C2E2: Inside The Diamond Summit

Thu, April 22nd, 2010 at 12:58pm PDT

Comic Books
Kiel Phegley, Staff Writer

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If there was anything apparent at Diamond Comics Distributor's 2010 Retailer Summit, it was the way in which the Direct Market of comic and hobby shops sits precariously between its traditional role as the epicenter of collectible-driven fanboy entertainment and the possibilities open to the market as the comics community grows involved with bigger media from the book market to Hollywood. The biggest news to come from the event wasn't an official change in policy or product, but the fact that Diamond floated the possibility of changing comics long-standing on sale day of Wednesday to Tuesday in order to synch comics sales closer to entertainment product like DVDs, amongst other reasons. CBR News was on hand throughout the Thursday programming (an industry "pre-show" to the Chicago Comics & Entertainment Expo), and spoke with organizers and attendees, gathering news and reactions from Diamond's new publisher focus groups, a change to the past versions of these retailer events.

"We've traditionally done more of an exhibit hall with a few speeches," Diamond's VP of Purchasing Bill Schanes told CBR. "This year, we've decided to go more with town hall meetings with more individualized, 20-minute Q&As with specific publishers in rapid fire sessions. It's not such a long event, but it's got very fast-pace, targeted meetings. And it seems pretty popular today. We've always done Q&As, but this is a whole day of it. A lot more individual publishers can talk to people, and they can get some one-on-one questions answered."

The conference kicked off with a keynote from IDW publisher Ted Adams, fresh off the company's recent promotion to Diamond's Premier Partner (AKA "Front of Previews") status. Adams focus was the question of digital publishing and how comics on everything from the iPhone and iPad to the PSP and computer screens can work with the Direct Market rather than against it. Adams said that from his standpoint, IDW was the leader in the digital comics space and that he felt strongly that sales onto mobile devices would not detract from comic shops but add to their customer base. "There's a very close association between the two," Schanes said of Adams. "Clearly, his message was 'Don't be afraid of digital' and 'IDW will be helping you to drive customers to your store.' And that's what they wanted to hear. It was great. It's a good message."

Later, when the assembled retailers broke out for their focus groups, Adams spent the time allotted IDW to further his point in a Retailer Q&A. In one such session, an attendee pressed Adams on IDW's choice to make its "Star Trek: Countdown" movie tie-in available online so soon after its on sale date in comic shops. "There's no way to know, but we can say that the digital version didn't cannibalize sales," the publisher responded.

"Our goal always is to have the Comic Shop Locator Service in every package [and] broadcast the service as much as we can." Later in the session, talk turned towards IDW's need as a premier publisher to balance its schedule so that retailers won't have to deal with weeks when three "Angel" titles hit all at once or, as was the case the week of the show, the publisher ships multiple #1 issues all together, hurting chances of customers giving each title a try.

Adams then queried his audience on what kinds of incentives and programs they'd like to see on his titles, admitting that with IDW's large slate of licensed books, it would be ideal for the licensor to promote the comics along with their core products (Adams said getting Transformers comic ads into movie and toy packaging had proven difficult, while HBO seemed primed to promote the upcoming "True Blood" comics to the TV show's audience). The publisher also asked what kind of variant comics would sell best, from "virgin" covers without a tradedress to true art variants with original pinup work on the package. "One of the things we need to do as a community is embrace the physical nature of what we sell and the collectible nature of what we sell. What differentiates us from daily newspapers is that people want to own what we do...we're unique becase people want to own our stuff. They want to have it in their house for decades," he said.

IDW's "G.I. Joe" ashcan

"It's such a sketchy thing," retailer Vernon Wiley of Comix Gallery in Wilmettte, IL told CBR News after hearing Adams speak. "From what I got out of it, he was saying his company's at the vanguard of it, and at least they pay attention to [the fact that digital and brick and mortar retail are connected]. I mean, he's communicating about it. He acknowledges it exists, which is something Marvel and DC aren't. He's an emerging company who's trying a bunch of different things, and they've probably got the biggest variety of titles and attitudes about what they publish than a lot of small labels do. Of course, they're not small anymore, getting into the premier section of the catalogue."

