Diamond Raises Minimum Order Threshold, Kills Babies!

Right off, I’m fairly certain Diamond hasn’t even caused minor distress to any babies. I just want to get that out of the way.

Lately, I’ve been talking about indie comics and how it’s certainly not easy to be successful, but still possible. Unfortunately, it turns out things just got a little tougher.

Over the weekend, news broke of a major shift that will affect small press and independent comics quite a bit. It seems that Diamond Comics Distributors has increased the minimum sales threshold for books from $1,500 to $2,500. You might be asking what this means for you the comic book reader, and I’ve been trying to make sense of it myself, both as someone who consumes a lot of comic books, and as someone who wants to create his own comics, and is not looking forward to a world where that’s harder to do.

So what does this mean? Dan Vado of Slave Labor Graphics already responded quite well in a letter to Tom Spurgeon of The Comics Reporter. He does a good job of explaining things and what it means, as well as highlighting that this isn’t necessarily a simple case of “Diamond is awful,” rather an endemic problem with the way comics are distributed overall. He says, “It’s a tough spot for everyone to be in. Diamond is in essence asking everyone to sell more in a recessionary environment or find themselves out of the catalog. Short term, a lot of publishers are going to find themselves with no distribution. While that might sound like I am angry with Diamond, I am not. I am unhappy, but the industry’s current situation is one that has been coming for some time, recession or not.” I think his level headed approach to this is important, and jumping to shouts about the evil Diamond monopoly doesn’t really address the root of the problem, as much as a very unfortunate business situation stemming from many factors and long in the making. These factors are really beyond the scope of my understanding of the business, and at the end of the day, shouldn’t really be the concern of the casual reader.

As far as I can tell, it works like this. Your book gets to be in Previews, the catalog that goes out to all the comic shops, three months before the book ships. Comic shops order books from there, to be delivered 3 months later. The total amount of purchase orders, or pre-sales of a comic must  meet or exceed $2,500 (wholesale, not cover price), or Diamond won’t bother fulfilling those orders at all. John Jackson Miller at the Comichron did a great deal of number crunching to estimate how many copies of books would need to be sold at various price points to stay in the catalog, and get your book shipped to stores. He found that, for example, comic shops would have to order 2,090 copies of $2.99 books to stay in the game. What sort of books does this affect? In September, Pax Romana #3 was the 300th book in the top 300, and with a cover price of $3.50, it sold about 2,800 copies. In November, the 300th book was Wasteland #22, which did about 2,200 copies. 

Now, you’ve heard of both of those books, right? You might not buy them, but you’re aware of them. They are published by Image Comics and Oni Press respectively, so they have that going for them. Now imagine that you’re publishing a book through a smaller publisher, like Ape Entertainment, or Viper Comics, or Archaia Studios Press, or Adhouse Books and Antarctic Press. I would bet that most of the people reading this don’t know too many of the comics being published by those companies, but they’ve been publishing comics on a small scale successfully for some time. In many cases, the sales of these issues barely subsidize the ability to get the book done, so an eventual collection can be sold. But if the issues don’t make it to market, the collection will be even more difficult to market, because there won’t be any word of mouth from the issues. I can’t imagine the first issues from Mouse Guard sold all that well, but they laid the ground work for all the success David Petersen has experienced, and the gorgeous hardcovers that were eventually made of that title. Had the issues failed to get into stores, even in small numbers, I doubt the response would have been as positive for a book like that.

We’re continually reminded that it’s not a perfect system by a long shot. Recently, fans of Phonogram: The Singles Club learned that the second issue will be delayed because artist Jamie McKelvie had to take paying work on other projects, because the monthly sales of the first issue weren’t quite high enough for him to pay the rent. Now, this isn’t necessarily anyone’s fault, but it isn’t like book publishing where they can get an advance. And this is an Image comic book. If it were self-published, they’d be lucky to get to the point where they can even put together a trade paperback. It’s a strange system.

