Financial Fretting: 12/19/08

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 Financial Fretting: 12/19/08
Just to keep the holiday spirit going, here’s a roundup of recession rumbling from the comics world:

Rick Veitch notes that he has received a notice from Diamond indicating that “offered again” items will be scrutinized more:

In the solicitation package I just received from Diamond Distribution, suppliers are being notified that due to economic conditions Diamond will be much more selective in which items they will offer in PREVIEWS and that they are cutting back on items being “Offered Again”. Since most publishers, large and small, depend on these relists of backlist items, this will be a hard pill to swallow for many.

It looks like King Hell backlist titles, such as THE ONE, MAXIMORTAL, SHINY BEASTS, ABRAXAS AND THE EARTHMAN, HEARTBURST AND OTHER PLEASURES, RABID EYE, POCKET UNIVERSE and CRYPTO ZOO will not be available through PREVIEWS in the immediate future even though historically most, especially the superhero titles, have attracted healthy orders each time they have run in the catalog.

So if you are a reader wishing to pick up a King Hell book, you’ll probably have to do it on Amazon.com, or at Paneltopanel.net (which offers exclusive signed plates for some titles) or, better yet, at my own on-line store (where all copies come signed).


This sounds very ominous — as Veitch mentions, relisting back stock is a major source of income for collection publishers — but note that this looks like it could also be part of the recently announced policy on cutting back on posters and prints. It’s also worth noting that the April 2009 D&Q solicits that Chris Butcher just posted include lots of offered again items, so maybe there is wiggle room.

• ICv2 reported this week that Comic Stores are “Holding Up Really Well’:

The numbers from comic stores are “holding up really well” in the economic crisis, Diamond Comic Distributors Vice President Sales and Marketing Roger Fletcher told ICv2. “Diamond’s sales are tracking close to last years levels, but down about 3%.”

“Retailers are trying to be prudent and conservative on inventory,” Fletcher explained. “That’s led to some sales declines.”

• As long we’re talking about Diamond, here’s a bit of news that doesn’t come under fretting, but rather, something we’ve all been wishing for. Diamond has expanded its GN sales charts from 100 to 300 titles, meaning folks will be able to track those back orders much better now. John Jackson Miller covers this and more in a new blog entry, which singles out November for yet another record:

OK, now to the bottom line. Not much good news for consumers or the market this month: First, comics were more expensive in November 2008 than in any month in history. The average comic book offered in Diamond’s Top 300 comics had a cover price of $3.50, beating the previous record (from last month) by 12 cents. The median price is still $2.99, and $2.99 is still the most common price within the chart. The weighted average price — comics dollars divided by comics units — was $3.35, another record. The average price of comics in the Top 25 was $3.43.

2009 = Price increase + recession = ?

• Several folks have responded thoughtfully to Tom Spurgeon’s ponderables, including David Welsh, who added his own questions, including one we think is highly pertinent:

2. Will Borders survive its seemingly inevitable bankruptcy or reorganization? Borders was one of the earliest adopters of manga and arguably played a huge role in popularizing the category for people who might not otherwise have ever picked up a comic, so trouble for the bookseller won’t be without consequences for manga. But while it was an early adopter, it’s been followed by other outlets like Barnes & Noble and Amazon. And if my memory is functioning correctly, graphic novels (including manga) are one of the few sectors of the book industry that are maintaining, if not thriving.


Matt Blind ups the ante, as he responds to ALL of Tom’s AND Dave’s questions:

My Best Guess: Borders will eventually have to declare a form of bankruptcy, but they’ll emerge from the process leaner, with a substantial debt load but less than what they have now and nothing an average retailer can’t handle, and with a focus on their core business. That isn’t a guarantee, though: The same could have been said of Hudson, Studebaker, and Reo back in the day.


• In shocking book news — and bearing in mind that returns from Borders caused many a woe in the second half of the year — HarperStudio Publisher Bob Miller talks about his new NON-RETURNABLE publishing plan. That’s right — books are becoming MORE like comics.

Today, Borders announced they will not be shipping unsold books back to HarperStudio, forging a new sort of relationship between publisher and distributor.

Yesterday, GalleyCat caught up with HarperStudio president and publisher, Bob Miller, to talk about non-returnable deals. In this exclusive video, Miller explains how he hopes to cut similar deals with more bookstores, and readers get a glimpse of HarperStudio’s upcoming titles.

