Spin Control: Marvel Releases 2004 3rd Quarter Numbers

[Kevin Boyd]

Marvel today reported its third quarter results for 2004

 

http://www.marvel.com/company/showarticle.htm?id=42

 

New York, New York – October 28, 2004 -- Marvel Enterprises, Inc. (NYSE: MVL), a global entertainment licensing company, today reported robust financial results for its third quarter ended September 30, 2004 and initiated financial guidance for FY 2005.

 

Net sales for the third quarter of 2004 rose 60% to $135.2 million compared with Q3 2003 net sales of $84.5 million. Q3 2004 operating income rose 44% to $62.1 million versus the prior year’s results due to growth in licensing income from the Spider-Man JV and Marvel Studios. A higher mix of toy segment sales, as a percentage of total sales, year-over-year, led to a shift in consolidated operating margins to 46% in Q3 2004, from 51% in Q3 2003. As a result of a $45.8 million tax swing, Marvel’s Q3 2004 net income of $34.4 million was lower than last years’ $63.2 million.

 

Marvel’s President and CEO, Allen Lipson, commented, “Our robust Q3 and year-to-date operating results continue to benefit from the expanding brand awareness of the Marvel Universe. The recent agreement with Antefilms for animated Fantastic Four programming is part of Marvel’s continuing strategy to support brands through multiple exposures in feature films, animated TV series, direct-to-video projects, video games, and other merchandising opportunities. This strategy is focused on developing a recurring stream of entertainment exposure fueling sales of Marvel-branded products.”

 

 

[awe4one]

This is the telling number:

 

In total, there was an approximate 5% increase in total circulation to 12.4 million units compared to the prior year period, reflecting success in the Company’s title management strategy.

 

Jim

[Kevin Boyd]

It is, but I think it has to be tempered with this information:

 

Marvel’s Publishing Segment net sales rose 15% to $22.6 million due to strength in core comic sales, advertising and custom projects.

 

We've discussed it elsewhere, but the company's title management strategy seems to be to add more titles with lower per unit sales. Marvel's publishing line grew by nearly a third between 2003 and 2004 and that increased their revenues by 15%, but their circulation only went up 5%.

[awe4one]

Yep....and let's look at the numbers...

 

Total number of new Marvel issues solicited Jul-Sep 2003: 168

 

Total number of new Marvel issues solicited Jul-Sep 2004: 220

 

A 52 issue and 34% increase in titles over 3Q 2003. All for a 5% increase in circulation. That's abysmal no matter how you spin it. The title management strategy is simply covering up for decreasing readership and making their statements look better than reality.

 

Jim

[SpideySense-migration]

It is, but I think it has to be tempered with this information:

 

Marvel’s Publishing Segment net sales rose 15% to $22.6 million due to strength in core comic sales, advertising and custom projects.

 

We've discussed it elsewhere, but the company's title management strategy seems to be to add more titles with lower per unit sales. Marvel's publishing line grew by nearly a third between 2003 and 2004 and that increased their revenues by 15%, but their circulation only went up 5%.

 

From a profit stand point I don't see anything negative in the numbers being quoted. Circulation and revenues are up.

 

From a fanboy perspective I hate all the new [#@$%!!!] Marvel is putting out like the Invaders, Rogue, Gambit, X-men Academy, etc...

 

The only way things will change is if fanboys stop buying all the [#@$%!!!] and gimmicks that is being put out by Marvel. It could be the early 1990s all over again. Marvel has a lot of talented writers and artists. They should concentrate on putting out their high quality monthly core titles instead of flooding the market with a bunch of low quality new titles and limited series junk.

[Darthdiesel]

From a fanboy perspective I hate all the new [#@$%!!!] Marvel is putting out like the Invaders, Rogue, Gambit, X-men Academy, etc...

 

The only way things will change is if fanboys stop buying all the [#@$%!!!] and gimmicks that is being put out by Marvel. It could be the early 1990s all over again. Marvel has a lot of talented writers and artists. They should concentrate on putting out their high quality monthly core titles instead of flooding the market with a bunch of low quality new titles and limited series junk.

 

As a collector, I agree that the extra titles make it hard on the wallet to pick these up weekly and what I would consider lower tier titles maybe best relegated to my TPB buying.

 

but the titles you mentioned like Invaders, Rogue, X-men Academy - I'm actually enjoying the reads and see some interesting new talent. It may be crahp to oldschool fanboys but isn't Marvel supposed to try and attract a new audience? New X-men Academy, Runaways, Marvel Age titles - all of these I'd feel comfortable handing out for Halloween to young kids without worrying about their parents accusing me of twisting their children's impressionable minds with stuff found in Identity Crisis.

 

Do you think that Marvel and the fans would be best served if they focused on ASM, Avengers, DD, FF, Punisher, Thor and Xmen (Make them all Ulitmate Marvel ) ? It would make it so much easier to collect if this was the case but it'd be boring too. I understand that there can be a glut of lower caliber books out there and it is frustrating but sometimes there are gems in there as well:

 

Bullseye's Greatest hits - I love Dillon's art and the story is pretty funny in a twisted way.

