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Regarding Comics Distribution

These days, comics distribution means the same thing as saying "Diamond". And my reading list is abuzz with opinions and reactions and responses to the announcement that Diamond Distribution is raising the sales threshold to $2500 wholesale from $1500 wholesale.

There are people suggesting that due to Diamond's position as a virtual monopoly, they should be 'required' to carry everything offered to them, even if they might (or will) take a loss in doing so; on the opposite side are those saying that Diamond is a business dealing with a difficult market, and they should be allowed to do whatever they need to do to keep their own business viable.

This is going to come as a surprise to some people, but I support the latter viewpoint.

I've had more than my fair share of disputes with Diamond over the years. Some were private, some were public, some were epic-level public - as I was one of the few publishers, along with Viz and Kitchen Sink, to sign exclusives with 'the other side', Capital City, during the Distribution Wars. But I want to point out - and I cannot stress this too strongly - the only times I had a conflict with Diamond was when they had dropped the ball on something they were actually obligated to do, and then tried to sweep it under the rug, or when the reps we were dealing with treated I or my colleagues in an unprofessional manner. Never because they weren't doing something I simply wanted them to do, that they had no obligation to do.

What this usually meant - and why I have a LOT of sympathy for all of the smaller publishers right now - was that one Diamond rep or another was sloppy and/or arrogantly dismissive of whatever issue I or my other small press friends were having. Books would be listed incorrectly - and options to remedy this were limited to a low-priority correction (read as: retailer packing papers), or a re-listing for the next month - which would devastate our projections and cash flow. Shipments would go astray, which might hold up payment - which could break a small press if it happened at the wrong time. Situations like those were anger-inducing because they were errors in the actual business Diamond was engaged in: solicitation and distribution of product.

At one point, there was a rep (I know Colleen Doran and Rick Veitch can back me up on this) who said he would extend shipping dates on late books if we would literally beg him to do so. This extension was NOT an obligation - but professional treatment (which includes a polite but firm, "no, we won't") was an obligation. And it was attitudes like his which contributed to the general opinion of Diamond as a hostile business partner.

I do want to say this: I have known Bill Schanes, the Senior VP of Purchasing (and the engine on which Diamond runs) the entirety of my professional career; and when there was a legitimate problem or error on Diamond's part (and the occasional inept rep could be gotten around), Bill always made it good. We have had our heated moments, certainly - but we always respected each other professionally. And when I looked him in the eye and said there was a problem, he looked back at me and said he would fix it. And then he did. And that included complaints about how I and other publishers had been treated by other Diamond employees.

However, one thing was true then (amidst a dozen other active distributors) which is still true today: it's not Diamond's job to market and promote the books they distribute. That's the publisher's job. And the creator's, if they want this to be their profession.

Yes, there are levels of promotion withing the listing and sales process; different ways books can be highlighted, and made to stand out. But those opportunities are offered largely because of the publisher's past track record and/or the potential of a book - which Diamond is not obligated to contribute to. They have an internal process to determine which of the thousands of submissions from prospective publishers can be accepted for catalog listings (in addition to the thousands already being listed), and they screen out the ones they believe will not sell. Period. Sometimes they miss a good bet - and the market, and professional community, make that known to them, and they relent. But mostly they screen out Bad Stuff That Will Not Sell. Because if they DO list everything submitted, they would soon drown in lousy, poor selling badly-created books.

Now, all they are doing with the sales threshold is saying they cannot support listing books they HAVE accepted on the basis of quality and/or potential, but which cannot sell enough to support the effort needed to list and distribute them. It is nothing but a business decision - and a good one. Availability does not equal demand. Diamond is obligated to make books they list available, but they are not obligated to create a demand for those books. And they are saying that if the demand is not there, they cannot continue to make those items available.

