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

[lighthouse]

To clear up a few misconceptions from earlier in the thread...

There aren’t 1400 comic shops in North America. Current (pre Covid 19) number is over 2700.

And at least 80% of them were closed to browsing in April. Curbside service is a fine model if you’re driving to a shop to buy a copy of Infinity Gauntlet, turning around, and going home. But it isn’t “being open for business”.

The contract between DC and Diamond had its expiration date coming and needed to be renewed. This wasn’t a “Diamond decided to pay us late, quick find a different option” decision.

Everyone points at Midtown, but for the record DCBS is actually a bigger Diamond customer.

Titles were canceled and delayed by other publishers because that’s what we asked them to do. Publishers reached out to retailers and asked what they could best do to support their retail partners. Did we want bigger discounts, more returnability, fewer titles, something else? They asked. And we told them. Our best route to ordering lots of product from them in 2021 and seeing nice profits for everyone next year was for them to publish fewer books during the summer of 2020. We gave them that feedback. And every publisher other than DC said if that’s what you need, that’s what we will do. (Several also gave large discounts and/or returnability. Marvel gave my shop a backdated discount that amounted to a $2,000 reduction in my cost.)

I don’t love Diamond. Being a small business owner who is also a de facto Diamond employee has never sat right. But Diamond’s infrastructure is the product of decades of improvement and it works really really really well. My damages most weeks are so small it’s not worth the time to even report them for replacement. Diamond introduced new shipping boxes just before Covid that have no bottom seam and allow comics to be unpacked from flat stacks rather than reaching in, grabbing a chunk and pulling them out (adding bends to the books in the process). Diamond maintains a dozen drop points around the country to reduce shipping costs, trucking full trailers across the country and only using UPS for the final 1-2 days of the journey. If you’re lucky enough to be in a drop point city your freight charges are often under 2% of retail. Even folks at the perimeter of the system rarely see a shipment with freight charges over 6% of retail. (I got to see the full impact of the difference last week as we had a weekly shipment handled by UPS from the point of origin and my freight charges were 13% of retail).

Are DCBS and Midtown scaled to take on 2700 new accounts with a median volume of $1200-1500 in retail product week in and week out? What are the chances that two competing distributors simultaneously both built out enough capacity to smoothly transition to taking on that kind of volume?

I suspect Donut is right. And this is a stopgap measure on the road to ceasing print. I suspect that the powers that be decided they wanted to end print sometime in the next 12-18 months and rather than re-up on a new longterm deal with Diamond they are using Midtown and DCBS while they run out the string. I strongly doubt they gave Midtown the discount they used to give Diamond. Midtown most likely offered to meet them in the middle, letting DC keep a larger share of the revenue. That’s the sort of choice you make when you’re looking for short term profits rather than long term stability.

Making major announcements that take effect the next business day isn’t something a longterm partner does. If your employer decided they were going to rearrange the office plan and your office was moving to another floor, would it affect your opinion of them if they didn’t tell you until Friday morning that it was happening Monday?

[Bookery]

30 minutes ago, Hieronymus Bosch said:

The monopoly was CREATED by this type of situation.

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

Exactly.  And for those crying "monopoly", that effectively ended a year ago when Diamond agreed to DC's terms about no longer being exclusive.  DC took advantage of those terms 2 months ago and added DCBS and Midtown as distributors.  Diamond was no longer exclusive with DC, and customers could choose their distributor for their product.  So why now cut out Diamond altogether?

 

[Prince Namor]

In 1993, there were approximately 11,000 Diamond accounts and somewhere around 6,000 comic books stores. After the Marvel Comics Heroes World Distribution debacle there remained roughly HALF of those shops.

Today, according to them (well 2016), Diamond ships to approximately 2,306 stores in North America.

[EC Star&Bar]

Troubles for comic shops actually began in late 1992 with DC's Death of Superman fiasco.  When investors realized that the character would return and their bagged 75s had no value, and the enhanced covers of other titles proved non-collectible/over-produced, they exited.  Coupled with outrage from new or casual fans, the loss of investors and those others who left the hobby crippled smaller retailers and many had to close.

