Tom Spurgeon's Web site of comics news, reviews, interviews and commentary

January 18, 2009

CR Sunday Feature: Dan Vado’s Informal Letter On Diamond’s Edicts

After asking out loud after news that Diamond was raising its minimum orders and eliminating the print iteration of its adult catalog, I received the following letter from SLG head honcho Dan Vado. I thought it was a perspective worth sharing through publication in whole on this site. Happily, Dan agreed. -- Tom Spurgeon

imageBy Dan Vado

I saw your recent post about the new/old Diamond policies and I would like to confirm that these new policies are indeed true and confirm that they will have a chilling effect on the business as we know it.

Diamond has been busy contacting vendors all week to make them aware of the changes. None of this was good news, and I have to give Diamond credit for manning up and talking to everyone on the phone and not just issuing a press release and letting everyone fume and twist. Bad news is never easy to deliver and I have to say that the people at Diamond know and understand how badly this will effect people, especially the people who can least afford to be hurt right now. On a side note, I have never been one of those people to see Diamond as an evil empire, I never got the impression that the people who work there have ever wished that I would just go away and a lot of people have worked really hard to help us out. So, getting the bad news personally meant something to me. Others may (and probably do) feel differently, every one's mileage may vary.

So, to the brass tacks, the thing that slaps us up in the face most is the raising of the Purchase Order benchmark to $2500. What that means is that every book needs to generate $2500 of revenue (that would mean a little over $6000 in sales at retail based on the discount we give to Diamond) in order to be listed with Diamond. That does not mean that Diamond is going to cancel or not carry books which appear in the Previews but do not reach that benchmark, but it does mean that if you have a line of books which consistently do not meet that mark, you will not be getting your books listed in the Previews for long.

The average person reading this may not realize that most small press comics (and by that I mean floppies) do not meet that benchmark. I think if the average reader knew how lousy some of our sales were they would be stunned. I can't tell you how many times people have wandered into our booth at one convention or another and engaged me in conversation and walk out scratching their heads and reeling to find out that the comic or graphic novel they just love more than anything sold maybe 300 copies total.

The big short term effect of these benchmarks for SLG is in the area of offered again, or re-lists. Basically this is the practice of a publisher offering a previously published book for sale in the Previews a second, or third time in order to generate numbers for our backlists. It is a core part of our strategy as very few of the books SLG publishes sell at a break-even level on their initial orders. Historically our back list sales are stronger than the average company, or at least so I am told by Diamond, so losing the ability to offer titles again is going to hurt us in a very real and concrete way.

The other effect is that what few books we published as floppies will probably not ever see the light of day. While a first issue might sell well enough to meet the benchmark it is more than likely that everything from a second or third issue on will not. Again, I think your average reader might be shocked at how poorly some comics sell. So, if you're a small publisher or a self-publisher and your plan is to release a mini-series and then collect it as a trade, those plans might change.

It's a tough spot for everyone to be in. Diamond is in essence asking everyone to sell more in a recessionary environment or find themselves out of the catalog. Short term, a lot of publishers are going to find themselves with no distribution. While that might sound like I am angry with Diamond, I am not. I am unhappy, but the industry's current situation is one that has been coming for some time, recession or not. Some of the fundamental flaws in the industry and the way things sorted themselves out in the post Marvel/Heroes World debacle are coming to roost in a time when even the best run non-comic business is in danger of folding. The economic base for comics and the direct market is built on jelly. The number of people living hand-to-mouth in this business, from paycheck to paycheck, having to work two and three jobs is stunning and always has been.

imageBeyond the notion of benchmarks and new edicts from the industry's major, if not only, distributor is the fact that comics as an publishing industry perhaps has no economic basis for long-term survival beyond Marvel and DC. Almost everyone in this business started under capitalized and most smaller publishing houses are surviving based on one project or product that has been carrying them for years. Retailers start their businesses under-funded and oftentimes poorly prepared on how to run a business. I think almost every publisher fits that same bill. The next year or so are a critical time for the entire country and the comics business is not going to get out of this unscarred, lots of people, be they publishers, retailers or creators, who have been around for a long time are going to suddenly with no business left and no place to turn. People, and I mean everyone from fans to creators to publishers to retailers, need to use this as the last wake-up call after years of hitting the industrial snooze button and finally find a way to get together and address our common lifelong problems and find answers to them.

The situation is so dire that I almost don't want to risk trivializing it by using a sports metaphor, but in this case it applies. It's gut-check time and we all need to see if we can take something from this situation and build something new for the future of this business.

in the same note he acquiesced to having his e-mail published Vado wrote an addendum:

Yeah, sure. I might want to add, in that case, for emphasis that this is not a Diamond problem, it's an industry-wide crisis situation for which Diamond is not the cause.

People may not like Diamond, but I remember when distributors were melting down right and left that Diamond was the only company that paid its invoices not only on-time but early and helped a lot of people out just by being dependable. We used to call them The Bank of Diamond and they kept us going and helped us out a lot. I think Diamond is now doing what the rest of the world's business are doing, finding ways to get smaller, leaner and back to profitability. I may not like it, it may hurt us and even drive us out of the Previews, but that does not mean I don't get it.

On another side note, next month SLG was going to be rolling out a website for retailers only where they could reorder our books and get our vital info without sorting through all of the consumer crap on our regular site. I am going to be offering some publishers an opportunity to participate by listing their stuff on that site, in essence trying to become a distributor myself. There might be some opportunity to make money on that bottom half of the scale that Diamond cannot handle right now.
posted 7:05 am PST | Permalink

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