Diamond is seen as a 'virtual' monopoly because they have locked-in deals with all of the major publishers - which means that retailers would have much less incentive to deal AT ALL with other distributors who can offer far less product, and what COULD be offered was going to be available through Diamond anyway. In that sense, what's happening now disproves the monopoly argument. The possibility that a plethora of smaller publishers won't be ABLE to sell books to Diamond (due to low orders) is being seen as a golden opportunity by some very smart people (Haven Distribution, Dan Vado) to start or augment other distribution setups. And while certain books may not sell enough to meet Diamond's new cutoffs - they WERE selling, and presumably (hopefully) would sell through other venues in the future. It's all a chaotic mix at the moment, and developing quickly.

The only thing thing that I can't quite countenance is that the rallying cry seems to be the wrong one: a lot of people are either railing against Diamond for not showing more support for lower-selling books, or banding together to formulate grand plans for how to continue the publication and distribution of lower-selling books - but there is far less kinetic energy being directed into actually increasing the sales of the books themselves.

Why couldn't this new threshold be met with a resolve to meet and surpass it? Why does it take Diamond dropping books or lines of books for new venues to be started or boosted? Yes, some books have shown great sales over time that may not be well served my Diamond's current processes - but why not raise our own standards not just for aesthetic and artistic quality, but for commercial potential and success?

In genre publishing (SF and Fantasy) self-publishing is looked on with outright scorn as the last refuge of an unpublishable author. Small presses there have a better reputation (depending on the press) and some outperform (in quality AND sales) the big companies. In comics, the lines are a lot more blurry, and the thresholds are much, much lower. It's very possible for an unknown to become a Hot Young Turk with a great comic they spent a month making and which they printed at a copy shop for five hundred bucks. It's also possible for a book with great potential to go absolutely nowhere because it wasn't properly published and promoted to begin with. And I can't see why this would be Diamond's fault or responsibility.

If I took a book to a retailer, and asked him to put it on the shelf for sale, and it doesn't sell, and my response was to expect him to give me another slot on the shelf for another copy, which also doesn't sell, and then I repeat the process again and again, and the books STILL don't sell - he would take down the books. I'm not entitled to his shelf space. Similarly, I'm not entitled to a listing in Diamond's catalog, if the books they list don't sell enough copies. Diamond has the infrastructure; they have the databases; they have the warehouse; they have the retailer list; all of which other distributors have (or can obtain) to a much smaller degree. Diamond is not obligated to carry my book because no other distributor can offer Superman and The Hulk to retailers.

Diamond statements/interviews have implied or outright stated that there may be exceptions to the threshold, based again on potential and other factors.  It's possible that were I to offer a new book to them under either my Coppervale imprint, or through my most recent publishers (Desperado, or Image), it would fall into that particular Twilight Zone - but I think, in my case, that it would be the fault of the creator and the publisher, if we did it the way it was largely done before.

I'm not going on at such length because I'm just an opinionated observer: I am, in Jim Valentino's words, a "Lifer". I'm a comics guy. My career started in comics, and for years my sole livelihood was derived from comics. The bulk of my work and income now is illustrated novels, but I still keep my hand in the comics world, with short work for things like DOOMED, and COMIC BOOK TATTOO, and covers for FEAR AGENT, and whatnot. And last year, I even released a new edition of my STARCHILD book via Desperado (which Diamond incorrectly listed as a trade paperback because of the squarebound format). The second issue was solicited - and we, the publisher and I, canceled it. Because we chose not to do it the wrong way, and then put the blame on others.

STARCHILD has always been a smaller book in the industry; decent selling, and respected by creators and retailers (the diplomatic term for this is "cult favorite"). Some years were better than others; in the early 90's, Jeff Smith, Colleen Doran, Rick Veitch, Batton Lash, and I (and several others) were poised to buy our own country somewhere. But still, even in the off years, I had a fanbase, and title recognition, and tenure as a creator. So I could get things listed, and always maintained a relationship with comics - and with Diamond.

