TILTING @ WINDMILLS: 2005 RRP REPORT

[MattBrady]

by Brian Hibbs

(#138 – November 2005 – “2005 RRP Report”)

Just got back from Montreal, the site of the latest DC RRP meeting.

For those of you who don’t know, DC Comics has an “annual” meeting with 70+ retailers. It has actually been three years since the last one, making this year’s session long overdue.

RRP stands for “Retailer Representative Program” (I think – no one calls it by its full name, so we’ve all pretty much forgotten what the actual acronym is meant to represent). Probably because it has been three years since the last one, the term “RRP” has also been inappropriately co-opted by other publishers in describing their high-end super-limited variant covers. In fact, DC does give a few limited edition books to attending retailers (this time we got a special edition of Infinite Crisis #1, and of All-Star Batman & Robin #1, among a few other things) with the idea that this can help offset the traveling expenses incurred by the attending retailers. I personally think the value of attending more than offsets any expenses incurred, but it is still nice to see DC try to cover those expenses in some fashion.

Still, “RRP” only properly applies to DC’s meeting, and everyone else trying to use the phrase is either an idiot or a cheat. Your call.

Click here for the full column

[The_Adventurer]

Nice article. As someone who dreams of being a comic retailer someday, it's very informative.

But one question....

Especially this year with all of the “higher chessboard” moves – switching the way we do business when DC moves to FOC in ’06, and the impact that will have on Diamond; what the boom of growth of the bookstore channel means to the Direct Market; DC’s corporate restructuring, etc.)

Did I miss something? Is DC leaving Diamond for another distributer?

[TRaik]

Originally posted by The_Adventurer
Did I miss something? Is DC leaving Diamond for another distributer?

No. I think "moves to FOC" refers to DC's recent announcement about making changes to their Final Order Cutoff policy.

I think...

[The_Adventurer]

Oh, ok. That's kind of cool.

[Cray_ws]

To me, the sensible thing to do isn’t to chase the bookstores – who will quickly have physical limitations on what they’re able to rack, if they don’t already, and who could lose interest in us tomorrow if cookbooks or something suddenly got hot – it is to grow the Direct Market. A specialist with always outsell a generalist – they know the product better, they have genuine affection for it – so encouraging more specialists to open and grow would seem the more sensible course to this observer.

Biased though I may be!

Ultimately I’m frustrated that it appears that DC wants and/or has been directed to put more resources to the less efficient channel.

If I were DC I would be building a real co-op program that is actually used by a large number of retailers. I would be funding the creation and implementation of a common POS standard that works for all levels of the Direct Market and lets us communicate our sales to things like BookScan. I would be offering substantial inventory start-up packages to new stores. In short, I would be strongly funding the pillar of my business to grow the future.

One thing you’re really struck by when surveying the faces in the room at the RRP is the graying of the retail base. There weren’t many people in their 20s in that room. If we don’t replenish the pool with new, young, hungry entrepreneurs, it’s frankly just a matter of time before we become financially irrelevant.

The other thing you’re struck by is how less territorial and adversarial we retailers have become over the years. At the early RRPs, opposing agendas often got ugly – but now there’s a sense that we’re all on the same page, and that our common interests are more important than our regional ones.

I think Brian Hibbs is indeed biased towards the Direct Market. There must be some reason why they are chasing bookstores. It isn't like DC is one to make rash moves. They obviously feel that's where the money is. And while its probably true that specialist can outsell the generalist, The local comic shops aren't the only specialist in the Direct Market. Online stores, even generalist stores like Amazon.com or Buy.com can easily be a specialist. Sure there hard to get comics not availble at those particular sites. But the same can be said about LCS, not all them carry those hard to find comics. Chances are you'll find it online sooner than scouting all the LCS in your area.

As for the suggestion that DC should fund or create some incentitives or "substantial inventory start-up packages" for new comic shops. I think DC is thinking after being in the direct market for as long as it's existed the DM hasn't grown past being a niche market. I think DC is tired of being a niche market.

I'm surprised you haven't grown beyond just your one shop? If the DM can be as successful as you believe it can be why hasn't been any expansion of Comix Experience stores? Niche market products rarely have their own stores and as small as comics are I'm surprised your shop has been open as long as it has.

