ALL BLOG POSTS AND COMMENTS COPYRIGHT (C) 2003-2018 VOX DAY. ALL RIGHTS RESERVED. REPRODUCTION WITHOUT WRITTEN PERMISSION IS EXPRESSLY PROHIBITED.

Saturday, May 26, 2018

Darkstream: why comics are collapsing



From the transcript of last night's live Darkstream. I'm still figuring out the system; for some reason the charts I prepared in the edit screen were not available once I went live. Also, thanks to Hooper, we were able to determine that the donation system is working but you have to use the Streamlabs system and not the YouTube one, since my channel has been deemed ineligible for both monetisation and SuperChats by YouTube.

What happened is that comics went from being a fairly broadly distributed product to one that was
completely dominated by a single distributor. Now, what usually happens in the case of a single  distributor. You can probably guess. They've got a monopoly position and so they have a tendency to significantly increase their prices at the expense of everyone else. Remember, the distribution is part of the pie and distribution cannot, by definition, increase the pie, and so it's always going to have to take something from somebody else.

Now if we're going to take it, are you gonna take it from Marvel? No, you can't. Marvel has about  40% of the market. Are you gonna take it from DC? No you can't. because DC is already very closely tied to Diamond. So who do they take it from? Well, when a distributor can't take it from the suppliers, they take it from the retailers, and that's exactly what's happened.

You know I knew what this situation was going to be even before I knew what the numbers were because I have worked in a distribution retail channel before. My father owned a large supplier in a particular industry and so my first job out of college was actually managing part of the distribution channel, so what that means is that if you look at a normal distributor, the kind of distributor that Arkhaven is working with, the kind of distributor that Castalia is working with, they usually do a 20% markup at most.

Diamond's markup is 38 percent. And so what that means is that if you run the numbers and you work out the details, then what you see is that instead of taking 11.9 percent of the total retail price of a comic, that would be what a normal distributor takes, Diamond is actually taking 22 percent of the total retail price of a comic. so where does that additional 10 percent come from? Well, it's not coming from Marvel and it's not coming from DC, it's coming from the comic stores. I worked it out, and the comic stores are losing, on average, each of them, $31,885 apiece because Diamond is a monopoly. So that's what's killing them, that's why we're seeing so many retailers going out of business, and this is not going to improve because the market is declining so everybody is trying to take bigger and bigger pieces out of a smaller and smaller pie.

I calculate that it's going to go down from 74 million [correction: 79 million] last year which is well down from you know the previous figure of 86 million, and I believe it's gonna drop down to 67 million or less by the end of the year.


The decline from 100.32 million units in 1997 to 67 million in 2001 is known as the Comics Crash. However, the current decline from the 2015-2016 peak of 89 million appears to be gaining momentum, due to rising prices, failing stores, and declining quality. The average price of comics has risen from $2.62 in 1997 to $4.14 in April 2018, Top 300 unit sales are already down 7 percent for the year, and the much-ballyhooed move of SJW Marvel writer Brian Bendis to DC is proving more disastrous than even the skeptics had expected.
I have been tipped off by DC editorial sources that the numbers that DC Comics received were a lot lower than expected. A lot lower. Less than you might expect for a new Superman title relaunching the character with A-List talent and spinning out of Action Comics #1001 and DC Nation #0 and more like – well, a newly launching Brian Bendis title at Marvel, without the tiered variants. And out of the top ten as a result.
Also note that at -10 percent, total unit sales are down even more than Top 300 unit sales. Put these factors together and it looks as if the comics industry will hit a new 21st century low in annual unit sales by 2019 at the latest, and quite possibly, by the end of this year.

Labels: ,

41 Comments:

Blogger Ken Prescott May 26, 2018 6:29 AM  

Way, way back, I knew a guy who was running a fairly successful business, danged near a monopoly in his sector, and I asked him what the biggest part of his success was.

