Sunday, July 20, 2008

Small Press, Diamond Distributors and the Direct Market

Subtitle, The Good, the Bad and the Ugly.

I have been “talking’ with various people in the small press world and I realize what an incredible amount of work that people do just to try and get their ideas published and out into the market place. Each and every one of them I sure harbor a secret desire that somehow their concept or idea will be noticed by the right person and Hollywood and CSA will come knocking on their door offering them riches so they can go to Vegas and drop a million dollars on a craps game and laugh it off the next day. The reality is that these are all labors of love for almost each and every creator who is involved in these projects. Most have “real” jobs and most hope that one day this can be their real job. Some take the chance to make it their real job and supportive spouses, parents or others help them as they try to find their way.

The shame of it is to me is that the deck is stacked against them in today’s market place. They have to get noticed in a market that when you add Marvel and DC together they own 75% to 80% of the marketplace. Add in Dark Horse, Image and a couple of others and you now have 95% of the market place. So you walk in trying to grab a share of the 5%.

Next up you have to deal with Diamond. Remember when you were in school (at least some of you got this type of economics or business class) and monopolies were considered a bad thing. Diamond is a living breathing example of why that is so. Diamond ended up for various market reasons being the sole distributor of Marvel and DC comics and by that the entire comic industry. Many comic stores are so small that Diamond supplies them with probably 99% of everything they carry in their store. Can you imagine if everything you brought came from only one person? When you are launching you new product Diamond gets to say whether they will carry your book or not. Have you every had to deal with some low level governmental employee who had one little power and they are just abusive as hell about it. Well I’m not saying that happens here, but Diamond is not paying the people who say yea or nay to your book a ton of money a year, so let’s say the area is fertile for abuse. Also for ordering purposes you are put in the back of the bus (the monthly Previews) and if you want to buy an ad, no worries it is only around $3,000 to get a full page ad to get some notice.

Next up is the direct market. Oh I know this saved the industry back in the day, but now it is the nasty choking myopic vision that will strangle the life out of the periodical market place eventually. (That wasn’t too negative, was it?) The direct market changed periodical publishing because you can no longer return unsold books. If you order a comic as a retailer you own it. This was a great innovation and truly saved the comic book market place. There are a host of reasons for what happened in the market, but suffice to say the direct market was a boon and specialty retailers are the backbone of the industry; unfortunately degenerative disc disease has set in. Since each retailer is tied to Diamond like a hooker to her pimp, almost every store uses the same approach to their ordering. So when Marvel and DC roll out fourteen new mini-series every month they dutifully order 10-15 copies of each one. Each store only has so much of a budget to spend every month and if Marvel and DC can produce enough stuff the retailer has a few dollars to gamble on other books.

So there you go as a new guy or small press guy you have to deal with a tiny market, a distribution system that stacks the deck against you and a retail system that hasn’t got enough money to even carry your book. Is there any doubt that the people who do this are doing this for the love of the work and that tiny hope to be rich enough to snort coke off Brittany Spear’s a**.

The newest twist to this dilemma is that printed media is now fighting an uphill battle in how to survive in a digital age. Webcomics are everywhere, DC and Marvel have various digital empires going on, MTV and Warner Brothers are doing animated comics, by using the comic book graphics a few gimmicks and voice actors. I believe that comics will ultimately be coming to a “kindle” type reader in the future and that maybe the saving grace for the small guys books (more on my thoughts there later).

The last problem is the financial side of trying to make money publishing a comic. Again I’m making educated guesses on these numbers. Okay I’m selling my book for $4 (already a barrier as many DC/Marvel and others are at $3) and I have sales of 5,000 units (that would be a great book for many publishers). Total potential money is $20,000. So wow $20,000 x 12 = $240,000 in one year. In four years I’m almost a millionaire!!! Oh wait the retailer only pays $2 for the book. My cut is now $10,000 for a book. Not bad at all, Right? Oh wait Diamond gets their cut say 20% of my 50%, now I’m down to $8,000. Damn I forgot about publishing costs. So the printer charges 50 cents a book to print it, 50 cents x 5,000 = $2,500, now I can pocket $5,500. It is my first issue so I ran an ad in Diamond that was $3,000, I have to pay the artist at $200 a page (as he is still new and not commanding the big $$) for a 22 page book that is $4,400. So if I carrying the one and subtract the five and add the three – WAIT A FRELLING MINUTE I LOST $1,900 bucks. What the hell happened???

