Answers For Spurgeon

By | Monday, December 15, 2008 2 comments
Tom Spurgeon recently asked a number of questions that he'll be mulling over this holiday season. I've got some thoughts on several of them, and felt that both the questions and some of my answers were worth sharing with a broader audience.

1. Why Don't Alternative Comic Books Sell Better In Comics Shops?
6. Why Is No One Alarmed That DC/Marvel Dominate Market Share?
7. Whatever Happened to Traditional Self-Publishing?

I think these three questions tie together and so I'd like to address them simultaneously.

The issue with self-publishing starts from a convergence of several factors. First and foremost is something of an industry maturation. Any successful business or society follows the basic notion that, as it becomes more successful, it becomes more and more suited to specialization through a division of labor. As it serves an increasing population, more individuals are required for production to serve the larger base. As you have more and more people involved, it becomes more efficient to divide the labor among them so that each person specializes in a particular aspect of the production process.

Think of agriculture. Back in the day, any given farmer might plant corn and lettuce and tomatoes and wheat and carrots and tobacco, as well as raise cows and chickens and pigs and sheep. But as farms serve an ever-growing population, they've become more specialized so that each farmer now focuses one element of that list. Rather than having EVERY farmer plant several types of crops and raise different types of animals, each only provides one items from that list, so they can be more efficient in (for example) growing carrots and get more and better carrots for the effort put into them. This has gone so far now that some farmers specialize in only sub-sets of those categories: dairy cows versus beef cows, for example. Or organic lettuce versus 'traditional' lettuce versus hydroponic lettuce.

Comics work in much the same way. Will Eisner famously started a division of labor back in the 1940s by separating out the tasks of writing, penciling, inking, lettering and coloring. Today, the self-publishing movement has matured and realized that they can more effectively get their story out to the public if the writer/artist does NOT also have to worry about publication issues. Wasn't there a internet discussion just last week that looked at various options creators had in going with Image over Dark Horse or whomever?

A couple decades ago, the outlets creators had for publishing their works (and maintaining their copyrights!) were extremely limited and not necessarily suited for comics anyway. The industry has matured sufficiently since then that creators now have a number of different options (online, print-on-demand, etc.) that allow them to focus on their storytelling, and not worry about the mechanics of book publishing and distribution.

Now, this ties in with a lack of sales in alt comics and the dominance of Marvel/DC by the nature of that specialization. With the industry maturation, comics shops have also matured. When creators' outlets were limited, so too were customers'. When there were only a handful of paper products being printed, a newsstand was adequate for providing all of a customer's reading needs. But as the number of periodicals grew, so too did the need for specialization. This gave rise to the comics shop which sold, not surprisingly, comic books. But, as comics have become increasingly specialized, the comic shop has also had to specialize more.

"But, Sean, my shop has more ancillary material than ever before! I can get DVDs, CCGs, statues, action figures..."

That's most likely true, but that shop has not specialized in media, but specialized in genre. Those busts and t-shirts and paraphernalia, by and large, are superhero-related. The comic shops of old aren't really comic shops any more, but superhero shops. They are peddlers in fantasy and escapism. The same holds true for Diamond. How much of their monthly catalog is actually taken up by comics? How much of it, by contrast, is taken up with statues and prop replicas and posters and...? (I've never done an actual comparison here, but I'd certainly be interested in seeing someone who did.)

Most alt comics don't really deal with the fantasy/escapist element that's seen in superhero comics. (That's not to say, of course, that there's no fantasy or escapism in alt comics, just that it's generally not the point of them.) And, of course, that's not to say that ALL comic shops sell exclusively superhero comics -- clearly, that's not the case -- but those that specialize in the superhero genre (that is to say, most of them) tend not to have much in the way of alt comics. In contrast, comic shops that specialize in comics focus more on the medium itself and have less in the way of ancillary products.

That being said, it should come as no surprise whatsoever that Marvel and DC -- the dominant players in superhero fantasy -- overwhelmingly dominate the market. Comic shops are selling the superhero genre, where Marvel and DC are almost the only real players. Folks like Image and Dark Horse, while often contributing to fantasy comic milieux, have comparatively little in the way of straight-up superheroes. That we see Marvel and DC swamp the Diamond charts every month isn't an indicator of their overall media dominance, just an indicator of their genre dominance.

So, while saying that comic shops don't cater to anything but the superhero set is something of a pat answer, that really is the case. But only because "comic shops" aren't really "shops that sell comic books" so much as "shops that sell superhero fantasies."

2. Why On Earth Does Marvel Think $3.99 Comic Books Is A Good Idea?

It's simple math.

