The Comic Book Industry Crash Of 201X
In 1993, the comic book industry crash that started looked like it was going to take down most of the industry, including one of the giants, Marvel Comics. By the time it was over, Marvel was fighting to emerge from bankruptcy protection, and there was only one distributor for a reduced number of comic book shops, and it was facing a federal anti-trust investigation. Several, smaller publishers had gone out of business. The industry clawed its way back from the brink of oblivion and grew into what we see today, with it being a record-breaking year for the industry, due to increased exposure from television and films, a emphasis on variant covers as a method to increase sales, and higher cover prices for individual issues. However, we could be on the brink of another collapse and here is how it probably will happen.
Comic shops have to increase their orders in order to receive incentive covers, which they can sell at a higher price point. However, this still leaves them allocating their resources on copies of comics that will not sell. Unfortunately, that also means if the demand for a particular variant cover does not match the higher price point that they are asking for, they don’t make back the cost of the extra copies that they ordered. Not a problem as long as the extra copies sell, but if you go to any comic book show, you will see dealers selling variant covers for cheaper and cheaper prices. The market for incentive covers is not an infallible one.
So what happens when the losses from these extra orders add up and put the local comic shop in a bind and they have to decide between their payments to Diamond Comic Distributors and the rent on their store, or other expenses? It’s not really a viable option, given that payments on anything in business can only be late for so long. Eventually, the store will have to go out of business or drastically reduce their costs, by moving to a smaller, more affordable location and reducing their orders to Diamond, which if it happens with enough shops and retailers, can drastically affect Diamond’s revenue, putting it in jeopardy.
Variant covers from Marvel, Valiant, BOOM!, and DC
Marvel and DC aren’t the only ones benefiting from the extra revenue that comes from incentive variant cover orders. Diamond benefits greatly from them, since taking a cut of the eight million comics ordered every year. Rest assured, if stores reduce their orders, then Diamond’s revenue is reduced. In the 1990s, we first saw local comic shops go under, which next hurt the publishers, which saw the distribution market swallowed up by the only distributor capable of surviving the chaos. Next time, what happens when the only distributor can’t pay its bills?
Marvel and DC are subsidiaries of major media companies and do not run the risk of folding anytime soon, unless major management at Warner Brothers or Disney decide to pull the plug on the money losing end of all those Film and Television properties. The most likely crisis scenario involves Diamond Comics not being able to operate. Most likely the announcement would be preceded by reports of late and incomplete shipments by local comic shops. These policies would drastically affect these shops, causing them to start failing first. Then the announcement comes that Diamond has filed for bankruptcy protection. During the restructuring, more stores fail and revenues to Diamond continue to fall. It may very well be determined that Diamond cannot be returned to profitability and it needs to be shuttered and liquidated. This is bad for comic shops and publishers. How long will it be before another distributor can establish itself? Perhaps one could be established before shops were left without a way to get new comics every week, but if not, then we are looking at a serious problem for the industry.
All of this may not happen immediately, but if it happens, it may provide a blow from which the industry cannot recover, or we may see it crippled so badly that it is many, many more years before it resembles anything like we have today.
Variant covers from Archie, Marvel, Dark Horse, and Titan
I’m sounding the warning bells, but how do we avoid it? The publishers have to avoid using gimmicks to boost monthly sales. Variant covers are out of control, and they need to stop, so the industry can see exactly how many readers it actually has. Some shops are actually getting dependent upon them, and their backstock is starting to show it. Fans need to communicate with shop owners, managers and employees about what they like and want to buy. Make use of Previews if you can to discover new comics so you’re discretionary comic spending is well-distributed instead of wasted on overly expansive crossover “events” and needless variant covers. Publishers, build your catalog and develop a reliable customer base. Expand that customer base by developing titles for all ages and genders. Just trying to boost single issue sales is too tempting, but it’s the short game. Play the long game and develop sales figures that you can rely on.
The next Comics Industry Crash doesn’t have to come in 2016, 2017, 2018 or 2019. It actually doesn’t have to come at all. All we have to do is stop repeating the same mistakes.