I realize the Heroes World goings-on was a major contributing factor, but an unhealthy market situation had begun growing worse and worse some time earlier.  Another factor, beginning in the late 1980s, was overproduction of sportscards -- which flooded the marketplace (on into big retailers) and adversely affected the many "Comics & Cards" shops in the U.S.
 

 

[Prince Namor]

55 minutes ago, lighthouse said:

I suspect Donut is right. And this is a stopgap measure on the road to ceasing print. I suspect that the powers that be decided they wanted to end print sometime in the next 12-18 months and rather than re-up on a new longterm deal with Diamond they are using Midtown and DCBS while they run out the string.

The industry has kept digital sales numbers secret for the last 5 years, to milk the print system as long as they can. According to Comichron, the last numbers we have are in 2015, not including subscriptions sales, they were at $90 million. That's roughly 10% of what print comics' total for the year ($940 million including bookstore, book club and newsstand sales, but excluding library sales) and nearly 16% of what Diamond's North American sales were for the year (Comics, GN's and Magazines).

That number of digital sales has very obviously gone up since then.

Will DC take a hit in losing some customers who abandon their monthly titles? Yes. Will they MORE than make up for it by cutting out the middle man, eliminating shipping and operating cost, and increasing profit per issue?

Very much so. 

This is the first big step toward the elimination of monthly print comics.

And thus... the comic book shop...

Edited June 6, 2020 by Hieronymus Bosch

[mysterymachine]

11 hours ago, KolmarAvenue said:

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

This may be a dumb question but why won't the comic shops hold the DC Books for 24 hours and continue to put them out on Wednesdays? Do Buyers absolutely need to get them on Tuesdays? I think all stores should agree to adopt this rule. It will simplify things for the buyers as well. 

Not that this will solve the biggest issue however which will be how Diamond will survive with less money coming in.

[comicstock]

Just to make it even worse...didn't UPS just announce a rate hike recently?

[Prince Namor]

2 minutes ago, EC Star&Bar said:

Troubles for comic shops actually began in late 1992 with DC's Death of Superman fiasco.  When investors realized that the character would return and their bagged 75s had no value, and the enhanced covers of other titles proved non-collectible/over-produced, they exited.  Coupled with outrage from new or casual fans, the loss of investors and those others who left the hobby crippled smaller retailers and many had to close.

I realize the Heroes World goings-on was a major contributing factor, but an unhealthy market situation had begun growing worse and worse some time earlier.  Another factor, beginning in the late 1980s, was overproduction of sportscards -- which flooded the marketplace (on into big retailers) and adversely affected the many "Comics & Cards" shops in the U.S.

You make a good point, but actually, 1992 was when the sales started to really climb. The market went from $300-350 million in 1991 to $500-550 million in 1992 to $750-800 million in 1993. When they 'declined' in 1994 to $650-700 million(!), there were 1000 ACCOUNTS that closed - not necessarily comic book shops - but Diamond accounts. Baseball card shops, individual accounts... that was what made up the majority of these, though I'm sure some stores did close - I agree with you.

Though obviously not the only factor, Turok #1 in particular gets a lot of the blame for 1993, because in April of that year it was purchased in HUGE speculation quantities by retailers (and card shops and individuals) and it was a big dud. That caused the market to start to question itself and suddenly people were trying to cash in their Death of Supermans.

MOST of the QUALITY comic book shops didn't necessarily get side swiped by this or at the very least had the means to over come it.

What ended up destroying a good portion of actual decent comic book shops though, some stable ones that had been around for years... was the Heroes World debacle. 

[Prince Namor]

30 minutes ago, mysterymachine said:

This may be a dumb question but why won't the comic shops hold the DC Books for 24 hours and continue to put them out on Wednesdays? Do Buyers absolutely need to get them on Tuesdays? I think all stores should agree to adopt this rule. It will simplify things for the buyers as well. 

Most New Comics have a life expectancy of about 7 days. Not putting them out for a day, when your competition, including Walmart or a book store or people who buy from DCBS directly, will take that sale away and you'll be stuck with a book.

