A market crash of a different cause

[dam60]

IMO they will eventually shift to quarterly TPB instead of monthly comics. This has been the trend for some time now in releasing a TPB of a just completed storyline. This would relieve the burden of the artists of a deadline for a monthly title. Dam mentioned he doesn't rush down the LCS for a TPB, because currently they are reprinting the monthly title. What would happen if the TPB was all new material. like a Hush storyline, would you be excited about buying it then?

 

That's a great point - I don't know. If it was something that got a lot of hype and word of mouth I probably would run down there like a drooling fanboy myself . . .

 

I feel that people just need their "monthly fix" in an "affordable" manner. Even if it were all new material, I am not so sure I would be that excited to spend $20 a month on a new Batman trade - I don't do that now and it seems like there is something new coming out once a month.

 

Personally, I wonder how Secret Wars does for Marvel. IMO, I think that the second issue will drop like a rock as the hype will have passed and it will be old news. Quarterly seems too "forward looking" for this current market enviornment . . .

 

DAM

[Zanarkand]

The critics will argue that TPB prices would have to be raised due to unit volume declines, but that is (wrongly) assuming that most/all of the current pamphlet-reading audience won't follow their favorite titles once they switch to the new format, that creator royalty payments wouldn't be restructured (which they definitely would be for such a paradigm-shifting move) and that the new format wouldn't actually bolster revenues as well from being a higher-margin, more durable format that could be distributed beyond specialty shops (e.g., bookstores, convenience stores, increased mail subscriptions and newsstand sales, etc.). Yes, you'd lose sales from people giving up on the new format and from guys like Darth no longer speculating/hoarding multiple copies of new issues, but you'd also pick up a number of new readers as well.

 

I think this is right on. Some comics can still be found in bookstores, but generally not anywhere other than specialty shops. Maybe specialy shops demanded it that way? I don't know.

 

My local Waldenbooks still has one of those spin-rack things. That's the only place I can think of offhand that sells monthly comics other than the LCSs. The big bookstores like Borders and Barnes & Noble, however, have a tremendous selection of TPBs, prestige format books, treasuries, and hardback collections. Not stuffed over in the magazine area either. Right in there with the Science Fiction and Fantasy.

 

The problem comic publishers face is one of exposure. Most comics, being holed up and sold through specialty shops virtually exclusively, never reach a general audience. They reach only people that go into specialty shops, and people that go into specialty shops don't go there unless it's to buy comics. So publishers have wound up selling mostly or only to fans, not to the general public, and that's not good.

[awe4one]

For this very reason, I think the publishers will be in no hurry to shift to all-TPB, because they realize it will first kill their captive distribution channel, and then eventually slit their own throats!

 

Agreed.....but I think current market economics and the lure of money now vs money later are driving the major publishers more than long term strategy. You can already see them moving more and more into the TPB market. As the shift becomes more prominent, they may (will?) hit a curve where the move towards TPBs at the expense of the monthly pamphlet becomes less about additional revenue and more about a necessity to survive as publishers.

 

Jim

[Marvelous]

I don't see Marvel, DC or Indies going strictly to TPBs. I think there are too many fanboys who need their monthly fix that can't (or won't) wait 3-6 months for the TPB who would be enraged if Marvel or DC did so. Plus, at current cover prices these companies are making a killing on monthlies even if the circulation is lower than it has been in the past. I think they risk loosing a huge fan base by going "strictly" to TPBs especially on well established titles like Spider-man, Batman, Superman, X-men etc... It would make more sense to make limited series "strictly" TPBs or graphic novels since they usually don't fit into the current continuity? Finally, if Marvel was thinking about going strictly to TPBs why are they launching new Marvel Knights and Ultimate monthlies for comics like Fantastic Four that already have a monthly? I personally only buy TPBs of comics I normally don't buy monthly like Batman Hush, 100 bullets, Y Last Man, League of Extraordinary Gentlemen etc... IMHO Marvel and DC going strictly to TPB format simply won't happen because it would be the kiss of death to the industry.

[CompleteRunComics]

 

Disclaimer: I know nothing about anything.

 

I myself think TPB's are in the future. A couple of reasons come to mind but I'll sum it up in one (run-on) sentence;

 

A savy younger generation and people with common sense are not going to pay today's cover prices for a flimsy 32 page, partial story, comic book that can be read in 187 seconds when they could be getting a sturdier 100 page book where they can actually follow a complete story instead of waiting for 30 (plus) days hoping to remember where it left off last.

 

Do I think LCS's will go under because of TPB's, nope. If a 100 page TPB costs, say, $9.95, and comes out every quarter, isn't that the same as 12 monthly comics at $2.99.

 

So one years worth of a title (4 TPB's) @ $9.95 costs a retailer $23.88 (40% off retail) which the LCS sells for a total of $39.80, simple profit of $15.92.

 

And one years worth of a title (12 comics) @ $2.99 costs a retailer $21.53 (40% off retail) which the LCS sells for a total of $35.88, simple profit of $14.35.

 

There's my thinking on why TPB's will eventually rule and why they will be fiscally viable for LCS's (which will now be called LTPBS's)

 

If you find a drastic flaw in my thinking please refer to the disclaimer.

