Saturday, April 11, 2020

An Industry Undone?

The comic book industry faces challenging times right now due to Covid-19, and many people blame the industry’s reliance on Diamond, and their recent actions, for some of the problems. However, many other consumer-reliant entertainment industries are also struggling, including the movie industry. And while the impact didn’t occur as quickly as with the comic book industry, traditional book stores are also facing significant challenges.[1]
Will this be the end of comics, as so many seem to fear? No. Will the comic book industry drastically change the way comics are distributed? Maybe, but I wouldn’t bet on it. Many critics of Diamond want to see comic book stores survive and thrive, but they also call for a complete rethinking of the way comic book distribution works. I don’t see how these two thoughts can be reconciled.
To briefly recap, a pandemic has swept the nation, and the United States has seen unprecedented unemployment and business closures. Comic book stores were ordered to close in many states in order to comply with social distancing requirements, which meant they could not receive and sell new comic books.
Diamond Distributors, the primary distributor to comic book shops for the industry, announced they would cease shipments to stores. There are a number of factors as to why Diamond made this decision, but two significant ones were (i) many of their customers were closed, and (ii) some of Diamond’s distribution centers were also ordered to close or soon would be closed. Around this time, some publishers began to trim back and cancel some of the titles they had scheduled for release in the coming months, and after Diamond’s announcement halting shipments, additional publishers started halting or rearranging production.
Diamond then stated they would not pay their suppliers until the situation improves, a move they have since clarified. This statement caused many to believe the comic book industry as we know it would collapse. 
Many have blamed Diamond for the fragile state of the industry. As the primary distributor to comic book shops, it has a near monopoly on getting comics from publishers into shops. However, it is important to remember how Diamond came to be the primary distributor.
The direct market emerged after the newsstand market started collapsing in the late 1970s. It was a lifesaver for comic publishers. Notably, comics distributed through the direct market were non-returnable. This factor, combined with reliance on pre-orders, helped increase publisher profits and financial certainty. It shifted some of the risk of a comic book not selling to the retailer from the publisher. Initially, there were a number of distributors, but after the comic book speculation collapse in the ’90s, Diamond remained as the primary distributor.
It is important to acknowledge that comic book stores are still a vital distribution channel for publishers. Other than trade paperbacks in bookstores, success outside of comic book shops is still hard to achieve for most publishers. And, even though I fondly remember buying comics off of newsstands at the grocery store, that market isn’t coming back due to the issues surrounding returnability.
Publishers recognize the importance of comic book shops to the industry, and they actively listen and attempt to support retailers. The movie industry is perhaps the only other comparable industry that listens to and negotiates with its primary distributors—movie theaters. The system we currently have, and the slow adoption of alternate methods of distribution, is due to publishers listening to and trying to support comic book retailers.
My guess is that Diamond will remain the primary distributor to comic shops after this crisis has passed. However, I think a lot of publishers will explore alternative means of distribution, particularly methods over which they can exert direct control. Direct shipment to stores or customers will likely increase, and more publishers will try to expand to the book market. Even though comic book consumers have been slow to adopt digital comics, I expect the numbers to grow. The ease of use, continuous availability, and profit margins make digital comics a distribution method publishers would like to see increase.
Notice, however, that all of these alternative models come at the expense of comic book shops. Any major changes to the current distribution system will cause stores to close.
Overall, I don’t foresee major changes to the industry. The direct market, and the money it generates, works too well for most publishers to abandon it. If true, radical change were to happen it would be at the expense of comic book shops, and most publishers don’t want to see that happen.