Darkstream: why comics are collapsing

From the transcript of last night’s live Darkstream. I’m still figuring out the system; for some reason the charts I prepared in the edit screen were not available once I went live. Also, thanks to Hooper, we were able to determine that the donation system is working but you have to use the Streamlabs system and not the YouTube one, since my channel has been deemed ineligible for both monetisation and SuperChats by YouTube.

What happened is that comics went from being a fairly broadly distributed product to one that was
completely dominated by a single distributor. Now, what usually happens in the case of a single  distributor. You can probably guess. They’ve got a monopoly position and so they have a tendency to significantly increase their prices at the expense of everyone else. Remember, the distribution is part of the pie and distribution cannot, by definition, increase the pie, and so it’s always going to have to take something from somebody else.

Now if we’re going to take it, are you gonna take it from Marvel? No, you can’t. Marvel has about  40{434e4795edb8718426f2262f16bc350bda72304c69f2c22d1de5754882bdf177} of the market. Are you gonna take it from DC? No you can’t. because DC is already very closely tied to Diamond. So who do they take it from? Well, when a distributor can’t take it from the suppliers, they take it from the retailers, and that’s exactly what’s happened.

You know I knew what this situation was going to be even before I knew what the numbers were because I have worked in a distribution retail channel before. My father owned a large supplier in a particular industry and so my first job out of college was actually managing part of the distribution channel, so what that means is that if you look at a normal distributor, the kind of distributor that Arkhaven is working with, the kind of distributor that Castalia is working with, they usually do a 20{434e4795edb8718426f2262f16bc350bda72304c69f2c22d1de5754882bdf177} markup at most.

Diamond’s markup is 38 percent. And so what that means is that if you run the numbers and you work out the details, then what you see is that instead of taking 11.9 percent of the total retail price of a comic, that would be what a normal distributor takes, Diamond is actually taking 22 percent of the total retail price of a comic. so where does that additional 10 percent come from? Well, it’s not coming from Marvel and it’s not coming from DC, it’s coming from the comic stores. I worked it out, and the comic stores are losing, on average, each of them, $31,885 apiece because Diamond is a monopoly. So that’s what’s killing them, that’s why we’re seeing so many retailers going out of business, and this is not going to improve because the market is declining so everybody is trying to take bigger and bigger pieces out of a smaller and smaller pie.

I calculate that it’s going to go down from 74 million [correction: 79 million] last year which is well down from you know the previous figure of 86 million, and I believe it’s gonna drop down to 67 million or less by the end of the year.

The decline from 100.32 million units in 1997 to 67 million in 2001 is known as the Comics Crash. However, the current decline from the 2015-2016 peak of 89 million appears to be gaining momentum, due to rising prices, failing stores, and declining quality. The average price of comics has risen from $2.62 in 1997 to $4.14 in April 2018, Top 300 unit sales are already down 7 percent for the year, and the much-ballyhooed move of SJW Marvel writer Brian Bendis to DC is proving more disastrous than even the skeptics had expected.

I have been tipped off by DC editorial sources that the numbers that DC Comics received were a lot lower than expected. A lot lower. Less than you might expect for a new Superman title relaunching the character with A-List talent and spinning out of Action Comics #1001 and DC Nation #0 and more like – well, a newly launching Brian Bendis title at Marvel, without the tiered variants. And out of the top ten as a result.

Also note that at -10 percent, total unit sales are down even more than Top 300 unit sales. Put these factors together and it looks as if the comics industry will hit a new 21st century low in annual unit sales by 2019 at the latest, and quite possibly, by the end of this year.