Tilting at Windmills: The Empire Strikes Back

Thu, April 17th, 2014 at 11:58pm PDT

Comic Books
Brian Hibbs, Staff Writer

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I doubt you've been living in a cave, so you're probably aware that Amazon has just bought comiXology. This is almost certainly a game-changing moment for the comic book industry, with what I think the closest analogy being when DC Comics signed exclusive distribution with Diamond Comics, and locking the comics world into a single, monopoly distributor for periodical comics.

I also think that said deal fundamentally broke several things about the eco-system of comics that we are still paying for today, and that this new Amazon deal holds at least as much disruptive potential for the long-term health of the market.

Most of the worst fears about digital never came to pass, so I'll be upfront in saying that, perhaps, Amazon will be the most hands-off steward of comics ever. Perhaps they'll do nothing but benefit our beloved industry and create a world in which seven figure print runs once again become the norm, and all creators are gloriously recompensed for their trade and craft.

But when one takes the longer view of Amazon, it seems pretty hard, to this observer at least, to see how that could be possible.

While I think that Amazon is pretty good for customers, I don't believe the same can be said about being good for publishers, for creators, or for booksellers. And I therefore think that they're not actually any good for books, themselves. A good text to support this viewpoint might be this excellent The New Yorker essay by George Packer. Amazon is utterly ruthless and aggressive in their relationships to publishers, and there are well sourced articles that show sweatshop-like conditions for the employees who work in Amazon's warehouses.

And there is not, I suspect, any reason to think that Amazon will not try to use their newly-increased leverage to squeeze out the largest profit margin that they can at the expense of publishers. This is a long historical pattern for them. Obviously, an Amazon-powered comiXology has far more leverage to do so than comiXology ever could have on its own. Because Amazon can now add its combined share of the print and the digital businesses to the negotiating table.

One of the reasons that digital hasn't significantly impacted print yet in the comics industry is because we've been able to keep a relative price parity between the formats for serialized releases. And Amazon's sudden increase in leverage makes it more likely that they'll try to change that parity.

The thing is, the ecosystem for serialized comics is at once fairly robust while at the same time being a house of cards that could fly apart in a second. I see the business growing, at least in San Francisco. More people are more broadly getting interested in comics as a medium, but most of the larger publishers appear to be interested in double-dipping as often as possible, and so sales are getting niche-ier as a result -- we're supporting more titles, but that splits the audience so that none of them do especially well. And what that means is that small losses in audience magnify significantly for the retailer.

In other words, the loss of one reader means a very different thing for the comic you sell five copies of, and the one which you sell fifty -- on the lower end of the scale, that's 20% of your gross, which at that level will be most of your profit.

I absolutely think there are things that a well-run store provides that no internet discounter can beat -- passion, curatorship, discoverabilty, atmosphere, camaraderie, and so on -- but for at least some percentage of customers, buying on price is a major concern.

And I'm not even sure that the threat is even truly for digital delivery itself for comic book stores. What if Amazon decides to try their hand at selling physical periodical comics?

What, you laugh? But it seems to me that you could conceivably deliver comics on those Amazon Fresh trucks that I'm now seeing all over town.

Here's the thing: comiXology started as a pull-list management system. And I know there are a bunch of stores all throughout the Direct Market who still use it as the backbone of their physical stores' subscription management. That's not proprietary data I personally would want in the hands of an entity that plays the game as they do.

If I were a retailer that used comiXology to power my subscription program, I'd be very concerned about the new ownership of that tool -- and it is a real shame and wasted opportunity that the industry has not yet developed a "non-profit" version of that tool. From Diamond, or perhaps even from ComicsPRO. I think building a non-Amazon version of the Pull List tool should be the major priority for the comics industry by 2015.

I worry about Amazon because the average Direct Market retailer doesn't have a whole lot of flexibility in their profit margins. I know exceedingly few who are even approaching rich, and far too many who are only ever a bad month away from ruin. It would not take much channel-switching by consumers at all to throw the system into chaos. And Amazon seemingly has been given a pass by Wall Street of the need to generate any real profit.

The only real advantage that DM stores might have surviving Amazon delivery is that comic book periodicals are relatively fragile, and many collectors are picky about condition. Well that, and that comics are a much much smaller market than prose or music or movies, and one that is exceedingly likely to stay a specialized niche market by its very nature.

I love comics, and I love selling comics, but I also know as someone who has been selling them for a quarter-century now, that they're not naturally a mass-market product. The love of comics needs to be inculcated, and passion needs to be fanned for it to grow into a fire. Amazon is really really terrific at selling you something that you absolutely already know that you want (usually cheaper and faster and with less hassle, too), but I firmly believe that they're mediocre at most in creating new passion, or of helping you discover something that you didn't even know exists.

It would take almost nothing for Amazon to casually crush out a whole lot of comics retailers, if it set its mind to it.

As I said before, I think there are a whole host of things that well-run stores do that make them indispensable members of their communities and critical partners to the very medium of comics itself. Good stores help expose you to comics you would never have otherwise encountered. Good stores proselytize good comics, they evangelize for creators whose work they adore. They curate their shelves, they promote work they love, they are tastemakers in their communities. They help increase the discoverability of work by racking and displaying it. They provide a hub for the like-minded to build a community for their own passions, and in doing so stoke the fires of that passion ever higher.

Amazon doesn't, in my opinion, do any of those things well, if at all.

So, I hope that my publishing partners are able to continue to resist Amazon, and that they continue working to find ways to sell more comics to more people through more outlets, not fewer.

Brian Hibbs has owned and operated Comix Experience in San Francisco since 1989, was a founding member of the Board of Directors of ComicsPRO, has sat on the Board of the Comic Book Legal Defense Fund, and has been an Eisner Award judge. Feel free to e-mail him with any comments. You can purchase two collections of the first Tilting at Windmills (originally serialized in Comics Retailer magazine) published by IDW Publishing, as well as find an archive of pre-CBR installments right here. Brian is also available to consult for your publishing or retailing program.

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