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The Inevitable Direct Market Implosion

The Winds of Change

We’re in the middle of the retail apocalypse.  Or, perhaps worse, we’re at its beginning.  You all know the list of the big ones. It includes J.C. Penney, Sears, Toys R Us, Macys, Sports Authority, Radio Shack, Borders.

Retail debt is piling up and going unpaid.  Fewer people are going out to stores. Amazon is eating everyone’s lunch on-line, while Walmart squashes the brick-and-mortars.

And even Walmart is closing stores.

Change happens.  Nostalgia never wins.  The cold, hard reality of business always wins, and that’s prompted by what the consumers wants.  If not enough of them are spending enough money, the business model fails.

Change the model or give up the business.

The entertainment industry is filled with well-known examples of this. These are lessons other industries learned the hard way.

You don’t need me to run them all down, but look at the worlds of books, television, movies, and music.  Not one of those hasn’t had its entire business model upended in the last twenty years. They’ve all changed to provide easy access at any time to a larger catalog of titles at a more reasonable price.

Easy access. Instant access. Vast catalog. Reasonable price.

I’m sorry, but that’s not the Direct Market.

 

The Inevitable Death of the Direct Market

Business models change.  Businesses change.  It’s inevitable.

Comic books started as a magazine business distributed on newsstands until that distribution model failed to support it.  Then, it moved to the Direct Market, a smaller collection of hobby shops where the books had a lower profile but a built-in market willing to keep it going.

Over the course of the last 30 or 40 years, we’ve seen that built-in audience shrink in size drastically.

Is the business model for comics about to change again?

In the internet age, everything speeds up.  It’s difficult to keep up with the changes, but if you don’t, you will surely die.

Industries may survive, but often at the cost of large chunks of infrastructure.  You can still buy a movie or an album or a book, but the way you get it today — and the way you WANT to get it today — is vastly different from what it was 10 or 20 years ago.

What makes you think the comic book industry is immune to this?  Why does the Direct Market deserve to live?

It’s inevitable.  It won’t be this year.  It might take another five or ten years. But why do we all pretend otherwise?

The Direct Market as it exists today is doomed.  Just look around.

 

Where’s the Money?

Comic publishing is not a profitable venture.  The most optimistic version of that sentence is “Comic publishing is not a profitable enough venture.”  You can make a few bucks publishing comics, but your return on investment will be demoralizing.  No company survives on publishing alone.

Hollywood bankrolls 90% or more of the comics industry.  Marvel is owned by Disney, and DC by Warner Brothers. Boom! (who already absorbed Archaia) is owned by FOX now.  Dark Horse is half movie producer, half comics company, and losing licenses at an alarming rate. Valiant is owned by a Chinese company that only wants it for the IP to make movies with The Rock.  Image is a collection of creators putting properties out in hopes of a paycheck from a Hollywood company so they can afford to keep making comics.  And once they’re successful enough at that, they turn into mini-production companies that make deals with the Amazons and the Netflixes of the world.  (I can’t blame them for that.  That’s the power of creator ownership. But please note the payday disparity between Netflix and the Direct Market.)

IDW (who absorbed Top Shelf) is mostly Hollywood licenses, but is also owned by a telecomm company, IDT, who put all its IDW assets into a company called “CTM Media Holdings,” pairing it with a brochure printing company they also own.

Yeah, don’t ask me to explain that one.

There is not a great amount of money in Direct Market comics.  It’s all bankrolled by Hollywood. And all Hollywood wants to own is the intellectual property so it can exploit it for the bigger bucks via every method in the world that’s isn’t print publication.

Nobody is getting into print media these days. Newspapers are dyingeBooks outsell print books. (Print is making a comeback, though.  Or is it?Comic Shops are closing left and right, and sales are down year over year.

People thought Netflix was going to create a comic book company to print Millarworld titles.  Are they nuts?

How long do you think Hollywood will continue to bankroll the minuscule profits of their publishing divisions/partners?

 

The Foundation of the Direct Market is Broken

The big draw of the Direct Market at its inception was that retailers got a fatter profit margin on the comics they bought, in return for not returning any of those comics.  Were retailers of that time so smart that they ordered perfectly every time and never lost a penny?

Of course not.  But the overages still had value.

Any book that didn’t sell would go into the back issue bins, many of which would increase in value with age. If you order too many books in today’s day and age, you’re lucky to sell those extra copies in a quarter bin at Christmas time…

The back issue bin is dead in today’s market.  Between the rise of the trade paperback market and the creation of digital comics, back issue bins are mostly over.

The Plan B of the Direct Market is dead.

But that’s OK, you might say.  Manga came up and the trade paperback economy replaced those profits.  Retailers got rid of the bins and replaced them with bookshelves, filled with books-with-spines at higher prices that led to bigger profits per piece.  Manga books are closer to $10 apiece, and collected editions go anywhere from that to $150 or more.

