The post-pandemic Comic Book Distribution Wars

First thing's first, I'm located in the Philippines, a small market player in the comic book industry. BUT, we are home to a lot of talented international comic book artists and illustrators who have contributed to the comic book industry since the 70's, from the likes of the legendary artists Tony De Zuniga, Alfredo Alcala, Nestor Redondo, Alex Nino, and Steve Gan, the 90's comic book boom headlined by Whilce Portacio, Gerry Alanguilan, Gilbert Monsanto, Ed Tadeo, Reno Maniquis, to the new millennium artists like Leinl Yu, Harvey Tolibao, Stephen Segovia, Carlo Pagulayan, and a host of others that are just too many to mention (and apology to those who I wasn't able to name here). Filipino illustrators have contributed to the industry for much of its existence. Now basically, the comic book industry in the Philippines is mainly controlled by Comic Odyssey, Filbar's, Planet X, Druid's Keep, and Comic Quest. These are the physical stores that are located in the capital, and which basically supplies the demand of the 7,000 plus islands in the country. Now with that background set, here's my take on the 2020 Comic Book Distribution Wars.


The Story thus far...

Well it seems the Corona Virus Pandemic has hurt the comic book industry so bad that not only the temporary stoppage of monthly comic book distribution has affected the monthly readers, but a new business landscape has emerged that it shook the decades long comfort zones of long time Comic Books store operators. In a nut shell, Diamond Comic Distributors (the sole exclusive worldwide distributor of comic books) who holds the monopoly of all the American comic book industry made announcements that they will shut down their operations (along with withholding payments to the publishers), affecting the distribution of monthly comic books worldwide. This left comic book publishers in a dilemma as they were forced to stop working on new monthly comic books due to the uncertainty of the resumption of the distribution. Some Local Comic Book stores were also affected, specially those who were allowed to open and continue doing their business. Realizing that putting too much power on Diamond's hand would result to the eventual collapse of the industry, DC Comics decided to open new distributors in the interim so that there would be a resumption of shipping new monthly books. But when the dust settled and Diamond resumed their Businesses, DC decided to effectively end their exclusive partnership and appointed new distributors UCS Comic Distributors and Lunar Distribution. This was met with violent reactions from Local Comic Shops (LCS)  in the U.S. because fellow Local Comic Shop operator/competitor Midtown Comics owns UCS, while another huge client of Diamond, Discount Comic Book Service (DCBS), owns Lunar Distribution. This results to Diamond losing 30% of their business as represented by DC's  market share for Diamond's total comic book business. This is an industry shattering catastrophe because Diamond basically finances (for a lack of a better term) majority of the local comic book shops because they are enjoying credit terms from Diamond. And the transfer to UCS and Lunar will greatly affect the LCS credit standing (and finances) with them because basically the LCS will come out as new accounts with no existing credit confidence with UCS and LCS. This possibly requires them to shell out additional capital for the purchase of DC Products. So this really affects the LCS' comfort zones and business health. Now with that established, let me share my thoughts how this Comic Book Distributor Wars will affect DC, their market, the LCS, and the industry as whole.


DC's Post Pandemic Strategy  

Covid or any world changing pandemic/event has always been the great equalizer. It is times like these where either you make it to the next evolution or break you down if you get stuck to the old ways. You have to act fast. And big changes like this are only applicable when there's a restart needed. Many LCS were furious at DC's move. But the thing is, they would have a hard time implementing changes like this if this was done when the market has recovered and the business running smoothly. Imagine if the backlash was so bad that they immediately lose all their customers and stuck with monthly books who nobody is willing to distribute. This was a calculated move. DC is forced (despite the stiff resistance) to change the Business model at a time like this because they look at the marketplace as damaged. Not doing this at a time like this will only see resistance. A resistance that they could not afford. So this gamble they are making right now is either they win big or lose big. And they are probably happy to take that gamble, whatever the outcome is. I mean I can understand the outrage of LCS operators because this will open up new distribution channels and in effect competitors and it lessens the "collectability" of the comic books and turn it into disposable consumer products. Relegating it as disposable entertainment. And the new executives at Warner probably never believe the comic book's value as a collectible. Personally I never believe Comic Books will turn you into a millionaire or something. Not unless those old books from the Golden Age, and even those are only limited to Superman, Batman, and probably Spider-Man. Beyond that, nothing worth millions. So instead of focusing on the speculator market who see comic books as collectibles, DC is focusing instead to reach out to more readers. And I don't mean to be insensitive to our LCS, but DC's move is basically about evolving to keep the business of comic books afloat by changing their business model.They are de-monopolizing the sources where you could enjoy their books. (And yes, to reiterate, Diamond withholding their payments to DC also freaked them out!) 