The Wall Street Journal has the story: “Under the terms of the deal, the nation’s second-largest bookstore chain by revenue will get a deeper discount on initial orders of books published by the new imprint of News Corp.’s HarperCollins Publishers — 58% to 63% off the cover price, instead of the usual 48%. In exchange, Borders won’t return any unsold books to HarperStudio, instead probably discounting them in the store.”

• Finally, because you will need to laugh about all of this, here’s the MySpace Guide to Holiday Shopping by ACHEWOOD’S Chris Onstad which we’ve excerpted above.

With the days until the winter festivities rapidly dwindling, and the number of people in your life tired of receiving gifts from Eddie Bauer rapidly increasing, please enjoy this ACHEWOOD-style holiday gift guide. Your yuletide shopping woes are OVER!

If this is your first experience with ACHEWOOD, hang on to your butts. You can check out more of one of the internet’s most popular comics on ACHEWOOD.COM, or on our very own MYSPACE DARK HORSE PRESENTS, or in the newest ACHEWOODcollection, THE GREAT OUTDOOR FIGHT.

Many thanks to Chris Onstad for the hilarious comic and to our good friends at DARK HORSE COMICS. Happy holidays!

Comments

  1. A-Rod says:

    The HarperStudio non-returnable deal isn’t all that shocking considering the HarperStudio imprint was created last year to do just that. It was formed as an experiment in maximizing profits and driving down costs and risks for the publisher. They are also eliminating huge advances to authors at HarperStudio and offering a larger share of profits as an incentive to new authors. If this succeeds it could change the entire book publishing paradigm.

  2. Torsten Adair says:

    Regarding King Hell Press, copies can always be ordered via trade distribution from Diamond Book Distributors… Wait… they share the same office! Are they saying that DBD also won’t keep copies in stock? I’ve heard the complaints about Diamond Comics spotty record of keeping manga volumes in stock from other distributors, but a title they supposedly distribute directly to bookstores?

    As for non-returnable product, I know Barnes & Noble has been using a similar program for the past two years. If a new release doesn’t sell as well as publishers hoped, the title is marked down 50%. (One of the first was George Stephanopoulos’ book on Clinton.) After a month of 50%, if there is still stock in the store, then the inventory gets a new remainder barcode and price (usually $6.99). No having to ship it back to warehouses and then ship it back to us. We just move it to a different area of the store. Eventually, it winds up on our bi-annual clearance table, and after that, we archive the books at the nearest landfill.

    This same paradigm could be applied to product at our warehouses. Say Marvel sees that “Essential Marvel Age” is stocked at about 200 of our stores, and we’ve got another 1,000 copies at the warehouses, but sales are dismal. Instead of shipping it back to Marvel/Diamond Books, they automatically issue us a credit to our account, we sticker the book as a remainder, and then find our best 100 graphic novel stores and merchandise the title as a featured title, as well as listing it on our website. Warehouse gets rid of the copies (bargain books are one-way). Since it’s listed in our database, other stores can also order copies if they think it will sell.

    As for the book industry going non-returnable, bookstores have been using POS systems since the early 1990s. At B&N Lincoln Center, I, a department supervisor, was responsible for reviewing the weekly sales reports for my departments (and graphic novels), reordering titles which were selling, suggesting new titles which the corporate buyers had not ordered, and returning product which was not selling for credit. POS systems automatically model inventory based on sales. We know that “To Kill A Mockingbird” will sell # copies a month, with a bump in September, January, and June (school reading lists, beach reading). Multiply that by 800+ stores and website sales, and we could easily place one annual order, get a non-returnable rate, and program our store systems to replenish stock from our warehouse instead of from the publisher. The sales price doesn’t change, but our margin does. With those extra copies, we could even place the title on a themed display, creating even better sales, so that the next year, we order even more, get a bigger discount, and make even more money. Heck, with a big enough order, we could commission a special store exclusive edition! (DC did that with the Watchmen trade for comics stores.)

    Mass market paperbacks are half-returnable. We send back the cover for credit, throw away the rest of the book. Publishers don’t have to deal with stock. Costs are less than regular books, and thus create a more experimental market for new writers and sub-genres. If the entire industry goes non-returnable, it will be much harder for new authors to enter the market, as bookstores will replicate comicbook stores and not order new, untested writers. (Although, some of that is happening now.)