But Amazon offers substantial discounts on all of those books (30% – 40%), with free home delivery.  More than half of internet-enabled America has an Amazon Prime account.  I wonder what the percentage of Americans within 15 minutes of a comic shop is.

So what’s the unique selling proposition of the Direct Market?  It’s a great social clubhouse, but how much are people willing to spend on that, in a world where everything else is so heavily discounted, and half the world can subscribe to a Facebook group in ten seconds to get their social fix?  (Though given current events, we might be moving back to message boards soon…)

 

Too Little Money, Too Many Middlemen

There’s too little profit in selling $2.99 or $3.99 comics, and too few buyers who want to pay that much for a monthly comic.  With those razor thin margins, who’s getting paid?

The retailers, who get nearly half of the money from every comic sold, but still can’t sell enough to stay alive?

The distributor who, if it wasn’t effectively a monopoly and didn’t ship “The Walking Dead” trades, might as well be dead already?

The publishers, who have fancy big city offices in expensive real estate markets and have come to rely on blockbuster publishing stunts and short term insanity like variant covers to artificially boost sales numbers to keep their quarterly earnings looking good for their parent companies?

Image Comics is your best deal, as a creator, because they only take a flat fee. You’re still losing 60% of the cover price to the combination of the distributors (really, just Diamond) and the retailers.  Print costs soak up another quarter of the price of a comic.

So let’s all hold hands, sing kum-ba-yah, and talk about what a great partnership this is for everyone…

…As another comic shop closes every week.

…And another creator leaves comics to go to animation or book publishing or video games.

…And another GoFundMe starts up to help someone who can’t afford the basic necessities of life because they thought, for some reason, that creating comics was a better  life decision than employment-with-benefits.

Kum. Ba. &*^%ing yah.

 

The Direct Market is Not a Panacea

40 years ago, the Direct Market saved comics. It did so at the cost of wider distribution.  Sales figures plummeted, but back issue sales were lucrative, and the bigger profit margin made it a workable system.

At first, the typical Marvel or DC title sold hundreds of thousands of units a month.

“The profit margins weren’t great, but we made up for it in volume!”

Today, there’s no volume.

Now what?

All those lost readers!  Whether it’s from the increased competition of videos games and home theaters and cable television, or the ridiculous prices of comics scaring people away — it doesn’t matter. They’re gone.  They’re not coming back in mass quantities.

No “Got Milk?” style campaign is going to save it. No 7-11 newsstand distribution deal will save comics.

We have the biggest movies in the history of Hollywood making over a billion dollars that are based on comics and yet sales are still sliding. You can’t ask for better advertising than that.  And what does it get us?  How many people have heard, “Oh, they still make comics?” from someone in light of a recent superhero movie blockbuster?

Retail space isn’t getting any cheaper, sales aren’t going any higher, new readers aren’t coming into stores, back issue bins are all but dead, you can’t possibly raise the prices any higher without completely pricing your extant fans out of the market, and people can buy the higher margin items incredibly cheaper on-line.

Remind me again — what is the upside to the Direct Market for either the industry that exploits it for short term profits or the readers who don’t need it?

 

Evolution of an Industry

Businesses change.  That’s just the truth.  I’m not being doom and gloom here. The writing’s been on the wall for years.

The Direct Market was an awesome idea that did save comics.  The only reason it’s held on for as long as it has is two-fold.

First, comics collectors are natural nostalgics, and they want to collect paper goods. (Along with that, habits are hard to break.)

Second, comic book stores offer an experience, when done right.  They offer a clubhouse, a friendly place for the exclusive few who still care, and a natural community.

That won’t save them forever. The current customer may think they want a comic shop clubhouse, but there’s just not enough buyers to keep the stores alive. It’s not sustainable.

In a podcast interview recently, I heard one guest say they thought of buying their comics at the local comic shop as the tax they pay to keep the industry alive.

The Direct Market is doomed when that’s what’s keeping it alive.

 

Comic Book Retailers

This is not a dig against comic book retailers, by the way.  Yes, there are plenty of them that do lots of things wrong, but there are just as many if not more than do lots of things right.  Their backs are against the wall and they have to do what they can to survive from month to month.

I would argue that every retailer can do everything right in their stores, and the Direct Market is still doomed.

It’s not the retailer, it’s the system.  It’s the customers (or lack thereof), and it’s the reality of modern life.

 

Where Do Things Go From Here?

Digital comics so far have been an add-on for the comics industry. It’s often credited for bringing lapsed readers back, but also in selling to new audiences who aren’t near a comic shop or who have no interest in buying more paper goods.