He told me, "Greed control. The goal is win-win, not beggar-thy-neighbor."

Alas, he had to retire and sell off the business to tend to a sick wife, and the new owner, Harvard Business School trained, was highly leveraged.

It turned into beggar-thy-neighbor in short order, and the new owner simply turned the page . . . until she eventually reached Chapter 7.

Blogger wreckage May 26, 2018 6:47 AM  

Monopolies eventually put themselves out of business. Unless they are government protected.

Blogger wreckage May 26, 2018 6:55 AM  

People talk about the comics being "only" a farm for IP; but test-flying a character, story arc, team, or villain in comic form costs virtually nothing in movie budget terms. Risk is damn near zero.

Blogger wreckage May 26, 2018 7:07 AM  

Oh, if I might add, I'd freaking LOVE behind the scenes stuff. There's hugely exciting stuff going on right now (across the economy, not just comics) and I crave details.

Blogger Gurpgork May 26, 2018 7:22 AM  

+1 for more behind the scenes stuff

Blogger Killua May 26, 2018 7:30 AM  

Thats sad. My guess is that the rise of the many multiples options of online entretainment plays a role too. Why spend money reading comics for entretainment when you can read many free comics online, watch many neflix, play so many videogames, etc.

Blogger VD May 26, 2018 7:33 AM  

My guess is that the rise of the many multiples options of online entretainment plays a role too. Why spend money reading comics for entretainment when you can read many free comics online, watch many neflix, play so many videogames, etc.

It's much more likely the changing population demographics. Blacks and Hispanics don't read, on the average.

Blogger Daniel Paul Grech Pereira May 26, 2018 7:52 AM  

> rising prices, failing stores, and declining quality.

The comics guy in my neighbourhood has switched completely to selling various models, figurines, and sports cards. He sells more special edition action figures and memorabilia than comics now. It's absolutely insane. For decades he made his bread and butter on MARVEL and DC.

Blogger Daniel Paul Grech Pereira May 26, 2018 7:53 AM  

@8
I should also note that the neighbourhood has gone from 90% Canadian 30 years ago to 100% Chinese/Indian so the lack of English speaking people from a Western culture might also have something to do with it.

Blogger Lovekraft May 26, 2018 8:07 AM  

@ VD: is the current alt-hero story some type of 'arc' i.e. 12-issues, which will come out in the future in a graphic novel? Seems buying single issues via amazon would be too expensive.

Blogger Johnny May 26, 2018 8:11 AM  

Just to give another example of a business selling off its own market, Ford Motor Company bought out the company that made Jaguar cars in England. Essentially they sold off the brand name by marketing a medium quality car at a premium car price. That caused a decline in sales. Sales went down faster in Europe than in the US. It took us a couple of years. Apparently the Europeans are more discriminating when it comes to cars. In strict money terms, maybe it was a winner in that transitory profits were high enough to cover the loss of value.

Good or bad, such policies once implemented usually can't be stopped because that would likely cause the management team to end up unemployed.

I wonder if the comic book industry is like that. Are the distributors making enough more to cover the lost value in the company owing to declining sales.

Blogger Johnny May 26, 2018 8:35 AM  

Along with the other stuff, the decline in comics sales may be deliberately contrived. Perhaps the entertainment industry as a whole regards these stores as a low profit competing area that they would just as soon have fail.

Old Karl Marx pointed out that businesses tend to consolidate into monopolies when they can. What he didn't point out is that all other social institutions do the same thing. There is always a desire to consolidate power because it is self serving for the elite class to do it.

Blogger Uncle John's Band May 26, 2018 8:42 AM  

"It's much more likely the changing population demographics. Blacks and Hispanics don't read, on the average."

So much for the diversity = new markets canard.

The sales graph is interesting, as is the Diamond situation. So the last decline was structural, while this decline is creative. Based on nothing concrete, I think there is a market for appealing, affordable, illustrated heroic fiction and the upside for Alt-Hero has been obvious from the start. But the landscape looks even more vulnerable that it seemed at first.

