvel, DC, Dark Horse, Image and IDW all *unilaterally* control prices and discounts for their products. Diamond has *zero* say in any of that.

    I mean that literally — Diamond has no ability in ANY way shape or form to impact pricing from their top five suppliers because retailers aren’t buying *from* Diamond; they’re buying *from* those publishers! Diamond is just a mechanism!

    There could be fifty different comics distributors, and *not a single one of those publishers* would sell through multiple distributors — they have far too many pricing and control advantages to even consider otherwise!

    Marvel could change their cover prices to 25 cents and a 90% retailer discount, OR $50 cover prices and 5% discount tomorrow if they liked, and Diamond could not say anything or do ANYthing to change those decisions.

    -B

  7. And, I strongly suspect that if the JD somehow *forced* Marvel to use multiple distributors, losing their (among the) Most Favored Nation status (and the *drastically* lower margin that distribution takes as a result of that deal) that that would only ACCELERATE the move to $5 comics, not slow it.

    -B

  8. Great piece Heidi! There are a lot of outliers that are having an impact on the overall market. While the ‘big two’ are often referenced as the business drivers of the industry, new readers(kids and women) are finding books in mainstream retail, libraries, and even in schools. If you follow the money like Scholastic, First Second, Hachette, and Random House, then you publish books.

    Mister Hibbs is definitely on target in pointing out that Diamond does not control the pricing of comics. They are a distribution company that has the responsibility of moving comics from publisher to retail. Their percentage of this business is insanely slim.

    Jonathan Allen makes a very interesting observation ” I’d be very surprised if a 20% drop since last year isn’t largely the result of many collectors being psychologically unwilling to cross that $5.00 frontier. Two comics for $10 is insane. Look for a 50% to 75% drop in sales when it happens in America…” There in lies the real challenge for comics publishers. Are you publishing stories that people want to read? Or, are you publishing a collectible item? The second choice is not a wise one.

    I was also struck by a telling comment from Todd McFarlane during the Will Eisner: Champion of the Graphic Novel panel at NYCC 15. He suggested that now DC and Marvel are owned by major corporations that have television rights wrapped up, indie comics publishers have a really good shot at getting their stories made into projects for TV or film. I get that he was demonstrating the new realm of opportunities but it is also something that corrupts the comics publishing mentality. If you publish with the idea that this comic is a collectible or a multi-media opportunity, you are thinking too far ahead.

    Write and publish a great story, FIRST. Then,make it affordable. Get it to the widest possible audiences via what ever platforms you can use. If it stands the test of time, then it has the right to be considered a collectible.

  9. The direct market is doomed because the overall economy is going back into recession. These numbers are proof that the next direct market crash has already begun. They’re every bit as bad as the darkest days of the pre-Jemas/Quesada Marvel market, even allowing for the SW outliers. Books in the 60s making the top 10? Marvel #1s not breaking 20K? The Top 300 bottoming out in the 5k range? Same old song and dance as before. Except everyone is older and more tired now and there is no Millennial calvary coming to save the day, no matter how many “diverse” books the same old bunch of middle aged white guys throw out there. I know a lot of retailers that have no stomach for another crash and are already making retirement plans. I’m sure Mr. Hibbs does as well.

  10. Wayne Beamer: I completely agree about previews. They should make the catalog easier to get! I have to spend $4 a month just so I can buy more product from you?!? It’s insane. Thankfully my shop gives it to me at what they claim is cost for them ($1.70 or $2.70 or something in that ballpark. I can’t remember). I buy mostly indie comics and feel like I have to buy previews to make sure I don’t miss something that would appeal to me.

  11. Maybe if OBAMA would fix the economy we could have more money but nooooo he just want to play golf with Syria….smh….

  12. Let me get this straight — the president playing the back nine in the middle east is to blame for the state of the direct market. It’s *Obama’s* fault that we have $4.99 comic books! (I knew it!)

    Next you’ll be telling us that Joe Biden *still* hasn’t decided if DC should cancel the rest of their new books — and that Hillary’s secret e-mails reveal *she* was the one responsible for making Captain Marvel a woman!

    Sheesh!

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