The upside potential is great, though. Done right, the digital distributor replaces the distributor, the publisher, and the retailer.  Suddenly, you as the creator can go from three middle men to one.  Even if you pool your efforts or go through a third party who acts as a publisher, you’re still losing one middle man.  I also bet that the new publisher model can exist on a margin far smaller than what the print publisher today takes.

You save tremendous amounts of money from never printing anything on paper and never shipping anything across the country or across the world.

It also aligns interests, as suddenly there are two people at play in every transaction: The consumer and the creator.  The distributor in the middle is a pass-through that still takes a bit off the top, but not as much as today.  No longer does the publisher have to convince a retailer to sell one of their books.  There will be some kind of minimum threshold of competence, of course, but there’s no fighting for shelf space.

There’s also no turnover. The library of offerings from the on-line retailer/distributor combination is unlimited.  Let the long tail roll!

 

The Tipping Point?

There’s an inevitable tipping point at some moment in the future. It’ll be when printing and shipping costs get so high that the cover prices become unbearable to the masses of buyers.  One could easily argue that we’re on the cusp of that now.  (I don’t think self-driving tractor trailers will get here fast enough to lower shipping costs to the degree that comics suddenly become relatively cheap to move around the country.)

$3.99 for a comic that only has 20 pages and 1/6th of a story?  That’s insane, any way you cut it.

Digital comics needs to adjust its business model in a way that the masses of readers will be ready to move to digital.  I think comic book readers like reading comic books. They might prefer the floppy or squarebound objects, but given the right economic model, they could switch in a heartbeat.  I don’t know if that’s a subscription model, or a dramatically lower monthly price across the board. Maybe it’s something we haven’t thought of yet.  Maybe Marvel is testing the waters with its recent day and date 99 cent trades.

Eventually, the ease and cost effectiveness of reading comics digitally will be so great that going to the store every Wednesday will seem like a remarkably silly idea.

Everything in life today is moving towards a world where we have fewer gatekeepers.  Hate to say it, but comic book stores — the Direct Market — are the ultimate gate keepers.

That will be the death of the Direct Market, once and for all.  The Direct Market cannot hope to compete.  No amount of “Buy a physical copy, get the digital for free” coupons or on-line reserve systems will save it.

Every comic shop owner can do everything right, and it won’t matter. There’s just not enough money in the system to keep it running.

 

Yes, It Will Be a Sad Day

Nobody wants to see all those people lose their jobs and their livelihoods.  Nobody wants to lose their local clubhouse.  Lots of people would prefer to own dead wood versions of their favorite comics. That includes me.

But life moves on.  The customer base moves on.  Industries change. C’est la vie.

Or, in terms Spider-Man fans might find familiar: Evolve or die.

Spider-Man Evolve or Die

What might replace this mess?  I have an idea, but I’m over 2000 words already.  Here’s a hint: Print specializes, digital delivers, and the Franco-Belgian model sits in-between.

Either that, or it’s all digital with a small print niche for the superfans, as comics goes the way of vinyl.

Give me some more time to think about all of that next…

 

Update and Further Reading

ComicsBeat.com picked up this article, so I thought I’d link you back to them for further discussion.

But I also wanted to pick up on another article that published there earlier in the week. Brian Hibbs did his annual look at the BookScan numbers.  There’s some great number crunching in there which might help explain what kind of shape the Direct Market is in as compared to the outside world.

And John Jackson Miller at Comichron has some thoughts on everything, too.  The most important one there being that comic shops aren’t really comic shops anymore, in many cases.  His local one is also a sandwich shop.  I’d laugh at that, but my first comic shop back in 1991 or so was a retro 1950s ice cream parlor/comics shop.

I also appeared on The Rorschach Test podcast to discuss the article with Chris Marshall (also of the Collected Comics Library podcast) and Andy Tom.

This article also provided the material for the third episode of the Pipeline Comics Podcast.  Listen here:

What do YOU think? (First time commenters' posts may be held for moderation.)

35 Comments

  1. Nice article, Augie. I’ve been thinking about this a lot recently, as my trips to my favorite retailer have dropped to once a month where a get a couple of floppies and Previews (most of my trades are bought from DCBS for 50% off – tough to beat). I’ve been moving to digital more and more, but it’s still hard. The price point is definitely a consideration (but I’ve just picked up a ton of Marvel’s 99 cent trades). I do have a question about purchasing items digitally though…

    Do I really own anything?

    At my home I have a room packed with beautiful trades and TPBs. If/when I get tired of them, I can sell them. Typically, I get half of what I paid for them, but in some cases, I make back what I paid or even make a tidy profit (I have a copy of Remender’s Uncanny X-Force Omnibus at home that I’m about ready to sell). And, God forbid, if I get hit by a car tomorrow, my family can rummage through these books, and my kids can read or sell them. There’s value in that.