And how can you best support the creators whose work you like? You have to make sure you get the Previews catalog from Diamond, and go through it, and pick out every thing you will probably want to buy three months in advance, essentially doing the job of the retailer, and agree to buy it on its eventual release. I have always hated this system, as it puts more onus on the retail customer than any other industry out there. How can we expect this medium to be treated the same way as other storytelling forms when such a byzantine system exists for its consumption? Perhaps it’s just the cost of doing business when your overall market is so small, but it just doesn’t seem right.

When all is said and done, what does this mean for you? Well, immediately, you probably won’t notice anything. If you only read Marvel and DC books, I suppose it’s “as you were,” But if you take any forays into the deeper realms of comicdom, you’ll start to see the prices of independent comics going up in order to meet the order threshold. For the books that don’t make the cut, you’ll see the previews catalog get thinner, and the indie offerings on your LCS shelves become slimmer. Competition to break in will get fiercer, and the standout books coming from left field will become more and more rare. 

Yet, if we’ve learned nothing else about folks who make comics, it’s that they have to make comics, and they will. They’ll have to find new ways to get their material in the hands of readers, and a lot of innovation will have to be found in uses of the web. Conventions will be a way to get to people directly, but of course, the cost of going to San Diego, for example, is getting a little ridiculous, especially for an unknown new comic book creator. So, like so many things in our lives right now, we’re in for a change. But that also presents opportunities for solutions and for things to get better. But that never happens quickly, or without a great deal of growing pains. 

 

Comments

  1. Do you think there is room in the market for an indie only distributor? That could be a solution to these problems.

  2. I just saw a baby killed in the street…it has begun.

  3. Time to stock up on indie books

  4. It still amazes me the hold that Diamond has on the whole comic book industry. In what other industry would one, and only one, company be allowed such a monopoly. Diamond’s sole supplier stronghold needs to be broken. Some might suggest that a move to digital format comics might help, but I honestly don’t think that will solve the problem. For one would it raise enough capital to pay creators.

    There really needs to be some competition out there against Diamond – another distributor willing to undercut them, and get books into stores through them. If diamond were actually challenged they’d have to consider lowering their demands.

    Sadly, with the state of finances across the world I don’t see that as likely. But if I were any of the Comic Book publishers out there, even the Big 2, I’d be doing some serious research into other available avenues which could cut Diamond out of the chain.

  5. I think in order to start a new distributor, someone would have to come in with a ton of capital to burn, because it would take a long time to de-entrench Diamond.  But the flipside of that is that ultimately, it’s not a terribly profitable business, and there might not be room for 2 distributors.  So the person starting the company would have to be someone both rich and altruistic.  I don’t see that happening.

    Again, please make sure you read Dan Vado’s comments, where are very level headed about Diamond.  As much as they hinder the industry to some, they’ve saved it for others.  I found the point about how they always paid their invoices on time, and reliably to be very interesting.  Diamond is where the money comes from, and they’re not flakes, as many others have been in the past it seems.

  6. inititate despair.exe

  7. does anyone know the full story of why capitol city distributors in madison wi had to sell to Diamond? What ive read makes it sound like marvel kinda caused it.

  8. The short version, as I understand it, is that when Marvel purchased Heroes World in 1994 to be their sole distributor, making all sorts of deals, they screwed up most of the other distributors, and Diamond was the only one left standing.  Then Marvel went bankrupt, leaving Diamond the sole distributor in a nearly dead industry.

  9. What irritates me the most is that this isn’t surprising. Diamond has been a pain in various ways for the past decade, and nobody ever bothered to do anything about it.

     On the other hand, it might be great news for podcasts like iFanboy – we’ll be depending on you guys to let us know when the good indy books are out so we can order them directly from the creators. 🙂

  10. @Josh

    Thanks for the info

  11. I’m with Josh here, there’s no incentive for someone to come in and try to take Diamond’s place.

  12. Yeah, I’ve heard horror stories of other distributors not shipping books, or shipping them incorrectly, or not paying bills on time prior to Diamond’s takeover of the market.  It’s better to have a reliable distributor than none at all.  As long as Diamond stays reliable, there’s no reason to get into the game. 

