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Those Who Do Not Know History...

So, I'm genuinely starting to get worried about the extent of how our largest partners are manipulating the solicitation process, and what the ramifications are -- every month I get a little more concerned that we're edging toward another crash of the market.

Generally speaking, though we retailers do like to complain about things, ordering our "bread-and-butter" stock -- that is to say, regular ongoing comics with stable creative teams -- is really not that difficult at all. Once you have a little time and practice doing it, and presuming you have a quality point-of-sale system that allows you to see what your average sales patterns are over a number of months, there's not a massive amount of deviation month-by-month on the average ongoing.

Yes, they tend to drop over time, but that drop is typically gentle, and it's usually predictable if you are at all aware of the content of the comics you are selling -- what I'm going to sell of "Batman" is likely to be pretty stable and consistent from month to month. I have "X" number of customers who are committed ("subscription" or "pullbox" customers) to buying every issue that is released; and even walk-in rack sales tend to be pretty steady. If one orders conservatively, ordering these comics is pretty safe and easy.

The pressure on the market comes from things that are outside being a "regular ongoing comic with a stable creative team" -- which is usually the majority of the order form any given month. Lots of comics are ordered with no history and no pattern behind them, and those are the ones that are risky. Even worse can be the ones where we're ordering like "A second try for the brass ring."

As we all know, September is DC's "New 52" Stunt Month -- they relaunched the superhero line in September 2011; in '12 they had "#0" issues; in '13 they did "Villains Month" with lenticular covers; and in '14 they repeated the lenticular covers for a "Futures End" connection.

Now, if you'll all remember, DC grossly underprinted the 2013 lenticulars -- DC set the print runs that year before they had orders, and the reported sales are generally under what the parent book was already selling even though they told retailers (by use of the "Series Code": an invisible, to you, piece of data that retailer POS' track) to order it like the parent. That is why there was a "feeding frenzy" for those comics -- there were fewer copies on the market than the market natively wanted. With the supply and demand curve thrown out of balance like that, speculators rushed in and just exacerbated things.

This September, however, retailers as a body ordered what they wished they'd had in 2013 -- some 20% or so higher than the standard sales of the "parent" book, it looks like. Just compare on the same chart "Justice League #33" (80K) to "Justice League Futures End" (93K) for your snap view of the trend (+16% in this case).

The thing is, however, that much (most?) of the 2013 demand was actually driven by speculation, not interest in the base comic -- while it certainly appeared to be that 20% more (or, in a few cases, double or triple the number of) people wanted DC comics that month than normal, that was only true insofar as there was money that could be made.

Far fewer people appear interested in the lenticular stunt covers when you take the potential profit motive out of it -- in fact, DC still has as of today (10/14/14) 37 of the 41 involved lenticular covers in stock (and 41 of 41 of the "standard" edition without the shiny) -- retailer message boards like the CBIA are filled with people trying to sell overstock on this year's comics for as little as $1 each -- or about half of the wholesale price they paid for them. The market is pretty saturated with these comics, because it's pretty dumb to think that lightning is going to strike twice.

(For myself, I banked on every other store in town ordering "enough," so I ordered very very lightly on these [like 1 or 2 copies on most of the line] for the rack; I still have far more leftover of those paltry rack copies than I would like, but the event was profitable for me because I knowingly didn't extend this year.)

If we think back to our comics history, the last major crash is generally pinned to "Adventures of Superman" #500 (though, this is a very simplistic logline, I think, because there were a lot of other books that were performing under market capitalization at that point -- "AoS" #500 was really no more than the straw that broke the horse's back). And why? Because retailers remembered how well killing Superman (in "Superman" #75) sold, and they wanted to recapture as much of that as they could, but the audience wasn't there in that same number the second time through.

Sound at all familiar?

Clearly the scale is different -- "AoS" #500 was estimated to have sold 3.45 million copies to retailers looking to capture lightning in a bottle -- but the end results of a market swimming in unsold product is much the same.

Or we can take another modern example: the Marvel intra-company crossover, currently in the form of "AXIS." Marvel has moved to a greatly accelerated production schedule on crossover events with multiple ones running at the same time, and within very tight time frames.

"AXIS" is a nine-issue series, with each issue being $5. These nine issues of "AXIS" come out in just a three-month period. Retailer initial orders for the ninth and final issue of the series are due less than two weeks after the release of issue #1, basically making it impossible to order this series on anything other than a speculative basis.