Truth is, DC sees the Direct Market now as an additional unnecessary step to their DIRECT (i.e. digital) line of profit to the customer. 

And the comic shops, already reeling from a soft market are in no position of power to fight them. Well, a few big ones might, but... the writing is on the wall.

Make as much as you can now.

Edited June 6, 2020 by Hieronymus Bosch

[Prince Namor]

Realistically, this attitude form DC isn't anything new. The Big Two have always had a downward sneer toward the Direct Market. And the Direct Market has always dropped its drawers for the Big Two since day one (No returns, minimum purchase amounts, etc.). That's why it gets no respect.

You can't be a cheap whore for decades and then one day start asking for a bit of respect.

Every time I ever talked to Marvel, their attitude underneath that salesman smile was "Why don't you guys just order the maximum of everything? It will EVENTUALLY sell!" THAT was what publishers believe - the problem with the industry was that shops UNDER order THEIR product. 

And customers miss out. "That's why sales aren't as good!"

So it's inevitable (in THEIR minds) that they take matters into their own hands to sell directly to the customer. We thought at one time it would be free standing stores or Disney stores or WB stores, but... it'll be digital.

It seems an unrealistic possibility but... think about how quickly movie rental stores disappeared and music stores... me and my son used to go on road trips back in the day and stop by every used music store, used CD store, comic book shop.... they were in every small town we'd go through.

Now... there'll be none of that left...

[lighthouse]

52 minutes ago, Hieronymus Bosch said:

Most New Comics have a life expectancy of about 7 days. Not putting them out for a day, when your competition, including Walmart or a book store or people who buy from DCBS directly, will take that sale away and you'll be stuck with a book.

This is not the case. I see around 26% of shelf sales the first week. Weeks 2-4 range around 10-12% each. Weeks 5-8 around 6% each. Weeks 9-12 around 3% each.

Less than 10% of my subscription customers come in consistently on Wednesdays. The few that do are disproportionately higher tickets as you would expect. But my most common subscriber transaction is a customer who comes in every 2-3 weeks on a day convenient to them, who then supplements their pull with books off the rack that came out in the last 2-3 months.

I have lots and lots of “only comes in on Friday” or “only comes in on Sunday” or “only comes in on Thursday evenings” etc customers.

The only DC customers I will miss by not shelving my books on Tuesday are flippers. 

[lighthouse]

1 hour ago, Hieronymus Bosch said:

This is the first big step toward the elimination of monthly print comics.

And thus... the comic book shop...

Companies like IDW and Boom have been profitable and growing the last several years. Selling print comics. With none of the built in advantages DC has with two of the most recognized characters in the history of fiction.

They’ve been taking market share from DC for three years now (Marvel is essentially unchanged) because they’ve been publishing stories worth reading.

83% of my subscription customers do not subscribe to a single DC title. Those folks will be completely unaffected if DC ceases print publication. If anything there will be more shelf space available for the horror and sci-fi and fantasy and robot and crime and thriller and licensed-TV/movie comics they love to read.

If DC can’t sell floppies profitably with Superman and Batman in their stable, when Boom and IDW can? That says a lot more about DC than it does about the direct market.

[Bookery]

We have spent the last 24-hours debating our options.  I considered dropping DC altogether.  Like has been said, in the end, they are not that big of a % of sales.  But in deference to our long-standing file customers (some with us for 30+ years) we'll grit our teeth and order them (but only a few issues will likely be stocked for the shelves, freeing up space for other things).  But the new system is on a very short leash.  Any major problems, and hassles in the next couple of months, and they're gone.

The real problem is what happens to Diamond.  I think they can withstand this, as long as Marvel doesn't do some knee-jerk response and mess things up as well.  Our traditional box, boards, and bags supplier has been acting rather shaky since even before the Covid situation.  So we are switching much of that business over to Diamond, and for our account, that will help make up a chunk of the DC loss on Diamond's end.  Diamond can make the effort to carry even more product... sign new agreements with T-shirt manufacturers, toy companies, etc.  If Diamond didn't survive, we can still make it without ANY new comics... we do a big business in vintage collectibles, and frankly I'd be freed up to spend more time in that area.  The problem, however, would be what a Diamond collapse would mean for Alliance.  I'm going to guess that DCBS and Midtown aren't in a position to do large-scale gaming distribution.