 

CRC

[Hensley300]

Good debate. I guess to further illustrate my point: take wolverine:origin and say 1602. Both limited series of course but this was my approach. I did not buy any of them raw because I knew that marvel would and will release both complete in tpb for or a nice HC formate. Since none of the two series were introducting any major characters, there would be many readily available 9.8s, the cost of buying each one as opposed to waiting for tpb wasnt equal, the effort of obtaining a 9.8 (cost v return) wasnt there for several reasons: long term return, printing problems, problem of trying to sell any grade lower than 9.8 if it came back a lower grade didnt make since). So, with origin, I waited for tpb and bought all issues cheaper since there was no real collectors advantage of buying those issues for anything other than reading them. And if the real value of collecting the individual books is gone, why not wait for the tpb or HC? Or take a monthly series like ASM. With monthly 9.8 service now available or indiv collectors routinely geting 9.8's-9.9's what is the real purpose of getting this series montly anymore besides your monthly fix. The purpose of collecting the indiv issues is really not there anymore. Why not wait for the story arc to be released in a tpb instead of buying the issues for collecting when the point of collecting for profit or return is no longer there. (im not talking about the true collectors who simply collect for joy with no idea of a return in mind). Really, one could just wait for marvel masterworks or essentials line to catch up with the number or wait for the arc to be reprinted and buy it at a substantially discounted rate through barnes and nobles, this forum, or ebay. I have a feeling it will be some years but that this market is going the way of most markets: what sells is what they are gonna produce. Think about it, $3.50 cover price every month. Sure, I pay it but we enough to sustain marvel and dc's production costs everymonth?

[FFB]

I don't think that Marvel would give up the revenue that comes from its monthly publishing. Last year, 71% of Marvel's net revenues from publishing came from the direct market, which means LCSs. In the two years prior, it was 76% (2002) and 80% (2001), respectively. Any massive change to its business model would threaten that chunk. There is no guarantee that the comic buying public feels the same way as a few people who buy TPBs do. Even if the TPB thing worked out in the end, it would take a couple of years and Marvel would lose a ton of revenue in the meantime.

 

Then there's the issue of "why?" Everyone knows that TPBs are higher margin products than monthlies. The reason for this though is because TPBs do not carry with them the bulk of the production costs, such as paying the writer, artists, colorists, editors, etc. The printing and distribution costs constitute the vast majority of the costs involved in selling TPBs. If you don't publish the monthlies to subsidize the TPBs, then those production costs get rolled into the TPBs, which suddenly become significantly lower margin items. And if they don't sell as well as the monthlies because of their higher prices and infrequent publishing schedule, then Marvel loses revenue AND has lower margins in its publishing division. Not an attractive prospect.

 

Then there's the issue of advertising. On average, ten pages of each Marvel comic are used for advertising. 17% of Marvel's publishing revenue last year was from advertising, up 50% from the prior year and a major reason why Marvel's publishing division had such a bang-up year last year. TPBs, on the other hand, contain no advertising. Has anyone conducted a study to see if any of the current advertisers would continue to advertise if the book were in TPB format, assuming that Marvel would put advertising into a TPB (which I'm not even sure they're permitted to do)? Those advertisers with time-sensitive advertising (for Comic Conventions, TV shows, movies, etc.) would probably not. And guess what? This is a huge chunk of Marvel's ad revenues. They are not going to give this up. In fact, if you look at Marvel's recent SEC filings and listen to their conference calls, they are actively seeking to expand the advertising aspect of their publishing division because advertisers are suddenly a lot more interested in putting their ads in Marvel's books.

 

Finally, Marvel has specifically stated on several occasions over the last year that it intends to *expand* its core line of comics over the next year, and will try to broaden its demographic appeal by introducing new monthlies that appeal to different demographic groups. Will a person who does not typically buy comics plunk down $17 on a TPB in which he or she does not even really have any interest in the first place? Or might a $2.50 cover price be more likely to convince the consumer to give it a shot? Despite what others have said, I do not think that the switch to all TPBs would bring enough new fans in to replace the ones Marvel would lose.

 

Disclaimer: I know nothing about anything.

 

I myself think TPB's are in the future. A couple of reasons come to mind but I'll sum it up in one (run-on) sentence;

 

A savy younger generation and people with common sense are not going to pay today's cover prices for a flimsy 32 page, partial story, comic book that can be read in 187 seconds when they could be getting a sturdier 100 page book where they can actually follow a complete story instead of waiting for 30 (plus) days hoping to remember where it left off last.

 

Do I think LCS's will go under because of TPB's, nope. If a 100 page TPB costs, say, $9.95, and comes out every quarter, isn't that the same as 12 monthly comics at $2.99.

 

So one years worth of a title (4 TPB's) @ $9.95 costs a retailer $23.88 (40% off retail) which the LCS sells for a total of $39.80, simple profit of $15.92.

 

And one years worth of a title (12 comics) @ $2.99 costs a retailer $21.53 (40% off retail) which the LCS sells for a total of $35.88, simple profit of $14.35.

 

There's my thinking on why TPB's will eventually rule and why they will be fiscally viable for LCS's (which will now be called LTPBS's)

 

If you find a drastic flaw in my thinking please refer to the disclaimer.

 

CRC

[Foolkiller]

Gene: bite me. I'm done arguing with you. I enjoyed reading some of your posts, but I don't have the inclination to fight with you anymore. I come here because I enjoy this hobby and it's a lot of fun, but frankly, lately you're about as much fun as a hemorrhoid. Wake me when we live in an all TPB world and the comic crash has happened. Until then . . . well, you know what you can do to yourself.

 

wow... classy statement here.

