Comics Economics, Part 1

By | Monday, November 10, 2008 1 comment
I can't imagine there are many (any?) of my readers who don't also regularly read Tom Spurgeon's blog, but on the off chance that you haven't seen it: Tom posted a piece early yesterday morning citing why he's been talking so much about the economic crisis amid the generally positive (Tom used the word "giddy") outlook many comics fans have recently adopted in the wake of the presidential election. While I don't frequent message boards as much as I used to, I do read more blogs and I'll agree with him that I haven't seen much internet chatter about the economy from comics folks. As Tom points out, it's a frightening and depressing topic, but he's quite right that we should be discussing it more openly and directly. (I have to admit that I've been pretty remiss in addressing the topic as well. I think with one exception, I've only tangentally alluded to the recession at best.)

It's an interesting dilemma. One of the reasons people enjoy comics is for the escapism, but without addressing the world we're escaping from, there's a chance we might not be able to continue our brief escapes to Dogpatch or Metropolis or Nova Venezia. So, I'm going to see if I can't join Tom to help get the ball rolling with some frank and earnest discussions about the current economy.

Let me start with a few personal facts about where I'm coming from.
  1. My B.S. is in graphic design, but I got an M.B.A. a few years ago. While my concentration was in marketing, there was still lots of economic theory there. I can navigate a balance sheet pretty well.
  2. My day job is with the financing arm of one of the world's largest corporations. We provide the financial backing behind things like your Walmart credit card. The company has maintained its AAA credit rating throughout this whole economic mess.
  3. My own finances are tight these days, due largely to additional costs brought on with my divorce from earlier this year. I've essentially got half the income to continue paying for the house and all the utilities, plus payments on a loan I had to take out to pay my ex-wife for her half of the house's equity. It's not an untenable situation, but I had to make some hard cutbacks shortly before the economy went south. On the plus side, I have zero credit card debt, my car (a fuel-efficient Civic Hybrid -- the smartest purchase I've ever made) is paid for, and I make sure everything I buy these days is paid for with cash (well, debit card, technically).
  4. My girlfriend has an express interest in personal finances. She maintains her own financial blog, and has a solid understanding (or as solid as anyone can have these days) of the financial pressures rippling through the economy.
Now, forget about all the garbage you've heard about how this whole mess got started. The practical, how-it-impacts-me perspective is what concerns us here. Because, frankly, even the financial experts don't know what the hell is going on. (The CEO of my company -- again, AAA credit rating, one of the largest corporations in the world -- spoke to a group of us, and the best he could come up with was, "Shit happens." Actual quote. The guy is a financial wizard, and the best explanation he can devise was "Shit happens.")

So what does the financial crisis mean to me?

Well, let's look at some data. Here's the estimated sales numbers (courtesy of The Comic Chronicles) from the past several months of Marvel's and DC's top-selling, event-driven titles.
Secret InvasionFinal Crisis
Although there's a downward trend for both, that's not atypical of any title, and hardly surprising given some of the critiques I've heard/read of both events. Also, since both titles' sales declines began before the current economic crisis, neither would suggest that any economic downturn.

Of course, this is something of a lagging indicator since we don't have any data yet beyond September -- when the economy as a whole tanked. And we're also looking at the most popular books, which are probably the least volatile. Looking down to the lower end of things, how about we take a look at (the arbitrarily selected) Witchblade from Image Comics and Lone Ranger from Dynamic...
WitchbladeLone Ranger
Again, not great numbers, but not unexpected. The biggest drop is seen in Ranger but only after a several-month gap between issues. For all intents and purposes, these numbers all look pretty normal.

Here's another indicator that comics aren't in much trouble. Marvel's stock price...You can see that the lowest their stock price has dipped recently ($29) is still higher than all but the highest peaks of 2007 (the highest being only $30.91).

Time Warner, the folks who own DC, don't look quite so hot...But as you can see, they took their big hit between 2000 and 2002. They did dip below $10 a couple times in October, but that was from only from hovering around $15 for most of this year. A hit, certainly, but not a devastating one. Furthermore, Time Warner does own a few other things besides a comic book publisher, so their data isn't going to be 100% applicable to a comics discussion anyway.

So far, this seems to suggest evidence of the notion that comics are recession-proof. Of course, anecdotal evidence suggests exactly the opposite, as I'll look at in my next post.

To be continued...
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Anonymous said...

"The guy is a financial wizard, and the best explanation he can devise was 'Shit happens.'"

Considering how effective financial wizardry has proven to be, in light of the past several months... that's pretty much par for the course, isn't it? :)