    As for how we got here and where we go from here, I’d be interested to see if there will be a Tilting at Windmills article on Newsarama dealing with this.  I forget who wrote them, but I always found those very insightful in relation to the business and retailer end of comicdom.  Wonder where they’ve been; maybe someone knows, or who wrote them so someone could make contact and get some info.

  13. I believe some of the Marvel/Heroes World machinations were discussed in an iFanboy mini from last year: http://www.ifanboy.com/podcasts/video/iFanboy_Mini_-_Episode__21_-_Comic_Wars

    If the mini doesn’t cover it, the book the mini’s about definitely does. It’s worth finding at the library, thumbing through the index to that one specific passage, and then carefully returning to the shelf before you accidentally get an MBA from holding it. "Dry" is the word.

  14. @Josh: I agree with what your saying. It would have to be somebody with almost limitless finances to challenge Diamond, and yes (Sadly) this really isn’t the kind of time that such people are likely to be investing in something which ultimately isn’t going to be able to make them any money, in this financial climate.

    Diamond aren’t the absolute %^&s which some would have you believe. I mean even here their only taking a move which really does make financial sense in a bad time. I just wish that there was some kind of alternative to force them into being more competitive.

    It might be a time where, rather than a company trying to take on Diamond directly, somebody could take a gamble at becoming a distributor for the smaller independent publishers. It would still really have to be somebody doing it more for the love of comics than the profit, but setting up distribution deals with companies outside of the big two could possibly make some profit if managed well. In fact if that company were to be able to circulate an all-Indy alternative to Previews it would probably give smaller companies a much better shop window to pitch their work in, rather than hoping they get some space after the larger brands have shown their wares.

    Yeah, still a dream, I know. But not totally implausible.

  15. What about direct sales from the publishers to the LCS’s how easy would it be to email upcoming comic release info and collect orders via there own website then ship directly to the LCS cutting out diamond.

    Devils Due did it recently when hack/slash was banned from distributing via diamond due to a legal action on its reanimator issues.

  16. Is this the very beginning of the end for Indie books? And then only mainstream comics (and a huge maybe) big indie companies like Image will be around? This scared comic book fan will have to say yes. 🙁

  17. Well if they increase their prices by 40% they can get around this change. Another option is they go to a double-sized format and come out every two months at twice the normal price.

  18. Not to question Dan Vado’s motivations, but he clearly cannot directly assault Diamond simply because he can’t afford to piss them off.  I think he probably knows that if we weren’t in a monoplistic situation the cost might still be rising, but it would certainly be lower in an absolute sense.  I also have to wonder if comics (as an industry) would be in the state it is in if we had some competition at the distributer level. There is clearly considerable interest in the characters and some very good work being done at both the "indie" and "mainstream", so the lack of sales is probably due to the distribution, marketing, and retail sales level issues.

  19. Somewhere Robert Kirkman is spinning on his green-screen. Looks like the "rarified air" just got a lot thinner.

     Sorry for the very untimely reference but I finally caught up with my videocasts like last week so its fresh in my mind.

     Is Diamond not a monopoly? Not that I want to take them down but I don’t see any competition in the field. I don’t know any of those laws or arnything. Anyone else?

  20. Digital Comics time.

  21. Diamond is a monopoly yes.  In 1997, the Commerce department filed suit against them, but dropped the case in 2000, since they’re only a monopoly on comics distribution, and not book distribution.

  22. The only good that can come from this is that it will push more stuff online.  Ideally, digital comics will finally catch on when all these indie books are pushed to the internet for half the price the physical copies were selling for and then everyone else will have to go digital to keep up and that is how Diamond will have put themselves out of business.

     What are the chances of this actually happening in a timely manner?

  23. iFanboy, lets rise up and combine all of our money and start an indie distribution company! I say "RISE UP!"