Desperado listed the first issue of STARCHILD: MYTHOPOLIS II #1 as a squarebound, 96 page pseudo-anthology of my stories for the retail price of $6.95. Diamond DID mistake it for a trade paperback, and listed it as such - which we only discovered when we got the catalog. The sales were low, not even 500 copies, which the publisher attributed in part to the mistaken listing. The fan and retailer reaction was good, because of the format, and the price point. There was concern that the schedule - quarterly - would not be kept (and it  wasn't) because there had been false starts before. But the package was good, and longtime retailers and fans were vocally supportive. But those initial orders meant no real income, which meant that doing more would be a negative-return proposition. However, I take the blame (as both the packager, and well, advisor, to Desperado on my own book) for having gone about it the wrong way - because it had - and still has - the potential to reach a far, far larger audience.

In the last three years I have been writing and illustrating a series of novels called The Chronicles of the Imaginarium Geographica for the publisher Simon & Schuster, and among other things, have gotten a schooling in the how-to's of Professional Publishing.

The sales and marketing process for a book is approximately 18 months long - and starts AFTER the book is largely in-house, completed. To be doing ANYTHING on the book a year from release is skirting a schedule crash. There are trade show visits, and sales conferences, and advance copies and postcard campaigns, and all manner of things that sales and marketing reps do to make booksellers aware of the new book. And so when it is finally released, the retailers KNOW THE BOOK backwards and forwards. They KNOW how to sell it, and to whom. And if the creator is doing their part, there's been active grassroots marketing among potential readers, who can then go in and ask for the book the retailers are prepared to sell.

My publisher puts a lot more money into my books now, because they're selling well - but for the first book, HERE, THERE BE DRAGONS, there was not much more available than in small press comics, except for the fact that the reps had the whole year to market and promote the book. So there was an awareness of it long before release - but more importantly, there was a demand. And demand facilitates availability.

HERE, THERE BE DRAGONS was announced with a first printing in hardcover of 100,000 copies; it's now in it's sixth hardcover printing. The trade paperback had a printing of 75,000 copies. The third book in the series, THE INDIGO KING, went into a second and third printing before release. The series is now being published in more than twenty languages. And because someone at Borders realized the first chapter of a prequel to HTBD was included in STARCHILD: MYTHOPOLIS II, they ordered 1500 copies - three times the entire direct market order via Diamond. And that was in no way Diamond's fault.

Even the listing error would not have been an issue if we had prepared better; as it was, that listing may have been the sole source of information for retailers, if not readers themselves. And we did not adequately even begin to make the connections between that book and the thousands of my readers who would love to buy it - if only they knew it existed, and where it could be found.

A number of people (most notably retailer Robert Scott) have made these arguments before - and if it was just a matter of poor work not selling, that's one thing. But when it's good work selling poorly, there has to be a reason; and I would rather discover and remedy that reason than try to argue that another business has an obligation to continue selling commercially produced work which is not making anyone in the chain any profit.

I have more stories I want to tell in comics. I have more projects like the STARCHILD book that I want to see published. But I don't want to put them out at the last minute, with no real expectation of how they will sell.  I don't want to be grateful/worried about what Diamond's cutoff for late books is; I want it to be irrelevant. I don't want to worry about Diamond invoking the threshold on orders, because I want them to know that the efforts to market the book have been sufficient to justify a listing, and a reciprocal effort on their part. And most of all, I want the work I do to be read by as many people as possible, and I would like to make a good living from that work. The processes, publishing/promotion cycle, and markets may differ - but there are a lot of things which can be brought from my experiences with S&S to what I hope to do in the future in the comics market. And I will.


( 20 comments — Leave a comment )
Feb. 1st, 2009 07:31 pm (UTC)
I read your whole essay. I agree with you. I'm just a comics reader, not a professional so I don't have much insight. I feel sympathy for those that are not excluded but these are tough economic times and the move makes all kinds of sense. I would hate for Diamond to go under. Not that I love them with fluffy bunny feelings but because I can't even imagine the chaos that would create in the comics industry.
Feb. 1st, 2009 07:41 pm (UTC)
Perhaps it would help if the complaints were clearly distinguished between claims of what Diamond is legally obliged to do, what they are morally obliged to do, and what they just plain ought to do.

"They're a business and they need to do whatever they need to do" is often used as a cover for just not wanting to do the third, or the second, or sometimes even the first. After much misuse over the years, the phrase has a stink around it, like the phrase "states rights" does.

