While I had planned a more orderly presentation of the different
aspects of comic books stores and the comic book industry in general; there was
a recent article mentioning the possibility that Marvel may end up no longer
While the comic book industry has been in the middle of a
multiyear decline, in spite of the success of many comic book characters in a
number of movies, comic books themselves have been in the middle of a gradual
decline spanning multiple years. Some things are not in the control of anyone
related to the industry, but there are parts of the decline that are within the
control of the various stakeholders.
In general, over the decades, comics have always had
boom/bust cycles, especially after the whole distribution model changed from
drugstores, supermarkets and book stores around the late 1970s/early 1980 to
dedicated comic book stores, as they are today.
While Diamond Comics Distributors Inc (hereafter referred to as Diamond) does not usually publish the number of comic book stores it has as customers, as far as I can tell, at the highest level, probably in the middle of the 1990s comics book boom, there were about 22,000 comic book stores. In recent years the last Diamond ‘official’ number of accounts with Diamond was put out at around 4,200 with 2,200 being comic book stores. (The non comic book store accounts are ‘entities’ that are buying comics through an account with Diamond but they do not have a retail store.)
Over the many years I have been discussing the comic
industry with people, is that it was generally believed that no matter what
happened, the publishers and Diamond would always stay in business as long as
they right sized their organization for the level of business they had. Since
most comic book sales are the result of orders in advance by customers through
stores, it should be very possible for publishers and Diamond (the one and only
distributor of comics) to properly size their businesses and keep operating.
Individual comic book stores have a problem in that customers may order comics
and then not pick them up, leaving the store stuck paying for comics that end
up sitting in inventory forever and costing the store money.
Over the years I have been part of a number of discussions
about if there was some ‘lower limit’ on comic book sales that could or would
cause something to happen that would bring an end to comic books in the United States.
One speculation, especially during the financial crisis of
2008/2009 was the possibility of Diamond failing. Diamond is the only comic
book distributor left in the United
States so its failure could be the end of
the comic book industry, or at least a big financial hit to publishers and
comic book stores. Without Diamond there would be no way for comic book stores
to get their new comics, and publishers would have no way to sell to the vast
majority comics to their customers. In such a scenario, it would be easy to see
how a lot of comics book store and publishers could all go out of business. It
was rumored for a number of years that DC was so worried about the effect of a
failure of Diamond on the industry that it had some kind of agreement of
understanding with Diamond that if it ever was in danger of failing, and being
unable top operate, that DC would have the first right to take over Diamond and
continue to keep the distribution operation going.
A recent article at comicbook.news (DISNEY SHUTTING DOWN
MARVEL COMICS? : https://cosmicbook.news/disney-shutting-down-marvel-comics
, March 1, 2019 ) talks about recent rumors that Disney may close the Marvel
(Marvel is a division of Disney, trading under the stock symbol DIS) comics
division because of a continuing drop off in volumes and revenue. While it is
not clear from the financial reports of Disney just exactly what the revenue is
for the comics or if Marvel comics makes a profit or not, because comics are
grouped in with other Marvel revenue in the quarterly reports. It does sound
like more and more people are under the impression and belief that Marvel
comics is losing money, has been losing money for a while, revenue continues to
fall, and there is serious speculation about Marvel not publishing comics
Within the same time period, IDW Media, the third largest
comic book publisher, appears to be having its own set of problems. IDW Media
is a publically traded company under the stock symbol IDWM. Its stock closed
today at $25.75, down around 50% from its 25 week high of $53.99. Last summer
there was an unusual capital raising done that looked like, to me, done to
raise cash and keep the company operating. To me this lends credibility to this
belief that the comic industry is having serious problems, in general. In
addition, BleedingCool.com reported on March 5, 2019 that investors sent an
open letter to IDW Media calling for the company to be sold.
(IDW Media Holdings Investors Call for Sale of Company in Open Letter
https://www.bleedingcool.com/2019/03/05/idw-media-holdings-investors-call-for-sale-of-company-in-open-letter/ March 5, 2019)
Here are some of the comments, posted with the first artilce,
that I found alarming from the first article, Disney Shutting Down Marvel
Comics?, were are follows, along with my comments on those comments:
1: ” Too bad Marvel’s deplorable business practices
are killing the comic shops that kept them going all these years.
I’m done with the Big Two. It’s indies and
creator-owned for me as has been for over a year now. If Marvel wasn’t putting
out such miserable crap, and insulting and attacking its own customer base,
maybe it would be in a better spot, but most of the creators they employ these
days are worthless hacks, so…”
This commentator clearly thinks that Marvel is partly
responsible for the sales declines, which also have been hurting (killing?)
comic book shops.