[bb8]

1 hour ago, Hieronymus Bosch said:

Realistically, this attitude form DC isn't anything new. The Big Two have always had a downward sneer toward the Direct Market. And the Direct Market has always dropped its drawers for the Big Two since day one (No returns, minimum purchase amounts, etc.). That's why it gets no respect.

You can't be a cheap whore for decades and then one day start asking for a bit of respect.

Every time I ever talked to Marvel, their attitude underneath that salesman smile was "Why don't you guys just order the maximum of everything? It will EVENTUALLY sell!" THAT was what publishers believe - the problem with the industry was that shops UNDER order THEIR product. 

And customers miss out. "That's why sales aren't as good!"

So it's inevitable (in THEIR minds) that they take matters into their own hands to sell directly to the customer. We thought at one time it would be free standing stores or Disney stores or WB stores, but... it'll be digital.

It seems an unrealistic possibility but... think about how quickly movie rental stores disappeared and music stores... me and my son used to go on road trips back in the day and stop by every used music store, used CD store, comic book shop.... they were in every small town we'd go through.

Now... there'll be none of that left...

I may just be old, but, to me, the experience of reading a comic book is intrinsically different than listening to music or watching a movie. I don't care about owning a physical copy of music or a movie such as a record, cd or dvd. But, for whatever reason, I don't like digital comics. At all. Someone gave me a digital copy of something like 100 Marvel and DC comics a while back, but I've read barely any. I don't want to sit at a computer screen or even scroll through a tablet to read them. The 'digital' experience is far inferior to holding the product in 3 dimensions. However, I may just be a hold-out. I don't like digital books either. I'd much rather read a paperback.

[Myowncollector]

43 minutes ago, bb8 said:

However, I may just be a hold-out. I don't like digital books either. I'd much rather read a paperback.

Not just you. Not by far. I want physical everything. I can't think of anyone I know who buys digital comics. I know people who read them for free. Know people who bought the book and used the code. Small %. They want the physical book. I have held social media sales and lots of teens and 20 somethings buying non key books and full runs. If dc stops printing, marvel will take over their share of the market. If marvel stops then there will be a problem. Other companies will make books but a lot of people want their known super heroes. Sure people buy digital comics but not enough. They weren't being nice giving out those free digital comics, they were trying to get people open to the idea of them and failed. Video game industry is same way, wants nothing more than for people to abandon the physical copies. Market has spoken, they don't want it. 

[Bookery]

6 minutes ago, Myowncollector said:

Not just you. Not by far. I want physical everything. 

I'm the same way.  I won't stream movies.  If they don't put it out on DVD/Blu-Ray, then I won't watch it.  This is mostly from a collector mentality... the desire to own a personal library.  But there is a practical side to it as well.  If media... literature, movies, music... is only available in digital format... then it is subject to being endlessly altered.  Ideas of what is PC changes with every generation.  In theory, whomever is in power can alter material to meet its needs.  Bradbury saw book-burning as the method for those in power to keep information controlled.  He could not have foreseen that burning books is unnecessary when it's even more effective to alter them for your purposes.  "1984" becomes a book about how benevolent Big Brother helps a beaming and thankful Winston Smith achieve happiness and success.  Did Han Solo shoot first?  Of course not... their conflict was resolved with a game of checkers... it's right there in the movie!

[Myowncollector]

7 minutes ago, Bookery said:

Did Han Solo shoot first?

That's not the main reason why I do it but good points. Glad I have original star wars movies. A video game would come out, I would buy it somewhere and get a $15 $20 gift card free. Play the game beat it, and sell it and make $. Digital I would of been negative $60. Same with new books. Or wait a year and get either for a few bucks and 5  or 10 years later they are still worth a few bucks. I am fine with digital just not paying for it. For reading I want physical even though digital is free. Might read a digital comic new release and if good will pick it up when it becomes under a buck. $4 is too much for a comic. According to the inflation calculator, a comic that cost 12 cents in the 60s should now cost $1 not 4 or 5. So I feel like they are sticking it to me. Cars, houses, beer etc went up normally but somehow comics are special and can charge more.