    With digital comics, I can’t sell the comics when I’m bored of them. When I die, do I just leave my kids my Comixology username and password in my will? This is a big reason why I feel comics have to be cheaper online than in stores – it may not be “fair” to the stores, but all I that’s being sold (and all I own) is 1’s and 0’s.

    And I agree, there’s little/no profit to making physical comics – mainly, their only value is as an IP (I mean, they have literary value, but creators can’t eat that). A few folks have figured how to make this new paradigm work – Scott Kurtz being one of them (although I’m not sure how he’s doing now).

    I had a really interesting conversation with Brad Guigar (Evil Inc.) at a convention. He used to make oodles from his online comic – some from trades but mostly from ads posted on the comic site. Unfortunately (for him), with the advent of ad blockers, ads weren’t seen and his profits dipped greatly. But he evolved! He started a Patreon experience with Evil Inc. After Dark (showing X-rated adventures of his characters) and he’s indicated that it’s done well. There may be some who say he sold out, but I think he just took his stories to a place where he could keep telling them and keep evolving his art. Actually, I interviewed artist Stjepan Šejić (currently on Aquaman) once, and he explained how his romantic bondage comic (Sunstone at Image) allows him the financial flexibility to do other projects he’s interested in. Anyhow, enough with the adult talk. 😉

    Thanks for taking the time to write this article. And viva la Asterix!

    1. Hi George, you mention Scott Kurtz so I’m curious to know what makes his business model stand out. Is it crowdfunding? I know some creators use it. Others, like Jim Balent have their own little niche market and make a living out of it.
      Since most artists now use computers for production, they can’t even sell their original art anymore…

      1. He’s created a little niche for his comics (which are essentially strips). He has them online for free, but sells collections. He knows his audience are primarily gamers (both board and online) so he runs ads for that and uses his creations to create tie-in products related to those items (Dungeon and Dragons game items with his characters on them). Plus he also sells t-shirts, plushies, etc.

        It’s not the comic itself that makes the money, but it brings in the audience to buy things that will make him money.

    2. Oh, I absolutely agree with you about the problem on lack of ownership with digital comics. That has to be the next big change. Image changed it, if you buy directly from them. But the Izneo/comiXology model is a big problem for just that reason. You’re technically licensing the comics for reading, until such a time as they go under or something. That might be a reason why a subscription model works better. That has its own issues, but more on that another time… 😉

      Scott Kurtz is one of the last few webcomics guys who can still make it with ads on his site. He’s a rare hold out from an earlier time, though. That model is going away now in the age of ad blockers, though. As you note, Guigar has already moved away from that and fully embraced the Patreon system, which is basically a subscription service to his adult material and other exclusive stuff.

      They’ve been talking about this on their podcasts of late — Surviving Creativity and Comics Lab. Both are worth a listen.

      1. Guigar also makes his money on the Collections. He also does Kickstarters
        In order to survive you need to adapt and provide for many ways.
        He provides PDF versions of his collection but also the print versions.
        But I wouldn’t put Webcomics in the same boat as IDW, Image, Marvel, DC and the Direct comic market. They are really 2 different beasts.
        And you also forget how huge comic book shows are. And what attracts people to these who collect comics. We see lots of new people selling comics and collections of their work.
        So you saying Comic Print is going away you miss the whole other part of the fandom that attracts people.
        In the 90’s their was a huge GLUT of Direct Comic book stores you could go in malls and almost every corner and get a comic book store. The Collecting was at an all time high people using comic books to speculate on future investments.
        Then that Bubble bursted and many of those stores died out because they were just too many.
        The Direct market stores who survived knew how to run business and had a loyal following and the right locations. And didn’t just order every NEW #1 Issue from Diamond distributions.

        I think you are fear mongering the fall of the Direct Model.
        I can go into B&N and pick up Trades and even individual comics.
        You also forget that some things are designed to be read in comic book form.
        That you don’t really get the effect from the digital.

        1. What are comic book shows anymore? Most of them are pop culture shows, and more and more comics professionals will tell you that it’s harder and harder to make money at them. There aren’t enough comic readers there anymore. There are exceptions like ECCC and Baltimore, but even ECCC is starting to turn into a pop culture show now, too, slowly.

          The problem with comic stores in the early 1990s was that there weren’t enough readers to support all those stores. It was speculators buying insane numbers of comics for “investment.” If we had that many READERS in the early 1990s and not SPECULATORS, then we’d probably have a much healthier industry today, with more stores.

          I am not fear mongering the death of the Direct Market at all. I’m laying out a business case. Business must always adapt to fit the consumer, or the business goes away. We’ve seen that countless times in the last decade, in particularly. Yes, you can go to B&N today, but you can’t go to Borders. B&N survives because it’s the last one left. Their store sales are on the decline — down 6.7% in 2017, according to their own financial report. Their only upside right now is their online store, not brick and mortar.

          http://forinvestors.barnesandnobleinc.com/annuals-proxies.cfm

          1. The Direct Market model does not serve the current market, which is used to ordering more and more things on-line and visiting retail less. The Direct Market model shifts risk to the lowest-capitalized part of the chain, creates a secondary market that consumers don’t want or need as much anymore, and limits the availability of goods.

