COMICS AND ECONOMICS: TALKING SHOP

[MattBrady]

by Vaneta Rogers

Higher gas prices, rising food costs, a housing slump, the threat of a credit crisis -- the latest news on the U.S. economy hasn't been good. And as today's consumer confidence index is expected to confirm, Americans are gloomier about the economy than they have been in 15 years.

As financial reports warn that economic worries will cut into consumer spending, what looms on the horizon for the comic book industry is tough to predict. In an industry that numbers show has experienced double digit sales increases in its top titles when compared to five or 10 years ago, the same numbers show that the cost of those comics has also increased. Trusting that consumers will pay a higher cost for their comics in a tougher economic situation seems risky, but some analysts claim that entertainment industries like comic books aren't as affected by negative economic trends as other products.

In an effort to find out what the latest news about the economy might mean to the industry, Newsarama took the issue to comic book retailers as part of our Talking Shop feature. And while some retailers have seen customers cut back because of economic concerns, the attitude from most retailers was that even during an economic slowdown, people are still willing to pay for entertainment -- as long as that entertainment is high quality and low priced.

"For the most part, people respond in stark terms to polls that subtly stress negativity in the economy, but over the past 30 years, very little of that has significantly reshaped the buying habits of our comics customers, whether during the heights of the Misery Index under Carter, the fuel crisis and related price increases of the early 1980s under Reagan, or the highest tax increase in history under Clinton," said Cliff Biggers, owner of Dr. No's Comics & Games Superstore in Marietta, Ga. "I don't see this time as being different; for most customers, their budgets allow for a certain amount of entertainment each week, and we have to work to make sure that there are good comics on our shelves to offer them reason to spend that entertainment money with us."

Craig Lopacinski, owner of Neptune Comics in Waukesha, Wisc., said he believes the sales increases that the comics industry has experienced over the past few years can't continue in the current economy, but the year will end up being flat because customers still enjoy their comics. Lopacinski echoed what several retailers said -- during tough times, people turn toward entertainment options that provide an "escape."

"In the past, when the economy has taken a downturn and people have fallen on harder times, they turn to entertainment like comic books to have an escape from their daily lives," Lopacinski said. "With people traveling less because of higher gasoline prices, they will turn to things like comic books and games for something to do."

Others countered that while comics were able to survive economic problems of the past, they were a lot less expensive back then. "That was when we were selling cheaper entertainment," said Matt Price, owner of Speeding Bullet Comics in Norman, Okla. "I think we could see some slowdown, but I think what's more likely is we'll see slowdowns in particular categories. For example, it seems as if $300 statues could become a harder sell. And I do think people could become more frugal about sticking with something out of habit."

Some retailers also pointed out that while they may only be seeing a small effect so far from the economic slowdown, there are shops closing that are unable to stay open in this environment.

"I think that most comic shops are already seeing the effects of the economy and the consumer lack of confidence. Discretionary income is drying up. People are constantly cutting their pull lists down, and I've lost a number of large pull list subscribers to job loss, gas and oil prices," said Ralph DiBernardo, owner of Jetpack Comics in Rochester, N.H. "New England has seen a large number of comic shops close in the past year (six or so at my last count and those were ones that I personally knew), and I don't think we have seen the last of it. The reality of stores closing is that customers don't always head on into a different shop. There are always a number of people that take that as their time to get out of comics."

Many retailers said they've started hearing customers talk about how they need to cut back on the comics they purchase because of economic concerns, although some said that's a worry they hear from customers all the time.

"I have heard first-hand from some who have lost their jobs or had them reduced in recent months," said Joe Field, owner of Flying Colors Comics & Other Cool Stuff in Concord, Calif. "Obviously, those working in the mortgage business have been hardest hit."

"We have all lost a lot of customers who are too busy trying to pay mortgages they can’t afford and working to stay above water in an ocean of debt. Their weekly comic fix is no longer a priority," said Mike Malve, owner of Atomic Comics in Phoenix.