Other focus group sessions similarly divided their time addressing retailer concerns about publishing models and new media while selling the assembled on new product launches. Marvel Comics, for example, spent their sessions demoing their "Marvel Retailer Resource Center" program which allows participants to build their own Marvel-themed website and gain up-to-the-minute shipping info. Meanwhile, Viz made a push on behalf of "Kekkaishi" - one of their manga they expect to jump in sales once the anime version debuts on Cartoon Network on May 29 - as well as new changes to their popular "Vampire Knight" manga publishing program which will see them directly market the book to fans of the "Twilight" series of novels and movies as the anime begins to stream online over the summer. In Archaia's sessions, the publisher focused on its new "Black Label" imprint with non-creator owned titles like "Days Missing," though discussion was often pulled back to the vagaries of collectible comics with attendees asking whether or not Archaia could ever produce a bag and board that would fit the company's popular "Mouse Guard" series.

The real news of the event hit in the presentations offered to the entire assembly of retailers after the smaller sessions had broken up. In a string of publisher presentations, the biggest players in comics offered up product info and announcemetns aimed at upping their sales amongst shop owners, from Dark Horse bringing special guest Jim Shooter to talk up the revival of "Gold Key" superheroes like Doctor Solar to Dynamite Entertainment President Nick Barrucci declaring his intent to land the publisher in Diamond's top four publishers by brokering a "singles for trades" returnability program with publishers willing to order Dynamite books more heavily upon initial solicitation. And as retailers ate dinner and tucked away IDW giveaways that included a gold-stamped edition of John Byrne's latest "Star Trek" comic and an honest-to-goodness 5 X 7 1/2 inch "Ash Can" edition of their next "G.I. Joe" series, the presenters showed off their usual "buzz" announcements, including the word on Marvel's upcoming "Steve Rogers: Super-Soldier" miniseries and DC/Wildstorm's "X-Files/30 Days of Night" crossover as well as promises of new trades for the Paul Dini/Alex Ross DCU one-shots, a single-volume edition of "All-Star Superman" and the new Peter Straub, Michael Eaton and John Bolton Vertigo OGN "The Green Woman." However, the biggest talk of the show came with Diamond's own presentation.

Chaired by Schanes, Diamond VP of Sales & Marketing Roger Fletcher and Diamond VP of Operations Cindy Fournier, the distributor's State of the Industry talk carried with it both specific changes to Diamond policy cheered by the audience and the big question of moving comics sales day from Wednesday to Tuesday. While much was made of this idea on the blogosphere in the days following the event, Diamond's announcement was less of a "is one day better than the other?" debate and more of a focused rollout of proposed changes to the entire system of comics retail, a rollout that started with the news which took on a rosey "reward" feel from distributor to customer. "It's our intention, before the end of the year, to switch the way we calculate your discounts from being based on the size of your initial order to be based on your total spending - including reorders and everything else," Fletcher said to applause. The Sales VP continued to announce new cash-saving benefits on the business side of things saying, "Also, we intend to...what's the right word here? I'll say 'lower' the reorder charge for graphic novels and book product. In addition, with the product we currently have capped at 40%, we're going to be looking to raise those discounts."

A more contentious note was struck when Fournier said, "More and more on a weekly basis we've been getting word from our customer service department and more and more word from custormers that they've gotten a perfect shipment. We've gotten our numbers way more under control." The statement was met with slightly good-natured laughter as Fournier reiterated that Diamond does have a state of the art system for tracking the product it ships and that its numbers suggest that "99% of pieces we ship go out to your stores without incident." She added that  they expect to take that number as high as 99.6% and enchouraged retailers who travel by the Memphis area to see Diamond's changes in their warehouse for themselves.

DC's Bob Wayne addressing retailers

The crowd quieted during the next phase of the panel as Fletcher addressed the constant question of "Is there any chance you could ever get your books a day early? This is another one that we've always said 'never say never' to, and we've had some discussions internally and talked to a number of publishers and suppliers we service. We recognize there are a number of benefits for you if you can get your books the day before they go on sale...such as, you can check on your week's reshipment and report your shortages and damages, you can process your full invoice, you can merchandise, you can read the books, you can send marketing messages to your customers - you can do all of that, and then, when your regulars come in, you can talk to them, because you'll have more time. We've long recognized that being able to get your books a day early would help you improve your quality of life.