 

anyway, on the actual subject of this thread... i do see trades becoming more and more pervasive in the market as Marvel and DC try and get their product into mainstream bookstores. Publishing in pamphlet form though, is not going to go away completely because a large part of the market relies on comics fans running to the store who need their weekly fix. That's still the majority of regular modern buyers. they enjoy going every week and picking up books. for most of us here, that's not a part of our regular or necessary routine. If we don't get a particular book, it's no big deal. The focus for most board members is back issues. There's a market for both trades and weekly/monthly books. I do see a reduction over time in the number of pamphlets produced and a shift towards more and more trades. Not a complete elimination in the near future.

[Darthdiesel]

I agree. Has anyone looked at the circulation figures lately? Only 15 titles sold more than 60,000 copies in February 2004 and there are a disturbing amount of titles selling below 30,000 copies per month including a lot of books featuring long-established characters (e.g., Iron Man, Green Lantern, Wonder Woman) and some edgy books that we are led to believe are popular (e.g., Y The Last Man, El Cazador, X-Statix).

 

 

No one leads me to beleive they are popular. These titles are just quality reads and come highly recommended. I buy and read for myself and decide.

 

What happens the next time the industry goes into a slump and all the $2.25 and $2.50 comics get bumped up to $2.99 and $3.50/$3.95 start becoming more popular price points for a number of titles, causing an acceleration in unit volume declines? I have to figure that there are a lot of titles out there that are either not making money or barely making money. I believe that a move to original TPBs would be a more cost-effective/economical move for the publishers in terms of lowering printing and distribution costs.

 

Titles are cancelled or revamped with new creative teams? TPBs may be more economical but can they hold the already short attention spans of the readers? What would they offer over monthly pamphlets other than complete story arcs all at once? What if the story arc sucks in the middle? Too bad you are stuck with the whole TBP instead of having the option to drop the title in mid series.

 

The critics will argue that TPB prices would have to be raised due to unit volume declines, but that is (wrongly) assuming that most/all of the current pamphlet-reading audience won't follow their favorite titles once they switch to the new format, that creator royalty payments wouldn't be restructured (which they definitely would be for such a paradigm-shifting move) and that the new format wouldn't actually bolster revenues as well from being a higher-margin, more durable format that could be distributed beyond specialty shops (e.g., bookstores, convenience stores, increased mail subscriptions and newsstand sales, etc.). Yes, you'd lose sales from people giving up on the new format and from guys like Darth no longer speculating/hoarding multiple copies of new issues, but you'd also pick up a number of new readers as well.

 

I find this to be highly optimistic that readers would be open to the TPB option only. Unless I'm reading a Manga title, I would definitely push back on being forced to go with a bulkier format and vote to close my wallet every Wednesday...

 

The TPB may make more sense to you; however, not everyone thinks the same way... there are type A personalities reading comics too that want their weekly fix; you've seen price points increase on the monthly pamphlets, you've even seen titles release weekly and yet you have folks buying them If my favorite titles ever went to a TPB only format, I would drop them in a heartbeat. There are already plenty of TPBs out; I buy them when I want a reader copy, not a collectible. Going the TPB only route eliminates the collectible aspect of the hobby. I may pick up a few extra copies of books I think will do well; however I do and have read each and every one so I know for myself if I will pick up the next installment a month later. With TPBs, I'll buy one and let it sit on the shelf for months before cracking it open. There is no sense of urgency to make myself devote some time and read a TPB...it'll always be there, and there's plenty of time before the next one comes out and I'm made to feel like I'm missing out...

 

It's interesting - it seemed a few years ago that all the talent being recruited to comics/back to comics/within comics would save the industry - Bendis on USM, Morrison on New X-Men, Jones on the Hulk, JMS on ASM, Kevin Smith on Daredevil, etc. Now, it seems that everyone's griping about JMS and Bruce Jones; Kevin Smith has proven incapable of completing a mini-series, let alone a monthly; Morrison is leaving New X-Men and the buzz around the book died a long time ago...only Bendis is still hot, though I don't think people are still stockpiling USM issues like in the early days. In retrospect, it seems as though the "renaissance" of new issue sales that we thought might be underway was just a speedbump in the industry's secular decline.

 

Be prepared then for more "speedbumps"...I always understood the cycle to be "when things get stale, get fresh blood in there" or "shift around talent on titles" - I would wager that they'll stick with the tried and true reshifting of talent and bringing in new blood before acquiescing to a TPB only format for new material. The day they do will not bode well for the comic book industry as it will be an admission of the sickness of waning sales and revenues weakening the health of the comic book market... and who wants to jump on board a sinking ship? Definitely not your "new readers" who you expect to save the industry by buying up scads of TPBsS...

[FFB]

What can I say? Trolls bring out the trailer park in me. Sorry about the vulgarity.

 

wow... classy statement here.

[CompleteRunComics]

 

You make some good points.

 

I don't think that Marvel would give up the revenue that comes from its monthly publishing. Last year, 71% of Marvel's net revenues from publishing came from the direct market, which means LCSs. In the two years prior, it was 76% (2002) and 80% (2001), respectively. Any massive change to its business model would threaten that chunk. There is no guarantee that the comic buying public feels the same way as a few people who buy TPBs do. Even if the TPB thing worked out in the end, it would take a couple of years and Marvel would lose a ton of revenue in the meantime.

 

I agree Marvel wouldn't lead the charge into the TPB country. This will be done by DC, Dark Horse, the Manga publishers (of course), followed by some of the other smaller publishers. Marvel doesn't strike me as a company that grabs the bull by the horns and runs with it, so-to-speak. Marvel is more likely to re-re-release an old title like The Invaders in comic book form and hope it makes it past 7 issues.

The few people that buy TPB's are the comic buying public.