Your comment about the aging retailers goes hand in hand with the aging readership. Its not going to matter because I'd say another 30 years the market will be barely nonexistant. Average reader is in his late 20s and in 30 years time he will not be able to support the climbing monthly cover prices. It will be at least 7 dollars for a 32 page comic in year 2035, by then kids and young 20 year old adults will have barely a passing interest in comics and focus more on 256-bit games and movies, TV shows and music videos on their portable players/cell phones. The age of convience will pass comics by because even books today acknowledge the presence of computers. Books can be downloaded and read or via audio.

Retailers are likely less territorial because they know their doom awaits them and feel helpless or they just don't care at this point. Probably satisfied with their current status as niche market specialist.

[Greg Spira]

Brian - I enjoy and respect your columns, but I simply do not believe that the direct market is an effective way to bring in new readers. The direct market was/is great for those already in the fold (like me), but the loss of the newsstand marrket was a huge blow to the industry's ability to capture new fans, and I think the bookstore market is the greatest hope to once again reach outsiders.

I also realize that you are one of the better dealers at bring new readers into the fold, but most retailers are and probably will always be ineffective at that.

So I think DC's new emphasis on bookstores is the right move, and hopefully it will capture customers that will then start taking advantage of shops like yours. And, by the way, I think comic shops have to continue to be the major distribution point for comics, because I don't think anyone else can sell the periodicals, and I think that the industry needs to hold on to the periodicals - a move to total reliance on graphic novels would be a disaster for everyone in the industry.

[surefire]

I agree with Mr. Hibbs, with aspects to new shop owners.

My brother and I are relatively new Retailers, and young(mid twenties - late twenties). We opened up our shop a year ago (november 12, 2004). And we really could have used some help from Diamond.

Having a set-up/program for people who are new to the comic retailing would be great. Some things that could be offered from our experience is: the best way to setup your store, what comics should you order, what should your website look like. The best way to track your comics, how many comics should you order? Discounts for perferred customers(yes or no)?

These are a few of the problems we had to work through ourselves, we just kinda gleamed stuff off the internet and did what we felt was best for our store.

I would love to see DC or Marvel have some kind of support program for new retailers, to help them setup, they could send a start-up bundle of their best selling comics. Marvel already has a bigger discount rate for new owners that last for 3 months (I think).

What would be great is a plan from Diamond and the big 2 (all 3 working together), to help with the questions stated above, a plan for the first three months (comic bundle, how to set up your store, spin racks), 6 months (advertising, how many comics should be ordered, maybe another bundle of comics) and the year anniversary and forward (how to improve sales, bring in new customers). A plan like that might bring in fresh blood to the retailing industry and help the first time owners have a firm foot in the ground to start off on. I know it would have helped us!

- Jeff -

[OcCaM]

Originally posted by Cray_ws
It will be at least 7 dollars for a 32 page comic in year 2035

I seem to recall comics were around a buck in early 90's and now decade and half later they around $3.

So not to nitpick too much but I'll bet they'll be around $10 by then.

[OcCaM]

1) So is Brian really surprised that IF the direct market is no longer their main bread and butter, that DC will no longer be considering the lcs's their most important customer? I know his store is his livelihood but that's should come as no shock! (Then again I have a bias against the direct market and always will. Amazing how those biases work huh?)

I can tell you I know the local comic shop's around my area no longer consider their comic customer their most important customer and hence pretty much ignore them in favor of the card players who rent space and buy more from their store. So, I just considered my new best friend the internet! Wow,40% so I basically get 1 free book for every 2 ordered and no annoying clerks! Ah satisifying! Should have done that more than a year and half ago!!!!!!!!

2) Was that statement, "“RRP” has also been inappropriately co-opted by other publishers in describing their high-end super-limited variant covers" a rip on Marvel? Coming from his mostly inappropriate Marvel digs in the past I wouldn't be surprised. Not that I remember too clearly but I'm pretty sure they call their program Retailer Incentive Program! It may be close but I think an Incentive vs. Representative program sounds about right!

