Is this for real? DC Cuts Ties with Diamond Comic Distributors 5 5

[jcjames]

I'm not in the business, just a collector, but my favorite LCS did cut ties with Diamond over a year ago, no more new issues, only back issues. He would tell stories about dealing with Diamond... ugh.

But I do find the idea of Diamond's monopoly on distribution in the US (for what, 1600 LCSs nationwide?) for so long to be just fascinating. 

 

Edited June 5, 2020 by jcjames

[badback83]

Isn’t one of the new distributors Midtown Comics, different name of course.  I’ve spoken to a few local shop owners that aren’t too thrilled about it.

[Myowncollector]

Good luck dc. I am bi. But a lot of people I know are straight marvel. Most others buy more marvel. Variant hunters and speculators are a big part of new comic sales. I don't think digital only will make enough in order to pay the top artists. I know people who read digital comics and they get them like they get their music and movies. 

Personally it doesn't effect me at all. Haven't bought a new comic in years. Was going to start picking up a few. But so many back issues out there. A lifetime of reading is available for 50 cents a issue instead of $4 or $5. Comics are too expensive for me. I can afford it but rather wait a bit and they will be dollar bin items. 

My prediction dc keeps printing comics. If they ever stop marvel sales will jump up so fast. DC digital will fail. They will go back to print and fail. Will sell comic rights to a small publisher to use their properties. There will be print comics for at least another 50 years. 

[JollyComics]

Marvel and DC were fine long before Diamond.

Wait and see how DC is doing on their own.

[KolmarAvenue]

2 hours ago, AstuTE said:

Please don't take this wrong, but what are you talking about? Is this something ever LCS owner does/will have to do?

Hi,

In my estimation each retail shop will have to:

1. Open an account with each of DC's new distributors. Typically you'll have to get an application form, fill it out, and then complete an initial order form, most likely with new account restrictions/net 30/costs/application fee/ cc#, forward proof of brick and mortar, and determine discount level based on your order(s).

2. If you also have an online site that allows your customers to order/subscribe to new floppies then it's going to be more complicated for your shop. Now your shop has to deal with a new distributor who probably has an entirely different model and spreadsheet format that you have to customize/format into your uploads when ALL have bee setup for Diamond formats. THIS IS A SYSTEMIC CHANGE FOR YOUR SITE DEVELOPERS. Apologies for the all caps rage there! Really this is going to F u p every comic website offering/previewing new releases on the planet. Thanks DC! Your shop is going to miss some orders, miss pull list books-statues-preorders due to this so don't get angry at them.

3. Adapt  to this new model. (keep in mind, most shop owners are a bit old school)

4. Be open on Mondays (the most often closed day of the week for comic shops) AND host 2 New Comic Book Days according to rumor. I've heard that DC books will be available each Tuesday.(so staff must be present and prep on Monday.) All of us know that new comic book day is Wednesday (Diamond releases) that arrive on Tuesdays for sale on Wednesdays which would incite customers to come to the shop for 2 consecutive days for new releases. That's a recipe for disaster. What will be the new accepted closed day for a small LCS?

-------------------------------------------------------------

Based on this change by DC, the comic book industry has entered an entirely different model. We've had a variety of ages, Gold, Silver, Copper, Modern, and now Post Diamond. 

 

 

Edited June 6, 2020 by KolmarAvenue
rant

[paperheart]

chuckles has weighed in:
 

DC SUCKS! 50% Off Codeword Sale Begins - Read why...

Howdy!

I was going to take this afternoon off, as I came in early this morning and spent four hours in 90 degree heat weed-wacking the Jason St. parking lot. My relaxation plans were all shot to hell, however, when DC Comics blindsided everyone at noon by sticking a shiv into the back of Diamond Comic Distributors, and Diamond founder, Steve Geppi.

To say that I am seething with rage right now, is a total understatement. I actually saw this coming a couple of weeks ago, but was hoping against my own common sense that the new owners of DC (AT&T) would come to the realization that keeping Diamond alive was critical to the revival of the 2,000+ Direct Market comic book retailers who serve the core of their most dedicated readers. Instead, my own predicted worst-case scenario is now unfolding, with DC announcing this afternoon that they are severing all ties with Diamond Distributing, effective in three weeks.