Your right, it will take at least a few years but Marvel won't lose a ton of revenue. They'll make the transition like everyone else. Ironically, I see comics in the future as testing beds for future TPB's.

 

Then there's the issue of "why?" Everyone knows that TPBs are higher margin products than monthlies. The reason for this though is because TPBs do not carry with them the bulk of the production costs, such as paying the writer, artists, colorists, editors, etc. The printing and distribution costs constitute the vast majority of the costs involved in selling TPBs. If you don't publish the monthlies to subsidize the TPBs, then those production costs get rolled into the TPBs, which suddenly become significantly lower margin items. And if they don't sell as well as the monthlies because of their higher prices and infrequent publishing schedule, then Marvel loses revenue AND has lower margins in its publishing division. Not an attractive prospect.

 

I'm not familair with publishing costs for comics vs. TPB's, all I can say is people who get tired of the $2.99 price tag for a 32 page comic (with the 10 pages of ads you mention) will also cost Marvel revenues, also not an attractive prospect.

I'd think Marvel would have a set publishing schedule for any TPB titles. Not that they would make any of their deadlines, but hey, they don't now.

 

 

Then there's the issue of advertising. On average, ten pages of each Marvel comic are used for advertising. 17% of Marvel's publishing revenue last year was from advertising, up 50% from the prior year and a major reason why Marvel's publishing division had such a bang-up year last year. TPBs, on the other hand, contain no advertising. Has anyone conducted a study to see if any of the current advertisers would continue to advertise if the book were in TPB format, assuming that Marvel would put advertising into a TPB (which I'm not even sure they're permitted to do)? Those advertisers with time-sensitive advertising (for Comic Conventions, TV shows, movies, etc.) would probably not. And guess what? This is a huge chunk of Marvel's ad revenues. They are not going to give this up. In fact, if you look at Marvel's recent SEC filings and listen to their conference calls, they are actively seeking to expand the advertising aspect of their publishing division because advertisers are suddenly a lot more interested in putting their ads in Marvel's books.

 

Interesting, that's a lot of revenue from those 10 pages of ads. Imagine how many pages of ads would fit into a 100 page TPB. If they can slap an advertisement on a boxers back during a fight there's no doubt there will be ads in TPB's and lots of them. Time-sensitive?, better plan ahead. I also assume there will be still be some form of monthly comic to alleviate this problem to a degree.

 

Finally, Marvel has specifically stated on several occasions over the last year that it intends to *expand* its core line of comics over the next year, and will try to broaden its demographic appeal by introducing new monthlies that appeal to different demographic groups. Will a person who does not typically buy comics plunk down $17 on a TPB in which he or she does not even really have any interest in the first place? Or might a $2.50 cover price be more likely to convince the consumer to give it a shot? Despite what others have said, I do not think that the switch to all TPBs would bring enough new fans in to replace the ones Marvel would lose.

 

Marvel will still continue to expand it's monthly titles. Change to TPB's as a majority will only happen over time and comics will still be there the whole way through it and even beyond. Will the people who normally buy comics pay $17.00 for a TPB? I hope not, I wouldn't, $9.95-$12.95 or thereabouts, yeah. Of course, if folks are shelling out $28.95 an issue for a new comic CGC 9.8 they may very well pay $17.00. I don't think it will ever be, nor should anyone think, a world of all TPB's. Same as above, I think comics will make a nice testing bed for judging release of future TPB's, or special one-shot type deals.

 

It's an awkward kind of change for those of us who are used to the comic format. If I myself hope to continue doing business in the new comics area I think I really need to prepare for a TPB world. Let me stress not entirely without the comics we know and love. The back issue market will be fine, publishers will adapt, sellers will adapt, heck, even CGC will probably adapt as they've gone from first comics, to mags, someday TPB's maybe. Who said..."Ride the wave of change or drown in it"?

 

Hang ten dude

 

CRC

[delekkerste]

If you don't publish the monthlies to subsidize the TPBs, then those production costs get rolled into the TPBs, which suddenly become significantly lower margin items.

 

Not just picking on you, because a lot of people have made this same point, but I don't buy the whole "monthlies subsidize the TPBs now and so you couldn't expect TPBs to do well economically without the monthlies" argument. If it were that simple, we wouldn't be having this debate. TPBs may not be as lucrative under an all-original format as they are now, but taking out all the costs associated with pamphlet production and distribution is a huge plus. Not to mention, you can do some creative things on the cost side with TPBs, such as lowering the paper quality. You can't do that now, because pamphlets are priced too high for what they are, but too low for retailers to make money if prices were slashed, so it makes no sense to reduce paper quality because buyers will feel even more ripped off than they are already if you keep the price the same, and sellers don't want to see the cover prices any lower than they already are.

 

The revenue side is open to debate - the collectibility factor and speculating activity will certainly fall. Some old-timers will call it quits. LCS's may have a fit at first. Eventually, though, I think the reduced cost base and additional revenues from expanded distribution channels will be a big net positive. Not only in terms of economics in the medium-term, but also in the long-term by having a better chance of getting the product out to the next generation of readers. Now, people will hem and haw and come up with excuses why this won't work, but I say that it all it would take is a little thinking out of the box, business savvy and imagination to get it done. Sure, some of the old rules and notions and a few hearts will have to be broken, but making this work is far from an impossible task.

 

 

Will a person who does not typically buy comics plunk down $17 on a TPB in which he or she does not even really have any interest in the first place? Or might a $2.50 cover price be more likely to convince the consumer to give it a shot?

