As most of you know, I love the numbers. It comes with the territory of being a portfolio manager.
But I love comics a LOT more than the numbers. It's why I'm doing 11 O'C and why I listen to a dozen other comics casts and why I spend ridiculous amounts of time and money on the hobby. And a lot of the time people joke about my obsession with the numbers, they might not realize that I talk about them because I see a lot that concerns me and yet sometimes feel powerless to stop it.
As a capitalist, I don't begrudge anyone their right to make money, and make lots of it. If the market will bear a price point, it's not only reasonable, it's optimal to charge the highest price that will be acceptable to the market. So for a long time I've sat back and scoffed at the cries of how expensive comics have become. Because the reality is that, cry as we might, we hardcore guys/gals keep on buying.
In fact, about 2-2.5 years ago the first time I ever had a conversation with Vince was about the price of comics.
Fast forward to today. There's been a lot of talk that Marvel is prepping us for a line-wide $3.99 price point. I had been holding out hope that people were putting the cart before the horse. But then I took a look at the March solicitations:http://www.newsarama.com/comics/081216-marvel-march-2009-solicitations.html
By my quick count, 34 books are priced at $3.99
. Of those, only 13 have more than the standard 32 pages.
This disturbs me.
We are in the worst economic recession in, at least the last 40 years, and when all is said and done the economic destruction is going to be worse than anything outside of the Great Depression. Millions of people are going to lose their jobs. And we are experiencing DEFLATION; meaning the price of goods and services is declining in aggregate.
Yet, Marvel is pushing toward a 33% price increase at a time when even the most insulated businesses are feeling pain.
So why are they doing it?
They want you to believe it's because they need to. I'm sure they will argue to investors [myself included] that costs are higher, the market is shrinking, and the price is necessary to keep the publishing business healthy. Sounds great but it's NOT TRUE. Over the last nine months, Marvel's publishing division has generated 37.2% operating margins. Those are FANTASTIC margins, and would be the envy of most publishers [in any type of publishing, not just comics]
So why are they REALLY doing it?
I believe it's a combination of two things.
A) What has helped, now will hurt. Lots of talk about how great it has been for comics to leave the direct market and move to bookstore shelves. However, with the economy getting rough, that causes a major problem. Stuff sold to book stores and conventional retailers = RETURNABLE. And Marvel [and DC] run lean operations. They don't have a business model built on warehousing tons of returned trades. They are lean, and the vast majority of their inventories are held by Diamond. Returns = erosion of profits. Quickly. And with Borders verging on closure, Barnes & Nobel struggling, and Amazon getting leaner [inventory wise], that means the golden goose of the last few years is laying an egg.
B) The audience is stagnant, but loyal. We talk all the time about the importance of new readers. And while there are always anecdotal stories of new people getting into comics, the trend is undeniable. Not many new people are finding monthly floppies and starting to read them in the direct market. As a result, despite lip service, Marvel [and DC and others] know where their bread is buttered. But they don't have a lot of respect for us either. They view us a cigarette smokers. We are loyal to a fault. We'll pay higher prices because we need our fix. And we have this belief that we need to endure higher prices to "support the industry."
So here's the all important question...ARE THEY RIGHT?
If we all sit down to fill out our DCBS orders or to tell our LCS owners what to pull for us, and don't blink an eye toward those $3.99 books, we are PROVING THEM RIGHT. We are, effectively, telling Marvel that they SHOULD move the line to $3.99, and that DC and others should follow suit. Because we may bitch online about prices, and we may get on our podcasts and rant. BUT WE ARE STILL BUYING THEM.
The ONLY way we can stop this from happening is to SPEAK WITH YOUR WALLETS. Don't buy those $3.99 books. You love Jeff Parker? So do I but I'm not paying $3.99. You think Red Hulk is great popcorn fun? Superb, but $3.99 is what they're tempting you with. Think Jon Hickman is a natural for Secret Warriors? Me, too, but paying $3.99 for it would only be adding fuel to the fire.
I can't stress this enough. If you want to complain about the rising prices of books, but are willing to pay for them anyway, SHUT THE HELL UP. Seriously, I don't want to see rants from people over the next few months saying how "pissed" they are about what Marvel is doing, only to follow that up with something like, "but I couldn't resist buying them anyway." Either buy them and accept the price hike quietly, or complain and put your money where your mouth is.
I'm going to. It pains me to not buy some of these new books; but on principle I'm not going to. And you know what? I'll be able to get them at cons next year in discount bins. Guaranteed.
For once a Wayback Wednesday where my views then are all but identical to my views now.