So, what do the new kingpins at DC think that they are doing? Well, first of all, they want to drive more business to their online channel. Second, they think that they can do just fine on their trade paperbacks and hardbacks selling them to traditional bookstores through their distribution relationship with Penguin/Random House. Third, their recent "experiment" of selling $9.95 pseudo comic books through Walmart and Target has shown them quite clearly that they can generate massive comic book sales without a single comics specialty shop remaining in existence.

Steve Geppi

All of those factors are serious, but I think that DC's real issue is money. AT&T paid one hundred and eight billion dollars ($108,000,000,000.00) to buy Time/Warner just 18 months ago. The exact amount that they paid in cash is unknown, but some portion of that purchase amount was an assumption of existing Time/Warner debt. Nonetheless, the debt service on those loans/bonds is easily six billion a year, and quite possibly more. Sadly, they won the bidding war on this incredible deal just in time for the pandemic to slam Time/Warner's business into the ground, and thus reduce revenues drastically. Simply put, the managers at AT&T are now in a horrible bind. They need immense amounts of cash flow to service their debt, and they need it immediately.

Meanwhile, while everyone at DC is freaking out because their entire ship is in danger of sinking in their self-created ocean of debt, Diamond Distributing sends out a letter to all of their vendors telling them that, instead of being paid on time for all of their products that were long-since shipped by Diamond, they will receive small incremental payments on the monies owed to them, over a period of 13 weeks.

As I am sure that you can well imagine, that letter from Diamond really was the death knell for their relationship with DC. Management in the past would have had fewer options, and far more loyalty to the long-term Diamond relationship, but these new guys are terrified that they are all going to be fired, so they want out. Now. Immediately. And they could care less about who is going to wind up as collateral damage. They are only concerned about saving their own sorry asses, and no one else matters. Absolutely typical self-serving NY financier/Wall Street BS.

So, what does this all mean? Honestly, I do not think that anyone knows for sure. DC is trying to force all Direct Market comics shops to now order their weekly publications from a couple of lame- pseudo-distributors that they have self-anointed. We saw Marvel try this exact same stupidity with their Heroes World debacle, in 1998. They lost millions in short term revenue, and even more from the debilitating effect that it had on their market share and their brand.

DC kills again for money!

Of greater importance to me is the future of periodic comic books, and the retailers who can only cover their operating costs by selling those new issues. Frankly, my first instinct is to say that they are all dead, and that the party is totally over for new comics. Diamond Distributing is certainly at immediate risk, as losing their #2 product line (in an already depressed market) is a catastrophic loss. To use the phraseology of Wall Street, their ability to continue as a going concern is now in great doubt.

The same is true of every comic book store in America, as the horrors of our Heroes World experience showed us all what an unmitigated disaster results from trying to coordinate multiple shipments from multiple distributors. It is an absolute nightmare. Not impossible by any means, but still an exercise in raw misery.

Truth be told, my greatest concern with the future of the Direct Market retailers revolves around money and/or credit. With so many stores having been shuttered for eight weeks, or longer, who has the means remaining to establish credit lines with these new "distributors," while simultaneously meeting their existing obligations to Diamond? Truthfully, this is a perfect storm of disasters for Direct Market retailers. Some stores will most definitely survive, but thanks to the unilateral decision today by DC Comics, I think that number of surviving entities was just reduced drastically. It is a sad, sad day in the history of comic books.

As regards Mile High Comics, I believe that we are going to be just fine. I was nearly four million dollars in debt nine years ago (including a million dollars! in outstanding Diamond invoices), and deduced that my operating losses were mostly resulting from unsold new issues that we ordered for our clients, but which they then failed to purchase from us. Simply put, I started reducing new comics as a key element of our company product mix, and immediately saw things turn around for us. We paid off most of our company debt through the sale of our 56th Ave. building three years ago, and (finally) paid Diamond totally off last week. I will never again (ever) go in debt for new comics.

Chuck going through one of the thousands of comic deals made over the years.

So you know, we are doing reasonably well right now selling back issues and books online, and operating our awesome Jason St. Mega-Store with a focus on families and pop culture products. I plan to still be around to serve you for many years to come, and we are actively buying collections every day with that future prosperity in mind. Meanwhile, however, I feel very badly for Steve Geppi, as he is my dear friend, and he also generously helped us in so many ways to stay in business during those years when we were down and out. I wish that there was something that I could do to help him right now, but the new guys at DC have come for him with their heartless knives, and all I can do is to watch the resulting carnage in dismay and horror. The cruelty of his fate is very hard to bear.