            This doesn’t necessarily mean print goes away completely. I think more people will move to digital eventually when we hit that tipping point, whatever it turns out to be, and that print collected editions and high end reprints will always be viable – higher profit margins, better distributions, availability to order on-line, etc. will make those attractive to both the consumer and the business.

    3. In regards to the comixology licensing argument – you assume that there are not ways to download the books in a manner CMX doesn’t approve of. I can assure you that there are. Bittorrent proves this, but it’s difficult for the layman to figure out.

  2. Well, that’s a bit rough but it’s a fair assessment of the current situation. When Disney bought Marvel I joked to my friends that very soon, Marvel books would only be sold in Disney stores (or in cinemas) and I’m still surprised that didn’t happen yet.
    My guess for the future is Digital for the masses with smatphones and tablets + print-on-demand for those like me who were raised with paper and still appreciate physical books.
    Very soon, paper is going to be a rarity anyway, with forests disappearing and water shortages, a book release will be like launching a perfume or a new iPhone, limited editions with a high-price point as a “collectible object” to be kept pristine in the box. Problem is, as you pointed out, the transition is going to make a lot of victims, starting with retailers.

    1. Rough, perhaps, but I’m sick of people dancing around it. Everyone hopes for the best and thinks everything needs to stay the same or else comics will go away. I just look around at all the other similar models and see that they’ve changed drastically and comics hasn’t. And comics continues to bleed readers and distribution outlets. At some point, it’s not going to work anymore.

      The model I think is coming is just what you suggest — paper book collection editions or higher end items for the superfans, and digital for everyone. But the digital price has to come down, too. Once the Direct Market is dead, though, the need to price digital comics at the equivalent to paper comics goes away….

      It’s going to be a sad and ugly transition, though.

  3. Coming from the retailer, creator, and, well, biological side, there’s a lot in here to dispute and refute. But one thing I won’t argue isn’t the broken nature of the today’s American direct market — thing is, it’s going to be on the publishers (and, really the Big 2) to effect any change. And I fear nobody there is reading thinkpieces like this.

    So I am going to counter with a message of hope, and something that can be done: readers may not be coming back in those “mass quantities,” there once was — but there’s new teen and preteen readers walking in the door all the time. They’re growing, they’re constantly hungry for new stories, they see no differentiation between graphic and prose literature, and their parents support them. The kids devouring SMILE and AMULET and BONE and ONLY LIVING BOY and MOUSE GUARD (now that it’s back in print, whew) are the future.

    1. Yup, the next generation of readers raised on Raina and Kazu will be the one to turn this ship around, perhaps. If they stick around…

      And when they’re not kids anymore, how will they want to digest the material? Kids love print books. (Or, at least, their parents will buy print books for them “to keep them away from screens.”)

      Do they continue to prefer that format as they get older and have their own buying power? Will they love it so much that they’ll go to a comic shop instead of Amazon?

      And can the Direct Market survive long enough to find out?

  4. Augie, unfortunately that was a great article. It’s going to be hard to explain to my grandkids how special bookstore and comic shops were.

    I wonder what will replace it?

    Where will we meet to discuss the new and cool? Will we?

    1. What will replace it? There’s an easy answer — digital comics. But that’s barely scratching the surface once you change the distribution and delivery methods. Once that’s done, many other assumptions we have for what comic books are can be questioned. I’m working on a follow-up piece for that now. I don’t know that I have enough answers/guesses to publish it, but we’ll see how it goes….

      1. I’m not that knowledgeable about digital but I see two main ways this is going.
        There is the Netflix/Spotify model, streaming, where you pay a monthly fee to access everything you want but you don’t own anything. Like a public library. When it comes to books, the notion of ownership is so ingrained in our minds that there is a psychological barrier still. That’s what Comixology does, right?
        Then there is the Apple model in which you pay on-demand and you download the article onto your own local drive. Do you really own it when you do that? I hear there is something called DRM, I’m not sure exactly how that works.
        Could there be a third business model for digital? I wonder. A few years ago, I was considering creating a foundation to host my (too big) collection of books and memorabilia and aside from a physical repository, I seriously pondered if I could maximise exposure by offering a digital access, in exchange for a donation or something. I had to put the project aside to cater to more income-generating matters but this is still in the back of my mind. I’ve been meaning to brainstorm the idea with people who are smarter than I am but that hasn’t happened yet.

