Friday, February 6, 2009

New Directions?

There sure has been a flurry of activity regarding Diamond’s new threshold for sales that they’re instituting which requires titles to meet a certain minimum in sales. They’ve had a minimum in place before but the buzz now is how they raised it. There are many people out there who while recognizing that Diamond has to make a business decision, still lament the possible demise of many independent companies and/or titles. This will especially be true for the comic format as opposed to the trade paperback, simply because of the cost per unit.

It’s very interesting to see the response. You have the ones that place Diamond as the instigator of the impending death knell of the direct market and you have others who see the opportunity ahead to remake the comics market and build it upon the non-Marvel and non-DC titles which currently make up the vast majority of the comics market.

It certainly does bring up a number of questions and I have been contacted by a number of people on my thoughts since I’ve been involved in this market as a retailer, a creator, and a publisher and of course, for the long time that I have been part of the market. I was here before the consolidation of the distributors…you know, the old days when we had nearly 20 distributors or so for comic material.

What are small publishers to do now?

Small publishers is bandied about and covers a number of publishers. To fans who flock to pretty much only Marvel and DC, everyone else is small press. To those who buy from a number of companies such as Image, Dark Horse, IDW, etc. small press refers to usually the publishers who are not in the Top 10. But generally, small press refers to those who only put out a few titles, perhaps not even doing monthly releases.

For most small press publishers, they relied on Diamond to get their books in front of the eyes of retailers and hoped that they would get enough orders to cover the cost of the print run. Additional copies would be sold on reorders, conventions, direct mail, etc.

Well, that’s not likely to happen now. Diamond had a minimum order before of about half and most publishers were borderline at that level. So, that means new strategies have to be adopted. Can convention and direct mail sales increase to offset the loss of the large initial order of Diamond? Probably not…even with increased promotion and focusing on the web marketing. Most stores did not order many copies for “store stock” but rather just transferred their customers’ orders. I’m sure if there was quite a bit of activity on a title, a store could sense the demand and perhaps added a few additional copies but I think it’s safe to say the majority of orders were directly from consumers utilizing a pull and hold service at stores. So, that means the consumer interest is there but without Previews, how are the publishers going to connect with them?

I read various comments from some retailers who feel that this new policy will get rid of the publishers who don’t do enough to attract fans to come into comic shops searching out their titles. Well, that’s sort of a catch-22. If a publisher is successful enough to increase demand on their titles, there is still the problem of whether the majority of the stores would carry it beyond what the specific orders were. I think most would not. I’m not talking about the exceptional stores (and by exceptional, I mean the ones that are exceptions to the rule, not necessarily great stores) who do allot a percentage of their budget for the small press. The fact is that most stores are superhero stores who will turn key special orders but not stock small press. It makes a great deal of fiscal sense because those are guaranteed sales for the most part whereas a single copy unsold eats the profit up on one of two sold copies (depending on the discount).

But if the Diamond Preview IS the tool, then the small publishers who list their products in there are doing their job in appealing to the base market. It is a form of promotion and marketing to just list the book. You get a cover image, a brief description, an approximation of when it ships, price, and ISBN if applicable. The publisher “pays” for this marketing in the substantial discount they offer the book to Diamond (usually 60-65% off the cover price). Stores may complain that it doesn’t drive customers into the store looking for that book but most publishers are aware that the majority of the stores are not going to carry the book anyways. Sure, if it’s a proven winner over time but there’s a lot of promotion on the initial appeal and for most, it just isn’t cost effective. If a publisher can drive sales, it behooves them to go for the direct sale at first.

Obviously, this is a situation that is not going to enhance relationships with retailers as they can’t be expected to carry everything in hopes that customers will come in. I’m not in any way expecting retailers to assume the burden. When I was a retailer, we carried just about every single comic that came out. But I had four stores, and two of them moved an incredible amount of product. That gave me leeway to shuffle titles around and yet, I was still stuck with lots of unsold titles, sometimes something I may have only ordered one copy each per store. I’ve been there, I fully understand. I don’t have an answer for that because we’re dealing in a small and relatively isolated market that essentially feeds upon itself. One title sold is usually at the expense of another, not in addition. That means a publisher can’t go after new readers but try and convince a reader to switch to their title from another.