  24. iVerse is already making plans for a minimal-fee-all-digital distribution – maybe this’ll be the best thing that happened to indies?

    http://www.comicbookresources.com/?page=article&id=19613

    C’mon, people. Hope and Change! C’mon!

  25. @OttoBott: While iVerse is one of many possible outlets it will never be a big mover while it cuts out 80% of iPod users. Fine if you have a touch or iPhone – but those players have such a small capacity for storing books on mass.

    The players just aren’t up to standard right now. And if you’ve forked out for 120gb iPod to house all your music and podcasts you’re unlikely to buy a smaller capacity device purely to view comics on.

  26. Great, cuz it was so easy to publish your own comics before. I just need an artist!

  27. Mhhyeah, it was kinda-sorta-a-joke. I don’t see iVerse as the solution, but if their business model is successful, I think it can be easily cannibalized for either the digital-book market when Amazon’s Kindle gets up to snuff or just digital distribution  in general – I’d pay $0.99 for a .cbz file. Figure out however much a creator gets per-issue on an indy-mag like Proof and sell the digital copies at basically their profit + whatever miniscule amount. Or if the cataloge was huge and current (none of this 6 months behind stuff), maybe just a flat rate to view them ala Marvel Digital?

    I wonder if there could be such a way as pre-ordering for the graphic novel as it is released online – a sort-of pay it forward to support the writer/artist as it’s being made – the previews are released monthly online, printed and those who subscribed through the process has that much of the dollar amount "prepaid" for the trade? I dunno, I’m just spitballing.

  28. Starting an indie distribution center takes more than love, it takes several full time employees with salaries that have to be paid.

    You could create the digital equivalent.  I have no idea of what are the most popular comic sites.  From my corner of the net I’d say Comic Book Resources and Newsarama.  Anyway, if you take the most popular comic internet destinations and attach a digital comic store to them, you might have a chance at creating a virtual LCS.   Somewhere that people connect with purchasing digital comics.  But that would be undermined by bitt torrents by "fans" who think everything digital should be free. 

    I think the results will be:

    Fewer independent books.

    A slight increase in graphic novels that are not distributed as individual issues.  Just like "real" books, you do it on your own and submit it to a publisher all at once or pitch the book with sample chapters to get an advance. 

    An increase in "done for love" web comics.

    Possibly an increase in indie anthologies.  (Somebody tell Tori Amos to write more songs) 

    A further shrinking of the comics industry.

     

     

  29. I’ve got to agree there has to be a way for someone to come up with a small-press distribution system that works for the creators. I don’t know what it is, but really, there has to be some way out of this Diamond monopoly.

    The only problem I see is guaranteeing books on time from people who have other things to do – like work real jobs and pay real bills. The unreliability of indy release schedules is legend, but there are (usually) good reasons behind them, like the McKelvie story above. It’s a double-edged sword – you can’t build a successful business when your product schedule is unreliable.

  30. Josh,

     

    What a great post.  its hard to imagine a world without independent quality.  Times are hard all around, and it probably would be in Marvel and DC’s best interest to reach out to Diamond to change their thresholds downward.

     

    Where would Bendis or Garth Ennis, or Jonathan Hickman have become the quality creators they are, were it not for their time in the indies.

     

    If Marvel and DC don’t/can’t influence this decision, it would be in the industry’s  best interest to develop some sort of "farm team" that allows promising creators like Jason Aaron to cut their teeth, otherwise this is an art form that will ossify and decay.  And dammit I love me my comics. 

  31. Face it. Diamond owns the industry until they face a legal challenge. For an indie distributor to make it, stores (which are vastly small businesses) would have to spend beyond the minimum order, which they need to make in order to sell bread and butter titles such as Spidey and Bats. Also, what’s to stop diamond from saying "If you order from other sources, then we aren’t doing business." So long as they deliver for the big two, nobody can leave them. I wouldn’t be completely surprised if this were a quid pro quo in an attempt for the big two to consolidate the industry.