Alright I have outlined in broad and sweeping terms lots of problems that face the small press guys. What are the solutions?

Okay as a preamble I’m just brain storming here and I have not tried to ever publish my own project. I’m an ex-CPA and ex-comic book shop owner, but I do not have all the inside scoop to how all of this works, so these are some thoughts.

1) All the small press companies should form a co-op and drop Diamond like a hot potato. The marketplace wants your books and you can find other methods to distribute. Maybe you can from a network of printers willing to work with you at various local places. That would reduce shipping costs and hey maybe you can get a local retailer to act as a sub-distributor and give them an extra discount. This would hopefully keep more money in the hands of the publisher to allow them to try and turn a profit.

2) Try to structure a different discount program for your books. If a retailer orders 3 copies he gets a fourth copy for free. This reduces the retailer’s discount and gives your book a chance to actually be put on a dealer’s new this week rack as opposed to just into the subscriber’s box who ordered it.

3) The hell with periodicals, just publisher the graphic novel. This reduces the amount of times you go to a printer, all the cost are sunk at one time and with Amazon and other non-comic outlets you can do Diamond and other distribution outlets at the same time.

4) Release the comic online for free and hope that generates more print sales. BOOM did it with North Wind and it worked. It you can get 100,000 hits and that generates only 5% wanting to buy it, that is better sales numbers then 40 other books on the top 300 from May’s estimated numbers.

5) Launch the small press website. One stop shopping for all the smaller press companies. There are so many websites that not everyone wants to go to your website. Yes it is better then the other guys site, but not everyone has time to look into your site. Have free ten page previews of your books and have this as the one stop location to buy the book you missed because the local store only ordered two copies and Diamond sold out of the 25 book overprinting you authorized.

6) Remember Creepy, Eerie and the like. Know how fans get upset as no independent publisher hardly ever consistently publishes a book. This is another co-op idea, but a monthly magazine that could sit on a newsstand as well as a comic store that draws from various publishers. Four different issues a month get published and do it a break even number, so it is only like $6.95 or something. You will make it up in trade sales later (hopefully).

7) PDF subscriptions. Charge someone $4 for the entire series and you send it to them as a PDF file or some other computer readable format. This supplements your sales and has the benefit of not costing anything to print it.

8) Be the first kid to work with "kindle" to offer your book for a quarter or something else very small. It is easier to break thru the wall if you are competing on a more level playing field and digital distribution maybe the answer.

Again I’m just brain storming here and trying to punch my way out of the box that we have made for ourselves.

Anyone else have any ideas?

My bottom line is that we as an industry have to change or die. I'm not saying the end is near, I'm just saying we need a new way to make the industry more available for more experimental books.


  1. Jim, this is great. You have a lot of ideas here that I think are fantastic, unfortunately most people are so stuck in the traditional way of doing things they aren't thinking outside of the box. I have been trying to figure out how to get our books on Kindle, but the problem I am currently having is the conversion process is not well documented at all.

  2. Man... that expense list is waaay too familiar sounding, Jim! Some great food for thought here. I'm taking notes...

  3. Mike Good luck with kindle.

    Michael - Good luck,

  4. Chris Folino7/21/2008 8:56 AM

    Great article Jim. Diamond is the Haliburton of the comic book industry.

  5. Maybe I'm just getting old or something, but I just can't get into digital versions of books. I find reading anything over a paragraph long on the Internet to be very difficult. I know we currently have essentially two markets, those who prefer digital and those who prefer the paper version of thees books, I fall into the latter. I have more thoughts pretty much on every point you hit here Jim, but will post on a separate comment as this one is already getting too long and it's making me sleepy.