2: “ If Quesada actually thinks the mouse is going to
subsidize Marvel’s garbage tier work while it runs an endless deficit, because
it somehow ‘inspires’ the MCU… he’s delusional. The last time Marvel made
comics that were coherent, much less entertaining enough to feed into the
movies, was almost ten years ago now.”
3: “It’s time for the comics industry–
and Marvel in particular– to clean house. FIRE these obnoxious scolds who
spend all their time antagonizing the company’s long time customer base with
their endless identity politics. Stop all the scams on comic book retailers.
Get some legitimate editors. Cater to the actual customers again.”
This commentator believes that identity politics has ruined
the product. The ‘scams’ this commentator refers to I believe are promotional
items like variant covers, or requiring stores to have certain minimal orders
in order to get special limited items. The problem is the minimums are so high
that usually it is impossible to sell enough to at least recover the stores
cost, leaving the store with unsold inventory and losing money on the
4: ” Marvel floods the market
with new #1s and a million variant covers to get that sweet #1 spot with
Diamond every month so they can show their masters at Disney that “We’re
still number 1. See?” It’s a bluff. It’s always been a bluff. These #1s
sit on shelves collecting dust while a “Second Printing” is announced
because they “sold out” at Diamond.“
There has been some considerable speculation over the past
few years that at times Marvel has been printing and sending out for
distribution comics that no one ordered. The theory under this idea is that
Marvel prints and sends out product that no one wants because it is able to
report to the higher ups at Disney what their print runs are, and look better
by doing such antics. Part of the reason some people think this is that there
are multiple reports of stores getting in quantities of comics that they did
not order or way too many ‘extra’ comics. According to the reports, this keeps
happening and the speculation is that Marvel is deliberately overprinting
comics so they can report better numbers. If this is what is going on, someone
at Disney should be able to tell by looking at the gross margin percentage over
a period of several years. If what I just describe is happening, what one would
see is that the gross margin percentage would have declined over time and be
much lower than it should be, for no discernable reason.
5: “ Gee,
You must live in a
different world than many people who don’t even have a comic shop closer than
45 minutes away!
There can’t be much
of a comic book industry if there’s no place SELLING comics!
There are fewer than
1900 comic shops in North America. They lost
around 300 shops in the last 3 years alone! There are many people evaluating
whether to keep their stores because Marvel and DC are NOT making moves to
improve the situation. They essentially told them at the last major meet-up
between the companies and retailers that they’re not going to change how they
run the business because it would cost too much to change their business
insane to do business like they have been for about 40 years and most people
are aware of that except guys like you who are ignoring the reality.
The business model
HAS to change if the industry wants to survive BUT they’re not going to make
the changes and it’s a bit late for some of things like selling anthology
reprint books at Wal Mart especially when the retailer is indifferent to that
idea and doesn’t care to promote comics.
What B&N and
most places sell are packaged reprints, not original stories for the most part.
B&N has DRASTICALLY scaled back the size of the American comic section
(which looks disorderly) while the manga sections have at least doubled in
size. This doesn’t paint a nice picture for American comics on top of the
reports about massive shipments of trades and hardcovers to discount places
like Ollie’s unless you care to dispute that, too? I’ve been to a local Ollie’s
and seen TONS of books from the last 5 years that just haven’t sold!
Yes, the industry
They HAVE tried to
make a go of it on digital but digital does NOT pay the bills and many web
artists are finding it impossible to make a living off of web comics!
Do you think it’ll be much better for “comics
pros” who are better at insulting the people who buy comics than selling
themselves and their product?!?
I think the most alarming part of this comment is the
mention and estimate, if true, of about 300 shops closing within the last few
6: “ I am gonna gonna tell you what has slowly killed comic
books. Comic shops. I am 49 and when I was a kid you bought comics at grocery
stores and convenience stores. Comic still depend of that 9-12 year old first
time buyers to get hooked for 5+ years.
The publishers only want to sell the 100% guarantee to shop. Selling other
places that return unsold issues just isnt acceptable anymore.”
This commentator cites to the change in the business model. Pre comic book shops, publishers had a big incentive to put out a quality product that people would buy, since the grocery stores and convenience stores could return unsold comics for full credit. Once the business model change to direct to comic book stores, who had to pay for the comics in full when they were delivered, the incentive and driver was just to make a comic ‘look’ good enough in Previews (monthly catalog of new comics available for ordering with Diamond) to get customers to order them through the store.
Hopefully, Marvel is still doing at least ‘ok’ and sales
will rebound, but I find it alarming for an article like this to be published,
and, with how things have been going with sales, for it to seem very possible
that Marvel comics could get shut down by Disney.
Good Luck and Take Care,
Louis J. Desy Jr., March 8, 2019
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