As the rest of the economy continues its slow recovery, the comics industry faces its own challenges. Management changes at the two biggest publishers, a sharp drop in the number of bookstores and comics stores and the open question of how digital distribution will shape comics publishing. Yet the mood at the State of the Comicsphere panel at the Chicago Comic and Entertainment Expo was optimistic, with panelists expressing enthusiasm about the influx of new creators and comics and the possibility that the iPad and other digital platforms could bring new readers to the medium.
The panel was moderated by David Steinberger, the CEO of the digital distributor comiXology and the other panelists were Milton Griepp, CEO of the retailer news service ICv2; Patrick Brower, owner of Chicago comics shop Challengers Comics + Conversation; and David Gallaher, writer of the comics "High Moon" and "Box 13."
Griepp started off by saying comics sales were down by less than 10 percent in the direct market (comics stores) in 2010 and by 10 to 20 percent in the bookstore channel, for a combined drop of about 10 percent. "We feel a lot of that was content driven," he said, dismissing increases in cover price as a factor. "I have been in the business long enough to have seen many, many price increases," he said. "At least half the time, sales go up when the price goes up. It doesn't matter as much as what goes between the covers."
Instead, he blamed management shifts at the two biggest publishers, Marvel and DC Comics. Marvel was acquired by Disney last year, and DC's parent company, Warner Brothers, began managing their comics publishing arm more closely. "Certainly, it was a distraction from the point of view of people in management positions," Griepp said. "They were curious about what was going to happen to them, so they were thinking about, 'Gee, am I going to have to move to LA, or am I going to have a job 6 months from now.' I haven't heard either of the big two companies actually say that, but that's our observation, that there was a correlation between a decline in content desirability and those management changes."
"Comics, like any other entertainment business, is a hit-driven business," Griepp said. "There just weren’t that many hits last year and that's what drives the business. People go into stores because they are excited about something they absolutely have to have and they buy other things." With those management issues now resolved, he said, 2011 is likely to be a better year for both companies.
Brower said that sales at Challengers were up almost 20% last year over the year before, but DC and Marvel had little to do with that. "It was people coming in who were just getting into comics for the first time, a lot of it neighborhood driven," he said. "The majority of the growth came from smaller, independent creators." While Challengers' top 25 comics for 2010 were all Marvel and DC titles, Brower said new books like Brian Hurtt and Cullen Bunn's "The Sixth Gun" built a strong audience from the beginning of the year to the end.
As for the "long tail" of comics, those below the top 300 sellers, Griepp said Diamond's numbers suggest sales of those comics did not decline at the same rate as comics in the top 300 -- they may have even increased. "But they are starting with smaller numbers, so the total impact on the market in terms of total dollars is still not great."
Brower cited the growth of new creators as the high point of 2010. "The books I read now are nothing like what teenager me were interested in," he said. "The books that are out there that keep challenging me as a reader and keep entertaining me, are phenomenal. As my tastes change, there's more things I find that I like now than ever before.
Griepp pointed to two media tie-ins, "Scott Pilgrim" and "The Walking Dead," as high points of 2010, saying both seem to be bringing in readers who are new to comics. Marvel and DC also had media events last year, Gallaher pointed out, but there wasn't the same "cross pollination" with comics. Brower agreed. "It hasn't been since Michael Keaton was Batman that people came flocking in after a mainstream superhero movie to get involved with the comic aspect of it, because they can go to Target and get all sorts of Batman related merchandise or Iron Man stuff there," he said. "There's nothing from the movie that says, 'Hey, go to a comics store.'"
Gallaher said the iPad could fill that gap, helping people easily find the comics associated with movies. Steinberger said "The Walking Dead" and "Scott Pilgrim" have both done quite well digitally and in general, media properties do better than continuing serialized comics.
As for the low point of the last year, Griepp said, "The saddest thing was the continuing decline of manga sales. Over the last ten years, manga has brought a whole cadre of new consumers into the business, younger kids and particularly teenage girls. I have been in this business a long time and have never seen the numbers of female consumers coming in that we have had in the last 10 years. We are losing a generation of girls to comics, which is unfortunate." He attributed the drop in manga sales to the decline of anime on television and the loss of mall bookstores such as Waldenbooks. "There just aren't a lot of places to buy graphic novels in malls any more," he said. "I don't think it was content driven as much as other factors."