  6. I think there are a few webcomics that have managed to find some amount of success without self-publishing. The trick is you have to update on a regular basis. Red String has had decent success with Dark Horse picking them up but I know that Gina still makes ends meet with commissions and donations. Sarah Ellerton (The Phoenix Requeium) still has a real world job but has managed to have the first few volumes of Inverloch make it to the comic book store shelf. Megatokyo has managed to get their volumes on the shelves at Borders and B&N.

    The hard thing here is that these people put in years of hard work without any guarantee of ever seeing their story published, and thus the death of webcomics comes from a lack of time to put out updates on a regular basis. I honestly think Gina's idea of bringing several web-creators together with Strawberry Comics was brilliant. They all promote each other and help to generate to word of mouth necessary to survive.

    Wowio has also been a great boon to webcomic creators as people many times get a book download for free and he creators will get 25-50 cents a download. It's a great free way to support your favorite webcomics.

    I obviously know more about webcomic publishing than anything else here as I looked into it myself several years ago. I've had several comic book ideas over the years but it's near impossible to get anyone to look at a writer's work alone. The best you can do is wait until you have a job that gives you extra money to pay an artist and pray that your project launches well. I looked to webcomics as another alternative but I'd need to have an artist as deticated to the project as I am =/

    This is a good discussion topic.

  7. Wow, my last comment was a bit off-track from the discussion at hand, wasn't it? Believe me though, I've strayed further off track on many occasions.

    I'm just going to throw things out here, I'm probably mentioned before that I tend to ramble. This topic specifically gets me spinning in circles like an R2 unit with one bad leg.

    My main thought is that there may not be one solution to this matter, so what are the main issues you tackle? Off the top of my head maybe generating awareness of your product and pricing?

    This topic screams for one of those yes/no flowcharts.

    So let's say you've got a good product by an unknown writer / artist team. Three issue mini-series, and it's completed, ready to roll. For whatever reason, you decide that pulling the hair out of your head and sucking back body-shots of Pepto Bismol is your thing, so you self-publish with the intent to get a paper book into readers hands. This could either be the three periodicals or a collected TPB.

    I want an LCS to sell my book. Can I contact them directly? In some cases yes, but these are busy people, would you want to turn them off before they even look at what you're offering? Does the retailer have an account with I'd guess that most are tied in directly to Diamond, and for the sake of ease, it's probably their only distribution point. (It'd be cool to know how much presence Haven has within the retailer community). I wonder what % of readers actually use the Previews catalog to order their as opposed to online news sites, Wizard magazine or what have you. It would be cool to have a CBR or Newsarama type place geared more towards anything that isn't the big two, maybe this already exists and I'm just not aware of it, or heck, maybe's there's just no demand. A portal How many of our problems are our own doing? If you can't put out something consistently on time as Gwen points out, how can you build your brand? Is there a printer that will allow for affordable short print runs, or tagging on, so that I can print 2500 copies of my book and my friend over at Brand X comics can print 2500 of his and we get the per page rate of 5000 copies? (I'm reminded of independent film-makers that would acquire the ends of film rolls to use to make their projects). If printing and shipping were more affordable to the small guy, then we could get our prices near those of the larger companies, then the reader who maybe has 3 more bucks to try out something new will look our way. Maybe online web then to TPB is the way. I'd see that one issue here would be when you're in a convention type situation where someone is seeing your product for the first time, they may drop 4 bucks on a periodical, but may take a pass on a 16 dollar TPB. But in general the idea seems pretty sounds. I can only subjectively say that I like the periodical format and like a mix of this and TPB when I do my purchasing. I feel like I need to make sure I do my little part to keep my LCS in business. I could buy TPBs for a cheaper price at Amazon, but I don't.

    I should just add that my previously posted comment was in no way meant to state that I don't like web / online comics, just that I find it difficult to read a full comic book that is say in pdf or cbz format, plus I can't take them to the little boys room because I can't balance my laptop on my lap very well. (Ew.)

    I have answered nothing, but just wanted to throw some stuff out there. Very pooped today after installing a whackload of laminate flooring last night.