I don't usually bother to comment on these threads (noir read many of them) because of his totally biased nature, but this was something I was interested in reading more.

[CMadness]

Originally posted by OcCaM

2) Was that statement, "“RRP” has also been inappropriately co-opted by other publishers in describing their high-end super-limited variant covers" a rip on Marvel?

No, I'm pretty sure it was a dig at Donkey Forces or Dynamite Felchers or whatever that company is called these days.

[Brian Hibbs]

Originally posted by Cray_ws
I think Brian Hibbs is indeed biased towards the Direct Market. There must be some reason why they are chasing bookstores. It isn't like DC is one to make rash moves. They obviously feel that's where the money is.

Or, as I said, there's outside pressure from a level above Paul's that mandates that expansion, by people who don't understand the intricicies of the marketplace, based purely upon looking at marketshare and saying "this must change because Time/Warner companies must be #1 in thier field" -- whetehr or not that makes any rational sense, or is even possible.

Originally posted by Cray_ws
As for the suggestion that DC should fund or create some incentitives or "substantial inventory start-up packages" for new comic shops. I think DC is thinking after being in the direct market for as long as it's existed the DM hasn't grown past being a niche market. I think DC is tired of being a niche market.

Paul talked about how much the market has changed during his tenure, and threw out some numbers I didn't actually write down. My recollection of that was that the Direct Market has grown tenfold in his time, or maybe it was more.


-B

[Brian Hibbs]

Originally posted by Greg Spira
I simply do not believe that the direct market is an effective way to bring in new readers. The direct market was/is great for those already in the fold (like me), but the loss of the newsstand marrket was a huge blow to the industry's ability to capture new fans, and I think the bookstore market is the greatest hope to once again reach outsiders.

The problem with this, as I see it (And, trust me, I understand the impulse to read things that way), is that in virtually every circmstance you can name of "literary" comic work -- the very stuff that appeals to the "outsider" -- the DM outsells the bookstores when the DM has equal and equivilant access to it.

Originally posted by Greg Spira
I think comic shops have to continue to be the major distribution point for comics, because I don't think anyone else can sell the periodicals, and I think that the industry needs to hold on to the periodicals - a move to total reliance on graphic novels would be a disaster for everyone in the industry.

I just want to underline this, because I think you're arguing my point for me.

I want to add that I beleive that the bookstore market is really only interested in skimming off our best-sellers, and aren't especially interested in breaking new voices or growing new works.

It's relatively easy to find WATCHMEN or V FOR VENDETTA (these days) in your local B&N or Borders, but how many of those stores are carrying Moore's SWAMP THING or PROMETHEA or TOP TEN in any appreciable depth? And that's Alan Moore, the "best known" comics writer out there.

-B

[Cray_ws]

Originally posted by Greg Spira
So I think DC's new emphasis on bookstores is the right move, and hopefully it will capture customers that will then start taking advantage of shops like yours. And, by the way, I think comic shops have to continue to be the major distribution point for comics, because I don't think anyone else can sell the periodicals, and I think that the industry needs to hold on to the periodicals - a move to total reliance on graphic novels would be a disaster for everyone in the industry.

How do you figure the total reliance on graphic novels would be a disater for everyone in the industry? I'm curious to know what you think might happen if the switch actually did occured?

Originally posted by OcCaM
I seem to recall comics were around a buck in early 90's and now decade and half later they around $3.

So not to nitpick too much but I'll bet they'll be around $10 by then.

I was being very conservative and giving publishers the benefit of doubt.

Originally posted by surefire
I would love to see DC or Marvel have some kind of support program for new retailers, to help them setup, they could send a start-up bundle of their best selling comics. Marvel already has a bigger discount rate for new owners that last for 3 months (I think).

Marvel and DC might as well open their own franchise stores if they are going to fund anything like that. They are too comfortable not having to take the risk retailers do.

Originally posted by surefire
What would be great is a plan from Diamond and the big 2 (all 3 working together), to help with the questions stated above, a plan for the first three months (comic bundle, how to set up your store, spin racks), 6 months (advertising, how many comics should be ordered, maybe another bundle of comics) and the year anniversary and forward (how to improve sales, bring in new customers). A plan like that might bring in fresh blood to the retailing industry and help the first time owners have a firm foot in the ground to start off on. I know it would have helped us!