"We've seen a few people drop files, and a few cut back, but people should always buy within their budgets, and they should always trim titles they no longer like from their lists," Price of Speeding Bullet Comics said. "Sometimes economic tough times remind people of what would be a good idea to do, anyway."

One cause for discussion right now in the industry is that higher costs might mean publishers will raise their prices on comics. Retailers already pay all the freight costs on their comic books, with some saying it makes up about five percent of their net cost -- but that cost (and percentage) is rising along with gas prices. If the costs associated with printing and shipping are passed along to the consumer with higher cover prices for comics, all the retailers we polled thought that would end up being detrimental to sales.

"Comics and books are heavy, so of course there's an impact to our bottom line when shipping costs go up," said Field of Flying Colors Comics. "The increasing cost of shipping (which includes shipping of raw material to printers, too) could lead to pressure to raise prices. I hope that doesn't happen because from the consumer feedback I get regularly, higher prices will only lead to consumers being even more selective about their purchases... something no one in the comics marketing chain wants to happen."

"[Higher prices are] already happening," said DiBernardo of Jetpack Comics. "Each month, Marvel and DC add more titles that have a $3.99 or higher cover price. They publish them as one-shots, but with so many of them coming out, it is really just an indication of what is to come."

"I only ask that publishers think before they act when it comes to raising prices on new comics," said Malve of Atomic Comics. "We are already having a difficult time getting new readers converted to regular customers. Having books priced even higher will only be yet another slap in the face to the consumers we already have."

Retailers also expressed concern about what they perceive as a glut of comics that don't live up to the hype surrounding them -- something that may lead to short-term sales increases, but long-term decisions by not only customers to cut back, but retailers as well. After all, retailers said that if they're feeling the effect of an economic slowdown, they will be more discerning on what they are willing to stock on the shelves, and if they can't trust the publishers to supply quality material, they won't be taking as many risks on their products.

"Publishers should be careful not to oversaturate the market with comics," said Lopacinski of Neptune Comics. "We have seen a large backlash on the Countdown crossovers that DC did late last year. If Marvel and DC continue on that trend in this economy it will not benefit themselves or the retailers because those tie-ins tend to be the first things people cut or simply do not buy when times get tight. They stick with the characters and story lines that they enjoy and do not pick up additional mini-series tie-ins. It is not a good investment for the publishers to create extra titles that people can't afford to buy."

"As Marvel adds more 3.99 to 4.99 one-shot and reprint books, it becomes harder and harder to judge which ones customers will be on board for. So the Thor one-shot sells out and King Size Hulk lingers on the shelf," said DiBernardo of Jetpack Comics. "More and more I am cutting my orders to reflect what my preorders/subs are. What I think I can sell and what I will sell are two different animals. Last year, I would buy on what I thought I could sell. This year, I am all about the sell out!"

As the economy is predicted to slowdown, most stores said they are also being a little more cautious about new expenditures this year.

"We started prepping for this about a year and a half ago. The writing was on the wall and no matter how hard we prepared for a recession, it’s just hard and you have to pace yourself to get through it. Tough choices are made and that is how a business survives," said Malve of Atomic Comics.

"We were considering a move to a different and larger location and those plans are on hold now while we wait to see if the economy gets better or worse this year," Lopacinski said of his Neptune Comics store. "The other way to deal with the slump is to adjust ordering - cut back on things if they are not selling because people are not buying. All retailers also need to be creative with marketing and promotions, not just when the economy slumps, but any time they feel like their customers are getting fatigued and loosing interest in comics and games."

However, Field said he's continuing to make improvements at Flying Colors Comics despite the gloomy forecasts in the news.

"In my 20 years as a comic retailer, there have been many ups and downs in the national economy, so I believe we are prepared to work through whatever happens. I do think there's hype about the way media reports any news, especially economic news in an election year," Field said. "Having just invested in store renovations, a new lease and continuing to look at other business improvements, it should be apparent I'm bullish on the comics' market. I believe direct market comic shops are still a real oasis from any potential hardships our customers may be going through---and I think it's incumbent upon all comic retailers to watch our numbers more closely, serve our customers as best as we possibly can, and continue to reach out to find new customers for what we sell."

