Why Are The Comics Retailers Worried About Mass Store Closings?

Hey, gang.  We need to talk to about the looming problem with the Direct Market.

You’ve seen the articles about comic shop owners being worried about mass closings in the Direct Market.  We’ve got a couple GoFundMe’s active for shops in Seattle and San Francisco.  There’s the game store in the Phoenix metro area dropping comics.  And this is what’s public.  It didn’t take a lot of asking around to hear multiple stories about shops hanging by a thread that might not make it very far into 2017 if they don’t have a great holiday season.

So let’s talk about what’s going on with the shops and then we’ll talk a little about what this *might* mean for the greater industry.  I’m probably going to slip back into business professor mode, but I’ll try and keep the wonky language to minimum.

The Current Problems at the Shops

The problems being articulated to me are the following:

  • DC’s prices are too low
  • Customers disappearing
  • Customers are switching to tpbs/book format
  • Customers don’t like Marvel’s output
  • Rising cost of doing business
  • Diamond credit crackdown

Let’s do this by the numbers.

DC’s Prices Are Too Low – Pricing has always been a thorny issue, but this one just makes me roll my eyes.  We’ve gone from retailers complaining about customers pushing back on Marvel’s $4.99 first issues and having to just WHY an indie publisher needs to charge $3.99 for a comic to make a living to whining about DC not charging a high enough cover price?  Stop.  Just stop.

Are DC’s sales partially due to a lower cover price?  I expect so, yes.  It encourages sampling and it’s easier on the wallet when you’re bi-weekly.  And after a DISMAL couple of years, DC really needed that wide sampling.  And some of those readers who sampled new titles stuck around or we’d be hearing a lot MORE about shops being in trouble.  Thing is, when Marvel first started upping the price on their more popular titles to $3.99, they didn’t lose a huge amount of sales on most titles (the exception being Loeb’s Hulk, IIRC).  If people LIKE the comic, they’ll pay $3.99.  I don’t think DC is stealing Marvel sales purely on price point.  It probably helped getting the initial audience and it probably helps retaining them, but it’s not such a big factor if Marvel’s creating material the audience clearly prefers. On two books a reader is lukewarm on, $2.99 is going to be $3.99, though.

So let’s just leave this topic alone and maybe you’ll keep those DC sales you currently have, rather than risk audience abandonment with a price hike.  I wish your customers were made of money, but not all of them are.  (Just the ones paying ridiculous prices for variants.)

Customers disappearing – This one startled me a little bit, but I’ve heard multiple stories about the customers, including regulars, dropping out since… perhaps the beginning of the Fall?  So after Rebirth finished launching and around Civil War 2?  There’s not a lot of agreement about why this is happening.  A particularly heated presidential campaign distracting people.  More customers switching to tpbs.  Marvel fans throwing in the towel.  Lots of different explanations, but not a clear narrative.  Nobody’s said “customers switching to digital,” and I doubt a regular’s going to admit that to his shop very often, but let’s throw that out there as a possibility.  Death of 1000 cuts?  Enough people are agreeing this is happening for me to believe it, but the “why” is up for debate.

Customers Switching to TPB/Book Format – Look, if you’re a regular visitor to this site, you’ve read me discussing this before.  It hasn’t changed and the needle keeps moving in this direction.  The short version: new readers don’t want to pay $3.99 for 20 pages that are a little on the thin side, in terms of story.  They want to get the complete story and not worry about running down individual issues.  Price and packaging are factors here.  Readers coming in at older ages, not being trained to make a weekly comics run is a factor.  It’s not nearly as convenient for the retailer and the ordering cycle, but this isn’t a new thing and it doesn’t look like it’s doing anything but gaining steam, so retailers would be advised to dip their toe in and get acclimated if they haven’t already.

The challenges here, and these are DEADLY SERIOUS challenges to retailers.  When a regular customer decides to switch to tpbs, there’s a gap before the new material can be collected in book format.  And it can be over six months.  In the case of DC’s Rebirth, first volumes start in… March?  Let’s just say if I was one of those shop owners who wasn’t sure if he was going to make it to January, I wouldn’t be real happy with DC not having those Rebirth tpbs ready for holiday shoppers when I could use the money to survive.

So your customer is waiting on new material.  I really hope the customer who told you their intent to switch to tpbs (not trade-wait… it’s time to lose that term) was receptive to getting hand-sold on some new material during that wait.  If not, you’ve got to hope that after 6 months, your customer REMEMBERS “oh, there’s new material in those series I read and I could go back to the shop.”  They could forget they still read comics in 6 months.  Out of the weekly habit, they might go to a different store or order the books online.  There’s a retention risk here that wasn’t nearly as serious before.  And it sound like a lot of shops are currently in the middle of weathering a year of customers switching formats.

I don’t think there’s anything unnatural about this switch and the customer gets to choose what format the customer wants to read in.  This is about the customer.  But it doesn’t mean a big transition isn’t going to be a strain on a shop. And yes, this does sound like an independent bookstore with a much larger newsstand, doesn’t it?

Customers don’t like Marvel’s Output – This is always a touchy subject as Marvel corporate always goes into a bunker and denies everything while the hardcore fans pitch a fit.  And Marvel is doing extremely brisk business in areas outside the Direct Market.  Marvel as a company may be doing quite well, but the bulk of their ongoing DM lineup is in a bad place when you take the variant covers away.  This has all been discussed before, so again, I’m going to just do the highlights.

