A Comics Journal History of the Direct Market, Part Three

Posted by on February 17th, 2010 at 5:20 AM

Suicide Club:

How greed and stupidity disemboweled the American comic-book industry in the 1990s

(Originally published in The Comics Journal #277, July 2006.)

Part One: Fine Young Cannibals
Part Two: Black and White and Dead All Over


From X-Men Vol. 1 #11, pencils by Jim Lee, inks by Bob Wiacek, written by Jim Lee and Scott Lobdell;, ©1992 Marvel Entertainment Group.


Gary Groth, in his essay on the black-and-white boom-and-bust cycle, described what has come to be seen as a textbook example of how the ebb and flow of collectability in comic books could produce turmoil in the marketplace. At the time, it was perhaps the most worrying series of events ever to bedevil comics-retail professionals. Summarizing the conditions that preceded the bust, Groth noted, “The domino was in place, and it was an unmitigated disaster for distributors as well as retailers.”

Alas, hindsight demonstrates that it wasn’t nearly as calamitous as Groth made it out to be at the time. While the industry as a whole took a hit, there was nonetheless enough saleable material being produced that smarter shopkeepers were able to weather the bursting bubble without too many tears. As future events would demonstrate, Groth’s definition of “unmitigated disaster” ignored the sheer havoc that could be unleashed upon an industry unable to learn the lessons of recent history, once the economics of scale were introduced to the proceedings.


In December of 1991, Marvel Comics President Terry Stewart met with several of his company’s most popular artists. By their own accounts, the artists were there to make Stewart an offer they knew he and Marvel would refuse: Give them their own, creator-owned titles or face a mass walk-out. Marvel refused, the artists walked out, and in February of 1992, six of the seven initial members of Image Comics — Rob Liefeld, Todd McFarlane, Jim Lee, Marc Silvestri, Erik Larsen and Jim Valentino (Whilce Portacio, who left the company’s inner circle shortly afterward, was in the Philippines) — held a press conference to announce the formation of their new company.

Marvel wasn’t the only interested party to react to the gauntlet thrown down by Lee, Liefeld and company with trepidation. Writing in the January 1992 edition of the newsletter for his mail-order buyers’ club, N.I.C.E. News Monthly, retailer Chuck Rozanski (who’d heard about the meeting with Terry Stweart but not its outcome) discussed the possibility of a new comics company staffed by “hot” comics artists, and probably spoke for more within the industry than were willing to admit it at the time:

My concern is that Marvel will somehow change the status quo. As I can see it, Marvel will either A) let them go their own way or B) pay them more. In either case, the Direct Market will at least momentarily suffer. The 1992 sales season is already projected as being only moderate in potential. Neither Marvel nor DC have unveiled a project of significant magnitude for the entire year. By that, I mean there is no Spider-Man #1 or X-Men #1 to give any particular week, or month, a large sales boost. Instead, we have a large series of smaller projects designed to accentuate the existing line-up of titles. To me, that’s a very good prescription for reasonable growth. But what if Marvel’s key artists all depart? We’ve seen a 40% decline in Spider-Man sales in our retail stores since McFarlane left. […] If a similar level of sales decline were to be experienced on several other Marvel titles, we would definitely feel the hurt. On the other side of the issue, I am not excited about Marvel increasing compensation a great deal to the artists. Any increase in costs by Marvel would be passed right on down the line to the fans, and right now, the comics consumers can’t handle even a single additional price increase. Comics are already too expensive. So I don’t see this as a winning situation no matter how it plays.

The stakes were high. Previous companies had attempted to challenge Marvel’s dominance of the Direct Market, only to be drowned out in a flood of titles which ate both retailer shelf space and fan dollars that might otherwise have been spent experimenting with alternative titles.