Blogger Johnny May 26, 2018 9:18 AM  

Perhaps there is a problem with the comic book format itself. Because it is a low cost per issue publication, the cost of delivery to the consumer has to be kept down.

I wonder, do comics go at the book rate for postage?

Can you sell a comic book in a magazine store. Maybe a magazine format?

And of course you are already marketing online. Maybe make the graphics novel format the print version because the more expensive product would more easily cover postage expense?

Blogger James Dixon May 26, 2018 9:28 AM  

> A lot lower. Less than you might expect for a new Superman title relaunching the character with A-List talent...

A-list talent ain't what it used to be.

Blogger bob kek mando - ( Creepy Joe Biden always asks for consent before changing your baby's diaper ) May 26, 2018 9:42 AM  

11. Johnny May 26, 2018 8:11 AM
Ford Motor Company bought out the company that made Jaguar cars in England. Essentially they sold off the brand name by marketing a medium quality car at a premium car price.


hah.

that's exactly what GM did with Hummer.

they paid beaucoup bucks to acquire a Jeep front grill. the ONLY distinct product that Hummer had was the H1 ( H2 was a Chevy Suburban variant and H3 was a Chevy Colorado ).

so, after spending a bazillion dollars for the Hummer nameplate, what does GM do? they kill production of the H1.

what. the. f.

you now have an entire "dealer network" which is trying to subsist on two substandard Hummer knockoffs ... neither of which actually IS a "Hummer".

GM was trying to sell the Hummer name plate for a while, then they finally just killed the whole "brand".

10 years ( 1999-2009 ) to entirely destroy the value that GM invested in the Hummer brand name ( strangely, it seems nobody wants to talk about what GM paid AM General ). you can't get management expertise like from just ANY community college. you've got to have yourself a Harvard MBA.

but AM General is selling more Hummers than ever.

https://www.carscoops.com/2017/10/am-general-is-selling-more-hummer-h1s/

Blogger Stickwick Stapers May 26, 2018 10:09 AM  

I play games a couple of times a month at a local game/comics super-store, and given what I've seen, it's no surprise whatsoever that sales are declining. I gave up on comics a long time ago, but it's gotten unimaginably worse in the last 20-30 years. There's so much nihilistic ultra-violence, story-killing political correctness, gender-bending, and homo-eroticism that the sheer amount of effort it would take to sort through it all to find something worth reading has got to be turning away potential new readers and returning old ones. Every time I start to feel nostalgic about comics, one walk-through of the comics section is enough to kill it.

Blogger Dave May 26, 2018 10:20 AM  

re Streamlabs

I demand Alt Hero GIFs in voxdays GIF Library!

Is it possible to increase the font size for the comments appearing on the right side of the video?

Anybody know if the streamlabs comment/donation box has to be opened in a separate window/tab or will it pop up on the youtube page as the Darkstream is occurring?



Blogger Man of the Atom May 26, 2018 10:55 AM  

Ken Prescott wrote:

He told me, "Greed control. The goal is win-win, not beggar-thy-neighbor."

Alas, he had to retire and sell off the business to tend to a sick wife, and the new owner, Harvard Business School trained, was highly leveraged.

It turned into beggar-thy-neighbor in short order, and the new owner simply turned the page . . . until she eventually reached Chapter 7.


Johnny wrote:

Good or bad, such policies once implemented usually can't be stopped because that would likely cause the management team to end up unemployed.

I wonder if the comic book industry is like that. Are the distributors making enough more to cover the lost value in the company owing to declining sales.


Back in the 1990s when there were 11 distributors for comics; everyone had a slice. Some focused more on a coast, some were known for carrying indies and off-the-wall stuff, some had the Canadian sector vs US sector.