  32. @theswordisdrawn

     I want to address what you’re saying about iVerse "leaving out 80% of iPods".  iVerse isn’t leaving ANY iPods out by choice.  Apple only allows us to create applications for the iPhone and iPod touch.  We CAN’T make apps for the other iPods.  Apple is only interested in games on their older iPods, and there’s not a huge selection of those. 

     Today, we announced that we’re soon launching a Desktop Application for Windows and Macs, and we’re also creating applications for Google’s Android platform.  So we’re expanding to as many outlets as we can. We’re going to do everything we can to help creators find an audience for their comics – and we hope every single one of them is printed as a trade or a single issue. We love print comics, and we believe digital can help grow this industry. 

     Right now we’re seeing between 3,000 and 5,000 comics downloaded every day on the iPhone and iPod touch. So we’re very pleased with how things are going thus far. We’re introducing comics to new readers every single day.

     When our desktop apps come out, we hope you’ll give them a try – and if making comics on older iPods ever becomes an option we’ll look into it.

     

  33. @ericwilder – you asked, "what’s to stop diamond from saying "If you order from other sources, then we aren’t doing business."

    Federal trade law would prohibit them from such actions I believe.  Right now they have a natural monopoly, and they’re not doing anything directly to discourage competition.  If they were to try to maintain their monopoly artificially, then there would be a problem.

  34. Of course, there’s nothing to stop them from doing it "unofficially".

    I’m not saying they would or do, I’m just saying…

  35. "Janice Rossi can do whatever she wants! You hear me?!"

  36. I’m making the DeNiro "just go down there and turn in there" face and hand gesture. You can’t see me, but I am.

  37. While I agree with the sentiment of your argument, Josh, I choose to spin it in a positive way. While Diamond is, sort of, dicking the small producers this could be an opportunity for another company to take up their mantle and bite into Diamond stranglehold on the market. They are, truly, a monopoly and with them making this choice we may even see the creation of an alternate distribution system.

     

    This would not be easy, that’s for sure, but it could happen.

  38. @ericwilder – Also, it’s absolutely not in Marvel or DC’s interest to do harm to the independent comics scene. If anything, that’s where they farm talent.  I’d bevery surprised if it cut into their market share in the least.  There’s nothing in it for them.  Marvel and DC aren’t losing money to smaller comics.

  39. now i have to find more better indie books. my wallet cant take this anymore!!

  40. @ Josh – Although you make it sound very negative, I agree about people telling their retailers which indie books they’d like to get.  It might actually be "the job of the retailer" to order books, but it doesn’t have to be a guessing game.  As much as I personally love and support indie books with my own money, I can’t afford to buy a bunch of books for my store that won’t sell.  

  41. "the fucking pies are fucking old

    the fucking chips are fucking cold

    the fucking beer is fucking flat

    the fucking flats have fucking rats

    the fucking clocks are fucking wrong

    the fucking days are fucking long

    it fucking gets you fucking down

    evidently chicken town"

  42. @iVerseMike: If we’re talking about a desktop application, which can function as reliable reader, I would be far more interested. The traditional CDisplay remains probably the preferred reader online, but if what you’re offering is cheap and easy to use that would definitely be welcome.

  43. @Toshimoko29 – And I get that.  I realize that pre-ordering helps stores and helps publishers, but it’s never sat right with me. I just don’t like it fundamentally, and I never have.  I was a regular at a store once, and they ordered based on their customers want lists, and if I wanted to drop a book, I had to give him 3 months notice, and I hated that.  I need to be able to pick and choose, and flip through a book I’m holding in my hands when I want to buy books.  Perhaps its a flaw in the system where books are non-returnable?  I’m not sure, but it doesn’t work for me.  I’m not sure if that makes me a bad comic book buyer or not, and I certainly don’t hold it against stores or customers who do, but it’s just not  my thing.