Again Diamond might as well open their own stores if they are going to fund such a massive program to bring more retailers in the business. They too are comfortable and very much enjoy their status as Direct Market monopolist. They would much rather go after the bigger market, which they recently started to do by providing their services to bookstores.

[OcCaM]

Originally posted by CMadness
No, I'm pretty sure it was a dig at Donkey Forces or Dynamite Felchers or whatever that company is called these days.

Thanks! You're probably right about what the name means!

[OcCaM]

Originally posted by Cray_ws
I was being very conservative and giving publishers the benefit of doubt.

Ok that's fair enough! Truthfully and in fairness a lot of readership has dwindled since the early 90's which obviously forced quick and the very highly inflated prices we have now. (By the relative factor of how much other things have increased with inflation since early 90's, which certainly isn't 300%!!!!)

So, if readership doesn't get that much worse than now, perhaps $6-7 in 30 years might be possible! (I suspect not as most of the aging fanbase will be dead, blind or otherwise poor and on soc. sec. and unable to buy comics!)

[maybeitsteve]

"A specialist with always outsell a generalist – they know the product better, they have genuine affection for it – so encouraging more specialists to open and grow would seem the more sensible course to this observer."

Since when have specialty stores ever outsold general stores...hello, Walmart anyone?

[Dood Lee]

Originally posted by maybeitsteve
"A specialist with always outsell a generalist – they know the product better, they have genuine affection for it – so encouraging more specialists to open and grow would seem the more sensible course to this observer."

Since when have specialty stores ever outsold general stores...hello, Walmart anyone?

Walmart outsells its competitors by undercutting them on price. BTW, your Walmart example isn't exactly the same as what Hibbs was arguing.

EB Games/Gamestop sells more video games than Walmart. Barnes and Nobles sells more books than Walmart. I would imagine that Gap/Nordstrom/"Brand Name Department Store" sells more clothes than Walmart too. Just some examples of specialist stores outselling a general one - in terms of specific products of course.

[Heidi M.]

Originally posted by Brian Hibbs
The problem with this, as I see it (And, trust me, I understand the impulse to read things that way), is that in virtually every circmstance you can name of "literary" comic work -- the very stuff that appeals to the "outsider" -- the DM outsells the bookstores when the DM has equal and equivilant access to it.

-B

What are you basing this on? Persepolis, No Towers and ANL all sold more copies in regular bookstores, f'rinstance.

I would question the definition of "outsider" as well. Girls are certainly outsiders, and they discovered manga in bookstores on their own.

[maybeitsteve]

I know I've read that Walmart sells more CDs and DVDs than anyone. You got any source that they don't sell more books and games? In a lot of rural areas Walmart is the only source for these things, because they've driven out everybody else.

Barnes and Noble, while a book store, still way outsells many, many small specialty book stores...

Part of the reason you don't see comics on newsstands (which I think is a tragedy) is because big chains like Wallgreens and CVS replaced the small, specialty mom and pop drug stores that used to stock them.

The other reason? oh yeah, the direct market.

[Brian Hibbs]

Originally posted by Heidi M.
What are you basing this on? Persepolis, No Towers and ANL all sold more copies in regular bookstores, f'rinstance.

The ending clause, Ace -- "Equal and equivilant access". The fact of the matter is that NO TOWERS and PERSEPOLIS were effectively unavailable to the DM throuhg much of thier early heat. Diamond had no copies. "Bookstore" publishers have given virtually no marketing or promotional effort to the DM.

My best example (or at least the one I've discussed numbers on) is probably SANDMAN: ENDLESS NIGHTS. Could not be a more perfect "civilian-aimed" comic, and the DM did much better (more profitibly, too) than the Bookstore.

Originally posted by Heidi M.
I would question the definition of "outsider" as well. Girls are certainly outsiders, and they discovered manga in bookstores on their own.

Again, I think that's a fucntion of location more than anything else. Historically comics haven't had a whole lot to offer young girls, so most comic shops don't get much natural traffic there.