Identity Disc - cheesy twist at the end but I liked the cover art and made for a so-so 20 minute read

I enjoyed Alias, Elektra, Emma Frost (don't know why - just the covers now that I think about it),Rogue etc

 

If Marvel cut down their offerings, I'd be forced not to pick up other MArvel titles, but look to DC, Top Cow, Dark horse adn IDW to get my weekly fix. I already do that now but would be buying more of those titles instead if Marvel didn't have new stuff for me to check out.

[awe4one]

Do you think that Marvel and the fans would be best served if they focused on ASM, Avengers, DD, FF, Punisher, Thor and Xmen (Make them all Ulitmate Marvel ) ? It would make it so much easier to collect if this was the case but it'd be boring too. I understand that there can be a glut of lower caliber books out there and it is frustrating but sometimes there are gems in there as well:

 

Darth, I'd buy this 100% if Marvel had faith in these titles and trying to give them a chance. But what we have instead is Marvel looking at #1's numbers, and if not great, will essentially bail on the title by calling it a mini and halting the hype machine full stop. These titles never have a chance from the get-go but they do have the ancillary effect of boosting overall circulation numbers. So Marvel is getting something out it....just not the readers...

 

Jim

[Darthdiesel]

So the alternative is to keep printing titles for the sake of printing, in spite of the declining sales numbers? This is one gloomy prospect. I'll never get to read anything new. Marvel will print minis based on reaction to the # 1, so I'll wait instead on the TPB; but Marvel won't print a TPB unless the sales of the regular issues meet a threshhold and they won't because I and others like me are holding back their weekly spending in anticipation of the TPB. should Marvel just give up on the new audience entirely or force them to swallow 40+ years of convoluted continuity by only focusing efforts and production on the oldskool core titles?

[Kevin Boyd]

A 52 issue and 34% increase in titles over 3Q 2003. All for a 5% increase in circulation. That's abysmal no matter how you spin it. The title management strategy is simply covering up for decreasing readership and making their statements look better than reality.

 

Ok, but part of me wonders whether overloading the current fanbase with titles has simply shifted the numbers across a much wider range of books rather than a rapidly declining readership.

 

I start and stop Marvel books all of the time now. Where once I might have continued with a title because I have every issue, now I will drop a book if I don't like the storyline, and evaluate it again when the next one starts. I'm also willing to wait for the tpb if I see that it's a multi-part storyline (which they ALL are).

 

Where at one point everyone bought the same Marvel books you see a lot of people picking and choosing what appeals to them. Check out any of the responses to the shipping lists and you will see what I mean.

[jbud73]

Good discussion, who knows if its the 90s all over again, in the new issue market it feels like it. I will say that as someone who purchases from numerous companies Marvel's content is behind DC and DH. For me its simply this...... They can put out all the tripe they want - and Darth is right some of it will actually be good, but I will continue to be very selective about my purchases. Of the entire glut only 2 titles have peaked any interest and I have still not picked them up. In the end you don't have to buy it.

[Kevin Boyd]

Marvel will print minis based on reaction to the # 1, so I'll wait instead on the TPB; but Marvel won't print a TPB unless the sales of the regular issues meet a threshhold and they won't because I and others like me are holding back their weekly spending in anticipation of the TPB.

 

That's DC's policy, not Marvel's. Marvel will print the tpb if they have faith in the material. Exiles, Runaways, Sentinel, Emma Frost, Mystique, Spider-Girl, She-Hulk, Wolverine/Punisher mini, Wolverine/Hulk mini.... these are not top selling books, but they have all had trade paperbacks in the last few months (or have had ones solicited).

[SpideySense-migration]

Do you think that Marvel and the fans would be best served if they focused on ASM, Avengers, DD, FF, Punisher, Thor and Xmen (Make them all Ulitmate Marvel ) ? It would make it so much easier to collect if this was the case but it'd be boring too. I understand that there can be a glut of lower caliber books out there and it is frustrating but sometimes there are gems in there as well:

 

Darth, I'd buy this 100% if Marvel had faith in these titles and trying to give them a chance. But what we have instead is Marvel looking at #1's numbers, and if not great, will essentially bail on the title by calling it a mini and halting the hype machine full stop. These titles never have a chance from the get-go but they do have the ancillary effect of boosting overall circulation numbers. So Marvel is getting something out it....just not the readers...

 

Jim

 

Exactly. I honestly don't think Marvel put out the new Invaders, Jubilee, Alpha Flight, Iron Fist, X-Force etc.. titles thinking they are going to last more than a 10-20 issue run. They put them out because it is a new #1 of (in some cases) popular 2nd tier character(s) that gullible fanboys will buy which equals increased circulation and revenue for Marvel, but equals crapy stories and art for the fanboys. In some cases they actually put talented writers and artists on new titles only to pull them off after the 1st story arc and replace them with less talented artists which equals the end of the title in most cases. It makes money for Marvel in the short run, but in the long run I think this practice will reach critical mass and implode like what happened in the early 1990s. I don't want to see that happen again and it doesn't have to IMHO.