ICv2 CEO Milton Griepp kicked off the ICv2 Conference ahead of New York Comic Con with new comic sales numbers showing a robust comics and graphic novel market that is rebounding from the closure of the Borders chain and bringing in new readers via digital comics and other initiatives.
Griepp's White Papers summarize sales and trends in the comics industry and cover both comics and graphic novels in bookstores, comics shops and digital media.
In 2011, he said, comics sales were up 2% compared to the year before, and graphic novel sales were flat (0% change), meaning the overall market was up by 1%. The first half of 2012 has seen marked change in opposite directions, with comics up 20% and graphic novels down 8%, for an overall increase of 5% for the market as a whole.
Griepp blamed weak comics sales in the first half of 2011 on content: "What was happening was people didn't like what was between the covers," he said. DC's New 52 relaunch stimulated sales in the second half of the year, bringing back lapsed readers and bringing new readers into comics stores.
Meanwhile, a different set of factors was affecting graphic novel sales. When Borders went out of business, in the second half of the year, the bookstore chain liquidated its inventory. "What that did was sucked sales that probably would have happened in the beginning of 2012 into 2011," Griepp said.
Looking forward to 2012, Griepp identified four trends in periodical comics:
- DC continues to do well, while trimming its lower-selling titles.
- Marvel has a more mixed picture, with the "Avengers vs. X-Men" comics doing well but others suffering as readers hold off in preparation the Marvel NOW relaunch; similarly, DC sales dropped in the first half of 2011 in anticipation of the New 52 reboot.
- Mid-size publishers, such as Image, IDW and Dynamite, are a bigger part of the market. "We had a great year behind 'The Walking Dead,' which is a huge phenomenon in the graphic novel business as well as on television," Griepp said, and he also noted Valiant Entertainment's revival of one of the most popular comics lines of the 1990s, which is reaching the existing fanbase and bringing in new customers.
- Finally, variant covers are growing in importance. While there has been some controversy about the practice, variant covers lead to multiple sales and encourage retailers to order more. "There doesn't seem to be resistance at the consumer level yet, but these trees never grow to the sky," he said. "Eventually, we will hit the limit, and then they will stop selling, and then we will have a period of adjustment."
Griepp estimated the value of the graphic novel market at $340 million, noting that it leveled off in 2011 after a period of decline. Sales of graphic novels in comics stores were down 5% in 2011 and up 13% in the first half of 2012. That pattern was reversed in bookstores, where sales were up by 2% in 2011 and down 18% in the first half of 2012. Total graphic novel sales showed no change between 2010 and 2011 but were down by 8% for the first half of 2012. Again, Griepp pointed to the Borders liquidation as a factor. "Realistically, in the bookstores, 2011 looks better than it was and 2012 looks worse than it was," he said.
In addition, Amazon has gained market share, not just because of the loss of brick-and-mortar stores but also because more graphic novels are priced at $50 and up, so customers go to Amazon for the discount.
In the first half of 2012 DC got into what Griepp termed "a little contretemps" with Barnes & Noble and Books-A-Million: Both chains pulled DC's graphic novels from their brick-and-mortar stores after DC made their digital versions exclusive to Amazon's Kindle Fire. Since those are some of the best selling graphic novels in bookstores, Griepp said, removing them from the shelves hurt sales at the end of 2011 and the beginning of 2012. With those books back on shelves and the Borders closure receding in the distance, he expects to see graphic novel sales rebound by the end of the year.
Griepp estimated the size of the manga market at $105 million in 2011, which was down 13% from the year before. Manga releases are down as well, by about 30%, in response to the lack of demand. Again, he saw Borders as a factor, as readers picked up entire series at a discount rather than spreading those purchases into 2012. The best selling manga is Sailor Moon, which first came out in 2000; the new edition is consistently the best-selling manga the month it is released. "That shows two amazing things," he said. "One is the strength of this property that came out a dozen years ago … but the other thing is gee there aren’t any new titles competing with it for that top slot, so that shows the weakness of the rest of the field."
"New hits are emerging, but the new hits are smaller than old hits," Griepp said. "We are not getting these culture-wide events that are getting people excited about manga properties. It's more of a niche market, as it was in the past."
The same thing is happening in Japan, he said, where the biggest seller is "One Piece," which has been coming out for a long time. "When you have your top property being that long in the tooth and no rejuvenation of the market and places for new consumers to come in, it hurts, and that's really one of the reasons manga has been in decline here the past few years," he said.
Griepp, who has been on the board of directors of comiXology since 2008, then took a look at the digital market. While the market has many components -- Apple, Android, Kindle, Nook, the web. iTunes is the dominant platform; while there are a lot of Android devices in use, he said, the Android Market doesn't scale in the same way iTunes does. "People have different thoughts about why that is happening," Griepp said. "I tend to think it's just not as good a retailer as Apple is."
Griepp estimated the digital comics market at $25 million at retail, and he expects the 2012 number to be three times that. Sales tend to be strong in the fourth quarter, when people buy new devices.
Other digital trends that Griepp saw as significant:
- Same-day digital and print releases are key, and DC's New 52 was a big factor in the market, as were Marvel's day-and-date releases.
- In most cases, same-day releases are sold at full cover price, the same as print. While publishers may have half-price sales or offer a first issue free, to get people to try out a comic, but these tend to be more targeted promotions than everyday low prices.
- "Comics are developing a huge long tail, with tens of thousands of comics available digitally," Griepp said. "That's making a lot of content available, [which] attracts a wide variety of customers." And once a comic is digitized, it will never go out of print.
- Publishers are experimenting with different formats, including different platforms, music, and animation.
"Nobody seems to have cracked the code in terms of everybody jumping on and saying 'This is the one,' but there is a lot of experimentation, and that's a good thing from my point of view because eventually some of these experiments are going to be successful and then we will have new ways of telling comics stories," Griepp said.
In terms of digital graphic novels, Griepp identified four trends:
- Graphic novels are more important than periodical comics
- Manga is still lagging in terms of putting content on digital
- Book publishers are slow to adopt digital comics formats
- It remains to be seen whether customers will switch to digital because they can't find graphic novels in bookstores.
Overall, Griepp said, the impact of digital comics on print comics sales has been positive. One important factor is the small size of the print market relative to the awareness of comics properties. "There are all these movies and TV shows that are watched or seen by millions and millions of people," he said. "Most of those people don't buy comics, and that's an opportunity because those people are interested in those stories but they are not finding a way to access them in their original form." What's more, a survey done by DC indicated that digital comics were bringing lapsed readers back into the fold, and some of them were going back to comics stores.
He posed four questions for the digital future:
- Will there be a format breakthrough?
- Will the digital share flatten?
- Will digital take comics to the mass market?
- Will multiple formats be part of the landscape?
Griepp ended on an optimistic note. "Overall, I am extremely bullish, and we at ICv2 are extremely bullish, about the future of both print and digital," he said. "We think there's a lot of room to grow. We're really excited that superheroes are being revived and that that side of the market is doing well; it's also great to see Image doing well with creator owned property out there that is blowing doors off in both channels. We see licensed books bringing in a lot of new readers, and seeing something like SPX, which just had a gangbusters show, devoted to small press, people were there to buy, so there is a lot of interest in stuff that is an expression of a creator's personal storytelling… Our belief is where there is creativity, readers will follow, and it seems to us there is a great flowering of creativity, so it's a great time to be in the comics world."