Once the Marvel and Heroes World decided that they wanted a bigger slice with exclusive distribution, all that imploded. DC chose to pick a distributor as well.

That year at least 2 distributors went under, and it became a monopoly in about 3 years. Diamond was the only one left, and they were already not well regarded by the comics shops.

Marvel, DC, and Diamond: destroyers of main stream comics.

Blogger Dorvannnn May 26, 2018 11:52 AM  

Someone can correct me if I am wrong, but I was under impression that both DC and Marvel make more money from licensing their intellectual properties than they do from the comics themselves. If that's true, I doubt anyone in their corporate structure actually cares about the contents of the actual comic books.

Blogger Killua May 26, 2018 12:36 PM  

Someone can correct me if I am wrong, but I was under impression that both DC and Marvel make more money from licensing their intellectual properties than they do from the comics themselves.

Yes. I would estimate at this point Marvel makes much more money from the movies.

Blogger VD May 26, 2018 12:50 PM  

Someone can correct me if I am wrong, but I was under impression that both DC and Marvel make more money from licensing their intellectual properties than they do from the comics themselves.

Vastly more. Hell, even IDW makes nearly as much from its licensing as from its comics.

I would estimate at this point Marvel makes much more money from the movies.

At this point? Marvel's successful 2006 gamble in making its own movies is the only reason they are still around.

Blogger Man of the Atom May 26, 2018 12:51 PM  

Dorvannnn wrote:Someone can correct me if I am wrong, but I was under impression that both DC and Marvel make more money from licensing their intellectual properties than they do from the comics themselves. If that's true, I doubt anyone in their corporate structure actually cares about the contents of the actual comic books.

For how long? SJW convergence at Dis-vel will kill the goose, just like the Star Wars gander was slaughtered and cooked. The comics would be expected provide an ongoing IP stream, even if it's not superheroes, if Disney had a focus on its business instead of politics. But what does Disney copy once Marvel is a shriveled husk (more than it is now)? What merchandise channels are left to kill, now that Disney Wars helped crush Toys 'R Us?

Expect that the Disney IP vacuum will go on the hunt for other properties to assimilate, since they are incapable of creating something new themselves. Rapaciousness + SJW Convergence won't kill Disney tomorrow, but I wonder how long before the trend becomes irreversible and Walt's factory is doomed?

Blogger electricsheeple May 26, 2018 12:52 PM  

Will Castilia House create an order magazine for the comic stores in the same way that Diamond does with Previews and send it out to Comic Stores nationwide?

Blogger Frank Lee May 26, 2018 12:58 PM  

Marvel does make more money from the movies, and so does DC. But they make even more money by merchandising those movies and characters based on the movies. Like three or four times as much profit through merchandizing.

On top of that, the studios can only develop and distribute (and merchandise) a limited amount of movies based on comic book characters, far fewer than a big publisher can make comic books for. And the big money is in sequels and reboots of the most popular characters. That's why Disney and DC are mostly focused on characters created in the 50's and 60's (Batman, Iron Man) with an occasional Deadpool thrown into the mix. Each studio would also rather release half a dozen movies with 200 million dollar budgets in hopes of making 500 million or more each, than a bunch of modest budgeted movies that might be more profitable combined, but take more work to produce. (Film executives have more fun blowing a ton of money per project and doing less work overall. They can also do saturation marketing better on fewer movies, which also helps merchandising.)

As a result, a slow decline in comics is fine with the big studios. They don't really want to worry about a lot of new characters and new story lines. Easier to just recycle old Stan Lee characters from the 60's. And if comic book stories stop selling many comics, and mostly sell toys and action figures, that's great too.

The only thing that would change that is competition. If new publishers come along with new popular characters, like Alt-Hero, and they gain an audience, then the studios might have to compete to buy those characters. They wouldn't like that. Even worse, if those new publishers were actually successful enough to start producing their own films, that would set off big red flags.