And one of those perceived intents is the gradual shift to the digital world. There are whispers that the endgame for this is for DC to shift their monthly books to digital format with the intention to have them collected as a whole and released as Trade Paper Backs and Graphic Novels in book stores and other retail channels (LCS included). This, according to sources, costs lesser to produce. And the success of their Kid friendly Original Graphic Novels and Young Adult Graphic Novels in book stores has been their model and basis for shifting their monthly books to trade and graphic novel formats. The monthly books will still be retained, but this will mostly be cheap reprints (like those currently found in Walmart stores, the 100 page monthly books that costs cheaper per page than the regular books right now). And by opening up the comic books to mainstream availability thru other non-traditional channels like bookstores and supermarkets, then they could probably encourage new readers to be brought in to their current and up to date stories thru their monthly digital releases. And if this pans out, DC is probably looking at it as an opportunity if those casual readers brought in by the mainstream availability will turn to become a serious comic book buff. Maybe it could revive the industry as they finally are able to tap a new market. Remember, the comic book industry began as reading materials easily accessed in Supermarkets, Drugstores, News Stands, and the likes. So this feels like a restart to the roots of the industry.


How this Affects the Direct Market/Local Comic Book Shops

This move by DC will open up more competition to LCS because if we could readily get these books anywhere, then the LCS will be severely affected. Right now, the LCS have the monopoly when it comes to the supply of comic books. And we loyal readers have no other channels to source it from but the LCS when it comes to our monthly fix. Of course digital is available, but it is a business model that is still not widely accepted by longtime readers. In my case, I still like to feel the pages of the books in my hands and see the vibrant art before me in person rather than obscured by the digital feel of the color hues of your gadget screen. So it is well and good that longtime readers such as myself have remained loyal to our favorite LCS, but on the flip side, does the LCS really get new readers beyond us? This new threat that DC seems to be head starting by expanding to new retailers to tap new markets, will the absence of this guarantee that LCS will continue to expand readership and patrons? I doubt that. Because the rise of new readership has become a constant struggle in the past few years, and the rise of sales has mostly been credited to publisher gimmicks that are more geared to the speculator market. People buy multiple copies of speculated books or variant cover incentives, thus temporarily rising the sales figures. Which I find temporary and artificial. And overall unhealthy once these people move on from the hype of the thought that comic books are worthy investments. In fact comic books for the most part is now treated as an art collectible/commodity like paintings more than as a reading commodity, as a source of entertainment. And also these readers' attention is being lured by other alternative entertainment like online games and Netflix. The publishers need to fight back to retain their readership. 

So while the threat is real for the Direct Market. What I could see however is LCS getting to benefit from this in the long run because these reading materials will be the entry point for casual readers. Remember those Dollar Comics by DC and True Believers reprints by Marvel? These are being sold at $1 each and serves as an entry point to the collected trade. Paid promo materials. If they want to enjoy the world of comics, then the LCS will have to be their source to get those back issues and other old runs. If the new readers reached by these new retail outlets is successfully fascinated by the world of COMICS, then they'll have to go back to the LCS for an even wider assortment of the books that they will begin to love. This drives more sales (if successful) to LCS and more patrons. Perhaps reinvigorating the love for comic books. As of the moment, it hurts for the LCS and their outrage is rightfully understood specially that they are dealing in the unknown. But granted that they'll have to deal outside their comfort zones, they have to quickly gather their wits and capitalize on new opportunities. This will be hard at first (like everything is) but if this pays off, they'll be more thankful and be able to expand their business outside the norm. The thought of having to deal with Mainstream competition is probably what scares them the most (apart from financial, logistic issues, and added work). But then they'll have to look at the flip side of things and what are the other opportunities available. They are mad at DC right now, and rightfully so. But the new ownership executives (they were just recently bought by telecommunications giant AT&T) running DC right now though is not loyal to anyone except to their Business. And that's how corporate entities work. They are not charitable institutions.