Plus, as Biggers pointed out, he suspects the gloomier outlook by consumers is as much caused by the political atmosphere in an election year as it is the actual effect of economic indicators.

"For the most part, other than concerns about escalating gasoline costs, our customers as a whole seem to be relatively unimpacted. As always, we have some customers whose budgets are stressed, others whose budgets are booming, and many who fall in between -- and that never seems to change dramatically," said Biggers of Dr. No's. "Politicians with an ax to grind use the word 'recession' even when the evidence isn't in to support that conclusion."

Others emphasized that even if consumers spend less on comics during the slowdown, there is still a possibility for growth because of the massive untapped audience of people who don't read comics yet. Even if each customer spends a little less, there's such a huge potential for more customers, it's not necessarily a negative.

"People are still really excited by certain comics, and the box-office success of Iron Man, for example, at least indicates that people are interested in characters who came from comic books," said Price of Speeding Bullet Comics.

"I have said this for years. We are still in the stone age of this industry," said Malve of Atomic Comics. "There is so much untapped potential for us as an industry. We all just need to keep moving forward even during these hard times."

As for what else publishers could do to help the industry transcend any economic troubles, retailers said holding prices steady and stopping the glut of tie-ins and one-shots is a start, but it all comes down to quality. As Field of Flying Colors Comics said, consumer confidence indicators may say one thing, but the confidence of the customers who go to comic book shops is influenced much more by something entirely different: "My experience is that our sales are primarily affected by the confidence our customers have in the comics they are buying."

"All you need is to look at the movie and the video game industries. People are still spending money at a fever pitch," Malve said. "We as an industry have to make sure we are always delivering the consumer a good product and experience when they decide to make their purchase. Be it the quality of the comic they buy or the way we as retailers conduct our business, we must insure that this industry has a stable foundation to build for our future."

[Lemurion]

Comics are already too expensive, higher prices will only hurt the industry.

[KraziJoe]

Originally Posted by Lemurion

Comics are already too expensive, higher prices will only hurt the industry.

At least they came down in Price in Canada.

[Corpulent1]

I have to agree with Matt Price. Car troubles put me in some major debt, which caused me to trim my pull list, and I later realized that most of the comics I cut were comics I wasn't really enjoying all that much to begin with. I doubt I'll ever completely stop reading comics, but less disposable income means I can't buy as many anymore, and when I drop a series I tend to stay off of it for a long, long time.

[lombardo]

Originally Posted by KraziJoe

At least they came down in Price in Canada.

While we in Australia continue to be charged twice the US Cover Price.

Our dollar is not half America's! It's average would be in the 0.90's, min.

[AirDave817]

Back in the day I think I would spend between $60 and $100 a month on comics. My wife thought I was nuts. We've been working toward an adoption for the past few years and that has dropped dramatically. I shoot for around $20. Maybe a little more if I splurge for a trade or two. I had to shift from shopping at my local comic book shops to DCBS, mostly for the 30% - 40% discount. If it weren't for that I wouldn't be buying anything new. If prices increase, I'll probably be back to reading only one or two titles a month - if that. Or re-reading what I already have.

[Truthseeker]

I know cover prices are starting to effect me. I am not adding as many titles as I used too. I know I am missing out, but I just can't afford it and as gas and comics reach the same price I know what I have to buy vs what I want to buy.

[Jeff_14]

Originally Posted by KraziJoe

At least they came down in Price in Canada.

Hear hear. Never thought I'd live to see the day. And this has been going on for years now. Here in Toronto, my store has been charging the US cover (in Canadian currency) for 2 years, well before the actual Canadian cover price dropped to match. Now with the list prices being identical and our currency making the US dollar look like a peso, my store has frequently recurring sales where we get 20-30% off the cover price. Its like going back in time all the way to the mid 90s. Oh wait, that wasn't such a great time for comics......