Your friend,

Chuck Rozanski/Bettie Pages,
President - Mile High Comics, Inc.
June 5, 2020

P.S. I am beginning a 50% off back issues sale today with the codeword DCSUCKS! I make no apologies for the forthrightness of my codeword choice, as I am rightfully and truly pissed off. The 50% off DCSUCKS! Codeword applies to all ten million+ of our back issue comics and magazines, including an awesome collection that Pam purchased this morning. Those key issues will be in our Premium New-In-Stock link at about 10 AM tomorrow (Saturday) morning. Only new issues, my few variants, and our professionally-grade comics are excluded. Please stay

[Prince Namor]

Marvel's Heroes World destroyed nearly half the Direct Market as it was coming off the most profitable era it had ever been through. This... this is going to be an issue for LCS's...

[Myowncollector]

Oh wow 50% off. I am going to buy a ton of books there now. Sweet deal. 

[lighthouse]

I’ve tried to let this simmer for most of a day. But mostly I’m disappointed in DC.

They’ve been sending out emails like a petulant child for weeks and have been less and less a partner since March. Every single other publisher has pulled together and made it clear that all of us, Publishers-Distributors-Retailers, are links in a chain between creators and the customers who love their work. Either all of us succeed or none of us do. Marvel, Image, IDW, Boom, Dynamite, Valiant, Aspen, Aftershock, Titan, Oni Press, you name it. All of them in the huddle with us. One team. Together.

And here’s DC sending emails that are the equivalent of a football player at the podium in the post-game saying “man we could have won if our quarterback didn’t suck”.

I don’t care whether DC and Diamond ended their relationship. You need to make a business decision as a multi-billion-dollar company, you make it. But no sophomore marketing major would have approved the emails DC has been sending out. I can’t believe there are functioning adults involved in keeping them on brand right now. You’re the publisher of freaking Superman. Act like it.

When I opened my current shop a few years ago we had a standing policy that I would order at least two shelf copies of every Marvel and DC book no matter how badly it was selling, and at least one shelf copy of every title from Image, IDW, Valiant, and Boom. I’ve wasted money every month on supporting dreg DC monthlies and miniseries. But no more. I’ll pick out the top 10-12 DC books each month and those will be the only ones I shelve. Currently my DC recent releases take up 66 slots on the rack (out of around 300 total). They’ll get 12 going forward. And the other 54 slots can go to other publishers. I’ll fill any subscriber orders. But I’ll spend my shelf dollars with publishers that are partners.

And no, DC, I’m not putting out your books on Tuesdays. They’re going out on Wednesday with everyone else. Your new releases represented 8.4% of my shop’s revenue last year. I’m not designating a special day every week just for you.

[lighthouse]

To give a concrete example of the lack of thought from DC lately:

Diamond has distributed statues and action figures for DC for decades. These items are a significant component of most comic shops’ aggregate spending with DC (which determines the discount received on periodicals).

Nowhere in the email from DC today are statues and figures addressed. Retailers are directed to two new distributors for floppies and trades, or to PRH for trades. No mention is made anywhere of statues that are FOC’d six months ahead of shipment.

[Juno Beach]

My LCS was already having problems with shipping costs. This will probably break him. He sells gaming cards too and I can see him just stop selling comics altogether.

[Myowncollector]

1 hour ago, lighthouse said:

Your new releases represented 8.4% of my shop’s revenue last year.

Always like to see people take a stand. That is such a small percentage I wouldn't give them any shelf space. You are nicer than me. I would take care of my subs, order a few extra copys of top sellers in case someone ask and slowly make my shop so its like dc doesn't exhist. Ordering books that you knew wouldn't sell, again nice guy. Wish your shop luck. 

Personally dc has to do what they feel is best. Bad time to do it. And wanting shops to put out their books on Tuesday is bs. Trying to undercut the competition. Shady move imo. A lot of shops take Monday off. And how much extra will your shipping cost will be because of this. 

[oldmilwaukee6er]

Fascinating... Just saw Chuck's email

In before the crash   

 

[kimik]

The big question is what is Marvel's plan now. I would imagine they are looking at alternate distribution arrangements as well given Diamond's recent troubles and shut down during the pandemic. The fact that most stores were open for business while Diamond was still closed was a bad business decision as a distributor. I don't blame DC for looking at alternatives when the current incumbent has been struggling and is not providing reliable service.