        1. I had planned on writing a large follow-up to explain how I thought things would shake out, but I’m not sure it’s that interesting. That said, it’s pretty close to this. A streaming model for comics would win out over everything else if one distributor had stock of ALL comics. But with some publishers being exclusive to various venues, and nobody wanting to give any one distributor a monopoly, it’ll be tough.

          Comixology is basically a streaming service, but one where you can only stream the specific titles you purchased. They do have an “All You Can Eat” streaming service, but the selection is very limited. It’s mostly first volumes of longer series. They use that to reel you in to get you to pay for volumes 2 through 10 down the road.

          DRM stands for “Digital Rights Management.” It’s just the code included with the PDF or CBZ that theoretically prevents a file from being “stolen” or copied or used outside whatever system the publisher intends it.

          If you buy a comic at Comixology, you can only read it through Comixology’s app. Izneo works the same way. That’s not quite DRM. That’s more a proprietary format. DRM is like when MP3s — an open format, basically — wouldn’t work outside iTunes or Google Play because of code embedded into it to make sure you couldn’t use it elsewhere.

  5. Two quick points:
    1. Comic sales are not down year over year according to Comichron or Diamond. Not sure where your numbers are coming from on that statement.
    2. The digital comics reading experience still (majorly) sucks, and will likely continue to suck for the foreseeable future, which is probably why digital sales dropped 10% in 2014 and then stalled. Digital still does less than 10% of what the print market does (which is still a $1B dollar industry, BTW.) It has failed to take any additional ground in the last 3+ years.
    No offense intended.

    1. I disagree on the digital comics reading experience. I’m not sure what else you want from it. You have standard page-by-page viewing and you have Guided View (and assorted other similar technologies from other distributors). I’d like more DRM-free downloads, but I don’t have too many complaints otherwise. And while digital sales may have stalled or plateaued, there’s still significant potential for it to become bigger, quickly. I don’t think you can say the same about Direct Market comic book shops. Like I said, there’s going to be a tipping point someday where digital will be more desirable than print for whatever reason — cost, availability, back catalog, etc.

      Comic sales I’ll need to do more research on. You’re right that on the face of it, the sheer dollars and units are rising, but I have to wonder how much of that is from publishing stunts and tricks like comic book store exclusive variants and other crazy chase cover stunts that DC/Marvel do constantly. And with the Walking Dead book sales coming back down to earth now, there’s a big empty slot in Diamond’s shipping pipeline that’s been full for the past three or four years.

      I wish we had a stat on “Direct Market customers” or “comic book readers.” Because right now it feels like DC/Marvel are selling more books to the same people, particularly with the constant relaunching and double shipping of recent years. That trick won’t work forever.

      1. So basically your saying you wrote an article with out the Actually doing research on actual Direct Market Sales.
        Also your Article is wrong about Print and ebook sales. I suspect you really don’t know book publishing well either. Print is not dying in anyway as of yet, actually many places go on a POD model. And High Profile books still outsell and are still cost efficient for the publishers.
        Sales from Epubs production is a no cost for most publishers that is why Publishers like Random House get slammed for poor E-pub quality.
        Can Print and the Direct market eventually fade away I suppose but if you have seen in the music business new stores are actually selling records again.

        You also forget that Comics is such a visual and tactile medium you don’t get the same response from holding a actual comic in your hand like you do with an digital reader.

        1. You’re making a large assumption here based on your personal experience. The “tactile” part of the medium may not be such a big deal in the future. The next generation might not care that much. Judging by your handle, I’m guessing you’re about 50, right? For you and I — early 40s — yes, paper comics are nice objects to own and stockpile. But we won’t be around forever. We’ll be an ever-shrinking part of the industry now as a new generation is raised on comics, mostly through Scholastic, where the numbers are huge. ( I’ve seen those numbers in my research repeatedly, thanks. )

          Honestly, I’m less attached to those long boxes that clutter up my house now more than ever. I’ve gotten rid of tons of them, many because I know I can always get them digitally later if necessary.

          I think the vinyl world is a very much like the future of comics. A niche industry that attracts a small but fervent community with lots of money to spend. It will always be dwarfed by streaming/digital downloads.

          For example:
          https://www.statista.com/topics/1639/music/

          In a 48 billion dollar industry, vinyl sales account for about $400 million. Nothing to sneeze at, for sure, but also not a terribly large percentage. And the dollar figure is inflated by the fact that vinyl commands a higher price and is often considered a “premium” good — they START at $12, but the big sellers are probably closer to the $30 – $40 range.

          (Trade paperbacks start at $9.99, but Artist’s Editions will run up to $150.)

          The numbers in growth look so huge because they’re starting so small.

          And I’ll argue the upside potential for vinyl sales is far lower than that of digital streaming.

