Sunday, September 19, 2010

It's NOT The Economy, Stupid

There's been some chatter recently about how comic readers are getting tired of the higher price points on many new comics, and how they can't buy as much as they used to which is, in turn, hurting retailers. I didn't really buy that line of discussion, as I think it's overly simplistic and doesn't really address some of the larger issues. I wasn't going to comment on it, but Bill Radford's sign-off from comics reporting suggested to me that it might be worth bringing up here after all.

First off, let me say that I'm not saying that price is not a factor at work here. It almost certainly is. BUT it's not the only factor involved by any means. If Marvel dropped all their books back to $2.99, I'm fairly confident (and I suspect they are, too) that sales would not return to what they were before they hiked their books up to $3.99. Despite the claims of many online who think dropping the price back will make everything better, it won't.

I noted back in 2008 that a price increase would cause some customers to leave, but it wouldn't have a large negative impact on the bottom line. More recently, John Jackson Miller surveyed the August numbers to find that they're really still in line with what we've seen over the past decade: "So the narrative is not that sales haven't increased since 2000; rather, we are not keeping pace with the best years of our run." While unit sales are down 23% from five years ago, dollar sales are only down by 7%.

Basically, irrespective of the price increase mainstream comics are doing okay, just not as great as they could be.

Earlier this year, Ogilvy & Mather Chicago and Communispace Corporation released the results of a study they did on the American consumer and how they've been impacted by this recession. The report, which is where I got the title of this post from, obviously looks well beyond the confines of comicdom, but there are a number of things in the report that apply very directly to it.
Today’s consumers look at the world through the lens of hard won experience; they are not na├»ve, they are acutely aware, their eyes are wide open... Consumers are emerging from this recession deliberate and discerning, and with their wallets half shut.

This mind-shift can be likened to a raising of consciousness that intersects with every aspect of living. The recession has been painful, but it has also brought people’s lifestyles in line with what really matters...
One of the themes throughout the piece is that consumers are concerned less with the actual money that is spent, but more with obtaining the most value for the money they do spend. Is the $5.00 coffee from Starbucks really that much better than making it at home? Maybe it is for some people, but that's a value judgement each individual is making more deliberately and more consciously than before.

But what they also note is that those value judgements are not limited to direct comparisons! That $5.00 coffee is not being weighed against what you can make at home, but every other $5.00 purchase you make with your discretionary income. Do you get the same enjoyment from that coffee as five songs off iTunes? Or a bag of cookies from the grocery store? Or a slightly larger than usual comic book?
Consumers are evaluating how they spend their time and money on a very macro level. Their eyes are wide open and they are making trade-offs and choices across seemingly unrelated things. Marketers need to get a better grasp on what they are really competing with and to be aware that the competition outside their category may be more of a threat than those within it.
On this front, I think the publishers actually DO have a very good handle on what they're offering comic fans. I think they know that many, if not most, fanboys ARE willing to spend their money on Action Comics or Uncanny X-Men or whatever. What's going to get dropped are the books that aren't part of that overall package. The fan whose pull list include all the X-Men titles and two books from DC is going to drop the DC books. They're not a "real" DC customer, and Marvel isn't marketing to them.

Which means that, yes, overall sales decline for retailers. Sales also decline for publishers, but less so with the bigger players whose marketing angle has largely been the broader continuity over the adventures of any single character. The fans' value lies in seeing how all the stories interact and they're largely still willing to pay for that.

Where Marvel and DC are screwing up, though, is in the content that they're presenting. Getting back to Bill Radford, he cites that he's largely getting out of the game because of all the heavy, dark events that have populated those publishers' works lately. "...through blackest nights and secret invasions and superhero civil wars and dark reigns... Wednesday — new comics day — isn’t the lure that it once was." The Ogilvy/Communispace report points to the same thing...
It is no longer productive or new news to remind Americans of how bad it is out there. Americans are feeling stronger than we give them credit for and are ready to rise to the occasion, brands just need to align with this can-do attitude and be helpful to people in their quest for something better.
That so many mainstream comics are highlighting the dark fears and problems in the world only reminds readers of what they have to face when they return from their attempts at escapism. It's absolutely why I stopped reading Marvel books!