  3. Yeah, I’m not sure what Veitch is saying about having to get KING HELL books through other non-Direct Market means. Not being O/A in PREVIEWS does not mean that Diamond does not continue to stock the product in its warehouse and make it available for reorder…it just won’t necessarily run ads and notices in their monthly catalogue letting readers know it is available.

  4. Regarding our health as an LCS. This quarter is down, by our estimates more than 3%. However we are still bucking the wider effects of the local economy. And with this mornings news of Bush giving the auto industry the loans they need to stay afloat it just might bring the Mitten State back from a slow death.

    To the news of DCD cutting O/A items. You can guarantee that we will have the full library of damn fine Rick Veitch King Hell books in stock here at Green Brain Comics. To hell with online shopping, shop local.

    Main Stree-ee-ee-et!!!!

  5. Hey Dan, I just checked out the Green Brain Comics website. Pretty nice site, lots of spirit and enthusiasm there! Wish I was closer, so I COULD drop in and buy stuff. Good luck with the shoppers!

  6. Justin Jordan says:

    I have a strong suspicion that the people saying that Marvel is nuts or short sighted don’t understand the psychology of the average Marvel consumer nearly as well as Marvel does.

    I’d be surprised if there’s any notable downturn in their sales.

  7. Torsten and Jarrett pretty much said (and no doubt answered) what I was wondering.

    Just because it won’t physically be listed as an O/A in the catalog, does that mean you still can’t order it at all from Diamond?

    Retailers actually have to SEE it in the catalog to know they can order something rather than calling their Diamond rep and ask if they have something in stock and if so, can they order some?

    Sounds Veitch is making it seem worse than it really is, unless he’s going to say retailers can’t do anything without proof in the catalog.

  8. Chris Midweeker says:

    Just to add a little to the O/A discussion, I think Diamond is more targetting those smaller publishers who publish one or two books a year, and then re-offer them every month, rather than companies like D&Q, or Fantagraphics. Whether King Hell fall into that category I don’t know, but as other commenters have said, those books will still be stocked and on the Star System list, they just won’t be in Previews every month.

    I believe Diamond are trying to get the page count on Previews down to a more manageable, less phone-book sized catalogue, and in fact, if you compare the current catalogue to one from around two years ago, there are less than half the amount of small-press and indie publishers listed now than there were two years ago – mainly (and yes, sweeping statement ahead) those little indie superhero books that no-one ever seemed to order.

  9. Sure King Hell titles will be in Diamond’s system, but they will cost retailers an extra 3% to get them on reorder (this on top of the already lousy discount small press books are saddled with at Diamond).

    The PREVIEWS relists, especially for my superhero titles, have brought remarkably consistant numbers over the years. This indicates to me that retailers who know they can sell a shelf copy of BRAT PACK or THE ONE or THE MAXIMORTAL wait until they can get the book at a price that makes profit sense. I can’t blame them.

    Diamond’s new policy, which we can only hope is temporary, cuts off a significant revenue stream for me. Since I don’t have an exclusive with Diamond, I’m happy to offer the books to retailers directly at a discount that makes us both money.

  10. Chris actually hit the nail on the head, in regards to Diamond’s desire to cut the catalog to a more manageable size. It’s no secret on the internet that the size of Previews is considered quite the joke, especially when one looks at the type of products being listed. That said, Previews has always been good for the industry in that there’s a pretty low barrier for entry.

    I’ve heard people complain about benchmarks, but they really aren’t that hard to hit if you’re marketing your book effectively. If you expect the Previews blurb to do all of your work for you, then you’re already screwed. If you think that Previews ad is going to be enough, you’re still screwed. I always felt that Previews should serve as a reminder and not an introduction, but few people tailor their publishing/promotional timeline as such. As for the backlist publishers, there isn’t really a model in place to help them at the moment. While consistent sales are good and respectable, “consistent” doesn’t always pay the bills. The thing about Diamond’s benchmark is that it is the bare minimum needed to be sold just to keep the lights on. An offered again item tends to make about 1/3 of benchmark. Even rotating a backlist, there’s no money to be made off of more than 3 relists a year, and even that’s pushing it – the benchmark applies to each listing, and *not* the lifetime of the item code, as some new publishers believe. Diamond will keep the books in stock, as long as there’s activity on the product, but will liquidate once that activity drops off and they’re left with inventory.

    This could easily descend into a standard period of anti-Diamond sentiment, but I hope that it actually spurs creativity within the backlist community to find new ways to keep their work in the public eye so that this O/A policy isn’t detrimental to their catalogs.

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