Yes, I know there are exceptions…Watchmen, Persepolis, Maus, etc. …but again, these are exceptions and you can’t build a business model on exceptions (something Hollywood has never been good at realizing).

For many, the solution is the web. Not just for promotion but for getting the work out there. However, there isn’t a good model that exists on making money on webcomics yet. Many of the successful titles branch off into other products (t-shirts, for example) to subsidize the comic but again, that won’t work for everything. And again, of course, there are exceptions who have done tremendous with webcomics. But the fact is, print is still the preferred method for many…not just publishers but fans as well. The scheme that seems to be taking hold is to use the web for previews/samples and try to drive the sales of the subsequent work (whether additional issues or a trade). Just like anything to do with the web, however, there is an awful lot of competition for people’s attention and the “noise” factor is only increasing.

What about new distributors?

There are alternatives to Diamond but that doesn’t put them on an equal footing. Not by a long shot, no matter how you look at it. Some enthusiasts are excited about the possibility of the Diamond world (DC, Marvel, Dark Horse, Image, etc) versus the independent world (all the small presses) and how the originality of the small presses will win out, or at least, provide fresh voices to the static of the exclusive publishers to Diamond.

That’s a delusional pipe dream and most people in the biz know that. Beyond all the marketing factors, awareness of titles, quality of work…there is still the simple fact that most comic fans prefer what the big publishers offer. They like the characters and scenarios of these superhero worlds and licensed titles. A lot of small press titles are not subject to ignorance that they exist but rather apathy and/or disinterest. It’s not from lack of eyeballs that they suffer from but simple appeal.

A new distribution method for small press is not going to guarantee anything. Yes, perhaps it will be an alternative listing to the back of Diamond’s catalog but if people were bitching about the slurry they had to go through before, can you imagine looking through page after page of unknown quantities that are not buffered by the occasional company who provides anticipated material (IDW, Dabel Brothers, Oni, Dynamite, and others)?

Right now, Diamond imparts at least a minimal level of quality---some may debate how much they do or not, but small titles usually have to at least be evaluated. A new distributor, which is likely not to assess merit to the titles, could be swamped with enormous amounts of comics with questionable quality in all areas. Or will the new distributors also have to level some kind of benchmark in quality and/or sales?

Who are these new distributors?

One name bandied about is Last Gasp simply because they have been at it for a long time. But Last Gasp specializes in a few areas and are not expected to expand into all genres. They work with what they know and apparently, just by their longevity, are quite good at it. They’re unlikely to set themselves up for disrupting what works.

Ka-Blam, a print on demand Publisher, has thrown their proverbial hat in the ring. They intend to expand from just providing their own titles (via Indy Planet) to distributing others through Comics Monkey. They’ve set up their initial launch with the caveat that they have to grow into the business but the margins for retailers is very small and for publishers, even smaller. I’ve worked with them in the past and have nothing but good dealings with them and they may be on to something but they have some substantial financial situations to deal with to make them appeal to retailers and publishers. I have the feeling that their announcement was a bit premature, simply because of the situation that arose from Diamond’s policy being released. It’s an alternative to traditional distributor in many ways so it may not be for everyone. Right now, they may serve as another source of product but they’re not going to be able to make up for what publishers had with Diamond.

Haven has been getting a lot of attention because they’re placing themselves at the front line as an alternative to Diamond. For many publishers, Haven seems to be the best hope as they’re following the path of more traditional distribution and will feature a catalog of upcoming product (ala Previews). The company is a bit all over the place and links take you back and forth to Haven, Enemi, and RogueWolf so there is a lack of clarity there. They seem to be a distributor, a publisher, a printer and even on their home page, the blog has five entries for 2008 and then goes into 2007.

You have to grant some allowance for Haven and Comics Monkey as they’re gearing up for a much more expansive role much sooner than they probably anticipated. I remember the early days of Diamond and Capital and in retrospect, it’s amazing how fast they went from start ups to professional companies. There is still going to be the factor of carrying all the publishers denied entry to Diamond in addition to the other companies so it could appear to be an expanded version of the “throw it against the wall and see what sticks” impact that the Diamond Previews had in the back part of the catalog…but even worse.

Retailers may use these distributors to fill order demands on product they can’t get from Diamond or perhaps even use the catalog to take orders like they already do with the backend stuff in Previews. Will that be enough to provide enough income to these distributors?