          Vinyl can be a healthy market that sticks around for a long time, but it’s never going to dominate.
          First, they’ll need to update their infrastructure, because they can’t produce enough and it doesn’t look like the manufacturing folks are too excited to start up new plants:

          https://www.austinchronicle.com/music/2014-01-10/the-price-you-pay/

          No, comics aren’t going to turn overnight into a digital good, but there’s enough infrastructure in place now that something big could happen with just a couple of tweaks.

          The numbers on digital versus print in the book world never tell the whole story. You can’t look at it as one big market.

          Print versus digital in the book world is often genre specific. Thriller readers like digital, but cookbooks and coloring book buyers are more likely to want print. Romance readers who devour the stuff are likely to subscribe to Amazon’s all-you-can-eat Kindle Unlimited plan. Art book buyers will want physical books. Computer programming manuals are all digital now, basically.

          Again, the market will decide what format they want their material in. Fiction readers are going digital in a big way. In 2016, it was 70% of adult fiction sales that went digital.

          https://www.writtenwordmedia.com/2017/01/04/top-ten-trends-in-publishing-every-author-needs-to-know-in-2017/amp/

          Also, those eBook numbers don’t count Kindle Unlimited readership and skew away from ebooks and towards print in all sorts of skewed ways:

          https://observer.com/2017/01/author-earnings-overdrive-amazon-kindle-overdrive-digital-book-world/amp/

          There’s also a big problem with ebook sales as far as prices go. Publishers are still pricing ebooks to protect their print sales, hobbling ebook sales. (Sounds like digital comics, doesn’t it?)
          And then Amazon discounts the print books to be cheaper than the ebooks. (Because they can’t change those prices, but it’s Apple that’s the monopoly for setting prices with its single digit percentage of the market. But that’s another story…)

          So, yes, I reject the notion that ebook sales are falling and print is making a comeback, because that doesn’t tell the whole story. I think comics will wind up more like fiction than cook books, but that there will be a smaller but healthy market for comics that act more like art books to be in print. And that the Direct Market, as it exists today, will not be equipped to handle that business model.

          1. “You’re making a large assumption here based on your personal experience. The “tactile” part of the medium may not be such a big deal in the future. The next generation might not care that much.”

            This is clearly true, BUT… my kids GN of the month club (www.graphicnovelclub.com/kids) is growing significantly faster than my adult one, and on the multiple occasions we’re polled our wide membership the kids say they prefer print comics to digital ones by overwhelming margins. So at the end of the day, I figure if the adults are all saying it, and the kids are saying it too, then maybe it’s not a “generational preference” after all.

            There’s literally zero evidence that digital can, is, or should be growing, and a metric ton of evidence that print is solid as heck, and is beginning to make the transition to a wider market all on its own in response to market forces. Markets do tend to work themselves out, provided they’re given time.

            But, man, I’ve been reading “The DM is just about done, here’s your evidence!” articles for, and I am not kidding, literally decades. And we’re still here.

            Look, end of the day, my 2017 sales WERE down. Down 8.5%. That sucks. But it was down 8.5% FROM MY BEST YEAR EVER. “Boo Hoo”, y’know?

            There ARE serious potential threats to the DM — so much so that I am actually worried more today about the market than ever in my life… but it’s entirely from overproduction, and too many publisher’s lack of respect for their own audience in the face of needing ever-increasing gross sales to serve Mammon.

            -B

  6. Not sure what happened to my earlier comment, so I’ll try again. I agree with most of your analysis, but the e-book situation is not as clear cut as you make out. As a librarian, I pay a lot of attention to print book sales vs. e-books. They have seesawed back and forth quarter by quarter; e-books are not the clear winner, so far. But the economics do seem to favor digital over the long haul. Print books have the same economic pressures of printing and distribution costs as print comics.

    1. I love print books, too. I love having bookcases filled with them. I’m just not sure about the upcoming generations who’ve grown up on the internet. I don’t think print will ever go away completely, but I think ebooks will continue to rise. The question is, when will it get institutionalized? When will ebooks be more the norm in education, for example? I know it’s happening in some places, but not widely enough yet. (Tech start-ups have been founded on renting paper textbooks, for goodness’ sake.) I know airplane cockpits have replaced heavy bags of manuals in some cases with an iPad. It needs to hit those areas of mass adoption to really gain steam.

      This is a decision that you and I likely won’t make. And I may be proven completely wrong by the Raina generation, who like those small books in their hands. (I may just be bitter in that I’ve always liked BIG books, and those don’t work, economically…)

      So, yeah, we’ll have to wait and see how it goes. It’ll be interesting. Whatever happens, I’m still going to be reading comics. =)

      1. Maybe saying I’m a librarian obscured my point a bit: I prefer e-books myself. And I like reading comics digitally, too, now that I’ve got a ten-inch Fire HD tablet. But as you say, it remains to be seen how this will shake out. I don’t see print books disappearing anytime soon, but I do expect them to become more of a niche item. PDFs have almost completely replaced users manuals already.

