Direct market

From Wikipedia, the free encyclopedia

The direct market is the dominant distribution and retail network for North American comic books. It consists of a small number of distributors and the majority of comics specialty stores, as well as other retailers of comic books and related merchandise. The name is no longer a fully accurate of the model by which it operates, but derives from its original implementation: retailers bypassing existing distributors to make "direct" purchases from publishers. The defining characteristic of the direct market is non-returnability: unlike bookstore and newsstand distribution, direct-market distribution prohibits distributors and retailers from returning their unsold merchandise for refunds.

1 History
2 Impact
3 Direct Market distributors
- 3.1 Current
- 3.2 Former
4 References

[edit] History

The Direct Market was created in the early 1980s in response to the declining market for comic books on newsstands. Fan convention organizer Phil Seuling approached publishers to purchase comics directly from them, rather than going through traditional periodical distribution companies. Unlike the newsstand market (which included drugstores, groceries, toy stores, and other magazine vendors), in which unsold units could be returned for credit, these purchases were non-returnable. In return, comics specialty retailers received larger discounts on the books they ordered, since the publisher did not carry the risk of giving credit for unsold units. Instead, distributors and retailers shouldered the risk, in exchange for greater profits.

Seuling's private agreement spread to other stores, and as Direct Market comics shops proliferated, a variety of regional and national distributors developed, essentially replacing the order-taking and -fulfillment functions of newsstand distributors. Publishers began to produce material specifically for this market, series that would probably not sell well enough on the newsstand, but sold well enough on a non-returnable basis to the more dedicated readers of the Direct Market to be profitable. As newsstand sales continued to decline, the Direct Market became the primary market of the two major comics publishers (DC Comics and Marvel Comics). In the late 1980s and early 1990s, as the popularity of comics collecting grew, many new comics shops opened, and existing retailers (such as sports card shops) joined the Direct Market, carrying comics as a side business.

Such rapid growth (due partially to speculation) was unsustainable, however. The market contracted in the mid-1990s, leading to the closure of many Direct Market shops. Marvel Comics purchased Heroes World, a regional distributor, with the intention of self-distributing their products; Heroes World also stopped carrying other publishers' books. Other distributors sought exclusive deals with other major publishers to compensate for the substantial loss of Marvel's business. DC Comics, Image Comics, Dark Horse Comics, and several smaller publishers made exclusive deals with Diamond Comic Distributors. Most other distributors, including Capitol City Distribution, Diamond's main competitor at the time, either went out of business or were acquired by Diamond. Others established niches - such as re-orders - in which they could compete. When self-distribution failed to meet Marvel's objectives, they also signed an exclusive distribution deal with Diamond, which had by then become the primary supplier for the Direct Market.

In the early 2000s, the bookstore market began to challenge the Direct Market as a channel for sales of increasingly popular graphic novels. Meanwhile, Diamond has continued to dominate direct-maket distribution, with the 2006 collapse of FM International leaving even less competition than ever. However, the growth of interest in comics among mainstream booksellers and book publishers has led to several publishers arranging for bookstore distribution outside of Diamond (for example, Tokyopop through HarperCollins [1], or Fantagraphics through W. W. Norton [2]), while Diamond has created Diamond Book Distributors [3].

[edit] Impact

The development of the Direct Market is commonly credited with restoring the North American comic book publishing industry to profitability after the 90's infamous crash. The emergence of this lower-risk distribution system is also credited with providing an opportunity for new comics publishers to enter the business, despite the two bigger publishers Marvel and DC Comics still having the largest share and it having shown signs of continual growth against independents and small publishers.

The Direct Market has been criticized for fostering a closed "ghetto" or elite for comics, arguing that most Direct Market retailers are specialty shops patronized primarily by existing readers and highly motivated fans, without the broader exposure of the merchandise that newsstands and other retailers once provided. Some claim that the current incapability of Direct Market to reach new readers and customers, might be cannibalizing the existing market out of existence.