Remember, the reason Steve Jobs was able to sell Pixar for billions to Disney was not that it was making billions in revenue, but because it's IP posed a long term threat to Disney. Likewise with Lucas Film, and Marvel. Disney couldn't afford to let that IP sell itself to the highest bidder.

The studios, like Diamond, want a monopoly on content. And once they have it, they want less content than more.

Blogger Dorvannnn May 26, 2018 1:00 PM  

Since everyone confirmed what I suspected, how long do think it will be before DC and Marvel just decide to stop publish comics altogether? Ten years? Twenty years?


Blogger VD May 26, 2018 1:01 PM  

Will Castilia House create an order magazine for the comic stores in the same way that Diamond does with Previews and send it out to Comic Stores nationwide?

Not until we have a lot more comics to offer.

Blogger Jack Amok May 26, 2018 1:12 PM  

you can't get management expertise like from just ANY community college. you've got to have yourself a Harvard MBA.

Bob, remember, GM isn't a car company any more. It's a pension fund that happens to control a car company. No reason to believe pension fund managers would know what they were doing running a car maker.

Blogger Frank Lee May 26, 2018 1:40 PM  

Dorvannnn wrote:Since everyone confirmed what I suspected, how long do think it will be before DC and Marvel just decide to stop publish comics altogether? Ten years? Twenty years?



They can't completely stop because it would create a market opportunity for competition. (Look at what Netflix did because the studios tried to resist digital on demand.) But if they can close most of the comic book stores, and turn what remains into toy stories for movie fanboys, with a few comics gathering dust in the back, that would be fine.

Remember also, the goal is to stop creators from creating. So young people waste time thinking they need to get jobs at Marvel or DC if they love comics. They go to college, rack up massive debt, and then try to get jobs at the big companies. Most are turned away and give up, spending the rest of their lives trying to pay off their student loans. Some go to work for the big guys and slowly have their dreams of being real creators destroyed.

If comic book stores completely disappeared, people who love comics and want to create them would all have to go independent. That would be a disaster for the people who want to control IP.

Blogger Jack Amok May 26, 2018 1:44 PM  

At this point? Marvel's successful 2006 gamble in making its own movies is the only reason they are still around.

I forget what blog I read it on, but a few months ago I read a post suggesting the superhero movie genre only had a few more years as a major component of the movie year. The guy's theory was that movie genres run in 20-25 year cycles (i.e. generational). Westerns, Disasters, Horror, Sci-Fi, Musicals, they all take their turn as blockbuster fodder but then settle back into the background. Movies in a genre get made before and after their peak cycle, but in considerably smaller numbers.

He pegged the start of the current superhero cycle to 2000 with X-Men. Spiderman was 2002, Hulk 2003, Hellboy, The Incredibles, Spiderman-2 in 2004... 2000 is when movies about someone besides Superman or Batman became common.

And he thinks there are only a handful of years left before it goes back to that, before audiences start to yawn at yet another superhero super fight, just like they eventually yawned at another gunfight between cowboys and another restaurant erupting into a dance number during dinner. Then some other genre becomes the darling of the industry.

That doesn't mean superhero movies go away, just that they go back to a niche market. CH could probably do fine in that environment, but I suspect Marvel will struggle mightily.

Blogger Gen. Kong May 26, 2018 2:16 PM  

Perhaps there is a problem with the comic book format itself. Because it is a low cost per issue publication, the cost of delivery to the consumer has to be kept down.

I wonder, do comics go at the book rate for postage?


The present USPS media mail for 1 lb. (e.g. a single copy of a comic book) is 2.63. One advantage distributors have is that they can set up an account with USPS (and with other shippers like UPS) and get a discount on the standard rate. Of course there's nothing to stop a publisher from doing this either. Distributors also have an advantage at the other end of the delivery chain because they can order by the carton from the publisher which reduces the landed unit cost. One of Ingram's great strengths is the fact that they have combined manufacture (printing) and distribution in one operation - with major facilities in three countries (USA, UK, Australia, plus partners in several other countries (including India and China). This gives them pretty much global coverage. Because of the very low unit price (under 10 USD) - the distribution model can work pretty well for comics and Ingram's set up gives them a considerable advantage over someone like Diamond.