  7. Speaking as a guy who saw this happening from the inside, the direct market was a good idea but should never have been the ONLY idea. The companies chose between newsstand distribution and the comic shops when they should have kept both. Newsstand was the entry point for readers who would never have gone into a comic shop as their first exposure. And there were LOTS of titles that sold well on the newsstand and poorly in the shops and vice versa. So, when the spinracks were abandoned for the “bag and board” places, they left a lot of readers behind..
    Funko Pops will not save them.

    1. Could they have worked something out, though, where only the newsstand-friendly titles would survive? Or was it a case where the distributors just didn’t want anything at that low a profit margin point on their stands? I started reading comics from the local stationery store newsstand, so it worked for me. If there were ONLY comic shops when I started, I’m not certain I ever would have. Did comics shoot itself in the foot by pulling out, or did the newsstand distributors — which have always been a shady, curious, and occasionally corrupt lot — push comics out?

      Don’t worry about the Funko Pops. By the time they fall out of favor, the Rise of the Pogs II will save the Direct Market for six months or so. Nostalgia always wins. 😉

      1. Comics publishers did keep both. From January 1982, when Marvel moved low-selling Ka-Zar, Micronauts, and Moon Knight to Direct-Only, until last year, both markets existed.

        It’s the comics publishers who left that market. Both Marvel and DC added a dollar to the cover price to mitigate against newsstand returns, and it still didn’t work.
        Archie remains, because they know how to market their magazines, the nostalgia factor is there, there’s little soap opera in the original stories (unlike the never ending battles in superhero comics), the stories are accessible and not controversial, and it’s easy for a casual reader to pick up a copy and have a fun time.

        Marvel and DC do NOT have newsstand-friendly titles. Oh, wait… DC has Scooby-Doo and Looney Tunes. Marvel, via Archie, has their digest. Cartoon Network? Disney XD? Not Marvel, not DC.

  8. “Boom! (who already absorbed Archaia) is owned by FOX now.” – I thought Fox only owned a minority stake in them?

    1. It’s “a significant minority stake.” If there’s one thing I’ve learned from watching tech start-ups over the years, though, it’s that once you bring investors in, it’s not your company anymore. It’s a little different with Boom!, in that there is a lot of creator ownership with some of their titles, so it’s a little less absolute. But, still, it’s another case of a comics publisher funding their efforts through Hollywood and not publishing.

  9. @BrianHibbs — Sorry, it looks like the software caps responses to five levels deep, then we need to restart, I guess. You bring up good points on everything, and I can’t really argue with too many of them. We just need to see how the new markets pan out, and how digital reading progresses in the years ahead. Cross our fingers…

    I think you’re particularly right about the publishers’ role in all this at the end there. And while I mentioned it briefly in my article, I should have covered that more. The need to report quarterly profits EVERY quarter warps the way the publishers play the game. They’d sooner break the whole market than sacrifice some imaginary sales number the bean counters came up with. And so they continue with the weird cover schemes, incentives, and pricing.

    What I wish we had more than a “Sales Dollars” and “Unit Sales” figures is an actual number of Direct Market comics customers. Are there new readers coming in? Or are we, indeed, just milking the customers who are in the prime earning years of their lives and most likely to spend more money than they should? Are these alternate covers and other schemes just artificially inflating the annual sales growth? How long before that becomes a house of cards?

    But most of all, what I’d like to know is what’s going on at Marvel with these 99 cent digital books? Are they just pushing it as far as they can go to see if they can entice people into the digital realm? Will we ever get a straight answer? Probably not. =(

    1. Well, Marvel says it’s Amazon/Comixology which, to be honest, is a believable Amazon practice.Why is Amazon doing it? How much of a loss are they willing to take to pull comic book readers to the digital world? This is a never-ending stream of questions….

  10. I see lots of new faces coming in; no way to be certain if this true for other stores.

    EVERY publisher says, over and over again: “digital is not growing, it’s not a very significant part of our business”. This tracks 100% with what consumers tell me too — I hear “I saw this digital, and I’m here for the ‘real’ version”, ALL the time.

    I believe there is something unique about comics for most of the current and new readership.

    -B

    1. Yeah, the first shot has been fired. I’m just not sure yet what to think of this deal. There’s a lot of details we haven’t heard yet that I’m waiting for.

      I am, as always, laughing over the idea of “binge comics reading” when we already have trade paperback collections of series. Amazon in its marketing is sticking to some old fashioned terminology to try to sell their fancy new technology. It will be interesting to see if this goes somewhere or not.

      I’ll be watching, of course. I’m an Amazon Prime member, so I should be getting some free comics out of this, at least. I just don’t know how many of them look interesting to me.