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February 8, 2009

Why Diamond’s New Minimums Policy Is Wrong, & What They Should Do About It


By Tom Spurgeon

In mid-January, word began to leak out that Diamond Comics Distributor Inc., the distributor for the vast majority of North American comic books and related merchandise to comic book and hobby shops, was raising its minimums. Instead of applying a standard by which every item would be expected to earn the distributor $1500 before it would be offered through the system, Diamond would now put into place a new standard of $2500. This is a 67 percent increase. In street-level terms, for a standard item to justify its listing in Diamond's all-important catalog, the place from which retailers order the bulk of what goes into North American stores, that item would now have to make $6250 retail. Those moves, and the shifting of an adult-products catalog to PDF form, were soon confirmed.

The fallout has been a lot of talk sprinkled with a few signs of substantive, paradigm-shifting change. The focus has been on the standard American comic book: an item that because of its relatively low price point would have to sell more copies to reach those minimum standards than, say, a book priced at $14.95. Special attention has been paid to smaller publishers that publish a number of titles, particularly traditional comic books, that don't meet, barely meet or run the risk of not meeting the new minimum standard. The consensus quickly became that these moves will irrevocably change how many smaller comics publishers do business. It may wound some small companies past the point of survivability, may drive some viable publishers away from comic books and into projects with a greater certainty to make their money back , and could drive other companies away from a serialization/collection model into original graphic novels or Internet serialization. It is a very big deal.

imageSince many alternative comics (second-generation undergrounds; comics in more typically literary genres offering a variety of writing and art styles veering sharply from the mean of styles that constitute superhero comics) publish at or near those sales levels, the new minimums are expected to have a more drastic effect on those books. It's a potential category killer. Indeed, a pair of traditional alternative comic books from well-respected, award-winning cartoonists, Sammy Harkham's Crickets and Kevin Huizenga's Or Else*, have since been canceled by their creators. Both cited the new minimums as a contributing cause. There will likely be more announcements to come, although at a certain point not too far in the future, the announcements themselves will trickle to a stop as fewer artists and publishers try to push work in the comic book format in the first place. If it's not the end of the alternative comic book, it's certainly a vicious blow to those comics as we've come to know them. This is worrisome because an entire generation of excellent cartoonists came to prominence through alternative comic books -- Joe Sacco, Dan Clowes, Peter Bagge, Julie Doucet, Jim Woodring, Chester Brown, Seth, Joe Matt, Adrian Tomine. Alternative comic books were not just a vehicle for those talents but played a huge role in shaping how those cartoonists developed by giving them platform that offered legitimacy without permanency, unfettered control with periodic feedback. Although there are more opportunities now and have been other opportunities all along, one can argue that none of those formats has been as useful to this expression of comics.

The reaction crackling through comics that last couple of weeks has been odd. As with most issues, a significant percentage of comics folk can't be bothered and don't care, at least to the point of making an opinion known. Much of the dialogue that has managed to spill out splits between a chorus of voices proclaiming that Diamond sucks/is evil/needs to be stopped and a number of folks stressing as if the life of a child depended on it that Diamond is a business and has no obligation to do anything other than make the best business decisions. Many, not all of the former are in a position to lose their access to the direct market under the new policy. Many, not all of the latter are in a position where they will likely maintain their current access to the direct market. As with most arguments in comics, few people can see a future for comics without a role for themselves. And like many arguments that unfold on the Internet, generally, comics has indulged in a lot of talk about what's fair and what's someone's rights are, and little about the immediate impact and overall wisdom of the decision.

I think Diamond's decision was wrong.

I think there are a lot of complications.

I agree with many of you that Diamond has the right to make the best business decisions they can. I remain unconvinced, however, that this is a good decision. The numbers are too vague, the policy implications are too vast and undependable. I hate to say it, but I'm not even sure the logic presented as the basis for the necessity of these actions holds up. A four percent loss following years with significant gains doesn't particularly sound to me like it's totally freaking time to cut staff and change policy. I assume there are other factors involved. I mean, does anyone out there really believe that we're in a recession that somehow forces industry behemoths like Diamond and DC to fire people and change policies while mid-sized publishers pick up projects and tiny boutique publishing houses hold pat? That's one remarkably capricious, Robin Hood-like recession. It's also difficult to argue convincingly, as I think Diamond has been if I'm understanding what's out there, that you're losing money per a certain kind of item and yet you've somehow lost more money recently during a time of selling fewer items. When I was a teenager, that was the kind of two-pronged logic that got me grounded a lot.