FWIW, stores here were allowed to stay open for curbside and mail order/online sales, and my file LCS said that they saw sales and profitability jump without weekly books. The reason - they made a big push towards TPBs and GNs two years ago and with people stuck at home they were ordering more of both online. Not having the weekly shipments single issues reduced their costs significantly. A couple of other stores that primarily do back issues sales did well with their eBay and weekly FB auctions, as well as online sales as they could still do curbside or mail order delivery. The stores that depend on gaming and weekly new books suffered and are still struggling. 

This also furthers the trends towards GNs/TPBs and digital rather than monthly single issues. Marvel announced a number of titles going digital now that will be collected in TPB format later - no single issues will be released. I wonder what the monthly sales cutoff will be for that decision going forward? Soon enough, will we only see the top 15-20 titles for each company coming out as single hard copies, with the rest going digital? 

 

Edited June 6, 2020 by kimik

[kimik]

6 hours ago, paperheart said:

Meanwhile, however, I feel very badly for Steve Geppi, as he is my dear friend, and he also generously helped us in so many ways to stay in business during those years when we were down and out. I wish that there was something that I could do to help him right now, but the new guys at DC have come for him with their heartless knives, and all I can do is to watch the resulting carnage in dismay and horror. The cruelty of his fate is very hard to bear.

 

So this is the only salient point here. Chuckles issued his rant to stand up for a "friend", likely only due to Steve giving him such generous terms on a $1M debt (WTF - do they have chimps punching random numbers when ordering?). The new guys at DC had an easy decision to make - go with a more reliable distributors who are willing to get product to market during COVID partial shut downs (and plan for a potential future shut down in the fall if there is a bad second wave of infections) and are not having financial struggles, or stay with Diamond. While I feel bad for LCS owners as this adds a layer of complexity to their lives, it was an easy decision to make. 

[kimik]

4 hours ago, lighthouse said:

To give a concrete example of the lack of thought from DC lately:

Diamond has distributed statues and action figures for DC for decades. These items are a significant component of most comic shops’ aggregate spending with DC (which determines the discount received on periodicals).

Nowhere in the email from DC today are statues and figures addressed. Retailers are directed to two new distributors for floppies and trades, or to PRH for trades. No mention is made anywhere of statues that are FOC’d six months ahead of shipment.

 I am sure they will figure out a way to do it. Does someone other than Diamond distribute figures to Walmart and Toy stores? 

Edited June 6, 2020 by kimik

[GeneticNinja]

I said it before when shipping stopped and I checked Midtown, I was surprised how just about everything comes from Diamond. For me monopolies are rarely a good thing. So let's see how this new process works.

[Tec-Tac-Toe]

Whenever DC Comics decides to stop publishing "hard copy" comic books I'll have an extra monthly $40.00 to spend on back issue comic books.

Detective Comics #27, here I come.

[Bookery]

2 hours ago, kimik said:

So this is the only salient point here. Chuckles issued his rant to stand up for a "friend", likely only due to Steve giving him such generous terms on a $1M debt (WTF - do they have chimps punching random numbers when ordering?). The new guys at DC had an easy decision to make - go with a more reliable distributors who are willing to get product to market during COVID partial shut downs (and plan for a potential future shut down in the fall if there is a bad second wave of infections) and are not having financial struggles, or stay with Diamond. While I feel bad for LCS owners as this adds a layer of complexity to their lives, it was an easy decision to make. 

This is wrong on many levels.  Diamond literally saved the market.  And now 2 months later DC is doing what it can to wreck it.  ALL of Ohio was shut down for 2 months, and even curbside delivery wasn't allowed for much of that time.  I just saw where Midtown Comics itself is only this coming Monday being allowed to do curbside business!  California is still mostly shut down.  If we had continued to receive $40,000 in retail product while being unable to sell it, we wouldn't be around.  Diamond did the best thing they could have done under the circumstances, and the gradual releasing of product is helping those states still under lockdown.  New-release comics make the smallest percentage profit (if any) of any product we carry.  They take up a lot of staff time and energy.  If Diamond goes under, the resulting chaos will make them not worth dealing with at all.

[Prince Namor]

3 hours ago, GeneticNinja said:

I said it before when shipping stopped and I checked Midtown, I was surprised how just about everything comes from Diamond. For me monopolies are rarely a good thing. So let's see how this new process works.

The monopoly was CREATED by this type of situation.

https://en.wikipedia.org/wiki/Heroes_World_Distribution