 

To give a $2.50 comic a "shot", someone has to go to a LCS, which most non-fanboys and girls are loath to do...and then go back to the LCS for the next 5 months to read the rest of the storyline. No wonder pamphlet sales are on an inexorable long-term decline.

 

Who says TPBs have to cost $17? Since we're not going to be dealing with $2.50 and $3 price points, there's a lot more margin to play with here. Plus, there's a ton of ways to get the cost down - renegotiate creator agreements to reflect the new realities, use cheaper paper, play with different sizes, bulk up the page counts with some reprints, etc. That's just off the top of my head - if Marvel did a 1-year study on this, you don't think they're smart enough to come up with something that works? With the higher price point and more durable, portable format, you can get these books back into newsstands, convenience stores, bookstores, toy stores, Wal-Marts, K-Marts, mail order, subscriptions, etc. etc. etc.

 

The industry needs to realize that readers, not collectors, are the key to its long-term survival. The pamphlets aren't getting it done. Smart business minds can make the TPBs work.

 

Gene

[Zonker]

if Marvel did a 1-year study on this, you don't think they're smart enough to come up with something that works? With the higher price point and more durable, portable format, you can get these books back into newsstands, convenience stores, bookstores, toy stores, Wal-Marts, K-Marts, mail order, subscriptions, etc. etc. etc.

 

The industry needs to realize that readers, not collectors, are the key to its long-term survival. The pamphlets aren't getting it done. Smart business minds can make the TPBs work.

 

Gene

 

I'm gonna be provocative here, cause I don't think my earlier comments were addressed

 

You understand getting them back into bookstores, newsstands, etc. means making them fully-returnable don't you? And that transfers the risk of guessing print volumes incorrectly away from the direct-sales retailers and back on to the publisher, right? And at a higher-price-point, the cost of each wrong guess, each unsold book becomes that much higher?

 

Or do you think 'smart business minds' can get the bookstores, newsstands, etc. to change their entire business model and adopt the direct sales approach (i.e. not returnable, retailers eat the unsold copies) just for the privilege of selling funnybooks tricked out as high-priced TPBs?

 

once the LCS are gone, the only retail outlet will be the bookstores, where books including TPBs are sold on fully-returnable basis! That's important because then the publishers will have to eat the cost of all unsold copies. With today's monthly comics, the publishers can essentially print-to-order, and any unsold books are eaten by the LCS (which is why so many failed during the 1990s bust).

[FFB]

One thing to keep in mind is that Marvel, the corporation, is no longer a "publishing" company per se. Management views the company as an IP company and has focused its strategies on maximizing its IP licensing prospects. It views publishing not only as a profit center, but also as a form of R&D. Most companies view R&D as a "necessarily evil," in the sense that it is always a source of expense for the company, not a profit center. Marvel, on the other hand, likes to brag about the fact that it is one of the few IP companies in the world that has an R&D "division" that actually turns a nice profit.

 

My understanding based on several dozen investor presentations, company conference calls, and company filings I've heard and seen is that MVL likes to use its publishing arm to test out new and old concepts to explore interest in them, so that they can more effectively pitch the property outside of the publishing arena (into movies, TV, lunchboxes, children's clothing, etc.) and show that they have a core demographic following for each particular property. This is not to say that MVL does not care if all of its books make a profit (their cancellation of poorly selling titles proves that profitability is still an important concern), but I think that it is fair to say that good monthly sales totals for each book are not necessarily the only thing that management has its eyes on. With MVL having about 40% of the market share for monthly comic sales and DC having somewhere between 20 and 30% (not sure of DC's total market share numbers last year), even if all of the independents went to TPB mode (which I believe they won't, because they don't have the Barnes & Noble/Borders/Waldenbooks distribution systems in place and because their customers are, in my opinion, even less likely to want to wait for each book on a quarterly basis), you'd still have MVL and DC with their 60-70% of the market doing things however they want. And keep in mind that while monthly circulation numbers are down when compared to the 80s and early 90s, Marvel actually increased its unit sales for each title from an average of about 45,000 copies per issue in 2002, to an average of 55,000 copies per issue in 2003. That's a 22% increase, year over year, on an overall basis, and one that I think shows Marvel that it can continue to make money by publishing monthlies.

 

I also believe (based on dozens and dozens of statements) that Marvel will continue their TPB expansion, but that they will primarily do this by continuing to exploit the favorable margins that MVL realizes from TPB reprints. The TPB reprints (especially for the classic stuff, like Silver Age reprints) have a sizeable built-in audience and are as cheap as can be to produce. This is where the high margins are, and MVL still has a million old stories that it can reprint into additional TPBs before they need to start putting new content in TPB format. Think of TPB reprints to be akin to buying a DVD that comes out after a movie has been in theaters for six months. Those who can't wait to see the movie will see the movie, while some of them will wait for the DVD. (Some will both see the movie and rent/buy the DVD, which is like comic collectors who buy and bag/slab the monthlies and then buy the TPBs to read.) The production costs of the movie usually (though not always) gets paid from box office receipts, and the DVDs are all gravy. The monthlies/TPB setup is similar to this, and MVL has been releasing TPB reprints of its current titles with this very setup in mind. But the fact that the company is selling a ton of TPBs doesn't mean that they give up on the monthlies, any more than a film company would give up on a lower-margin theatrical release because the film sold a ton of higher-margin DVDs.

 

I view TPBs with new content as being similar to the old "Graphic Novel" format, which had been tried before without great success in the 1980s. There are plenty of differences between the Graphic Novel situation from the 80s, but there are enough similarities to make you wonder.