[erudite]

you know i hate the high prices of comics too- but with convention season looming i know i can pretty much pick up all my stuff at the dealers tables at or below the dealers costs.

50 dollar hardcovers are regularly 25 bucks or less at these things. yeah its a few bucks to get in but it seems a day visit to one of these things could be factored in with a weekend getaway/summer vacation thing pretty easily.

With so many of the dealer types at these things disrespecting SRP and selling all of the recent books- even books from as recent as last weekend- in the 50 cent and dollar boxes, they make it easy and fun to not go into a comic store. I've almost given up going into stores altogether now - when the local shop tells me i need to pre order x-men? i sorta feel thats like the local grocery store saying i need to pre-order bread. And with the price of gas? the old argument of go to another store gets as weak as the US dollar.

Yeah not everyone does his but in a market where a good book makes 20K in sales? You'd think some force of dealers or manufacturers would at the least try to keep SRP. The folks at Webkinz wont let certain places sell their webkins- Too bad comics cant police themselves...

(I would often wonder why the so called "good" dealers who also decry the srp-slashing dont do anything? until i see them in the dollar boxwees with me looking to get stuff from their store- great way to teach me the value of a dollar there

just a crazy rant from the office...

[Axelay]

I've dropped probably 50% of my pull list due to tight finances. Comic publishers need to seriously think twice before raising prices.

[CKdoubleU]

I'm glad our Northern friends are finally getting the financial break they deserve, but it's sad that the US dollar has to suffer. Ultimately it's our own fault though.

All the more reason to begin the switch to digital; there aren't any shipping costs with an electronic comic. When will the industry make this a reality?

[Tusko]

I too have significantly cut back.
I don't buy events, I buy from a few choice creators and allow myself one oddity a month.

[Doctor_Chronos]

"All you need is to look at the movie and the video game industries. People are still spending money at a fever pitch," Malve said.



Thinking that this is translatable into comic sales is going to get them into trouble

Yeah, in hard times, people will spend $6 for a 2 hour movie, or $7 for a 300 page novel or even $50 for a computer or video game that will take a month to finish and has a high re-playability factor.

But thinking that this also means when times are tough, people will pay $4 or $5 for one 22 page pamphlet that they will read in 10 minutes and stuff into a box never be to seen again?

The DCBS type sites that offer very good discounts will be ok, but I really think that the brick and mortar LCS shops are going to have a real rough row to hoe and only the absolute best will make it out the other end.

[bungi43]

Originally Posted by CKdoubleU

I'm glad our Northern friends are finally getting the financial break they deserve, but it's sad that the US dollar has to suffer. Ultimately it's our own fault though.

All the more reason to begin the switch to digital; there aren't any shipping costs with an electronic comic. When will the industry make this a reality?

And they'll still charge us 2.99 for books because they know we'll pay it.

Same reason that gas prices will never take a substantial drop. Even if the price of oil were to hit what it was in the late 1990's (I remember .89 cents a gallon in Indiana) we'll never see those prices again. They'll continue to charge us 2.99 or more because they know we'll pay it.

[RedSquirrel]

Call me crazy, but I think Cliff Biggers is a Republican.

[ubuking]

I would prefer that, instead of prices going up, the quality of the materials go down, thus maintaining the same price. Comics have always been about stories, so if the story's good, you still got customers. But If the publisher only thinks about raising the price just 'cause the fancy paper he uses is too expensive, I'd prefer he think a little and drop the paper.

[Jay_Bird7]

Originally Posted by Lemurion

Comics are already too expensive, higher prices will only hurt the industry.

true,my pull list is smaller


but I like it that way,cause I use to buy books just for buying them


but now if it doesn't have a great story,and great art

it will only sit there

[Colossus2420]

Trusting that consumers will pay a higher cost for their comics in a tougher economic situation seems risky, but some analysts claim that entertainment industries like comic books aren't as affected by negative economic trends as other products. -Quoted from the article

To be fair, the piece says "And then there are the comic books, or more accurately, big budget movies based on comic book characters...[w]hen you are talking about spending eight to ten dollars on a movie ticket or toy, that is a lot less economically sensitive than buying a $20,000 boat..." Nowhere does it say that comic books are resistant to negative economic trends. A one-off ten dollar movie ticket is far different than a ten dollar a week pull-list habit.