Our LCS will have to innovate and adapt. So far we have five. Comic Odyssey, Planet X, Filbar's, Comic Quest, Druid's Keep. They each have their own specialty. Filbar's have so far shifted to Pops. CO/Planet X are also bringing in Pops, and they have some trading card games and even KPOP photo cards, DK is more on the Action Figure and Statues variety besides the comic books. CQ is also a mix store. I understand it will be hard for them and we have to continue supporting them. In fact on my end I continue to get my TPBs (apart from my weekly pulls) in Comic Odyssey even if Fullybooked is more accessible to me. If I own an LCS, it will really be stressful for me during these times. And Diamond has really been a big supporter for our LCS especially if they enjoy credit terms. So eliminating Diamond and then forced to shift to other distributors and not offering the same perks will really hurt them. But I'm hoping in whatever the changes, by DC's plan to widen the Distribution, this will help draw in new committed fans and readers of comic books. After all, we all used to get our source in Supermarkets and other retails stores for our books. If we can get these new readers to buy them in our LCS (because our LCS is still the best source for pristine, well handled books) then it is a win for everyone.

How this affects me as a Consumer

So I put consumer there so that I could accommodate everyone. Comic Book consumers are basically divided into three, the readers, collectors, and the speculators. I basically fall on the reader/collector category. I don't join in the speculation and the slabbing (grading them and preserved in acrylic plastic) of comic books (though I own two for posterity purposes). CGS and CBCS (comic book grading systems or slabbers) for me is overrated. They are business models that are benefiting or driving the speculator market. And in my belief, speculators are not healthy to the totality of the business. Comic Books were created to keep us entertained. And like all art/entertainment forms, I believe it will survive for the years to come because people need entertainment in their life. Books are meant to be read, not to be framed. And the speculators bulk buying the speculated books most of the time leaves a bad taste in the mouth for those seeking books to read. Case in point, I was thinking of buying Hell Arisen books just to connect the events from Justice League and Dark Nights: Metal, but when issue 3 (or was it 2) sold out because it was heavily speculated, I decided to nix the book altogether. And if I could not get the monthly books regularly, then it would be better to shift to trades so that you'll get the entire story. In short, speculators took out the joy of reading the books on a monthly basis. And since I am a reader first and foremost, any format will do for me (digital or trades) as long as I get to enjoy my books. I enjoy buying the monthly books because of the variant covers and the likes. And that's why I continue buying them.  

Of course people say that if you are a regular customer or if you have a good relationship with the LCS owners, or Pre-Order in advance, you'll be prioritized and get what you need. Sure that is an option. But on the other hand there's a part of me who hates to beg for my entertainment. And I should not be stressed with my hobby. I'm also speaking in behalf of walk in or new readers who just discovered the joy of reading monthly books. So the thought of current monthly books would be released in digital format and with the intent of collecting them in trades is fine with me. So if you are a reader first and foremost, then you won't see this as a problem as you'll just subscribe the monthly digital books and opt to keep the printed collected trade if you like the book so much by buying one. Less clutter (and my house is filled with clutter really!!!), but you still get to enjoy the literary and art experience. DC (or any publishers) on the other hand still wins, because you get to pay for their services on a fixed monthly basis (like Netflix). But of course online digital piracy is another thing. And they'll have to deal with that too.

Oh and what benefit lies for the speculators if the comic book industry dies? Well, they can hold on to those comic books, because it may be of some value as OLD Art Relics from the PAST.

Final thoughts

I think DC is moving away from the "traditional" collector driven market. In short, they don't care about the business of speculators and collectors. They care more about the reading public. They just want the books sold. They don't care what you do with those books. They look at the speculator and collector market as unhealthy. Remember the 90's comic book boom that was driven by speculators? We are almost on that same state right now. Case in point, Marvel recently released a Filipino Character named Wave, and almost all Filipino comic book Fan bought that first appearance issue to own a piece of history. But did those people really sustain the title? You go to Filbar's and some comic shops you'll still see those New Agents of Atlas 1 lying around. If the LCS over ordered on those books due to catering to the speculator market, you know what's next. We are just one wrong decision away for the 90's comic book mistake to happen again (which bankrupt Marvel back then). And as I've read multiple articles about Marvel's strategy to gain "extra" sales, some LCS in the U.S. are closing down because Marvel forced them to over order just to get those speculated high price variants. Sometimes, that high priced variant is just enough for LCS to break even from those unsold regular covers. DC's plan for the industry is ambitious. It is for me the right strategy to ensure the health of the comic book reading public. Now for it to actually work, that remains to be seen.