Newsarama finally gets Diamond’s recent changes on the record from Bill Schanes. Those following the story will probably have read the whole thing, but it’s worth discussing a bit — most of the changes are because of the economy, but according to Schanes, Diamond is being sensitive to the individual needs of publishers. But it’s still going to be rough. One of the changes less noted among message board commenters, but much noted among publishers, is that not as many items will be offered again:
Clearly we understand that the Offered Against generate revenue for the publishers – sometimes very much needed revenue, and we’re trying to be sensitive to that, and we have been for the last 10 years. We’re just not sure that we can be as generous as we have been in the past with the number of Offered Agains in our catalog every single month. So there will be less going forward. I don’t have an exact percentage, or what the numbers will look like until we go through a whole cycle, but it will be less.
Schanes expects 20 to 30 publishers to be removed from PREVIEWS because of the new benchmark:
BS: I don’t have the number in front of me, but it’s well south of 1%. It’s very small. I will say that it ties up a tremendous amount of energy processing these small orders that are not performing for us from a P&L standpoint. So we’re doing the same amount of work for the bigger titles as we are for the smaller titles with a totally different end result.
Hard to argue with that. Also, while Diamond is working with publishers, everyone has to have their own oar in this boat:
There are a number of different things that can be done that are out there, but we also have to ask publishers what they’re going to do to help themselves? Often times, publishers feel their responsibility to the product is done once they hit send on that final e-mail. We don’t feel that’s fair – we feel that they should be driving business to the retailers, and helping Diamond help market their product. We don’t think it’s the responsibility of the distributor to be 100% of the sales, marketing and commercial arm of the publisher. We can augment their effort, but we should not be the only effort.
Elsewhere:
• Steven Grant weighs in:
But they’re a monopoly. (Diamond’s recurring argument that they can’t be a monopoly because other distributors exist conveniently overlooks the breadth and depth of their reach, and the ordering habits of retailers who don’t want to be bothered with multiple catalogs and order sheets, and the inability of other distributors to last long in competition with Diamond.) This puts a certain moral burden on them to facilitate distribution of all comics, because their policies decide what gets distributed, and what gets distributed decides who in the business survives. Diamond’s business model is built around the Marvel/DC business model, but not all publishers operate on that model. Some publishers can make enviable profits on very small print runs. Some have businesses built on reorders, not orders. (Diamond has never been comfortable with the reorder process, and their calculations rarely take reorders into consideration.) Raising order limits – meaning where you only needed 1000 people ordering your comic before, you now need at least $2500 worth of orders or you’re Diamond toast – effectively punishes publishers for innovative business models. The upshot for the comics market is a new anti-competitive atmosphere that mostly helps the publisher least in need of it: Marvel.
• John Jackson Miller notes that Diamond has also canceled their long running Diamond Dialogue which, before the internet, was where you would get what passed for inside news:
“It is with a touch of sadness that I announce that this will be the last print edition of this monthly magazine,” Steve Geppi said in the magazine’s editorial. “After almost 17 years and hundreds of issues, the publication is closing up shop. However, this is not ‘curtains’ for Dialgoue, because the same great content will be available online at Diamond Daily. In this age of the Internet, we feel that key product and sales information will make a bigger impact if it’s delivered sooner to retailers, allowing them to make more intelligent ordering decisions as quickly as possible.
• Radio Comix Publisher Elin Winkler comments on the end of the Adult Only supplement:
Potentially, this could spell the end of independent comics (and adult comics!) being available in the direct market (comic stores), not to go all doom and gloom here at the end. Just think- not being able to get anything but Marvel, DC, Image, Dark Horse, IDW, Dynamite or Devil’s Due comics in comic shops- no Radio Comix, no Antarctic Press, no Slave Labor, no Oni Press, no Lightspeed Press, no Top Shelf, no Fantagraphics, no Drawn & Quarterly, etc. Imagine comic stores where all you can get are superhero titles or comics based on licensed properties (TV shows, movies, cartoons, video games). It’s not a cheerful thought, even speaking as someone who currently works in a comic store as a retailer. It will not help diversity, which in turn will not help to expand the readership of comics as a whole. Yeah, yeah, I know, diversity doesn’t pay any bills or make anyone rich. But it bothers me that something like this is threatening the industry that I’ve been working in for nineteen years of my life.