They say people buy digital music and movies and such. I suppose it is true.   Don't know who these people are but good for them. Everybody I know uses torrent and has their Amazon fire sticks.

[Prince Namor]

41 minutes ago, Bookery said:

I'm the same way.  I won't stream movies.  If they don't put it out on DVD/Blu-Ray, then I won't watch it.  This is mostly from a collector mentality... the desire to own a personal library.

And there are still people out there who collect the same way.

But... There's whole new generation that just doesn't see it that way. I'm 56 years old, and I haven't bought a DVD in at least 5 years. I watch movies regularly though. 

41 minutes ago, Bookery said:

But there is a practical side to it as well.  If media... literature, movies, music... is only available in digital format... then it is subject to being endlessly altered.  Ideas of what is PC changes with every generation.  In theory, whomever is in power can alter material to meet its needs.  Bradbury saw book-burning as the method for those in power to keep information controlled.  He could not have foreseen that burning books is unnecessary when it's even more effective to alter them for your purposes.  "1984" becomes a book about how benevolent Big Brother helps a beaming and thankful Winston Smith achieve happiness and success.  Did Han Solo shoot first?  Of course not... their conflict was resolved with a game of checkers... it's right there in the movie!

I hardly think George Lucas was influenced by a higher power or PC culture in making his decision. 

54 minutes ago, Myowncollector said:

Not just you. Not by far. I want physical everything. I can't think of anyone I know who buys digital comics. I know people who read them for free. Know people who bought the book and used the code. Small %. They want the physical book. I have held social media sales and lots of teens and 20 somethings buying non key books and full runs. If dc stops printing, marvel will take over their share of the market. If marvel stops then there will be a problem. Other companies will make books but a lot of people want their known super heroes. Sure people buy digital comics but not enough. They weren't being nice giving out those free digital comics, they were trying to get people open to the idea of them and failed. Video game industry is same way, wants nothing more than for people to abandon the physical copies. Market has spoken, they don't want it. 

It's weird to think that everyone's own personal experience shapes what they think is reality. Truth of the matter is,15 years ago there were 9000 Blockbuster Video stores in the world, now there are ZERO*. If you're old enough to remember it, and lived it, you never would've thought that could all change that fast. It did. 

Did people stop watching movies? Not hardly. 

In 2018, GameStop reported a record breaking loss of $673 million... is the gaming industry dying? No. It's moving to a non-physical format. I'm sure there are people here who don't know anyone that only plays games on their smart phone, but there are. Plenty.

DC Comics, if they switched to all digital, could probably sell 50% LESS copies in that format and make the same amount of profit, especially if they use their own platform to sell it and not rely upon comixology - which I'm SURE is the goal.

It's coming. There will still be comic book shows and used comics, but the world is changing. Especially for new comics. 

[lighthouse]

I’ve mentioned this several times. But as a retailer I don’t hate digital.

My shop is very family friendly. Very LGBT friendly. Judgment free. You love My Little Pony? So do we. Here’s our section of MLP comics and I’ll be happy to talk the Mane 6 with you. You think comics as a medium died when Coletta stopped inking? No worries, let’s geek out on some Kirby Thors I’ve got right over here. You want a great LGBT story with BDSM themes? Got you covered. You’re gonna love Sunstone.

I can’t tell you how many customers bought their first printed comic from me that had already fallen in love with comics digitally. It’s dozens and dozens. Might be hundreds by now. Folks who see Moon Knight memes trying to collect his money from Dracula on Reddit or Imgur and come to my shop to get the real thing. Folks who read Ultimate X-Men 41 on Imgur (probably the most digitally shared Wolverine story of all time) and realized comics aren’t what they thought they were.

Good brick and mortar shops benefit from digital. 

[bb8]

8 minutes ago, lighthouse said:

You think comics as a medium died when Coletta stopped inking? No worries, let’s geek out on some Kirby Thors I’ve got right over here.

He was quite the, uh, minimalist.