 

Having said all of that, I think you have hit the nail on the head when you talk about resistance to the $2.99 cover price of monthlies, or really, anything above $1.50. What I would like to see happen is for Marvel to go back to printing comics on newsprint, rather than the shiny paper used today, except on deluxe format books like JLA/Avengers or 1602. It would be a lot cheaper and the books would be more delicate, which means that in ten years, you'd have a lot fewer NM books lying around (which would help create scarcity in high grade, and thus, attract collectors). The problem with this is that a lot of the new color techniques don't look as good on newsprint or even the "Baxter" type paper that Marvel was using on its nice books in the mid-80s. It would be a trade off, but I would be interested in seeing how the market would react to a new comic on lower quality paper, but with good stories and art, decent (though not state of the art) coloring techniques that are more appropriate for newsprint, and a cover price of $1.50. This is a tradeoff that I, for one, would gladly take. I think it would help bring in a few more of the younger kids who don't want to spend three bucks on a comic book and who don't necessarily even notice the difference between the paper in a $3 book versus the paper in a cheaper book.

 

On the issue of TPB pricing, I think you are confusing two different types of customers when you say that someone who would buy a slabbed 9.8 modern for $30 would pay $17 for a TPB. The people who pay $30 for a 9.8 modern are collectors or speculators who care about the collectibility of their books. These are not people who buy comics JUST because they love the stories, although I am sure that many of them do like reading stories as much as the next guy (and those that do like the stories are also buying an extra copy of each issue to read -- these excess sales go away if you switch to TPBs). If you tell these collector/speculators that they have to buy mass-produced TPBs from now on, I don't think that they would happily switch from collecting/speculating on 9.8s (which rightly or wrongly are perceived by them as "rare") to buying a mass produced TPB off the shelf, when the TPBs are likely to have little resale value down the line. And if you drop the price of the TPB to $10-12, you eat away at the margins on the TPBs, which are what make TPBs so attractive to a publisher in the first place. Add in the production art/creative costs for TPBs that are not reprints, and you wind up with a proposition that is even less profitable for the publisher than printing monthlies is. And with this in mind, you have to ask yourself why Marvel would risk irreparably harming a division that is central to its corporate strategy by switching the business model to an all-TPB model. I just don't think it'll ever get there, or even close to it. I believe that monthlies are here to stay.

 

You make some good points.

 

I don't think that Marvel would give up the revenue that comes from its monthly publishing. Last year, 71% of Marvel's net revenues from publishing came from the direct market, which means LCSs. In the two years prior, it was 76% (2002) and 80% (2001), respectively. Any massive change to its business model would threaten that chunk. There is no guarantee that the comic buying public feels the same way as a few people who buy TPBs do. Even if the TPB thing worked out in the end, it would take a couple of years and Marvel would lose a ton of revenue in the meantime.

 

I agree Marvel wouldn't lead the charge into the TPB country. This will be done by DC, Dark Horse, the Manga publishers (of course), followed by some of the other smaller publishers. Marvel doesn't strike me as a company that grabs the bull by the horns and runs with it, so-to-speak. Marvel is more likely to re-re-release an old title like The Invaders in comic book form and hope it makes it past 7 issues.

The few people that buy TPB's are the comic buying public.

Your right, it will take at least a few years but Marvel won't lose a ton of revenue. They'll make the transition like everyone else. Ironically, I see comics in the future as testing beds for future TPB's.

 

Then there's the issue of "why?" Everyone knows that TPBs are higher margin products than monthlies. The reason for this though is because TPBs do not carry with them the bulk of the production costs, such as paying the writer, artists, colorists, editors, etc. The printing and distribution costs constitute the vast majority of the costs involved in selling TPBs. If you don't publish the monthlies to subsidize the TPBs, then those production costs get rolled into the TPBs, which suddenly become significantly lower margin items. And if they don't sell as well as the monthlies because of their higher prices and infrequent publishing schedule, then Marvel loses revenue AND has lower margins in its publishing division. Not an attractive prospect.

 

I'm not familair with publishing costs for comics vs. TPB's, all I can say is people who get tired of the $2.99 price tag for a 32 page comic (with the 10 pages of ads you mention) will also cost Marvel revenues, also not an attractive prospect.

I'd think Marvel would have a set publishing schedule for any TPB titles. Not that they would make any of their deadlines, but hey, they don't now.

 

 

Then there's the issue of advertising. On average, ten pages of each Marvel comic are used for advertising. 17% of Marvel's publishing revenue last year was from advertising, up 50% from the prior year and a major reason why Marvel's publishing division had such a bang-up year last year. TPBs, on the other hand, contain no advertising. Has anyone conducted a study to see if any of the current advertisers would continue to advertise if the book were in TPB format, assuming that Marvel would put advertising into a TPB (which I'm not even sure they're permitted to do)? Those advertisers with time-sensitive advertising (for Comic Conventions, TV shows, movies, etc.) would probably not. And guess what? This is a huge chunk of Marvel's ad revenues. They are not going to give this up. In fact, if you look at Marvel's recent SEC filings and listen to their conference calls, they are actively seeking to expand the advertising aspect of their publishing division because advertisers are suddenly a lot more interested in putting their ads in Marvel's books.

 

Interesting, that's a lot of revenue from those 10 pages of ads. Imagine how many pages of ads would fit into a 100 page TPB. If they can slap an advertisement on a boxers back during a fight there's no doubt there will be ads in TPB's and lots of them. Time-sensitive?, better plan ahead. I also assume there will be still be some form of monthly comic to alleviate this problem to a degree.