  • Marvel has been locked in a template for a decade, trying to duplicate the success of Civil War. In broad strokes, it goes like this: six months of cross-over event -> six months of reboot with variant covers -> six months of cover-over event. And the DM audience is just over it.  Especially when the crossovers don’t feel organic and half of them are duds.  It interrupts the attempts at an ongoing story in the regular titles and guess what?  Those interruptions aren’t great for the burgeoning tpb audience, either.
  • Marvel has trained an awful lot of their audience that they’re reading the story of the universe and only the stories feeding into the big events count. So it tends to be an all or nothing proposition and the series that keep out of the events tend to get marginalized as not counting as much.  It’s silly for the self-contained titles to flow like that, but it’s a function of the promotional style.  I’m not sure Hawkeye would’ve gotten its tpb sales under Fraction/Aja if it was constantly crossing over, though.
  • Marvel’s chasing different demographics, but trying to keep them in the same imprint. Marvel is having HUGE success with the tween market, selling tpbs into Scholastic Book Fairs.  Moon Girl and Devil Dinosaur does HUGE numbers there, but the monthly comic is a barely a blip in the DM.  And then people get upset that 40 year old men aren’t picking up comics targeted at tweens.  I must be getting old, because I remember when that was an ugly stereotype.  The point is, Marvel is putting some of those characters that do big numbers OUTSIDE the DM at the forefront of the monthly titles.  If the Scholastic audience doesn’t migrate into the shops to seek out the monthlies, OF COURSE, there’s going to be an audience disconnect.  In a perfect world, comic shops would be selling to wider demographics, but especially in shops that serve a tighter market, this is going to create some confusion with audience.  I know demographics are scary, but when Harlequin (the romance novels) bought Mack Bolan/The Executioner, they sure didn’t put the Harlequin logo on the cover.
  • How many different Avengers/Inhumans/Squadron Supreme/Iron Man, etc. titles does ONE person really want to buy? The line extension is out of control. And if you cross over inside the family of titles enough to make it feel like an all or none proposition, well… there you go again.
  • Inhumans and X-Men. How’s that Terrigen Mist plot point been working out the last couple years?  Breaking records on that new event yet?

The cherry on the top of the sundae is when some of the owners think that they’re losing sales on non-Marvel titles because some of the primarily Marvel readers are just not coming in much any more.

On the bright side, at least Marvel’s getting better about keeping tpbs in print, which was an astonishing problem for years.

The truth that nobody wants to hear is that Marvel could probably downsize the DM and make a go out of chasing the Young Adult market through Scholastic and the “regular” bookstore market if they had to.  It’s going to be pretty darn interesting when the 2016 Bookscan numbers drop, so we can see what’s real and what’s hype, but they’ve been building other markets.  We also don’t know, and won’t know, if Marvel’s digital sales have picked up.

The other thing is that while the state of Marvel’s DM mid-list is approaching late stage New 52 kinds of pathetic, they do a good job of papering over that weakness with those variant covers.  Which probably means shops that have a good market for those and/or shops that are large enough to take advantage of those without much extra ordering may be making out like bandits.  But clearly not the entire market.

Is it time for Marvel to get new editorial direction and finally use the nuclear option – a reboot?  Axel’s staked his name on Marvel not needing to reboot, so I’m sure he’d say no.  The majority of retailers I talk to would just as emphatically say yes.  I don’t think the midlist is likely to improve with  yet another iteration of “Marvel NOW,” a promotion that’s been run into the ground.

Here’s the thing, though.  Marvel’s better about planning ahead than DC is.  If they were to walk into the office tomorrow, give Axel his severance, put Sana in the EIC chair and say “we need a new direction – start lining up the reboot,” the earliest that would come out would be Fall and the way I hear it, I’m not sure the shops that are in trouble could hang on that long.

Retailers should have been pointing readers to the Image titles that so many of Marvel’s A-list writers have left for and started doing so 2+ years ago when there was time to build a little publisher diversity into the system.  Some shops did, but apparently not enough.  There is a sense that the pure Marvel fans have been leaving and it’s too late to get them interested in something else.  That sentiment is not as universal as other things, but there’s definitely extreme concern from some of the retailers.

And just because people get so touchy about Marvel, let me throw out a couple titles a lapsed Marvel fan might actually like.  I’m six months behind, because the family got me an Unlimited subscription for Christmas last year (which is why I’m not a totally lapsed Marvel fan), but Carnage is a shockingly well done 70s Marvel flavored horror/adventure/fun mashup with Man-Wolf and the Book of Darkhold mixed up in it; Daredevil is currently one of the more enjoyable pulp style adventures on the market; and Black Widow is Waid/Samnee, which is all you need to know.  I’m not a Marvel hater, but I do understand and share the profound disappointment in their output of the last few years with some of the fans who have walked away.

Rising Cost of Doing Business – There are mentions of rising rent and rising minimum wage.  This is a cost of doing business issue.  It’s very real, but it’s somewhat out of the scope of what a publisher can control, save taking the cover price off the book… except not that many customers are likely to be excited about $4.99 cover prices, which makes it a Catch -22.  And an unfortunate Catch-22.

Diamond Credit Crackdown – There’s a clear narrative of retailers getting nervous because Diamond’s being serious about credit limits and it sounds like maybe a lot of shops got behind while DC and Marvel were both in the tank.  Or maybe there was some over-ordering on big titles that didn’t have as much popularity with the customer as the publishers were hyping.  Either way, this is a real problem.  Diamond took a hit with the Hastings bankruptcy.  They weren’t the only company that took a hit and you really don’t want the distributor for 90+% of the monthly product going bankrupt, so Diamond really does need to protect itself.  I’m not sure the market would survive the scramble for all the publishers to arrange alternate distribution if they didn’t.  It’s a problem and we can just hope the shops in trouble have good luck with holiday sales.

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