Brower said the number of comics stores that have closed in recent year was troubling. "There was a point where there were thousands upon thousands of comics stores in the country," he said. "To see so many stores go away in such a short period of time saddened me the most."
"Something that really bothered me last year was the lack of publishers' ability to . take the initiative to develop a lot more digital content for readers," said Gallaher and he pointed to his own "Box 13," and Niki Smith and Mike Jasper's "In Maps and Legends" as the rare comics that were developed specifically for digital media.
Steinberger responded that original digital comics are "incredibly expensive." While creators can set up a website fairly easily, creating apps for Apple and Android devices is more expensive and complicated. "Those of us in digital have taken some beatings from creators for not moving faster, but the reason you don't see creators taking it into their own hands is it's really tough because of the closed environment created by Apple," he said. "You can do a web app, but it takes a certain amount of expertise and money that is hard to come by."
Looking to the year ahead, Steinberger said the saddest part of 2011 so far has been the Borders bankruptcy. Griepp agreed, noting that Borders had about 650 stores and plans to close 275. "That's a lot of places to buy graphic novels that are not going to be there any more," he said. "For comics stores, bookstores have become the new newsstand, places where people learn about comics and become comics fans and when they want more they go to comics stores."
Gallaher said losing Borders and comics shops affects the casual reader, the one who is still discovering comics but could become a lifelong comics reader. "What I would like to see is initiatives made by comic stores and digital to really capture that casual reading experience," he said.
"That is the biggest question for retail; how do you get that casual comic fan to come into a store," said Brower. "So many stores have the stigma: 'That's for hard core fans, people who are obsessed, I just want to pick up a couple of trades.' There has to be some sort of welcoming from retailers."
Turning to the future, Griepp said that there are five major movies coming up this year, three about Marvel characters (Thor, Captain America and X-Men), one from DC (Green Lantern) and Cowboys and Aliens from Platinum Studio. "I really feel like digital can become a new way to recruit consumers," he said. "I am really hoping the industry can take advantage of opportunities for broad exposure."
With regard to the impact of digital comics on comics shops, Steinberger said he recently did a survey of retailers who are already working with comiXology (which also offers website and electronic pull list services) and found that 100 percent of them were interested in selling digital comics. "One-third of them thought digital had a chance of hurting sales, so two-thirds of them didn't," he said. "That's a good number."
Steinberger asked how many people in the audience had a tablet, with about half of those in attendance raising their hands. "For my crystal ball, it's going to be about the price of the devices coming down," he said. "That's the only way you are going to get it into tons of hands."
Brower said he was not afraid of digital. "I don't feel the people who come to the comic shop on a weekly basis are going to abandon print comics and go to digital," he said. "I think digital can complement what we do in the store. I see the people coming on a regular basis getting digital copies of the books they are already getting to have a portable way to carry them around."
"Once a month, my fiancé and I trim our comic collection, find out what is available digitally and then we give that copy of the floppy comics or trade to someone else so they can have that and our house is less cluttered," said Gallaher.
The price of digital comics came up during the question and answer period at the end of the discussion, with an audience member asking about the 99 cent price point. Steinberger pointed out that if a comic were released in print and digital formats at the same time and priced at $3.99 for print and 99 cents for digital, that would hurt the market. On the other hand, Gallaher pointed to the stand-alone titles available through DC digital, like his own "High Moon," which are priced at 99 cents per chapter with the first chapter available for free.
Griepp said that the competition for digital comics was free comics, because of digital piracy. "People will pay for content, they want to be legal most of the time, but if the price difference is too great, they will say, 'Somebody is ripping me off,'" he said.
The panel ended with a brief discussion of Free Comic Book Day, the day when retailers encourage new customers by offering a selection of comics for free, to he led this year on May 7. Brower said Free Comic Book Day is his busiest day of the year, but those customers seldom come back. "We see people once a year and it's on us to turn them into regular comic readers," he said. "When they just want free stuff, it's hard to do that. They are not interested in the medium, they are just interested in the stuff."
"I think that brings us back to what we started with," said Steinberger. "It's up to the creators to do good stuff."