I also agree that there are benefits to Diamond having higher standards. The bilge that Diamond likely sees on a regular basis must be soul-destroying. If you've ever spent ten minutes with a sizable submission pile whether at a review site or in a company's slush pile, you quickly pick up on the toxic arrogance with which a lot of these submissions come. There's far more "I'm better than the worst piece of shit out there" than there is "I'm as good as the best going." There's far more "I'm going to allow you the honor of making me as rich and famous as I deserve" than there is "I think we could partner together in a way that works for us both because I really want to do this." The Diamond catalog carries a lot of material that simply isn't ready to be part of a national business transaction, or involves actors unlikely to sustain themselves over a long period of time. I do believe that Diamond has a moral obligation as a juggernaut within its category, whether or not it chooses to follow it or whether or not it feels it has greater obligations. I do. You can't escape that. That obligation, however, isn't to carry every comic but to offer every comic a chance to be carried.

Finally, I think there's a point to be made that Diamond's decision merely accelerates certain trends and they shouldn't be punished for the entire trend. As Dan Vado points out, comics publishing of a certain kind has a systemic capitalization problem. A lot of comics publishing is the 34-year-old guy who won't leave his parents' house, if that makes any sense, or that does a lot of laundry there when they do leave. In alternative comics specifically, one may argue that certain cartoonists simply don't publish frequently enough or with enough of their A-list material to make a go of a traditionally difficult format, that alternative comics publishing of the kind that's been going through Diamond has simply become a place for people to publish because they're fond of it, not because the format is a vital one. It's the comics publishing equivalent of granting a football player a certain number jersey. The format may be much more prohibitively expensive than it was even 10 years ago because of the cost of paper and printing and the needs of shop owners to get value per book. Diamond may in this case simply be the guy who after a long and furious fight walks up to one of the participants and taps him on the forehead, causing him to fall over.

With all of that understood -- and congratulations for reading this far -- I think the Diamond decision is wrong. Here are some of the basic reasons why.
1. Diamond's Policy Works Against the Core Identity of the Direct Market
I'm not sure I'm able to communicate to those who weren't there how radical the comic shop was if you'd been biking over to Ross Supermarket (or its equivalent) to pick up your weekly books. It was like going from rabbit ears straight to digital cable. The fundamental appeal of the comic shop was simple. Comic shops were the places that had all the comics. They had way more than your grocery store rack did. They carried them every month. They had more comics than you'd heard of, perhaps imagined possible. Carrying all the comics a store could was a near-standard operating principle through the DM's first heady period until that impulse was manipulated by profiteer douche bags. In the days before everyone became a marketing and retails sales expert, having all the comics or at least access to all the comics was the main mechanism by which stores were judged.

Although largely symbolic, raising the minimum to a point that so many comics -- some good, most bad -- are going to no longer exist deepens the divorce of the Direct Market from that core identity. If I can get Kevin Huizenga comics on the Internet and I may or may not be able to get them at a comic shop, the Internet grows in estimation as a place for me to buy comics and the comic shop shrinks for me. If I can get them at a comics show, the comics show grows in estimation as a place for me to get comics and the comics shop shrinks. While I don't deal in the Internet hothead rhetoric that hisses all Diamond wants comic shops to be is Wolverine Delivery Systems, I can't help but wonder what Diamond wants their shops to be if not that. If comics shops are to stop being the place to get all the comics and simply become, say, the best place to get comics, there's a ton of work to do in that direction. If they are just another place to get comics, there's work to be done to prepare for the greater competition they have today. If they are the place to get a certain kind of comics, they need to be ready for the implications of that stance, too. I don't see the Big Picture gain. I don't see a Big Picture.

In 1997 Diamond could make decisions and know that it was doing so in an insulated world where there only fall-out was contained within that system. In 2009, there exists no such insulation.

2. Diamond's Policy Strikes A Blow Against A Group Of Comics That Have Grown In Terms Of Sales The Last Few Years
Someone correct me if I'm wrong, but while Diamond's top 100 comics have increased a bit from what comics in those same positions sold five years ago, it was my understanding that comics at the bottom of the charts have also seen an increase, only to a much greater extent percentage-wise. If that's a place where sales have increased, why pull the legs out from under it?

3. The Loss Will Not Be Limited To Comics That Fall Under The Minimum
A huge failing of this plan is that action A (establishing a minimum) doesn't lead to reaction A (loss of market access by comics falling under that minimum). Action A likely leads to reaction A, B, C, and D. Comic books are frequently published not as entities unto themselves but as series and as component parts of lines. The smaller publishers most likely to feel the impact of this latest change in policy are far less able to specifically and easily excise the targeted books on a one-for-one basis. It seems likely that many publishers will choose to not only forego publishing comics that fail to meet the new minimum, but, say, an entire six-issue series of comics if there's a risk that issues three through six may fail to meet the standard. They may cancel plans for comics with the same trade dress because a third of them might not make it the minimum. And so on.

Additionally, if publishers remain devoted to material that will not make the minimum and find alternative methods to publish these books -- hand selling, say, or on-line distribution -- they'll likely take comics that easily meet the minimums into these new programs alongside the Direct Market orphans. Diamond's policy pressures publishers to innovate in opposition to their system rather than on its behalf, and there will be collateral damage.

