Online Comics Vs.
Printed Comics:
A Study in E-Commerce and the
Comparative Economics of Content
Chapter 1 - An Introduction to Print Comic Books,
Their Economics, and Fall from Circulation Grace.
(Con't)
"Let's look at exactly what Diamond does for a moment," Panaccio explains. "1) They print a catalog, which they make outrageous money on. That catalog costs them about $1 per unit to make. They sell it to consumers for $5 per unit, and make an average of $5,000 per display ad, with more than 150 pages of display ads per issue. 2) They take big boxes and make them into little boxes and ship them, via UPS, which costs them very little. That's it -- there are, perhaps, four field sales reps, a few sales executives in Baltimore, and that's it. For an entire industry.
"Now -- if your main business is boxing and shipping, your margins are reduced with each new publisher that enters the market, and with each new store that opens. If 75 percent of all your product comes from 5 vendors, and the other 25 percent comes from a combination of 40 vendors, your margins actually rise when some of those other 40 vendors go bye-bye. If 75 percent of all the product you ship goes to 750 locations, and the other 25 percent goes to the remaining 2,400 locations, then your margins actually rise when those bottom feeder stores go bye-bye. Fewer vendors and fewer shipping points equals a higher margin of the product you are guaranteed to place no matter what, because you are a monopoly and have no competition.
"Diamond's primary business model is to shrink the comics industry down to its lowest common denominators and squeeze out any potential competition for its premier publishers" (Private Interview).
This view may be an extreme one, but keeping it in mind while viewing the Diamond sales chart indicates there is at least circumstantial evidence to take this viewpoint seriously.
ICV2 is a website for direct market and pop culture retailers run by the former owners of Capital City Distribution. Each month they issue estimated sales figures for the comic books Diamond distributes. While these numbers are estimates, they are commonly accepted in the industry as such, and can likely be considered accurate within 10%. Looking at the estimates for December 2003 (http://www.icv2.com/articles/home/4107.html), the bestselling independent comic (that is to say, from a company not listed in the front of the catalog) is Dreamwave’s TRANSFORMERS GENERATION ONE VOL 3 #0 at number 29 with an estimated 53,081 copies ordered. This may be slightly misleading as Dreamwave was formerly a studio distributed by Image Comics, the Transformers franchise was initially published through Image Comics, and the company was also engaging with a cross-over event with the "G.I. Joe" franchise, which was also being published by Image.
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