 

Finally, Marvel has specifically stated on several occasions over the last year that it intends to *expand* its core line of comics over the next year, and will try to broaden its demographic appeal by introducing new monthlies that appeal to different demographic groups. Will a person who does not typically buy comics plunk down $17 on a TPB in which he or she does not even really have any interest in the first place? Or might a $2.50 cover price be more likely to convince the consumer to give it a shot? Despite what others have said, I do not think that the switch to all TPBs would bring enough new fans in to replace the ones Marvel would lose.

 

Marvel will still continue to expand it's monthly titles. Change to TPB's as a majority will only happen over time and comics will still be there the whole way through it and even beyond. Will the people who normally buy comics pay $17.00 for a TPB? I hope not, I wouldn't, $9.95-$12.95 or thereabouts, yeah. Of course, if folks are shelling out $28.95 an issue for a new comic CGC 9.8 they may very well pay $17.00. I don't think it will ever be, nor should anyone think, a world of all TPB's. Same as above, I think comics will make a nice testing bed for judging release of future TPB's, or special one-shot type deals.

 

It's an awkward kind of change for those of us who are used to the comic format. If I myself hope to continue doing business in the new comics area I think I really need to prepare for a TPB world. Let me stress not entirely without the comics we know and love. The back issue market will be fine, publishers will adapt, sellers will adapt, heck, even CGC will probably adapt as they've gone from first comics, to mags, someday TPB's maybe. Who said..."Ride the wave of change or drown in it"?

 

Hang ten dude

 

CRC

[delekkerste]

You understand getting them back into bookstores, newsstands, etc. means making them fully-returnable don't you? And that transfers the risk of guessing print volumes incorrectly away from the direct-sales retailers and back on to the publisher, right? And at a higher-price-point, the cost of each wrong guess, each unsold book becomes that much higher?

 

What's your point? Fully-returnable...so what? I guess all those companies that make (returnable) products distributed through retailers must all be going out of business. People need to stop thinking in terms of the antiquated pamphlet paradigm and start thinking outside of the box. All the rules are going to change. Yes, there will be some upheaval. No, it will not halt progress.

 

Gene

[CompleteRunComics]

You understand getting them back into bookstores, newsstands, etc. means making them fully-returnable don't you? And that transfers the risk of guessing print volumes incorrectly away from the direct-sales retailers and back on to the publisher, right? And at a higher-price-point, the cost of each wrong guess, each unsold book becomes that much higher?

 

Or do you think 'smart business minds' can get the bookstores, newsstands, etc. to change their entire business model and adopt the direct sales approach (i.e. not returnable, retailers eat the unsold copies) just for the privilege of selling funnybooks tricked out as high-priced TPBs?

 

 

What do we consider high priced for a TPB?

 

If I buy three issues of Daredevil today I pay $8.97, am I to assume that a TPB, of say 100 pages, is going to be considerably more than $9 or $10? It's not.

 

Bookstores, newstands etc.. will still be able to return unsold copies. The difference? Instead of returning 3 copies of daredevil, one every three months, they will be returning one Daredevil TPB every three months. Same difference, except the TPB is a complete story in a sturdy shell.

 

CRC

[FFB]

Who knew that we could turn this into an informative discussion if we stuck to the facts???

 

Anyway, you raise some interesting points. Here are my thoughts.

 

You can't do that now, because pamphlets are priced too high for what they are, but too low for retailers to make money if prices were slashed, so it makes no sense to reduce paper quality because buyers will feel even more ripped off than they are already if you keep the price the same, and sellers don't want to see the cover prices any lower than they already are.

 

Why not just adjust the cover price so that the retailer makes exactly the same amount of profit from each unit sale at a $1.50 price point as he does from a $2.99 price point? Then it wouldn't matter to the retailer what the cover price is, as long as he's making the same amount of profit per book. (In fact, the retailer would be even happier with the lower price point, because his cost would be lower and he'd be risking less capital for the same end result.) The question, of course, is how well Marvel could cut its own publishing costs on a book in order to make up for the decreased unit price. But with a reduction in paper quality and cover stock quality to newsprint levels, I imagine they could get it pretty low. And even if the LCS owners had to take a slightly lower unit profit at first, I think that increased unit sales (which would almost certainly follow from reduced prices) and new customers would eventually result in more profit for the LCS as more buyers are drawn back into the hobby.

 

The revenue side is open to debate - the collectibility factor and speculating activity will certainly fall. Some old-timers will call it quits. LCS's may have a fit at first.

 

Although I'm sure it's not true of all of them, my understanding is that most LCSs are not that well capitalized. Anything that would place them in direct competition with Barnes & Noble/Borders/Waldenbooks (and with an all-TPB format, that's what you'd have) would spell their death the same way it has spelled the death of the local mom-n-pop bookstore. Marvel would be killing the source of more than 70% of its publishing revenue, i.e., the direct market. I think that the consequences would be far more severe than the LCSs simply having a fit. I think it would put them out of business, because they wouldn't really have anything "special" to sell to its customers that the customers couldn't find cheaper (with a Waldenbooks discount card) at any of the 90 million megastores around the country.

 

With the higher price point and more durable, portable format, you can get these books back into newsstands, convenience stores, bookstores, toy stores, Wal-Marts, K-Marts, mail order, subscriptions, etc. etc. etc.