• SLG’s Jennifer de Guzman:
If you want to know more, I suggest you read this article by my boss, SLG’s President Dan Vado at The Comics Reporter. It’s about the new ordering benchmarks implemented by Diamond Comics, the biggest (err, only) distributor of comics to comic book stores. The benchmark has been raised from $1500 to $2500, which means we have to sell more comics if Diamond is going to list and fulfill orders for them. It puts all smaller publishers in a difficult position, and probably means the end of independent serialized comics. Unfortunately, the book market isn’t doing very well either, with Borders seemingly constantly on the brink of bankruptcy and bookstore sales indeed down 13% in November (compared to 10% for all retail).
• Matt High, who once worked for Cold Cut, has his own wrap-up:
The blogosphere has been in a tizzy for the past week about the recent changes at Diamond Comic Distribution. And for good reason, too – it’s probably the biggest news in small press comics in a couple of years. As expected, reactions range all over the place – from dire “The sky is falling, this is the end of the direct market as we know it” to “No surprise, this has been expected for some time, it’s all business”. No need to hash out all of that discussion here – if you are really interested, just do a quick blogsearch and it will bring up more than you ever wanted to read. It is of interest to me, because I did work in the comic book industry for fifteen years, including the almost-unique perspective of working at a small-press indy distributor that was in direct competition to Diamond.
While I agree with Steven Grant (Diamond’s near monopoly should does entail a certain moral obligation on them), I think two should be made clear. First, this is NOT the end of direct market. The direct marlet system is built around Marvel and DC, who will be unaffected by this change. It is a different story for smaller publishers, but not for the system as a whole. And second, I agree with Shanes on the responsibility of publishers to provide the bulk of the promotion for their efforts. While his characterization may not be entirely fair, the amount of promotional work done by non-comic distributors, like Ingram, is zero. While retailers order through distributors, the publishers do all the promoting.
Stories proclaiming how badbadBAD the Diamond monopoly is have been popping into my RSS feeds with increasing frequency the last year or two.
Now, this might be a stupid/ignorant/naive question, but what is really stopping another party from starting up a rival to Diamond? Is it just a matter of finances & size of the market? What if an existing company like Amazon or Barnes & Noble were crazy enough to want to get into the comics distributing business? Would that help or hurt matters?
To start up a distributorship to compete with Diamond would require a giant pile of money, and the willingness to let that giant pile of money get burned up in the effort. It would take years and very deep pockets in a marketplace that’s perceived as dwindling not increasing (print in general, comics in specific.)
It’s possible. But it’s not likely.
Another impediment to starting a competing distribution system seems to be the ease with which Diamond gets most titles out there. What I am trying not to say is, retailer can be a lazy bunch. One order form is better than ten. Managing one business account easier than two. If enough small publishers are pushed out by this, a secondary distribution system may grow up to service them but its success will lie in getting the shops to use it.
I have a hard time seeing how Diamond has a moral obligation to lose money. Some risks are unavoidable but this seems similar to banks being obligated to approve loans for people who are unqualified. We have all seen how well that works out.
Ryan asks a good question that I have yet to hear anyone answer. If it is so easy to list these low volume comics in a catalog why hasn’t someone else come in and filled the void yet?
People seem to be saying that Diamond creates both the supply and the demand for the direct market. I don’t see how that’s possible. But I don’t sell to the direct market. I would like to think that there’s a creative solution to this waiting to be uncovered.
One reason competitors left the business is that all the top publishers and many smaller publishers signed exclusive agreements with Diamond, so another distributor is very limited in what titles it can carry.
Is a piggyback system an option? Someone could become a company that lists and stocks small publishers, has their catalog sent as a supplement with Diamond, and fills orders to the Diamond warehouse, which get sent to retailers with the Diamond shipment. No overhead for Diamond, offer Diamond a small percentage, and retailers still only have one shipment to receive.