Another source that doesn’t get discussed much is Shenton Sales which is run by Tony Shenton. Not a true distributor in the sense of carrying product, Tony acts as a liaison between publisher and retailers. Orders are filled and invoiced directly to retailers and I’ve personally dealt with a few orders via Tony. The problem here is that not all retailers pay their invoices and some that do, pay late. I’ve found that Tony does his job well but it still comes down to dealing with stores and they’re suffering the economic downturn as much as others. It’s a supplemental form of distribution, certainly not a replacement.

Of course, bookstore distribution is bandied about but the reality is that this is only a panacea for those publishers who have never dealt with bookstore distribution before. When you get a large order, you can count on getting a large number of returns. If you can construct your business in anticipation of this, then you can do all right with it as it does provide a new source of sales but strict accounting and awareness is an absolute must.

And one of the major concerns that the small publishers who are on the cusp of Diamond’s threshold have to content with is whether to utilize alternative distribution at all. Taking away potential sales from Diamond in order to reach out to the other distributors may be just enough to push you under the limit. The likely scenario is that the distributors will get product that was rejected from Diamond on the mid level publishers. That may be fine but it will take awhile for publishers to get a handle on what is going to make the grade and what won’t.

The smallest publishers will probably not have this problem but there are a number of publishers that will. I wonder about the smaller publishers who are exclusive to Diamond and what their alternative is if Diamond doesn’t list certain product. Will those items be released from the exclusivity? I know of one publisher who only sold 100 copies of a book through Diamond yet had orders of 700 through Diamond’s book deal. How is that going to be handled in the direct distribution to comic shops as the book order came in much later than the comic shops’ orders.

More Questions

There are many other questions that pop up that I won’t go into great detail but with print on demand (POD) rising to be the preferred method of printing and the idea of reducing costs by cutting paper quality (whether traditional printing or POD), the concern on how much of the comics market is collector driven. Will someone who purchases a 2.99 comic in full color and on glossy paper settle for black and white newsprint for 1.99?

The market for product will continue strong…in terms of creators and publishers providing the material. The trick is not just having catalogs and listings of a large variety of titles…they have to sell to someone. Obviously, the first step for these new distributors (including new ones that may come forth) is to get publishers on board and I don’t think that will be a problem. There’s a lot of creators and publishers that can provide that. Some will be personal projects…sort of the Artists Alley of publishing and others will be to provide content for other media (film, games, etc.). But neither are going to get sales just because they’re in a catalog or listed on a web site. For many of the personal projects, any sales are worthwhile so it behooves the publishers to find as many sources as possible for outlets.

For the “media-driven” publishers, legitimacy is established as soon as they have a printed book that’s distributed some way. We sometimes forget that most of us in the business understand what it means to be in Previews as opposed to only a POD site but others don’t. A printed book that gets national exposure someway, somehow, is a book that got national exposure. Critics of this strategy contend that a book that is designed purely for ancillary reasons is not worthwhile but for them, the finished product is all that matters. The purpose of the book is irrelevant in terms of why it was created, only what is in someone’s hands matters.

As a creator, of course, I want these other avenues to succeed. The material that I like to do is not likely to strike a fire for most of the “standard comic fans” as I don’t do superheroes and I’m not likely to be a Marvel or DC writer. I get that. Much of what I do appeals to outside of the traditional market.

As a publisher, obviously, I want to have as many outlets as possible. I will continue to use Shenton Sales and have already talked to Haven and will likely explore Ka-Blam’s Comic Monkey. What I think will appeal to Diamond’s customers will be offered there as well.

It’s easy just to throw up that “time will tell” what will work or not but it is good to see that there are options are brewing.

Exploring what the potential pitfalls are is not meant as a discouraging snide but it is troubling to see that so many people think that the system has been “against” them when in reality, their work hasn’t fit into the system. I think that’s a big difference. They may not like it and wish it were different but I think success happens when cold and hard evaluation takes place, not wishes.

Sorry for getting so long winded...


Anonymous said...

At this week’s red carpet for “Coraline,” producer Bill Mechanic revealed to MTV News that he’s already got another project in the works with ties to the comics world — an adaptation of the comic book series “Deadworld.”
The press release doesn't mention Desperado Publishing (we partnered with Image Comics when the new Deadworld series debuted in 2005), but this is still cool. I'm excited that Bill Mechanic is attaching himself to Deadworld!

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