The serious question of what a business needs to do to stay afloat is often snagged by improper framing of the question. As an example, Circuit City had to cut costs a few years ago, so they dismissed their most experienced and hence expensive salespeople. But they'd framed the question wrong: they weren't selling electronics, which you can buy on the web; they were selling expertise to customers who needed guidance. And thus they dug their hole deeper, and look at them now. Improper framing is what led Mr. Bush to think that the solution to terrorism was to attack Iraq.

I have no idea whether there's any relevance to Diamond or not. But I do know that when the only business in a field claims it can't do something that ought to be done, someone ought to take a long hard look at whether they're framing the question properly.
Feb. 1st, 2009 09:19 pm (UTC)
But I do know that when the only business in a field claims it can't do something that ought to be done, someone ought to take a long hard look at whether they're framing the question properly.

Fantastically well said.
Feb. 2nd, 2009 12:45 am (UTC)
I think I need to have you and Charles Tan edit all my essays.

Great comments. Thank you.
Feb. 1st, 2009 08:17 pm (UTC)
So, there will be no 2nd issue of "Starchild?" This deserves a post of it's own not just to be used as an example in this essay. I am happy for your success as an author of illustrated novels but I've been waiting for new "Starchild" COMICS for a long, long time and until today thought that a new issue would be coming out soon. I would not have bought the last issue had I known it was just a glorified one-shot. I understand business is business but I still have to wonder how the story you began will end. Do you still have a plan for publishing new "Starchild" COMICS now or should I just reread my old issues again?
Feb. 1st, 2009 08:21 pm (UTC)
Oh, no - it (and other issues) ARE going to be coming. I'm going to be finishing the Mythopolis story. It's one reason I'm trying to get ahead on my production schedule on the novels - so I'll actually have more time to devote to doing the comics properly. I want them out as much (if not more) than readers do - but I can't publish something that will require me to pay money out rather than make money in the process.
Feb. 3rd, 2009 08:40 am (UTC)
Are said issues going to be published by Desperado?

I love the work they did on the P. Craig Russell art book, but when the Kaluta book was cancelled I must admit it left a rather sour taste in ye olde palate.
Feb. 4th, 2009 07:43 pm (UTC)
They've had some difficulties, true - but they do good work. So, yes. That's the plan.
Feb. 1st, 2009 11:29 pm (UTC)
I hear you, but I think you're misguided. If comics, like Here There Be Dragons were sold to retailers on a returnable basis, I could see your point. But Diamond has no risk in the system. The size of the jump, $1500 to $2500 is large and essentially arbitrary. It's not like they've done a $50 increase every year for 20 years. Why not a sliding scale? If your numbers drop below 'x', then Diamond takes a larger percentage?

Ultimately, I do agree they are not obligated to carry books. Nor is marketing their job. But my objection is that the size of this increase will both hurt the industry and make it impossible for some fine work to ever be seen or even made simply because the barrier to traction costs too much. Some famous, wildly successful books would never have made it past their third issue at these new levels. Even the great comics need shelftime to get an audience, to get the word out and create demand. BONE and THB might never have been made. Finder? Castle Waiting? A Distant Soil?

An effective monopoly does mean that a certain level of responsibility is heightened because they are affecting not just themselves but the entire industry. Business decisions that are responsible to shareholders in the short term may do lasting long-term damage at the countertop level at a time when floppies are getting to be $4 a pop. (And with black-and-white comics, where cover prices are less, they have to sell that many More units to make the minimums! "Shit, do I spend the money on marketing or color??")

• Comic shops are going to be essentially leaning towards carrying only Marvel, DC, Image and Dark Horse comics (IDW?) because that's all that will be in the catalog.
• Those four/five will be less likely to take aesthetic risks, playing it safe and tending towards the bland, safe material they are already doing.
• Assuming young, ambitious creators manage to find a way to promote their comics online, they will be financially forced to go directly from web to trade --and floppies die for the independents.