The problem for Marvel, though, was that the excessive number of titles had eventually convinced even the most die-hard Marvel fan that it simply wasn’t possible to purchase every book. By the time the Image creators broke from Marvel, the company had already begun to resort to gimmicks like variant and hologram covers to stimulate interest among readers and collectors. Meanwhile, fans had begun to discriminate between titles based on the creators who made them, seeking out work by writers and artists whose work they liked best and learning to ignore the more substandard works. This created the rise of what was then the modern crop of fan-favorites — almost all of whom would now be publishing under the Image banner. In his four-part history of Image comics [Newswatch, TCJ #222-226, also available online at TCJ.com], News Editor Michael Dean noted the challenge that the very existence of Image Comics posed to the comic-book industry:

By failing to hold onto its most popular creators, Marvel had set the stage for a showdown that would test its worst fears: a competition between the top artists and the top characters in comics. There were few who weren’t anxious to see who would come out on top. When the Image partners announced that they were opening for business and would soon be releasing a new line of comics, it sent ripples of excitement through the comics industry and beyond. Barron’s, the widely read financial publication, ran a feature article, and even CNN turned its cameras on the new comics company. “Everybody anticipated that something big was going to happen,” Marder remembered. “It was akin to the way people were getting excited about the astronauts before they went into space.”

It’s hard to underestimate the initial effect the formation of Image had on both superhero fans and the comics industry in general. The creators’ first public signing at Golden Apple Comics in Los Angeles in the summer of ’92 attracted as many as 2,000 comics fans; police had to be called in to control the crowd, while news helicopters hovered overhead, recording the massive wall of people. The Image crew’s next public appearance, at the Chicago Comicon, drew lines a mile and a half in length. Using the Scott Rosenberg-run comics company Malibu as administrative and distribution base of operations, Image’s initial comic-book efforts had sales in six and seven figures, numbers rarely reached even by Marvel and DC by that point, and unheard of for any other company.

For Marvel Comics, which had only just taken itself public on the New York Stock Exchange the year before, it must have seemed like D-Day. Looking back on the phenomenon in 1996, Capital City Distributors co-owner John Davis told The Comics Journal: “When Marvel treated the creators like they weren’t important, and the six top creators left to form Image, that put a serious blow onto Marvel which they never recovered from, and when Image left, they took 15% of Marvel’s market share, and it has never come back. Marvel has never been able to regain that market share. It just was gone.” As if the rise of Image Comics weren’t bad enough, a previous editor-in-chief at Marvel, Jim Shooter, had gathered investor capital in 1989 and launched yet another rival company, Valiant, bringing with it Shooter’s astute knowledge of the business of comics and how best to manipulate the superhero-comics readership for maximum potential.

Adding to the frenzy was the appearance of a new market of buyers: trading-card shops, which had just experienced a speculation-induced bust in their own market and had retrenched their financial positions by adding comic books to their backstock. For such a market, used to trading their wares in almost stock exchange-like terms, the sudden appearance of a new comics imprint fuelled by outrageously popular creators must have looked like a no-brainer. From the beginning, Image comics weren’t merely bought by fan readers, but by speculative collectors as well, who purchased multiple copies of each issue and sealed them away as investments. In February of 1994, then-Journal News Editor Eric Reynolds questioned industry experts to put it in context. From TCJ #166:

“This sort of thing happens every five to seven years,” said industry analyst Mel Thompson, “Five years represents a comic-book retail generation, considering shops have a 10 percent customer turnover in a given year. In this case, there was an avalanche of card shops which got into comics, but these retailers didn’t understand that profits are made differently in the comic-book industry. Card dealers make profits by marking up hot product above suggested retail prices and blowing out slower product at markdown prices. The comic-book market, on the other hand, plays the cash-flow game… Bring in, sell out, turn over.”


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2 Responses to “A Comics Journal History of the Direct Market, Part Three”

  1. Tim Tylor says:

    Much thanks for reposting these – it’s been a fascinating read. Is there any chance of a Part Four in the future? There must be something worth saying about the last ten years, even if they haven’t had as much drama. How have graphic novels and bookstore competition affected the DM? Has the internet changed things seriously?

  2. Mint City says:

    Thanks for the interesting story. Having lived through these dual nightmares (speculator crash and distributor wars) I can attest to the difficulties retail stores had in trying to survive day-to-day much less try to look forward to the future. This was about the time I realized that there wasn’t a future in comics retailing and obtained a teaching certification. From about 1997 on (I sold the shop in 2002) I had less than a focused attitude on the shop, thus did sales fall on top of the BS you described in your story. What is interesting is that I did supplement my sales with Magic cards, toys, and other material that kept the store alive; regulars maintained that I “sold out” yet the shop remained open so that they could still make their weekly purchases. I still have all of my Heroes World invoices from the transition and the “newsletters” make for some interesting reading today! Thanks for the travel down memory lane, as distressing as it was to live it at the time.