Blogger Jack Amok May 26, 2018 2:34 PM  

A-list talent ain't what it used to be.

The whole "A-list talent" bit makes it clear that Marvel and DC are going after poseurs instead of actual fans. Poseurs like something because it comes with the right credentials and they can yammer on about obscure details like some wine snob telling you about the terroir of the swill he's drinking. Fans like a comic book for the characters, plots and artwork.

Blogger RobertT May 26, 2018 3:28 PM  

There is no better situation for you. Happy harvest.

Blogger Snidely Whiplash May 26, 2018 3:31 PM  

Dorvannnn wrote:If that's true, I doubt anyone in their corporate structure actually cares about the contents of the actual comic books.
Not at the Disney level, perhaps, but specific people have specific responsibility to deliver results; unit sales, revenue and profits.
Those people care very much, and their income is based on those numbers.

Blogger Michael Maier May 26, 2018 7:33 PM  

Gurpgork wrote:+1 for more behind the scenes stuff

I would love to hear more, too.

You're doing great work, Vox. I hope more and more independents flock to Castalia and your comic imprint for printing and distribution.

Blogger Michael Maier May 26, 2018 7:54 PM  

Jack Amok wrote:A-list talent ain't what it used to be.

The whole "A-list talent" bit makes it clear that Marvel and DC are going after poseurs instead of actual fans. Poseurs like something because it comes with the right credentials and they can yammer on about obscure details like some wine snob telling you about the terroir of the swill he's drinking. Fans like a comic book for the characters, plots and artwork.


No, not really. For a good while before the big boom and bust of the early 90s, if there were certain A-Listers on a book, it was going to be good. Certain writers are worth following as they elevate mediocre art (Vox' buddy Chuck Dixon being one of them).

And comics being such a visual medium some fans WILL buy for certain artists they love. (Jim Lee, Alan Davis, John Byrne and a few others for me.)

Sometimes you get burned by crappy writers (Jim Lee w/ Frank Miller writing ALL-STAR BATMAN, Jim Lee's SUPERMAN run, Alan Davis on X-Men retreading old ground in the 2000s) but then again that's all post-early 1990s, too.

IMAGE seemed so cool when they emerged but it was clear before long that artists are not very good writers. None of the stories from IMAGE stand out as anything worth reading 20 years later.

I much prefer Vox' approach of having strong stories and characters and letting the art sort itself out. It's a better way of storytelling, IMO. And some artists start off "meh" and develop into something special (Alan Davis).

Blogger James Dixon May 27, 2018 12:27 AM  

> (Jim Lee, Alan Davis, John Byrne and a few others for me.)

John and Sal Buscema, Dave Cockrum, and of course Jack Kirby.

Blogger Michael Maier May 27, 2018 1:48 AM  

Dave Cockrum stole $40 from me. He took my money at a convention here in Indianapolis and promised to mail me a custom pic of Nightcrawler as a pirate.

Thieving fat bastard.

Loved his art, though.

Blogger James Dixon May 27, 2018 9:46 AM  

> Loved his art, though.

That was the subject at hand, was it not. :)

Blogger Michael Maier May 27, 2018 12:44 PM  

I'm still bitter. And now he's dead so I'll NEVER get my art.

Blogger James Dixon May 27, 2018 7:45 PM  

> I'm still bitter. And now he's dead so I'll NEVER get my art.

Completely understandable, and you have my sympathy.

Post a Comment

Rules of the blog
Please do not comment as "Anonymous". Comments by "Anonymous" will be spammed.

<< Home

Newer Posts Older Posts