Desperado doesn't have the marketing budget to set up a table at key shows, nevermind page-ads in Previews. The direct market got its start as a way to make it possible for comics to survive when the newstands were no longer an option. (The catch was, the comics were suddenly non-returnable putting all the risk on retailers.) Now the direct market is going to make it impossible for many really good comics that don't have a big marketing budget to survive at all.
Feb. 2nd, 2009 12:38 am (UTC)
All excellent points, Lee. And worth considering.

I should point out my primary reason for this essay was the spate of people suggesting that Diamond should be compelled to carry everything/have lower minimums/only offer gluten-free comics whatever, rather than start a dialogue with them to see if these issues can't be solved together.

DM distribs have always thrown stuff like this at publishers - and there have always been gray areas and room for compromise. I agree that under these terms, books like BONE may not have existed in the form that we know it. But I also do know of specific times where they kept books which failed to meet minimums, because it was evident the publisher/creators were making efforts to increase awareness and sales.

As to Diamond having no risk in the system: retailers are the ones who buy the nonreturnable books, sure. But they may still be able to buy many of those same books from Haven - and I can't say that it won't end up being a better situation for new indy publishers to have a distributor (or more than one) which will focus entirely on them, leaving the bigger companies to Diamond.

I know firsthand how limited some of Desperado's resources have been - which is one reason I've discussed other ways to drum up promotion for their publications which can make the line as a whole sell better. We'll see where that goes.

However, you do state that the size of the increase hurts the industry as a whole, and that some books might never get off the ground. You know, I actually do agree with both of those points. But as I touched on above, no one needs Diamond's permission to start a company, or publish a book, or sell that book. MOST of the sales I got from the early days of STARCHILD came not from the distribs, but from my working the phone and mail with every retailer I could contact. It was hard work - but often my direct sales were equal to the distributor orders. And those were also nonreturnable.

300 copies was a number mentioned in relation to the sales thresholds (the lower one, I think). That's only sixty retailers buying five copies apiece (to pull a number as an example). I think that's attainable by any decent creator/publisher willing to put in the work. So, from a business standpoint, what's at stake is Diamond's in-place system doing that work for the publisher. And really, if 300 books is all you expect to sell, even via a huge distribution company, then is that book really better served by staying in that system? Or would a paradigm shift actually improve things?

I do like the points you've brought up, and I'll think on them more. I guess the best way to sum up my other sore point with the whole debate is to say that instead of people saying "What can we do to raise our sales?" They seemed to be saying "Our sales won't go up, so we still want you to keep backing our books."
Feb. 2nd, 2009 01:03 am (UTC)
Yes, theoretically, people could start up distributorships to compete with Diamond, or carry the Indys. But the system and the habits of retailers... they just don't want to deal with multiple catalogs. (ColdCut)

We aren't talking about 300 books. As I understand it, the $2500 level is Diamond's cut. That is, $2500 is the %40 they keep. So if your book is $3.99, their unit cut is $1.57 and you have to sell 1,566 copies to make it. Even if I'm wrong and the $2500 is gross, rather than their net, if your book is black and white at $2.95 you have to sell about 850 books, close to triple your figure.
If you can't quite do that in your first issue, the world will never know, because you're already cancelled before you've sent your PDF to the printer.

**Would Diamond be making this move if they still had to worry what CapitalCity, FriendlyFranks and HeroesWorld were going to do as a response?**

If Diamond wants to cut costs, stop printing the friggin PREVIEWS. Make it HTML and post the mother. Customers could then walk into their local shops with the order numbers in hand.
Feb. 2nd, 2009 01:19 am (UTC)
I did say I was estimating the 300 copies above against the lower threshold number - and the last I knew, the dollar about was the actual order generated (as in, the order the publisher fills is above that number). So Diamond's cut would be far less. That would make my number more realistic but still off. I pulled that from one of the commentaries online, but thanks for doing the math! It would make it harder, yeah.

I suppose I'm still looking at those numbers as a gamble anyway. Those quantities would barely pay a printing bill, much less return a profit to the publisher - or creator. And isn't that part of the point? To make some kind of profit?