"You might be wondering, 'If you recognize it'll help our quality of life, why hasn't this happened?'" Fletcher continued. "Well, the issue we've always been stuck on is the issue of what we internally call 'policing.' We don't want to be in the business of internally policing our customers, and we were never able to get over that hurdle." Fletcher went on to explain that a Montreal retailer wrote the company with the idea of a retailer pay in program that would fund "Secret Shoppers" to check up on stores suspected of breaking embargo dates and selling products too far in advance - an idea Diamond liked a lot. "Last Christmastime, when we had a scheduled skip week, and DC Comics offered 'Blackest Night 'early, I think about 1,000 customers said, 'Yeah, give us our books a week early, and we promise we won't put them on sale until the following week.' And there was a grand total of one person who broke the rule. That got us over the hump of talking to publishers and getting their feedback. And we're not to the point where we think this absolutely could happen, but I think we're at the point where we could get feedback from you guys about it."

Fournier added that "There are more details than any one person can keep in their head in terms of what all would need to be changed to make this happen. It would be a big change for the publishers going to their creative people to adjust schedules." As a specific example, she said that, currently, Diamond ships comics to retailers on Mondays using a UPS "two-day zone" format getting the new comics to shop on Wednesday (Thrusday on holiday weekends), and moving shipping back to Tuesday would require the company to back up the schedule three days to ship the week before as Diamond employees currently work through the weekend to prepare shipments. "I don't want to minimize the complexities of making this kind of change, but for the first time ever, we're at a point where we want to discuss this at all levels."

Fletcher then extended the entire idea to the much balleyhooed Tuesday sale day. "The idea has come up that, since we'd be adjusting the schedules anyway, what about changing the new release date from Wednesday to Tuesday?" he said, explaining of the benefits of the system, "First of all, if you get your books on Monday, and you have a problem with shortages or damages - though odds are rare, because it's less than 1% - but if that happens, you can get it fixed more easily in time for weekend sales. In addition, when you put books on sale on Tuesday and see them on a Monday and go, 'Wow! This is going to be hot!' you can place a reorder and get them before the weekend. That's the benefit of moving from Wednesday to Tuesday and getting your books on Monday. In addition, a lot of other media products are hitting street on Tuesdays: books, DVDs, video games, etc. So we'd be putting comics in synch with those other products rather than a day late." Fletcher added that this kind of a program would incur a minimum weekly charge of $5.00 per store to pay for the secret shopper program to be set up.

Left to right: Bill Schanes, Roger Fletcher and Cindy Fournier

"There are a couple of things on the negative side," Fournier quickly added. "I want to make sure that we're not painting some picture that's all rosey where everything will be better. One thing that I absolutely know where we'd need more lead time is that it would add more days, depending on which warehouse you're serviced from, to when your rehipped or repackaged orders would need to be placed compared to when you're going to get them." Fournier expected an increase from a 10-day to 11 or 12-day lead time on such orders. When it comes to the final order cutoff or "FOC" dates for front of "Previews" publishers, "Right now, we're at about 20 days, and from what I've seen so far from what we've looked at is that, in a worst case scenario, that might have to move to 26 days. I want to make sure we're presenting the picture from both sides. There's a lot of positives, in my mind, and there are a few negatives in terms of working out the details, as well as a few steps in the other direction. That's what happens when you make a change."

At this point in the proceeding, DC's VP of Sales, Bob Wayne, took the mic to reiterate a point he'd hinted at in DC's breakout sessions, saying, "We will endeavor, on the DC Entertainment side to work with our colleagues at Warner Home Video to make sure that, if we go to Monday arrival and Tuesday on sale, that you will recieve new Warner Home Video product on the Monday and will be able to sell it on a Tuesday along with everybody else." Earlier in the conference, Wayne had hinted at programs such as variant covers for Direct Market editions of DC animated DVDs.

Fournier asked for a show of hands of the assembled retailers about whether they'd be interested in moving their on sale day to Tuesday, considering the changes both financial and practical that the move would incur, and the split seemed to be around 60/40 in favor of moving to Tuesdays (one retailer later joked that, if the day was moved, DC would have to change the title on its "Wednesday Comics" hardcovers).

Ultimately, the challenges facing Direct Market retailers are as wide as the opportunities ahead. From finding ways to leverage digital initiatives back into brick and mortar sales to supporting products that can sell to both the hardcore collector and the neophyte fan and from discussing the possibility of sales in line with bigger media to making those sales work by helping to enforce the embargoes placed on product, there are myriad choices weighing on Diamond, its retail and publishing partners and even consumers. While very few things were settled at the Diamond Retailer Summit, the discussion has been started in earnest.

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