A Comics Journal History of the Direct Market, Part One

Posted by on February 15th, 2010 at 8:13 AM

 


John Davis (left) and Milton Griepp, from a Capital City promotional photo.

 

The Direct Market clearly answered strong needs on the part of both publishers and fans, and its rapid financial growth created a very forgiving environment that allowed a crowd of amateurs to launch themselves into business, flying by the seats of their pants. “You could make a mistake,” said Mangiaracina, “and buy 200 She-Hulk #1s like I did and it would still turn out all right.”

Marvel had so embraced the Direct Market that it had released its first comic exclusive to comics shops in 1981: Dazzler #1. It sold 400,000 copies, roughly twice what its other titles were selling at that time. Initially intended as a more efficient way to get comics to their audience, the Direct Market had become much more than that. It essentially redefined the comic-book audience. It’s hard to imagine a better illustration of the Kevin Costner adage “If you build it, they will come,” than the comics shop of the 1970s. One comics shop after another was built and still they kept coming. And with comics shops becoming destination points for an increasing number of customers, the shops naturally began looking around for a wider line of products to sell.

Hence, in 1981, Pacific Comics the distribution company became Pacific Comics the publisher. “We started the publishing end,” said Schanes, “because there was not enough product for our stores.”

Eclipse Enterprises, founded by Jan and Dean Mullaney, published its first graphic novel in 1978 and evolved in the 1980s into Eclipse Comics. Wendy and Richard Pini began WaRP Graphics in 1977. Mike Gold and Rick Obadiah’s First Comics began publishing in 1983. Dave Sim began his self-publishing operation, Aardvark-Vanaheim, in 1978. The Comics Journal itself would have folded in 1977 if Seuling and Plant hadn’t given it a strong push to the new comics-shop market, and in 1981, parent company Fantagraphics Books launched a line of alternative comics that would have been impossible in a newsstand-only world. The Direct Market also gave a second wind to underground survivors like Kitchen Sink, Rip-Off Press and Last Gasp. New comics publishing companies had been rare things since the early 1950s, and as recently as 1974 they were problematic, as evidenced by the Seabord/Atlas line launched that year. At the time, all Marvel had to do to push an upstart comics publisher off the stands was to step up its output. A few extra Marvels and there was little room on the trucks or the racks for a relatively unknown also-ran publisher. As the Direct Market blossomed, however, there was, seemingly, all the room in the world, and Marvel and DC, to their consternation, found themselves facing a wider and wider range of competition.

Furthermore, these new publishers, needing incentives to draw popular comics creators from the majors, offered deals creators had only dreamt of before. The bulk of titles published under Pacific, Eclipse and First were creator-owned or co-owned with creators. Pacific’s Schanes said, “We were the first to introduce better paper in comics, the first to offer royalties and creator-owned comics. It kept people in the industry who would have split because there was no money in comics. Eventually, we forced Marvel and DC to match our terms.” In 1982, a year after Pacific started publishing, DC began offering royalties and Marvel followed suit shortly thereafter.

In 1984, the first issue of Kevin Eastman and Kevin Laird’s Teenage Mutant Ninja Turtles was self-published in a modest print run of 3,000, presaging a deadly tidal wave of black-and-white titles and publishers in the late 1980s. [See Gary Groth’s “Black and White and Dead All Over,” the second part of this series, for the full story on that phenomenon.]

The Direct Market boom could not last forever. Almost none of the publishers that launched to meet the Direct Market’s appetite survive today (though some of their successors, Dark Horse in 1989 and Image in 1992, have proven to be survivors). Consolidation could already be seen in the crowded field of distributors in the mid-1980s, justifying or perhaps resulting from DC’s early hedging. The downside of a business built by high-spirited, low-capitalized amateurs is that they had little skill in managing their cash flow.

Steve Schanes and his brother had quickly noticed that there was “an inherent conflict of interest in being a store and a distributor. It was not a long-term good play.” They divested themselves of the stores, as they expanded their distribution business, but the lesson they had learned about conflicts of interest didn’t stop them from launching their own publishing company. In the end, according to Steve Schanes, the distribution company essentially strangled the publishing company in its crib. Both Pacific’s distribution arm and its publishing arm were facing increasing competition, but the distribution business was especially crippled by retail accounts that would rack up large debts to Pacific and then defect to other distributors. Nearly 200 of its 800 accounts departed for other distributors in 1984 alone. Compounding the problem, many of the distributors stealing Pacific’s business were actually subdistributors getting their comics from Pacific and, like Pacific’s delinquent retail accounts, failing to pay for the comics. The result was a severe cash-flow problem that was initially subsidized by successful titles from Pacific’s publishing operation but eventually grew out of control.

In a 2004 San Diego Reader article, Jay Allen Sanford, who was a shipping manager for Pacific, described the company’s ignominious end: “[By 1984] on paydays, at one second after 5 p.m., the remaining two dozen or so employees would rush en masse out the doors and peel out of the parking lot in all directions, racing to the nearest check-cashing outlets and devising the most inventive shortcuts to ensure we’d get our paychecks cashed, because the final few inevitably bounced.” The Schaneses threw in the towel the summer of 1984, laying off all their employees as of September. Overstock, defective merchandise and promotional items were tossed in the dumpster behind the Pacific warehouse. According to Sanford, when Schanes caught some San Diego comic-shop owners salvaging items from his garbage, he grabbed a hose and leapt onto the dumpster soaking its contents into waterlogged pulp. In the wake of Pacific’s closing, Sanford ended up managing a local strip club where one of Pacific’s former secretaries masturbated in a glass booth for dollar tips.

Steve Schanes went on to start a new publishing company in 1985 called Blackthorne, which, among other titles, experimented with 3-D comics for licensed properties like Star Wars, Transformers and Michael Jackson’s Moonwalker, until the company fell afoul of the IRS. The government attempted to set a precedent under which work-for-hire comics creators were seen as employees rather than independent contractors — and therefore subject to having taxes withheld. Fighting the IRS in court, he said, drained Blackthorne dry, and in 1992, the California Franchise Tax Board suspended Blackthorne from operating for nonpayment of its taxes. Bill Schanes went to work for Diamond Comic Distributors, eventually becoming Geppi’s right-hand man as vice president of purchasing.

 

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One Response to “A Comics Journal History of the Direct Market, Part One”

  1. patford says:

    Great story, I’m looking forward to the rest.
    One thing I’d point out is there was no, “Marvel-led resurgence of the 1960s.”
    The fact is if you ignore total sales (Marvel was restricted because they were distributed by the DC owned Independent News), and focus only on the best selling individual titles, Marvel’s best selling comic book Spider-Man didn’t break the top ten until the last two years of the decade, and even then was far from the top.
    For almost the entire decade Spider-Man was being out sold not just by Superman, and Archie, but by Tarzan, Lois Lane, Superboy, even books like the Metal Men.
    Where Marvel stood apart from the other comic book companies in the 60’s was their sales were increasing year by year (until 1968) while the sales of DC, Dell/Gold Key, and Archie were in decline, but Marvel’s best selling books never reached the top, and only Spider-Man ever made the top ten. By the time Spider-Man cracked the top ten in 1968 it’s own sales had peaked, and begun to erode.