And no: if those other distribs were still around, or they didn't have a lock on the big guns, I doubt they would do this
Feb. 2nd, 2009 01:36 am (UTC)
"And no: if those other distribs were still around, or they didn't have a lock on the big guns, I doubt they would do this."
[*Lights-sirens*] DANGER, WillRobinson, DANGER.

If a self-publisher can't get enough order numbers to pay his printing of say 1000 units, then they should probably get out anyway. BUT they might operate at a loss for a bit (six months? 3 bi-monthly issues?) in hopes that the quality and the word of mouth and the phonecalls, direct mailing and online reviews can put them into the black.

"I suppose I'm still looking at those numbers as a gamble anyway."
Right, but until now, the self-publishers have been allowed to take the risk.
Feb. 2nd, 2009 01:42 am (UTC)
LOL! Yeah, but check out my reply to Charles below. No one is going to corner Diamond on anything at this point. So it's imperative to find a way to work with them.

I guess I'm saying if the quality is there, Diamond may be willing to see an argument for potential sales - and give a title like that a little more room than the threshold implies.
Feb. 1st, 2009 11:59 pm (UTC)
Great essay and looking forward to more of your comics.

I think the problem with some people's reaction to Diamond's new policy is that they've settled for less. They don't think their sales can meet Diamond's quota. Granted, some business models (particularly the smaller ones) are justified in not being able to meet Diamond's requirements but at that point, they might want to look at a different model other than getting listed in Diamond--especially in this age of the Internet.
Feb. 2nd, 2009 12:44 am (UTC)
>>>I think the problem with some people's reaction to Diamond's new policy is that they've settled for less.<<<

You said in one line what it took me fifty gazillion words to say.

That's the heart of it, really - on a planet of several billion people, sales of a few hundred copies shouldn't be seen as a ceiling, even for the really offbeat stuff. It should be seen as a challenge to make the books sell better, and never have the threshold be an issue at all.

And the subtext for the argument is this: whatever the ruckus people raise, Diamond will not be changing the policy. They have no obligation to do so - and their bigger publishers will not push them into it either. So the only thing left to do is to raise our own games, or find another way to play.
Feb. 2nd, 2009 03:21 am (UTC)
"No one is going to corner D------ on anything at this point. So it's imperative to find a way to work with them."

"I had no choice, they arrived just before you did."

"I'm altering the deal, pray I don't alter it any further."

You and Lando are on notice, mister!
Feb. 2nd, 2009 03:32 am (UTC)
I can hear your wife cackling from here. ;)

Feb. 2nd, 2009 05:22 pm (UTC)
I've speculated on this change in Diamonds policy a few times since it was announced. At the Phoenix con a few weeks ago, it was a topic of frequent discussion. I think a lot of people, both fans and pros, are a little worried about it. Not the policy itself, so much as what it means for the industry.

I think people see this is a tacit acknowledgment by Diamond that the comics industry is doing worse than we actually thought. It's been in a bit of a spiral now for years, and this maneuver is perceived as a lack of confidence in the market to support itself. Coming so close on the heels of industry wide failures in newspapers, people are starting to get the idea that print is quickly becoming a boutique market.

Comic books have thus far managed to stave off the doom that is rolling through the newspaper industry, likely due to the collectors market. This isn't a long term strategy though and companies like Diamond need to either evolve their business model or they'll start to whither like so many of the newspapers have.

I suspect this is only the opening salvo in a market change that will see more direct sales from creators to distributors. Despite the gloom that so many have predicted for independent comics, I think this is an opportunity for some motivated people with the right savvy and connections to increase direct sales by either supplanting the distributor, or avoiding them altogether.
Feb. 5th, 2009 04:14 pm (UTC)
This is definitely the most intriguing, and possibly earth shaking news in comics right now. I've long felt that the system was broken and hopefully this will lead to a new way of doing things that can allow the industry to get off life support & flourish once again.

I'll be eagerly waiting for more developments as they happen.
( 20 comments — Leave a comment )