I’ve just reread that, and I’m not sure if it’s clear. Could a distibutor make any money doing that, or would Diamond even be interested in acting as a hub?
Sorry, thinking out loud..
Cheers,
B
The experiences that publishers of literary magazines and small presses have had getting their products into stores might be relevant. One Web site with potentially useful information about distribution is http://www.spdbooks.org/root/index.asp .
SRS
Brian.. “Someone could become a company that lists and stocks small publishers, has their catalog sent as a supplement with Diamond, and fills orders to the Diamond warehouse, which get sent to retailers with the Diamond shipment. No overhead for Diamond, offer Diamond a small percentage, and retailers still only have one shipment to receive.”
That doesn’t sound like 0, or even little, overhead for Diamond.
First, Diamond would be beholden to another company publishing a catalog. Then that catalog would have to be shipped to Diamond to allow them to distribute both at the same time (requiring both manual labor and management overhead to come to the agreements and maintain the relationship).
“Fills order to the Diamond warehouse” again sounds like the retailers would send their orders to this 3rd party, who would collect the books and send them to Diamond, who would package them with the existing package going out to retailers. At least, that’s how I read your proposal. But again, Diamond is stuck hiring a Joe in their warehouse to receive these books from the 3rd party, break them into the shipments, find the existing shipments to retailers, and collate them together. Again, you are going to require executive/management’s involvement here. What happens when the 3rd party is late in shipping? What happens when a publisher doesn’t fill the order to the 3rd party on time? All these questions have to be decided, except now you’ve got two companies have to make the decision and agree upon it instead of one.
It sounds like this would end up requiring both more manual labor on Diamond’s part. They would handle the exact same number of books in their warehouse, just some of them would come from the 3rd party ordering service. The introduction of the 3rd party service, and shipment from them, would only introduce extra inefficiencies into the system that Diamond themselves have no control over.
In addition, it would only increase the management expenses for smaller books to boot.
Monopolies exist for a reason, their cost structures are (generally) as low as possible.
Matt, thank you for your reply. I knew I had some holes, just couldn’t see them for the sentences. But I was trying to lessen Diamond’s responsibility, only in the sense that they wouldn’t need to store anything – not comprehending, as you make clear, someone still has to sort the incoming product and add to current shipments. You’re absolutely right, that does just seem to create a bigger headache.
I hope there’s an answer somewhere, though.
Cheers,
B
My response to what Elin Winkler says is simple:
If we want the Adult Comix, we can still order them from the actual catalog and just find the info on the solicits online.
Or who knows, Diamond may actually put the solicits in the actual regular catalog.
I pick up stuff from Carnal Comix (yeah I’ll admit it) when they’re solicited and I haven’t used or needed to see an Adult Supplement catalog.
Just have to do the “full solicit” info on DCBS’s website and it answers all my questions. There’s no reason to think Diamond won’t continue to give out that info, just no longer in a printed format.
A-Rod,
The idea that Diamond has a moral responsibility stems from their control over distribution. They have a de facto control over the distribution system, meaning they have de facto control over what you can and cannot read. It would be great if they was an alternative, but for a lot of people there isn’t.
Never mind what this means for small publishers, what does this mean for the entire distribution model centered on the Comic Shop? In this age of the Internet where I can go online, track down that obscure book that Diamond likely won’t list any more, order it from the comfort of my home and then have it delivered here directly, why go through the hassle of going to a store where they won’t have my obscure title of interest on the shelf anyway so I have to go through this quaint Sears & Roebuck ritual of ordering it through a catalog (which still persists in a charming old dog-eared, expensive-to-produce, unsearchable hard copy format) to have it delivered to the shop where I have to return to pick it up. Yes, my good man, do put me down for a corset, a bolt of that lovely pink gingham and a barrel of moustache wax too! It will arrive on the noon Stage a fortnight hence, you say? Splendid! What thrilling Modern Times we live in.