  44. Check out Kurt Amacker’s "No Fly Zone" article at mania.com on this topic.  He mentions a company called Haven (http://www.havendistro.com) that specializes in distributing indie comics.  So maybe there is an alternative.

  45. Diamond sucks. The Previews, order 3-months ahead of time, can’t drop a book without shafting your retailer, can’t get a real idea of what’s good and not good without seeing it first yet still need to preorder to get it system sucks. We get that. And yes, it’s a monopoly and yes, this action may fall into restraint of trade territory and yes, this could lead to litigation … and so on. The question I have is what do we – as comics readers and consumers – do about it?

    Oh, shile self distribution is an option for creators, I’ve been told the single biggest hurdle to self-distributing is postage. The great thing about the Diamond system is that the transportation/shipping costs are amortized over a big number of books, resulting in costs of only a few pennies per book. Try to ship just one or two copies of a floppy and you’re looking at 50 cents to a dollar per (more if you factor in labor). Now, for a retailer to make money, she needs to get product at about 50% of what she’ll eventually sell it. When the cost of getting the book from the publisher/creator to the retailer is nearly 25% of retail price, someone is going to take a haircut, and that works for no one.

    This sounds kind of childish, but: if we, as comics comsumers, contact Diamond and let them know that we disagree with this plan, and can give some reasons why or books we’d have missed under the new plan, books we now follow and purchase, Diamond might reconsider. Or we could just sit around a gripe a lot. Me, I’m going with writing a letter, an actual letter on real paper, and sending in. 

  46. I heard this year Diamond is going to have reps at the New York Comic Con walking through the crowd killing babies.

  47. @Josh – You just articulated the exact same reason I had to cancel my pull list at the LCS closest to my house. It’s a small shop and they can’t afford to stock many indie books, so it was my "job" to special-order any book that I didn’t think they would normally carry and that I had heard about in advance. After 2 years of that, I couldn’t take it anymore and now drive an additional 20 minutes to a shop that has vastly superior selection, and that I can have 99% confidence that they’ll have what I’m looking for. The whole ordering from Previews thing is just too much of a hassle for me. I want to go into a store, peruse the racks, and pick what I want.

  48. This isn’t the change I voted for 🙂

    I think I read 2-4 Indy titles. but I think they are big enough to make the cut. maybe one of them is not but it is a limited and will be done in like 2 issues.. BUT… It does put the lights out for some Indy Pub’s and that sucks..  I love Walking Dead and think it is one of he best books out there..  With out the indy’s we don’t get books like that.. 

    Maybe Diamond will see the error of their ways when we all start complaining to them.

  49. I can’t stand the Previews system; I cannot live my life shopping for three months from now. "I know Secret Invasion #5 just came out, but could you tell me whether or not you’ll be reading Dark Avengers #2?" Well, I don’t know, Sparky; what the hell is that? Oh, you can’t tell me yet? I see. Put me down for three copies. And as long I’m here planning your store’s spring inventory for you, let me know if you need me to sweep this floor a little.

  50. It’s time for indie comics to go OGN and get put out by book publishers.

    Not easy, I know, but it’s either that or start putting the books online.

     

  51. @ Josh – I guess I’m just sensitive hearing this topic go from "Diamond sucks" to "retailers suck for having to go through Diamond and use their system".  Given the choice, every store would carry everything, but money is a cruel mistress.

  52. I always try to steer any conversation away from "_______ sucks".  As I said, it isn’t really the retailer’s fault.  It’s just the system we’re stuck with, and I think it’s a broken system.

  53. Other forms of distribution are certainly key to independent publishing’s survival. They are also fortunate enough to have good venues such as this website informing the general public of their work. Over half of what I read is in part due to to the conversation here.

  54. We definitely need a new form of distribution, one that caters to those who print 1000 or less copies of a book.   That’s why I’m currently exploring the possibility of starting a new, small and modest distribution system for smaller publishers!    If you would like details—-creators and retailers alike—please visit my site at http://www.screamingmonkeycomics.com……and long live indys!!