Comic Book Stores – Could Marvel Comics End Up Being Closed Down by Disney? – Part 4 of a Series

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 publishing comics.

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 anymore.  

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 promotion.

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 models!

It’s completely 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 CAN collapse.

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 years.

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

LouisDesyjr@gmail.com

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Comic Book Sales – Iceman as of 12/17/2017

As a followup to Just Some Guy video about the Iceman comic book series
( Dear SJW Marvel: Why Does Iceman #3 exist? )

I took a look at the sales as reported by Comiccron for Iceman.

In summary, what I have found, is that the sales look like that after only a few issues are below the 15,000 copies per issue, where it is rumored that Marvel would cancel a series.

Here is a chart and graph of the sales as reported by Comicron.com:

(Change is change from prior issue)

Chart of sales through issue #6

While the most recent issue for which sales are available, issue #6, do show a large jump, almost back to the initial first issue, it looks like there was some kind of special promotion that may explain that jump in copies. If this is correct, then when sales for the next few issues are reported, I would expect sales to resume their decline as though the promotion never happened. The one good thing, that a quick look at the numbers seem to show, is that the rate of decline seemed to be starting to ‘level off’ with issue #5, and it looks like the series should be be able to hold at or above 12,000 copies. The only problem is that this would be 3,000 below the rumored Marvel cancellation level of 15,000 copies for a series.

Based upon how it looks like the decline in sales is half as what is was in a prior month, here are my projections for the decline in subsequent sales of the series:

Projected Iceman sales for issue #7 through #12 as of 12/17/2017

There may be disruption in the decline trend due to the large jump in issue #6, but I expect that over time that reported sales by Comicron would revert to near this trend.

I will try to update this data as new sales are reported.

Agree or Disagree, Like or Dislike, I look forward to the discussion about comic book sales and its effects on stores and the industry as a whole.

Good Luck and Take care,
Louis J. Desy Jr.
Sunday, December 17, 2017

UPDATE on Friday, December 29, 2017:

sales update:
Iceman #7 12,677 November 2017 Comic Book Sales to Comics Shops

Apparently, Iceman is being canceled as of March 2018:
And Now Iceman is Confirmed Canceled Too

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#ComicGate and comic book sales

In my looking around at various web sites and YouTube videos, I came across the term ‘ComicGate’ recently. While there was a video a few months ago that I viewed that talked about the comic book industry ‘inching its way towards its own comic gate’ ( The Comic Book Industry is Inching Its Way to Its Own Gamergate By Just Some Guy, published Aug 08, 2017 ) The term ComicGate or #ComicGate I assume is a reference to the #GamerGate of a few years ago.

There is definitely a problem with comic book sales, especially with the fact that even years after the 2008/2009 financial crisis has been over, for about a decade now, numerous comic book stores continue to close. Over a number of years I have compiled reports on comic book store closings which I sent out to a few people; friends that worked their own stores, in the industry or are interested in the industry.

From my viewing of the reports over time, what I have found alarming is that stores that survived the 2008/2009 financial crisis, and the Borders closing in 2011, do not appear to be ok or financially stable. I would have normally expected that those stores were now safe or ok, in that the economy and industry was back to a more normal state where a store should be able to stay in business without any serious problems.

Instead, what I have seen, and reported on in the subsequent years is that a number of stores are on the edge financially and either end up closing once they get to the end of their lease and/or the owner retires and is unable to sell the store as a going business because it is not making any money. In a few cases, the store ends up ‘financially imploding’ where the store is evicted from its retail space.

While I have looked at this years sales numbers, and I do see some declines in sales, my initial looking at the numbers do not seem to show the decline as huge, but does show a decline on top of a decline on top of years of declines.

While I do think that the changes in many comic book series are contributing to these declines and these additional declines in sales is pushing a number of comic book stores ‘over the edge and into a financial abyss’, causing them to close. (i.e. The stores are so close to not being able to stay open that an additional decline cause by changes in a number of comic book series causes the store to close.)

In the coming days I am going to look at the comic book sales numbers and see if a simply charting of total dollars and total units shows anything of interest.

After that I think an ecometrics look at the numbers would be interesting to see if the recent declines are all due to changes in a number of comic book series or if something else, such as a downturn in the economy, could explain the changes or if it is a combination of factors, all of which are working together to cause the declines.

One big advantage of an ecometrics look at the numbers is that a properly done multivariable look would give us an idea as to how much each factor is helping or hurting sales and how the factors relate to each other.

Why would the or a competent man would be interested in this topic? The reason I would put forth, is that if there is some kind of #ComicGate going on, or about to start, is that it would be an interesting study in if a business or an industry would be able to correct sales declines or, if a number of critics of the comic book industry are correct, that an ideology and feelings of a group of people is now allowed to override facts and logic; and in the process destroy an entire industry.

Agree or Disagree, Like or Dislike, I look forward to the discussion about comic book sales and its effects on stores and the industry as a whole.

Good Luck and Take care,
Louis J. Desy Jr.
Sunday, December 10, 2017

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