Correct me if I am wrong, but I had thought that most of the growth of manga was lead more by the "mall" type store than the "urban" ones? -- ie, having the product in the actual location where those customers naturally congregate?

-B

[Dood Lee]

Originally posted by maybeitsteve
I know I've read that Walmart sells more CDs and DVDs than anyone. You got any source that they don't sell more books and games? In a lot of rural areas Walmart is the only source for these things, because they've driven out everybody else.

Barnes and Noble, while a book store, still way outsells many, many small specialty book stores...

The other reason? oh yeah, the direct market.

I interpreted Hibb's statement to mean that specialty stores (meaning they specialize at selling one particular product) will outsell stores that sell a general assortment of products. Hence, Barnes and Noble is a store that specializes in selling books, whereas Walmart sells books, food, electronics, etc. Also, it doesn't really matter if Walmart sells more. "Specialty" retailers have a wider selection of products, and are (sometimes) more knowledgeable about the products they are selling.

[TRaik]

Originally posted by maybeitsteve
Part of the reason you don't see comics on newsstands (which I think is a tragedy) is because big chains like Wallgreens and CVS replaced the small, specialty mom and pop drug stores that used to stock them.

I rather think that the reason comics don't appear on newsstands so much doesn't have that much to do with Walgreens and CVS replacing mom and pop drug stores as it does with the fact that nowadays drug stores--be they national chains or mom & pop stores--find that selling comic books isn't as profitable a venture as selling any number of other sorts of products.

That said, it is true that there are fewer newsstands, fewer "mom & pop" drug stores, fewer magazine shops etc. nowadays, but that seems to have as much to do with overarching demographic shifts as it does with the prominence of big chains.

The other reason? oh yeah, the direct market.

No, not really. Many comics historians would argue that (in general) the comics direct market arose because newsstands were becoming less interested in selling comic books, not that newsstands became uninterested in selling comic books because the direct market came to exist.

[mmurphy1968]

Originally posted by maybeitsteve
"A specialist with always outsell a generalist – they know the product better, they have genuine affection for it – so encouraging more specialists to open and grow would seem the more sensible course to this observer."

Since when have specialty stores ever outsold general stores...hello, Walmart anyone?

Walmart may be the exception to the rule in some cases. However; one person, group or company performing outside the norm does not make a case that everyone is performing outside the norm. Exceptions to the rule will always exist.

[Cliffy]

"co-op"

Oh, that's a beautiful word. It could really be very effective. But I think that's always going to be a tough road to hoe because of the freerider problem, especially since Marvel's always Minmaxing the charts. If 7 of the top ten books aren't published by your company, why are you going to spend dough to drive customers to the stores that are then going to sell that customer Astonishing X-Men? Sure, a rising tide raises all boats, but it's an awfully difficult argument to make (both by the retailers to DC, and by DC to Time Warner) to spend money building a dam so your boats go up a certain amount but your main competitor's boats go up that plus another 20 feet. And I'd wager that the co-op customer isn't going to be diving into the midlist, where DC is king -- not for a while anyway.

--Cliffy

[Nat Gertler]

Originally posted by Cliffy
And I'd wager that the co-op customer isn't going to be diving into the midlist, where DC is king -- not for a while anyway.

I'm gonna disagree here. Yes, Marvel has X spots out of the top Y at any given point, but they don't have much range. It's all superhero stuff. And yes, they probably will get a bit more of the new superhero customer, just as they get more of the existing superhero customer.

But DC has a range of material that can attract the new folks who are not locked into the superhero end of the field. War comics, crime comics, fantasy, slice-of-life... there's much more of a "something for everyone" there. So if you pull back in an old-timer or find a way to get the existing custeroms to spend more, yes, Marvel's probably likely to get more of the money (well, maybe not at this moment, because DC is doing some impressive work in superhero event comics, but let's say on average over the last few years.) But if you just get someone new into the shop, DC is probably more likely, in my estimation.

(Quick follow-up note on the moment's sales chart position: DC and Marvel actually each have 5 of the top 10 on the actual Diamond sales chart for the most recent completed month, with the DC top 10 books selling an average of more than 20% more than the Marvel top 10ers.)