What all this boils down to is that people cut back on their comic purchases because the recession on the whole has forced them to re-evaluate their values. What, specifically, are they looking to get out of a comic book reading experience and which title(s) deliver that? And if they can't find what they're looking for in comics, they're not above going elsewhere, even if that means spending more money. A lot of people over the years have paid lip service to the notion of comics being in competition with movies and video games and the Internet and whatever. But I think the American consumer is making more active and conscious choices about where their money goes, such that even the consumer is considering comics in direct relation to other media.

So to all those who are bitching about a higher price point, you can please stop now. In the first place, no publisher would roll back their prices unless they see a sufficient decrease in revenue. Which isn't happening. In the second place, the price increase isn't the real issue anyway; it just happened to coincide with a recession that's deep enough and long enough for people re-evaluate the wallet.

4 comments:

Matt K said...

Some thoughts:

1. Both Marvel and DC, in their (odd, to say the least) seeming synchronized way, seem to have launched a big push for "hope, optimism, heroes," etc. Did they run the "doom, darkness and terror" themes too long before this U-turn? And will it last anyway? Dunno.

2. I think the comics are overpriced in a way that is new, at least to me. Four dollars for a baseline, standard new issue from even the best-selling titles just feels like too much, somehow. Even if I had more more money to spend I would dig in my heels on spending that much; back issues are a far better bargain and even new books will come down if I wait for a sale or convention. I don't know that it's anything I "protest against," though; Marvel and DC can run their businesses how they want.

3. I suspect that at least at Marvel, at least some people may still feel burned from their 99¢ experiment when it comes to arguments that "we'll buy more if you lower the price." Admittedly most of the dollar books were garbage, but 3a) a lot of the full price books were and are garbage, also and 3b) Untold Tales of Spider-Man was excellent, critically-acclaimed work that basically gave fans what they claimed to want, and still didn't set the sales figures on fire. Rightly or otherwise, I feel like Tom Brevoort, et al., are going to say "nope, we met your demands for cheap once before and you were nowhere to be found."

Sean Kleefeld said...

1. Late by at least a year and a half. And while I admittedly haven't read very much of either Marvel or DC lately, I haven't seen any appreciable change in tone with the actual content itself.

2. That goes to what I was saying about Marvel and DC recognizing where they're reading readers' values accurately. You weren't really buying their books at $2.99 a shot in the first place, so raising their prices doesn't lose you as a customer. It's more of a dis-incentive for you now, but if the likelihood of you buying one of their books was already around nil, the needle doesn't have much of anywhere to move.

3. That was 1996. I think Brevoort is the only guy who was at Marvel then and is still there now, and I'm pretty certain he'd be the first one to point out that, with the exception of Untold Tales, those 99 cent books were all crap. I'm pretty sure he'd also be able to point to any number of other factors (poor marketing, association with other bad books, too rooted in the 1960s for a '90s audience, etc.) why Untold Tales didn't do so well. That said, though, that all reinforces my point about how readers would NOT return to current books if Marvel dropped their prices back to $2.99.

Danny said...

Always liked following your blog, and always mean to keep commenting, so there's no reason why I shouldn't start now!

Another point about the 99 cent comics is that the price model in the past has always been to lower the price on comics that "don:t matter." People will spend X on Amazing Spider-Man because it is Amazing Spider-Man, and will not spent 99 cents on Untold Tales because it isn:t Amazing Spider-Man. People are already buying things that matter to them, and dropping prices aren:t going to make things matter more to them.

In other words, if suddenly all comics dropped in price by half across the board, you wouldn't be picking up half as many MORE comics, you would just say, "hey, I have half as much cash in my pocket, let me spend that on this an extra iTunes purchase" or whatever. (And my "you" I mean "the majority of generic consumers that actually affect sales and not the few exceptions.)

JimShelley said...

Great correlation of the two trends Sean! I don't know that I would have arrived at the same conclusion, but you logic seems perfect. An excellent article!

And of course I agree with you about the dismal state of today's mainstream comics. There are *some* good ones there, but more than not, I find myself shuddering when flipping through modern comics.

- Jim