[Batbob71]

"All you need is to look at the movie and the video game industries. People are still spending money at a fever pitch," Malve said.

How can this guy compare the two?!?
One provides 5 minutes of entertainment for $4-$5+ & the other provides HOURS of entertainment for $50. The end-consumer costs are not proportinate to one another! How many comics @ $3.99 would I have to buy to equal the same entertainment dollar value that I get from a video game? 12 1/2 just to break even on the cost, that's how many! Video games can last from 3-10+ hours for the first time playing & completing, not including any going back & replaying or doing any of the on-line portions of most games. So let's split the cost & say 6 hours for 1 video game. This equals $8.33 per hour of enjoyment for a $50 video game if it is only played once & takes 6 hours to complete. Comic books typically take 5 minutes each to read, but let's be generous & say 10 minutes each. This equals 360 minutes of reading, or 36 comic books @ 3.99 each = $143.64. Do I need to go into this with the comparison of movies, too?
Comic books are (generally speaking) over-priced, under-talented, over-hyped & more times than not a disappointment. But I just can't seem to stop buying 'em. I currently spend $40-$120/week (depending upon what comes out & what supplies I need) on my comic fix.
If there are any good & reputable dealers out there looking for steady & genuine business, contact me. I currently get 25% discount from my LCS - anyone willing to do better than that?

[Kamandi2]

Originally Posted by lombardo

While we in Australia continue to be charged twice the US Cover Price.

Our dollar is not half America's! It's average would be in the 0.90's, min.

I have to think that's because of shipping. For Canada it's just a truck delivering them just like in the US. Getting they to Australia means a plane. Sure, they could cut costs by sending them via truck and then boat, but that would probably delay delivery by weeks.

[RedSquirrel]

Originally Posted by ubuking

I would prefer that, instead of prices going up, the quality of the materials go down, thus maintaining the same price. Comics have always been about stories, so if the story's good, you still got customers. But If the publisher only thinks about raising the price just 'cause the fancy paper he uses is too expensive, I'd prefer he think a little and drop the paper.

YES! Cardstock covers are pointless and add a buck to every book they're used on !

[Ken B.]

Why don't the retailers tell the companies, particularly Marvel, not to gouge the customer with their big event with an added dollar for no reason whatsoever?

Also, I echo the statement that I would rather have lower quality paper rather than pay more for it. Let the TPB's get the higher paper treatment, but give those of us who help get the books into trade format to begin with a break.

I've been thinking about it, and $4 for a normal size issue is my ceiling. If it ever gets to that point, I think I'll call it a day with comics.

Originally Posted by lombardo

While we in Australia continue to be charged twice the US Cover Price.

Our dollar is not half America's! It's average would be in the 0.90's, min.

Some of that has to do with you being on a continent all the way down in the middle of nowhere. I'm just saying

[Doc_doom79]

Civil War made me cut my Marvel stuff from 19 books to four

Nova
Captain America
Immortal Iron Fist
X-factor.

And those I have switched to trade formate.

[MrVinegar]

I've been dropping books consistently for the past year. Each month my pull list shrinks. I allow myself a few specials at 3.99 (e.g. I'm picking up SI and Final Crisis but nothing else at that price point) but if regular monthlies surpass 2.99 anytime soon, I'm out. $3 is my breaking point for regular issues. I can't imagine getting any new readers at $3 an issue.

And now that many, if not most, trades are the same price as buying individual issues I probably will pass on trades too.

[IzzySlash]

my list is at its minimum, till things clear up I'm allowing myself 5 books a week to purchase and letting the rest build up in my bag. im trying to remove myself of the mentality that I need to read it all now.