4. Diamond's Policy Diminishes Comics' Greatest, Distinct Advantage Over Other Avenues For Purchase: Their Skill At Delivering Serial Comics
Serial comics is a unique market. It is the DM's unique market. What you guarantee by conflating your markets the way Diamond does is drift towards the higher-priced item. That's already happened, for sure, but raising the minimums makes it that much worse. I think there's a great case to be made for finding ways for shops to invest in and sell a greater number of pamphlet-style comic books, as opposed to dropping a group of them entirely and potentially frustrating a ton of others out of existence. Diamond's new policy not only puts the comic shop into more direct competition with the Internet, it puts greater emphasis on a format that forces the DM into greater competition with big box retail (such as they are) and on-line bookstores. If the economy is as bad for comics as Diamond's moves seem to suggest, is this really the right time to be picking those fights?

5. Diamond's Move Reinforces A Literal Bottom-Line Standard As To Cost
Driving breakeven or limited-loss comics out because they don't work according to the new standard may have costs that have nothing to do with the bottom line. We've already talked about art; I think comics as an art form has value as a general publishing reality. This also limits publishing strategies. Some comics operate as advertisements for the eventual collection or for the creators involved; some are helpful first drafts for stronger collections. We have as yet very few OGN-only comics stars and even fewer on-line serialization stars. It could be that there is a sizable audience that buys a print collection after buying print serialization that will drift away once their way of buying becomes obsolete. The damage to specific categories may strand comics that make the minimum. I've long been told that the most effective and profitable way for stores to sell comics is by having the customer's recurring business every week. Ending the reason for people to come in every week may further damage already ailing customer bases for certain categories. There are also buyers that buy across categories that may be pushed from the weekly buying habit because their particular mix of comics slips below the weekly visit and reward level. And, of course, there is the idea of low-cost comics of all type as sampling points in order to keep readers trying new titles and new artists. By stressing a system where each item must make a sales minimum, Diamond risks robbing publishers of a number of wider sales techniques that may have a more significant long-term effectiveness than the short term benefits gained, and they may put pressure on retailers to keep certain customers who count on a range of material being present.

6. The Loss Is Potentially Permanent
Comics markets are to a certain extent about momentum, and I think this not only effectively ends a certain kind of publishing for the present, I think it brings it to a permanent close. Comics has only lurched into maturity in the last three years; I think it's possible that there are a number of models that had yet to be tried: for instance, a non-profit devoted to serial comics publishing in the same way that a theater company featuring new plays might go non-profit, or a long-term initiative regarding original, non-licensed children's work. I think this all goes to the Internet now, both because of the real barrier of the minimums and because these projects will be judged by their makers on making their immediate minimums rather than a longer-term model.

7. Diamond's Move Leaves The Market Even More At The Mercy Of Its Biggest Suppliers
A market completely dependent on actors like Marvel and DC was a terrifying thing when those companies had every reason to be invested in the Direct Market. Now that they're just as if not more interested in bookstores, movie-making and the revolving licensing bonanza movies can bring, it's that much scarier to have a greater percentage of the DM given over to them. This isn't an analysis of Potential Extinction Events -- DC and Marvel leaving the market entirely would be equally apocalyptic no matter what else is in the stores with those books. But in a time where DC is running its Summer 2008 events into January and leaving many fans frustrated in terms of simple "you seemed to promise this but gave us this" expectations, and in a time where Marvel is running into its the latest of a long string of event mini-series with no end in sight and frustrating retailers with arcane premium books that make many of them look like doofuses when their press then sends people to stores, couldn't the market use the stability that might result from helping develop a half-dozen additional Jeff Smiths and Terry Moores instead of pushing talents on their level into on-line or book-only publication?

8 The Move Was Put Into Place Much Too Quickly, and Asks Too Much Of A One-Time Jump
The catalog after this new one institutes the new minimums. That is an incredibly quick turnaround for companies many of which now plan entire seasons ahead. I have no idea why this had to be done so quickly, and I don't think Diamond has made a compelling case for it, either. It's hard then not to see this as a move designed to balance the books short-term at the potential cost of the long-term health of suppliers who must scramble rather than operate on plans they made long ago. I think there's bound to be some specific dissatisfaction on the consumer end because of the speed with which these policies are instituted. To use our two alt-comics examples, Sammy Harkham and Kevin Huizenga are not simply ending their comics, they're shuttling material created for those books into DIY packages. I don't know how 1800 frustrated, potentially dissatisfied customers isn't a bigger concern than the costs earned back from the time saved sorting that specific material for the next half-year.

