The direct market of comic book distribution

In order to save comics, the first step is getting comic books in the hands of readers. A common complaint from potential readers is that comic books are difficult to find because they can only be found in comic book stores. With the exception of a small selection of comic books at chain bookstores like Borders and Barnes and Noble, most comic books can only be acquired at stores that specialize in comics.

Barry Lyga is a young adult fiction writer who worked for Diamond Comic Distributors for ten years. On his blog, he writes that one of the key problems in terms of getting the word out on comic books is that “there are no large national chains in the comic book industry. There are some smallish regional chains, but for the most part, the comic book industry is made up of a wide array of small, locally- and individually-owned stores. As a result, it can be difficult to coordinate the sorts of mass promotion that book publishers take for granted.” Lyga brings up an excellent point and one that is often overlooked. Comic books are not a mass market medium, but at one time, comic books could be found in grocery stores and gas stations. This paradigm shift in distribution has lead to less exposure for comic books, but nearly 40 years ago, the direct market was viewed as the savior of the comic book industry.

The direct market system of distribution has been in place since 1973. Prior to 1973, comic books could be found in gas stations, newsstands, and grocery stores, and while comics could be found in a wider amount of locations, the system had an inherent flaw; comics could be returned. Jean-Paul Gabilliet puts it best in his book Of Comics and Men when he writes, “Publishers had always been obliged to print copies without knowing with any certainty how many copies would sell, or even if an issue that was particularly popular would require reprinting. Once the period during which comics were on the shelves had passed, retailers returned them in exchange for credit on future orders” (143).

Comic book writer Mark Evanier breaks down the logisitics of it all on his blog, “Marvel would print 500,000 copies of an issue of Spider-Man and would get paid only for those that actually sold.  So if the racks were crowded (or the distributor trucks filled with an extra-thick issue of Playboy that week), 50,000 might not make it to the racks at all.” So, while this system certainly had more exposure than the current system of distribution, the fact that comics could be returned for credit was damaging to publishers. The key problem with this system was that retailers weren’t being held accountable for lack of sales, therefore, if another magazine was deemed more important than the comic books that were coming out that month, then retailers could sacrifice comic book shelf space in order to make profits off of other products.

On a lesser note, one of the issues surrounding the shift towards the direct market was a growing concern on the rise of adult magazines. Newsstands were becoming inundated with pornography and the magazine rack was quickly becoming a place where children were not welcome. This was certainly a minor concern in comparison to the economic concerns that surrounded the distribution system, but it’s a fascinating concern especially when taken with the immediate shift towards more adult storytelling. As comic books settled into the direct market in the 80’s, publishers began releasing comics with the disclaimer “For mature readers only.”

In the early 70’s, a school teacher by the name of Phil Seuling proposed to distribute comics to stores that specialized in comic books if DC and Marvel would sell the comics to him at a cheaper price than the newsstands were paying, but he would ensure that those comics were nonrefundable. At first, publishers were skeptical, but when it became apparent that the current business model was going to bleed the industry dry, they decided to try Seuling’s method. Evanier writes, “Within a year, around 25% of all comic books were being sold via “direct” distribution, through Seuling’s company and about a dozen others, with 75% still on conventional newsstands.  Within ten years, those percentages were reversed.”

Today, Diamond Comics Distributors is the primary source of distribution for comic books. Publishers solicit comics through the Diamond catalog (Previews); retailers order comics through the catalog and Diamond compiles the orders and the information is then passed on to publishers so they know how many copies of each issue to print. Every Wednesday, comic books are delivered to retailers and it is their responsibility to sell those issues or they are stuck with them. While the old system avoided putting pressure on retailers, the current system places all of the responsibility for sales on the retailers. This discourages risk taking for retailers, which ensures overprinting/oversaturation isn’t possible, but it can still leave retailers with an overabundance of comic books.

From a mathematical standpoint, shifting from a wider distribution to the direct market theoretically should have harmed sales due to a lack of exposure – after all, most small towns have a grocery store, but many don’t have a comic book store – but the early direct market proved to be financially successful for many comic books that otherwise wouldn’t have been given shelf space in the old system of distribution. The most famous of all of these titles was Teenage Mutant Ninja Turtles in 1984. According to Paul Lopes, “By 1986 TMNT had a circulation of over 125,000 and had a licensing arrangement that quickly brought an anaimated TMNT. By 1988, TMNT was generating twenty-three million dollars just in the sale of plastic toys” (124). Obviously, the success of Teenage Mutant Ninja Turtles wasn’t the norm in terms of sales within the direct market, but considering the title was from an independent publisher, its success is absolutely stunning.

Today, the days of independent publishing are essentially over. While many independent comic books may find their way into the Diamond catalog, they are typically overlooked due to the nature of the catalog itself. Ellis explains it best, “You get one shot at convincing the retail community to order your work. Your place in Previews. For many people, that’s it – everything they’ve worked for is balanced on a little heap of ink in a 500-page magazine” (98). The Previews catalog doesn’t just feature comic books, but also movies, trading cards, books, action figures, and many other items. Most independent comic books are given two or three inches of space for a short description and that’s all.