 

What is stopping them from just printing more TPBs and doing this now, while keeping the also-profitable monthly sales going through LCSs? Nothing is. In fact, that's exactly what Marvel has done so well over the last couple of years. I don't think that the company views this as a zero-sum game, though. The TPBs, which co-exist harmoniously with the monthlies, have been a great source of additional high-margin revenues because it's easier to sell through the big bookstores. I think it would be great if they could also get them distributed through newsstands, which I am sure you know gave up on regular comics a long time ago because of the higher profit magazines that took up the good shelf space. But Marvel doesn't need to do away with monthlies in order to expand TPB production. There is ample room for both.

 

To give a $2.50 comic a "shot", someone has to go to a LCS, which most non-fanboys and girls are loath to do...and then go back to the LCS for the next 5 months to read the rest of the storyline. No wonder pamphlet sales are on an inexorable long-term decline.

 

Sales levels are certainly down compared to where they were in the 70s, 80s and 90s. But they are pulling out of the decline. As I pointed out before, Marvel had a 22% increase in average unit sales of monthlies from 2002 to 2003 alone! That is huge, and it has nothing to do with TPB sales! There are strong barriers preventing sales from getting back even to 70s levels, but I think that reduced pricing, quality stories, and increased availability is a good start. And as far as restructuring creator contracts goes, that's going to be pretty tough, especially with Marvel and DC in a constant bidding war for creator talent (offering high paying exclusive deals to the top talent), and independent companies like Dark Horse offering creator ownership opportunities. If the big two ever try to crunch creator pay too much, the top creators will just jump to Dark Horse and publish their own stuff. Marvel and DC will then suffer from a lack of quality creators and sales overall will suffer.

 

The industry needs to realize that readers, not collectors, are the key to its long-term survival. The pamphlets aren't getting it done. Smart business minds can make the TPBs work.

 

I agree with the last sentence but disagree with the first two. I'll start in reverse order. I totally agree that TPBs are a key to the survival of the comic industry, in the same way that DVD/VHS is key to the survival of the film industry. I also agree that TPBs do not need to be limited to reprints only. The possibilities are virtually endless, and represent a nice, still-relatively-unexplored source of revenue. And as you noted, TPBs are more amenable to being sold in places like a mega-bookstore shelf where selling pamphlets is no longer economically feasible. But TPBs and pamphlets can and do co-exist right now. Marvel doesn't have to kill one to allow the other to thrive.

 

As to the first two sentences, I don't agree. I don't think that readers and collectors are mutually exclusive categories. I am both a reader and a collector. So are lots of other people. The key to their long-term survival is, in my opinion, to expand comics' reach beyond the limited demographic groups that currently consume the product. They especially need to make the books more available and affordable to kids, because kids are the ones who seem to relate to the superhero fantasy genre the most. And while pamphlets are not selling at the levels they used to, they are improving and are profitable at current levels. Marvel has always had low selling titles, even during the boom years. Some titles will get cancelled, but the monthly comic sales are recovering nicely over the last couple of years, at least for Marvel. (I don't track other companies' sales levels.)

 

Finally, thanks for being civil. Let's keep this going.

[CompleteRunComics]

Although I'm sure it's not true of all of them, my understanding is that most LCSs are not that well capitalized. Anything that would place them in direct competition with Barnes & Noble/Borders/Waldenbooks (and with an all-TPB format, that's what you'd have) would spell their death the same way it has spelled the death of the local mom-n-pop bookstore.

 

Good point.

 

I think our (anyone selling these TPB's) only hope would be a bookstore/newstand only carrying a few titles and not the wide variety that would draw people to an LCS.

 

 

CRC

[FFB]

Last time I was in Barnes & Noble, they had an absolutely massive section of Marvel and DC TPBs. Plenty of independents too, but the breadth of selection of MVL and DC TPBs was impressive.

 

Although I'm sure it's not true of all of them, my understanding is that most LCSs are not that well capitalized. Anything that would place them in direct competition with Barnes & Noble/Borders/Waldenbooks (and with an all-TPB format, that's what you'd have) would spell their death the same way it has spelled the death of the local mom-n-pop bookstore.

 

Good point.

 

I think our (anyone selling these TPB's) only hope would be a bookstore/newstand only carrying a few titles and not the wide variety that would draw people to an LCS.

 

 

CRC

[lighthouse]

I had given this thread up for dead... I am amazed that it actually came back to the living...

 

I voice my opinions pretty frequently on these topics, so some of the old guard here are tired of hearing them... but...

 

I honestly believe that increasing cover prices is probably a better choice than reducing them. There simply isn't the elasticity of demand you would expect when it comes to comic book price points. On two separate occasions I have offered every title in my shop at a 30% discount to every customer off the street for a period of 3-6 months. Unit sales increased by less than 9% in response and revenues dropped sharply (with profits obviously dropping even more sharply). There was no difference in the reponse of subscribers compared to walk-in traffic. Both groups gave a collective shrug at the prospect of cheaper prices.

 

Similarly, when prices increase on a particular title, unit sales decline by less than 25% of the percentage increase in price. So a jump from $2.50 to $2.99 results in a drop in unit sales of around 4%. Revenues and profits both go up. Isolating variables for a legitimate econometric analysis is hardly easy, since most price changes are accompanied by changes in creative teams, but in virtually every case study I have run, profits increase when prices increase.

 

I've said before that Marvel can legitimately treat their monthly pamphlets as an advertising cost for their movie licenses, toys, trade paperbacks, video games, t-shirts, statues, etc... Just as Hasbro was able to sell advertising during its GI Joe cartoons, which were really intended as ads for the GI Joe toys...