We're at least three issues in before we have even the slightest chance of having any scrap of real and practical data upon which to base our orders -- in other words we're placing orders that are, at best, wildly stabbing guesses at how many people might be interested.

And that doesn't mention the thirty-seven (at least?) other comics that tie-in to "AXIS!"

I know that our first week sell-through on "AXIS" #1 was considerably lower than I wanted (in fact, it sold fewer copies in the first week on-sale than "Uncanny Avengers," the title most of the plot spun out of, typically does) -- that kind of gulf between order and results is dangerous on "tentpole" titles, which typically have significantly greater orders than the books around them.

This is the formula from which market crashes tend to happen -- too many speculatively ordered products, too deep into the pipeline. Especially when those goods are priced higher than standard format comics.

As this market has shown again and again over the decades, consumer interest in "events" is a fickle thing. Sooner or later every publisher hits a few foul balls, or the public gets tired of oversaturation, or the story just doesn't work, or whichever of the myriad of reasons... and the retailer is the one left holding the bag.

It used to be that when, say, "Secret Wars II" turned out to be a pile of lox, we weren't that over-extended with orders in the pipeline -- 2-3 issues out, sure, but that's very different from "order forty-six different comics and tie-ins before you've had any real amount of time to judge how the first one did."

Now, historically, retailers have learned some of the lessons of the past, and tend to order conservatively (too conservatively, some might say), but we're in a period of market growth now, with really a growing number of stores that didn't live through any of the prior crashes, so I get the sense there is perhaps more irrational exuberance in play than there has been in quite a long time in our market.

Hell, I'm guilty of it myself -- both my two stores are doing very well at the moment, and I ordered "AXIS" thinking it would sell closer to what "AvX" sold than, say, "Age of Ultron" or "Fear Itself." That's a pretty big gulf in sell-through, in my experience.

I'm not so over-extended on DC's lenticular covers or Marvel's Event Cramming that I'm putting my business at any significant structural risk -- but then, I also try to run stores that have a good diversity of comics products, and where more of my dollars are coming from creator-owned books than the majority of my peers. This makes me a bit more likely to be able to withstand market corrections, I think. But market corrections always come, inevitably.

What we need from our publishers is, as always, a certain amount of restraint in how they try to maximize their profits. I'm pragmatic in the sense that I understand that Disney and Warner Bros. don't actually care about comics except insofar as to it being profitable enough for them to bother, so I get that there's a lot of pressure on the executive teams at those publishers to consider short-term profit over long-term health, but there's something in the air that smells very much like "crash" to me.

And that means that it is time be more considerate of what and how we publish, and especially to the risk that it brings to the market as a whole. Producing work at a rate faster than Final Order Cut-Off allows retailers to adjust (that is, three weeks on a standard comic) is entirely irresponsible to the market. Weekly and bi-weekly releases are poison for the economic structure of the market, when the retailers are the ones bearing the burden of Costs of Inventory.

The Direct Market system, I think, works pretty damn well when all participants respect what the other legs of the table need -- but it's pretty easy to stress and overtax it, and even to absolutely break it.

Historically, I'd argue that we were always able to regroup because the stewards at the largest publishers were mostly loyal to comics, so when crashes came, the publishers dialed back; I don't know that I believe that is true, exactly, any longer. Oh, people at Marvel and DC are still (largely) comics-loyalists, but they don't make the final decisions any longer -- it is very easy to envision a situation where some bean counter at the parent companies say "What? You only made fifty million dollars profit this year? Why do we bother with this division at all?"

Smart retailers will continue to hedge their bets on risky titles; the problem is that publishers try to pretend that there's seldom any "risk," because the thrust of their marketing is to the consumer, not the retailer. If publishers really want to push weekly and bi-weekly publishing schedules, then they really need to step up and mitigate that retailer risk to a much greater extent than they currently do.

Brian Hibbs has owned and operated Comix Experience in San Francisco since 1989, was a founding member of the Board of Directors of ComicsPRO, has sat on the Board of the Comic Book Legal Defense Fund, and has been an Eisner Award judge. Feel free to e-mail him with any comments. You can purchase two collections of the first Tilting at Windmills (originally serialized in Comics Retailer magazine) published by IDW Publishing, as well as find an archive of pre-CBR installments right here. Brian is also available to consult for your publishing or retailing program.

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