The Direct Market: So Long and Thanks for All the Fish

News broke a week ago last Friday — because everyone was ready for the weekend and therefore not ready to vent some outrage — that DC would be ending its exclusive partnership with Diamond Comics Distributors.  You know, the distributor that has had a virtual monopoly on serialized comics distribution in the U.S. since the 90’s.  If you’re coming late to this discussion and wondering, “Why does Diamond have a monopoly?  Aren’t those illegal in the U.S.?”  Well yes they are.  It’s just that single issue comics are really low on the kinds of monopolies that law and order types in the U.S. actually care about.  So Diamond has been able to maintain its monopoly for over two decades until this last Friday when DC decided it didn’t want to be a part of it any more.  While DC deciding it doesn’t want to be part of such a thing would ostensibly seem to be good, it could actually spell the end of comic shops and single issue serialization in the U.S.

Why is this the case?  Because the direct market — represented by the 2000+ comic shops serviced by Diamond — has been surviving for a while in a delicate balance of terror with the major comics publishers.  Outside of major relaunches like DC’s “New 52” or “Rebirth” events, sales of single issue comics haven’t been growing over the years.  Sales have been either flat or declining and that has allowed the shops that sell these comics as their lifeblood to just barely hang on over the past several years.  Then the Coronavirus pandemic came around and Diamond stopped shipping new comics to retailers out of concern for the public good.  This was the right thing to do for everyone, except for the comics shops themselves and those who couldn’t survive without a weekly dose of new comics promptly closed up shop.

Rather than wait for Diamond to start distributing new comics again, DC approached new distributors, UCS and Lunar Distribution to ship their comics at the end of April.  These distributors, were actually major comics retailers Midtown Comics and DCBS.  This meant that not only was DC relying on existing distribution channels from comics shops to ship their comics, but that all other comics retailers would be ordering from their competitors to fulfill their orders for DC comics.

This… did not sit well for a lot of retailers, and it was assumed that it would only be a temporary measure until Diamond started distributing again.  Then last Friday rolled around and everyone found out that it was the new normal.  Comics retailers would not be able to order comics that would be solicited in the future from DC.  All future orders would be going though Midtown Comics and DCBS.

Other retailers being forced to empower their competitors is a bitter pill to swallow.  What makes this worse is that it’s not clear that Midtown/DCBS will be able to offer the same quality of distribution as Diamond has in the past.  What’s meant by that is the fact that comics retailers will now have to put in more work, and expend more money to get DC’s comics from these new distributors than they had to with Diamond in the past.

This is a real problem because, while it may have been true in the 90’s, selling comics in the ‘10’s is not a profession you get into hoping to get rich.  Most comics stores exist on razor thin margins in order to stay in business.  That’s why you’ve heard that many have already gone out of business once they had to close up shop to protect against the Coronavirus pandemic.  So when it’s announced that DC has made arrangements with new distributors that will — in all likelihood — be raising costs for every retailer in the Direct Market, it’s not hard to take the cynical path when it comes to predicting the future of single issue comics.

Let me be clear:  The medium of Comics is going to survive this.  Reading materials made up of words and pictures were present long before the Direct Market, and they’ll be there long after it’s gone.  Whether that day is tomorrow or next year (most likely) or ten years from now.  Creators like Raina Telegemier and Dave Pilkey have already shown that the original graphic novel format can be a fantastically successful one when geared to kids, and I’m willing to bet that these kids who grow up on these kinds of comics will want more mature ones as they grow older.

As for the likes of us who grew up on the monthly adventures of Superman, Batman, the X-Men, and the Avengers, well… Our world is likely going to look considerably different in short order.  I mean, it’s possible business as usual won’t change and all this speculation I’m doing is for nothing.  My gut feeling is that charging comics shops more to do business will likely send the majority of them out of business and force everyone to the magic buzzword that has been haunting the industry for a while:  Digital.

Imagine being able to cut out the middle man (comics shops) and being able to distribute single issue comics directly to consumers.  If you’re a major comics publisher, then this sounds like a fantastic idea.  There are only a couple things standing in your way.  One is the fact that there are a lot of readers who prefer reading their comics in physical form as opposed to digital.  The other is looking like the bad guy when it comes to putting 2000+ comics stores out of business.  Nobody wants that.  Not even if you’re running a major entertainment company with worldwide ambitions like Disney or Warner Bros.

Except it appears that the higher-ups at Warner Bros. have decided that if there was ever a time to pull the trigger on ceasing distribution of monthly serialized comics, now is certainly it.  Warren Ellis mentioned in his most recent newsletter that there were certainly payment issues here — with Diamond stating that they were only able to pay DC 25% of their usual distribution fees due to current circumstances — while DC’s official statement focused on the distributor’s failure to grow the market over the past few years (or decades, really).  All this strikes me as a convenient excuse to find a way to stop publishing comics in their current form.  I mean, if DC was REALLY committed to the format, why would they be using a couple of existing comics retailers to ship their product.  They’re a subsidiary of Warner Bros. for Pete’s sake.  They should have near limitless resources to do it themselves if their corporate overlords were so interested.

Except their corporate overlords really aren’t interested.  When the biggest comic book around — “Batman #92” with the debut of the Joker’s new sidekick, Punchline — only has a print run of 250K, that likely registers as pizza and beer money for the big WB.  It’s been said elsewhere that WB won’t stop publishing comics.  They make for a useful format to field test the look of their characters and develop potentially successful stories after all.  Yet it can’t help but seem to be more cost-effective to publish these stories themselves, digitally, than it would to ship them to comic stores.

Which they’ll still be doing for the foreseeable future.  While I’m decidedly cynical about the future of single-issue comics as they’re shipped to comics stores, it’s still possible that retailers will find a way to make this work.  The problem is that with the amount of cynicism that has surrounded the comics retailing space over the past decade, it’s not certain as to whether or not there are enough retailers that will want to make it work.  DC’s break from Diamond has ben met with a near-universally-negative response from retailers and it’s not certain that Marvel is going to try and pick up the slack there.  Hell, it could be that there are people over at Marvel, and Disney specifically, who are thankful that DC made this move first.  So that they don’t seem like the bad guys here.

What do I think the future will look like?  It’ll involve all of the major publishers putting their comics out digitally first.  If a comic proves popular enough, then they’ll publish a collection for the readers (like me) who prefer to read it in a physical format.  I’ll be fine with that.  While I prefer to read a comic in physical form, I’ve got no problem picking it up digitally (if it’s substantially cheaper).  It’ll require a bit of an adjustment on my part, but that won’t be a problem in the long run.  I’m invested in comics as a medium — not a specific format.