Even if an independent publisher is lucky enough to be selected by Diamond for space in Previews, their product must generate a minimum of $2,500 in sales for Diamond to distribute the product. Putting this in perspective, if a $3 comic has any hope of being distributed, then it requires retailers to order at least 835 copies of the comic book. Though this may not sound like much to ask, consider that all of those sales are being generated by a three inch advertisement in a 500 page book and there are far more impressive publishers putting money into bigger and brighter advertisements.

Each new month brings a brand new catalog with new comics and products which means that each single issue gets one shot at getting ordered by retailers. Searching for previously solicited issues for interested customers requires retailers to search through old Previews catalogs or navigating the complicated retailer portion of the website. For customers, however, there isn’t a way to search through products that Diamond offers on their website.

While Diamond Distribution has had its uses, given the current state of the industry, it is time for this antiquated system to receive an update. In today’s increasingly interconnected world, people expect to be able to purchase things in a simple manner. Consider how online shopping has changed the way people spend their money (a click of the mouse and suddenly, a product is yours) and then consider how comic books are purchased. First, a consumer must be lucky enough to live near a comic book store, then they must look through a 500 page catalog every month, fill out an order sheet (on paper!), and then the store must collect all of the order sheets and then the order is placed through Diamond. The potential for human error in this process is great and often times, when customers don’t receive their requested comics, they get upset with the process and typically give up. Therefore, a restructuring of the distribution process is necessary so that the process is user-friendly, and in order for customers to be sustained.

With our increasingly digital world, the move from print to digital comic books is becoming increasingly more important. Mark Waid (comics industry veteran and chief creative officer for Boom! Studios) is a firm supporter of the digital comics format. During the 2010 Harvey Awards, Waid delivered his keynote speech and he used this opportunity to discuss the possibility of transitioning from print to digital. In an interview with Newsarama, Waid restated his keynote speech by saying, “we have to stop being so wary of the transition especially when it comes in terms to filesharing and torrents and so forth. The reality of it is, we print a comic book and whether you like it or not, that comic book is available for downloads for free on torrent sites the next day.” Waid argues that digital comics set at a price point of a dollar would be viewed as disposable income and therefore, people would be willing to give up a dollar for a digital comic. Also, cheap digital comics create less of a hassle than having to search for a comic through torrent sites.

Issues of piracy are certainly a problem facing the industry today, but Waid views the issue in a more positive light. The very fact that illegal downloading is an issue with comics means that there is an interest in comic books. Waid states that “what this means is that there is an appetite for what we do that is enormous and it is international. People are so hungry for this that if we can’t find a way to sell it to them, then they will come and find it anyway.”

Currently, both major comic book companies are making a push towards digital formats. Marvel Comics currently has a subscription program in place where customers sign-up for a yearly plan of $4.99 a month for access to over 5,000 comics. The range of products is relatively diverse and includes some of the most famous comic books in the Marvel library, but it does not include current issues that are being released each month.

DC Comics announced the launch of their own digital comic program titled Comixology on November 10, 2010. This service allows users to download comics with a price point between a dollar to $2.99. Comixology also features previews of new titles that have not made the jump to digital just yet. DC’s digital comics project serves two functions in this regards; as an archive for older comics and as a promotional tool for new comics on the shelves. They are also currently working on digitizing comics for the Apple Ipad, and the Sony PSP in order to make the digital format more convenient.

Conclusion

The problem with the distribution system boils down to an issue of who is responsible for unsold product. In an attempt to provide competition for Diamond, Red Route Distribution was formed in the U.K. and operated under a different business model. The purpose of Red Route was to keep a backlist of popular comic books to supply British comic book stores in need. In an interview with Warren Ellis, Richard Davies of Red Route Distribution says of the company’s business model, “stores can come to us on a weekly, monthly or whatever basis, and keep all the issues (or collections) in stock in shallow depth, knowing that they can come back whenever they sell to re-stock” (107). Instead of ordering many comics in hopes of selling out, retailers would just order a few and then get replenished when they needed it from Red Route.

According to online comic book news site the Comics Reporter, Red Route Distribution went out of business in 2006. Though some have said that this is in part due to Diamond’s increased influence in the British market, it really has to do with whose responsibility it is to pay for unsold comics. In the pre-direct market days, publishers were paying the price for unsold comic books because comics were returnable.  Once Diamond Distribution stepped into prominence, it became the responsibility of retailers to ensure that comic books were being sold. With Red Route Distribution, it was the distributor that paid the price of unsold comics because if Red Route over ordered a title, and retailers didn’t wish to be supplied with the title, then Red Route was stuck with the unsold comics.

Ultimately, restructuring the direct market is a problem with no easy solution because the party that is responsible for sales is going to suffer heavy financial losses unless a larger audience is attained. The current audience that purchases comic books simply isn’t large enough to sustain the amount of work that goes into creating and distributing comic books. It seems that the only real solution is to get comic books into more locations rather than focusing on small comic book shops.

Ten years ago, when Warren Ellis stated that “comics don’t need saving” (24), he addressed the very issue of larger distribution by saying, “We need to be reaching out to a new audience via new distribution channels. Newsstands, book stores, record stores . . . Yes, we do. But the simple truth is that this is not going to happen any time soon. Marvel and DC simply are not interested in fully opening up these distribution channels” (24). Ten years ago, it was considered a good idea for comic books to branch out to larger distribution channels. Today, it is absolutely imperative for this to happen or the industry will not be able to sustain itself.