Since the small independent bookstores and music stores have been obliterated by internet distribution, its quite astonishing that comic book stores continue to exist. Don’t get me wrong, I like my comic shop (and I mourn the passing of the indy book and music shops). I like browsing there and talking to the folks there. But I’m afraid I only buy pamphlet comics there and buy most of my GNs and trades online. But I’ve stopped buying the popular pamphlets that I read because the trade is a foregone conclusion–another wacky business model of comics I’ve never quite managed to wrap my head around. Why not just skip straight to the trade? Yes, I understand that it’s expensive and risky to print an OGN without using the pamphlet to measure interest. But this is the devastating irony: the few pamphlets that I’m still buying are ones which are NOT big sellers, therefore a trade collection is not a foregone conclusion and I’m betting that this new deal from Diamond is going to kill those titles off. And then that’s it. There go the last solid reasons for me to go to a comic shop. And as more people lose patience with the redundant system of the popular pamphlet collected in the done-deal TPB, there go the redundant pamphlets (or they go electronic), since Diamond won’t support their dwindling numbers any more and–oh look, I think I see some writing on the wall.
If this is one more nail in the coffin of the pamphlet then it’s one more nail in the coffin of the Comic Book Store.
Meanwhile, how’s about an Etsy-for-comics Web 2.0 social network for indie creators and fans, equipped with shopping cart technology, like a virtual Artists’ Alley?
BTW, I’m aware that there is a electronic Previews version and even a retailer ordering system attached to it, but it amazes me that if they’re making “business decisions” they haven’t made the obvious one and killed the print version.
Does Diamond lose money on books under $2500 or does it simply make less money?
# maija Says:
BTW, I’m aware that there is a electronic Previews version and even a retailer ordering system attached to it, but it amazes me that if they’re making “business decisions” they haven’t made the obvious one and killed the print version.
maija,
the last figure I saw from October of 2006 said that nearly 50% of the country had no internet service at home. Also, that more than half of those with home internet service were still on dial up. I just finally got high speed. The frustration of dial up, especially on slow days, is enough to make you want to give up the internet. A page might take 10 seconds to open, and with a catalog of 500 pages, one could spend the entire day going through Previews. Even factoring in that a larger percentage of comic book readers would likely be on the internet, doing away with the print version would be giving up on a big portion of a potential customer base.
I can’t blame Diamond for their, stay rich, monopoly on the comic book industry, it’s obviously successful. But as a fan, I despise them.
Diamond’s business plan has room for improvement. In today’s economy you cannot afford to drop the small guy. If I did that in my business the small guys in a lump sum are a chunk of my change. I am sure they can’t bully both DC and Marvel so why not get more coin out of the little guys. There are more of them to push around. If the country went after small business and kept taxing them through the nose, there would be no country. What is keeping the country afloat? Small business. Big business is looking for bailouts. Small business works harder and always gets the short end of the stick. If I were Diamond I would find new ways to protect the small guys and encourage their growth. Everybody wins in the end. A true collector will always find a way to get his product. If you are going to pimp your company to Diamond only then you are also in trouble, you have to find other ways promote your products. It’s one thing to complain, but you have to do leg work. People like Fantagraphics and Drawn and Quarterly have found ways to sell their books. They even have their own stores. More power to them. If you are printing a comic book out of your basement, in the basement you will remain. If Edison stayed in his basement, I would not be able to write this comment. Fight for your survival! Complaining does not sell books.
I always love how Diamond says small publishers have to show they are willing to market their books and advertise. Gee.. I wonder where Diamond would pressure a small publishers to spend their advertising dollars? Anyone have any anecdotes about Diamond pressuring them to buy ads in Previews before agreeing to solicit their books? Does Diamond consider having a dedicated site, MySpace, blog, etc. as part of a marketing plan?
No, Diamond doesn’t necessarily consider a dedicated website as “marketing”, as a site is useless if no one visits it. It’s nice to have as a base of information about your title, but it’s not an *active* form of marketing. You could very well set it up and walk away. Unless you’re driving people to your site, it’s not doing anything for you. So, no, Diamond doesn’t consider the existence of a website/Myspace/blog as part of a marketing plan unless there’s some major heat, or at the very least, a dedicated fanbase. Sadly, though, in a few cases, there’s the opposite: where a website is more dynamic and engaging that the comic itself.