Let's say a Marvel comic costs $2.99 and it sells 30,000 issues a month. That's $89,700 in revenue. If Marvel jacks up the price to $3.99, they will inevitably lose readers. How about we assume 25% for the sake of simplicity? If a dollar price increase drops monthly sales by 25%, Marvel will actually bring in more money. 22,500 x 3.99 = 89,775. Yes, that's only a $75 increase in this example, but that's also just using off-the-top-of-my-head figures. I suspect Marvel has done some number crunching and figured that they won't lose nearly that many readers for most of their books.

What Marvel realizes here -- and I've heard Marvel editors speak to this point directly -- is that Marvel comics are what economists call price inelastic. That means that the price you pay can fluctuate quite a bit without a change in your buying habits. Gasoline is a more classic example of having price inelasticity. But, as we've seen recently with gas, there IS a point at which people will start changing their buying habits based on price. But, in the case of gas, that didn't really start until after we'd staying north of $3.50 a gallon for several months and we started seeing that reflected in the price of moving goods around the country. Marvel is betting (accurately, I'd wager) that a $3.99 cover price won't send away too many of their customers.

Consumers don't have an infinite bank account, though, so that price change is going impact them. But, I'd bet (as I'm sure Marvel is) that most of their customers are going to drop books from other publishers before theirs. Sure, the folks who buy mostly DC books and only one or two Marvel books are more likely to drop the Marvel books over their DC ones. But the bulk of Marvel's readership, I'd guess, is comprised of people who buy mostly Marvel comics. Most superhero fans seem to have a preference to which universe they visit, and the Marvel fans which comprise the majority of their overall readership are more likely to drop non-Marvel books. Especially in this era of perpetual company-wide crossovers. Does it make more sense to drop Final Crisis (which doesn't really make sense unless you're also reading a half dozen other DC titles) or Secret Invasion (which ties in with another dozen or two books that you were already reading anyway)?

The issue I'm sure many of you have thought of is, of course, that this will likely have a detrimental impact on smaller publishers, as people drop their one Slave Labor title to afford their Marvels. This will, overall, almost certainly hurt the industry and I expect we'll see Marvel actually increase their market share with regard to dollar value. It doesn't strike me as a positive move for the industry overall, but I'm pretty sure the bean counters at Marvel aren't focused on that.

8. Why Is The Fact That A Few People Are Making That Kind Of Money On Webcomics Not A Bigger Story?

I think there's a couple of issues here. First is that, as Tom points out, the vast majority of webcomic creators are NOT making a living off their site. I think the number of self-sustaining webcomics are decidedly the aberration and not the norm. So any discussion that does happen is going to center around those handful of nearly unique creators. Which leads to a second issue.

People, and Americans in particular, don't like divulging their financial information. It's considered a distinct breach of etiquette to ask someone how much money they're making. We can see what the going page rate is at Marvel or DC because there's enough folks working there that the number is inherently NOT indicative of what they earn. But if we mention the going rate is for self-sustaining webcomics, we're essentially talking about what Phil Foglio earns.

(Even though the small number of financially successful webcomics is very small as to inevitably skew the data. It'd be like asking what Bill Gates, Jeff Bezos and myself earn in a year, and assuming that's a pretty good indicator of what all computer type folks make. The extremely limited sampling makes the margin of error so great as to render the numbers unreliable.)

All of which means that, so far, webcomics creators dodge the issue by saying, simply, that they make enough to earn a living. There's a general assumption that that means at least roughly twice the poverty level (currently about $20,000/year/person) but there's a lot of room for interpretation there. There's a big difference, after all, between $20,000 and $30,000.

So until we have a substantial number of webcomic creators earning a living, and we're able to start generating some reasonable average numbers, I think any matter-of-fact discussions are going to continue centering around the unique experiences of a small handful of individuals -- which more likely than not don't apply to anyone else. There simply aren't enough folks to determine what "best practices" are for the business.

9. How Many Staffed Editorial Cartoonist Positions Will There Be Ten Years From Now?

I won't even BEGIN to speculate this one. As recently as a couple weeks ago, he also posed the question of how many editorial cartoonist positions will there be by the end of 2009. At the time, he cited there were about 60. I think we've seen a half dozen cartoonists let go since then!?!

Technology is moving to fast to speculate ten years out. Try to recall what the newspaper or comics field looked like in 1998. The New York Times web site had been online for maybe 12-18 months. Girl Genius hadn't been published at all, much less been transferred to a web-only comic. Achewood was still several years out. Most news was still consumed via television. The number of cell phone users had just topped 50 million, compared to the 3 billion users today.

I think speculating ten years out on such a specific point is about impossible. I think it's safe to say that we're going to see a decrease in staff newspaper cartoonists over the next several years, but I can't even begin to imagine what the news/media outlets are going to look like in a decade, much less what sort of business models they'll be using, much less how many cartoonists will be on staff of those organizations.

As to Tom's other questions, I'm not sure I have any reasonable answers/thoughts about those beyond what he's already noted.
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Matt K said...

Did you mean that comics are price inelastic?

Thanks for catching that. Corrected accordingly.