9. The Move Was Uncreative
I would imagine Diamond expects its suppliers to adjust to the new realities by repackaging material, or coming up with new publishing approaches generally. The speed with which this decision seems to have been made and its specific focus makes me suspicious whether Diamond demanded the same creativity of themselves. Was anyone contacted to see if they'd act as a specialty distributor on Diamond's behalf for this material? Is there no other way to limit the extra work caused by lower-end suppliers? Just because the math doesn't work for Diamond doesn't mean someone else couldn't have figured it out or there aren't other ways to get to the very same figures. Could a sliding scale to cover the extra costs be instituted so that Diamond wouldn't lose money on these books anymore? Could Diamond have established more rigorous standards in terms of slots and scheduling to better coordinate the labor needs? It's as if Diamond feels powerless to do anything other than beat up on the weakest parts of the industry.

10. In The End, The Move Sets a Bad Precedent for the Entire Industry In Surviving This Recession
Barring a culture-destroying slide that has us all working for Tina Turner in Bartertown, my hope for comics during this financial downturn has been that the major players wouldn't automatically seek to re-balance its books as things slip but absorb some of the blows and reform some of its excessive business practices to strengthen the long-term bottom line. Comics is a good and mostly lean business, and while it's going to suffer from outside pressures just like everything else will, I think there's every reason to suggest it might be able to negotiate the choppy waters ahead with some aplomb. We're definitely not the first industry at the Superdome asking for food and shelter -- no agency in comics has done anything as cynical as NBC has in turning over five hours of prime-time programming to Jay Leno, and DC firing a couple of editors looks far less repulsive than the money-soaked NFL does in cutting a bunch of jobs weeks before the cash gorge that is the Super Bowl -- and I think there's some pride to be had from that. And I'm still hopeful. However, Diamond's moves are a severe vote in favor of individual agencies turtling up and let the general industry fend for itself. We can do better.
So there's that.

In the end, I don't think Diamond's decision can be reversed. As you can see in the opening graphs, I'm not altogether convinced it should be. What I would recommend instead is that Diamond largely ignore its new standards and in doing so de-emphasize the whole concept of regulating fairness by letting people do whatever they want and then periodically taking a hammer to some arbitrary measure of under-performance. I know that comics people love the concept of playground fairness, but indulging in that kind of standard on an industry-wide basis leads to a less special, more stunted Direct Market that must go to war with other systems for comics delivery to a greater degree than is necessary or advisable.

I call on Diamond to reorient itself towards long-term health, stable publishing partners and in serving a unique marketplace. That's more than I can simply suggest into being, but I think there are few steps they can take as a start towards making this a greater reality.

First, I would like to see amnesty offered to as many current suppliers as want to in satisfying fashion wrap their current titles, particularly those with material already created for the Direct Market. Second, I would like for Diamond to redefine fairness as an opportunity not a scalable birthright. It can do this by increasing its barriers to catalog entry in every way other than sales minimums, including hiring an industry veteran as a consultant for guidance on titles to keep on their bottom-line contribution to the art form and forcing companies to submit on a project basis rather than a publication basis with deep penalties for failure to keep up their end of the bargain. Third, I would like to see all O/A restrictions relaxed and exclusive benefits in total -- designing one's own solicitation section, better marketing information -- given to all publishers that have worked with Diamond for more than ten years or a reasonably bench-marked number of publications. If Rick Veitch can make a living selling his books but has to offer them multiple times in order to do so, it seems to me there's little harm in allowing him to continue in this direction and no compelling reason people without Veitch's track record have to get to do the same thing because they stamp their feet on some message board where people address each other as "sir." Fourth, I would like to see the encouragement of initiatives that specifically target and strengthen serial comics publishing, the DM's special contribution to the enjoyment of the comics art form. I think this should start with an attempt to fix shipping difficulties and stacked dates within months. It should also include Diamond allowing continuity between innovations by actively acting as a repository for how they perform, so that if Vertigo tries $1 entrance issues, as announced at NYCC, Diamond keeps track of how this does in order to better work with publishers who would like to try the same thing. Fifth, I would like to see Diamond shift its overall conception for comic stores to the Best Place For Comics, starting with an industry-wide, Diamond-led commitment to the notion that any person walking into any comic shop can find out accurate information on any comic published.

That would be a great start, and I think every bit of it is doable. And yeah, I would also like a pony and magic elbows. I'm not sure how much of the above could happen with the mindsets that exist now. If DC's latest round of Vertigo sales initiatives tank they're not going to allow Diamond to report that information to a smaller company that wants to try the same thing, because DC is in the habit of routinely slinging public bullshit regarding their sales figures. But one can hope. And what I hope for today is that Diamond reconsider its unique role within comics, engaging rather than shielding themselves from the possibilities before them, starting with the serial comic book market.

* Kevin Huizenga objects to this depiction of the cancellation of his book
posted 8:00 am PST | Permalink

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