Industry Scuttlebutt: Diamond On Track for Bankruptcy Protection? - Page 2

Tatterdemalion · June 30th, 2009, 01:02 AM

Quote:

Originally Posted by daveyyojimbo

Didn't Marvel try distributing their own stuff in the 90's?

Yes, and the failure of that venture contributed greatly to their bankruptcy.

DC purchasing Diamond makes sense, albeit perhaps not in the long run, Risingstar. Absolutely, DC could start from scratch, and, as you said, "establish their own business culture, hire their own handpicked "we love WB" henchmen, and they could feel free to market their own properties up the yin yang." Unfortunately, that would require a substantial period of time to develop the infrastructure, properly staff above and below the line (so to speak), and figure out their logistics ... all the while, DC product still needs to be moved out to retailers. It makes enormously more sense for DC to buy Diamond and gradually overhaul as needed rather than starting from scratch and building everything from the ground up, which wouldn't be time or cost effective. I don't like the idea of DC buying Diamond, but for DC to eschew the opportunity seems like it'd be, well, pretty friggin' nuts.

As for Marvel? Sheesh. Who knows.

daveyyojimbo · June 30th, 2009, 01:12 AM

Quote:

Originally Posted by Tatterdemalion

Yes, and the failure of that venture contributed greatly to their bankruptcy.

DC purchasing Diamond makes sense, albeit perhaps not in the long run, Risingstar. Absolutely, DC could start from scratch, and, as you said, "establish their own business culture, hire their own handpicked "we love WB" henchmen, and they could feel free to market their own properties up the yin yang." Unfortunately, that would require a substantial period of time to develop the infrastructure, properly staff above and below the line (so to speak), and figure out their logistics ... all the while, DC product still needs to be moved out to retailers. It makes enormously more sense for DC to buy Diamond and gradually overhaul as needed rather than starting from scratch and building everything from the ground up, which wouldn't be time or cost effective. I don't like the idea of DC buying Diamond, but for DC to eschew the opportunity seems like it'd be, well, pretty friggin' nuts.

As for Marvel? Sheesh. Who knows.

Whatever happens, if it's not handled well (shops getting their product on time), it could push already hurting comic shops/chains (who need new product on a almost constant basis) right out of business, which would of course reverberate right back at the distributor. Great timing!

Tatterdemalion · June 30th, 2009, 01:16 AM

Quote:

Originally Posted by daveyyojimbo

Whatever happens, if it's not handled well (shops getting their product on time), it could push already hurting comic shops/chains (who need new product on a almost constant basis) right out of business, which would of course reverberate right back at the distributor. Great timing!

Exactly. As neat an idea it is to start a new distributor and "work out all the kinks" as you go, that could easily translate to massive losses given the lack of product downtime. Retailers constantly need not just new product, but older items, too, and even the slightest logistic problems can severely hamper efficiency (even if that's a relative term when it comes to the Diamond we know and ... uh ... like?).

I don't know what's going to happen with this - it seems like it has been stewing for some time, and certainly, DC and/or Marvel could have their own machinations, but trying to basically redo the distribution process in the middle of this economy would be a kiss of death.

daveyyojimbo · June 30th, 2009, 01:25 AM

Quote:

Originally Posted by Tatterdemalion

Exactly. As neat an idea it is to start a new distributor and "work out all the kinks" as you go, that could easily translate to massive losses given the lack of product downtime. Retailers constantly need not just new product, but older items, too, and even the slightest logistic problems can severely hamper efficiency (even if that's a relative term when it comes to the Diamond we know and ... uh ... like?).

I don't know what's going to happen with this - it seems like it has been stewing for some time, and certainly, DC and/or Marvel could have their own machinations, but trying to basically redo the distribution process in the middle of this economy would be a kiss of death.

Exactly. Much better stated. I need a How to Write like Tatterdemalion for Dummies or something.

Tatterdemalion · June 30th, 2009, 01:27 AM

Here's a nice little piece about Geppi's public congratulations to Boom! Studios, who swept in and snapped up the Disney comic book license after struggling Gemstone Publishing (owned by Geppi and thus part of the Diamond family) said they would not renew their license. Gemstone still exists despite closing one of their offices and a round or two of layoffs; they're still responsible for the Overstreet Comic Book Price Guide and, I think, they still hold the license to EC Comics, but as I recall, the future of that license at Gemstone is questionable, too.

Tatterdemalion · June 30th, 2009, 01:29 AM

Quote:

Originally Posted by daveyyojimbo

Exactly. Much better stated. I need a How to Write like Tatterdemalion for Dummies or something.

You do fine, I'd just recommend sprinkling more obscenities throughout. You can never have too ****ing many!

daveyyojimbo · June 30th, 2009, 01:33 AM

Quote:

Originally Posted by Tatterdemalion

You do fine, I'd just recommend sprinkling more obscenities throughout. You can never have too ****ing many!

I do plenty of that in ******* person, I **** you not.

daveyyojimbo · June 30th, 2009, 01:37 AM

Quote:

Originally Posted by Tatterdemalion

Here's a nice little piece about Geppi's public congratulations to Boom! Studios, who swept in and snapped up the Disney comic book license after struggling Gemstone Publishing (owned by Geppi and thus part of the Diamond family) said they would not renew their license. Gemstone still exists despite closing one of their offices and a round or two of layoffs; they're still responsible for the Overstreet Comic Book Price Guide and, I think, they still hold the license to EC Comics, but as I recall, the future of that license at Gemstone is questionable, too.

Was there some kind of lag time involved? Or period of discontinuation for the characters?

Tatterdemalion · June 30th, 2009, 01:48 AM

Quote:

Originally Posted by daveyyojimbo

Was there some kind of lag time involved? Or period of discontinuation for the characters?

Not 100% on this, but from what I read, Gemstone purchased the license from Gladstone Publishing in 2002, who had been essentially sitting on the license for something like four years, not producing any new material.

Gemstone took the license and ran with it until November 2008, when they suddenly left everything in Limbo, and now it turns out they've sold the license off to Boom! Studios.

What I'm not sure about is who was producing new, original content, and who was just repackaging comics from Europe or the classic Carl Barks work. It's likely both Gemstone and Gladstone were doing a mixture of both.

From what I know of them, Boom! will likely take the Disney license and make a big impression in the same way they've scored a sales hit with their take on The Muppets. They'll eschew the "prestige" format and go to single issue, which'll speak to a younger audience instead of relegating the license to older, nostalgic readers/collectors.

It boggles my mind that of all formats, comic books seem to be the one where Disney just can't find a stable foothold for success.

daveyyojimbo · June 30th, 2009, 01:53 AM

Quote:

Originally Posted by Tatterdemalion

Not 100% on this, but from what I read, Gemstone purchased the license from Gladstone Publishing in 2002, who had been essentially sitting on the license for something like four years, not producing any new material.

Gemstone took the license and ran with it until November 2008, when they suddenly left everything in Limbo, and now it turns out they've sold the license off to Boom! Studios.

What I'm not sure about is who was producing new, original content, and who was just repackaging comics from Europe or the classic Carl Barks work. It's likely both Gemstone and Gladstone were doing a mixture of both.

From what I know of them, Boom! will likely take the Disney license and make a big impression in the same way they've scored a sales hit with their take on The Muppets. They'll eschew the "prestige" format and go to single issue, which'll speak to a younger audience instead of relegating the license to older, nostalgic readers/collectors.

It boggles my mind that of all formats, comic books seem to be the one where Disney just can't find a stable foothold for success.

Yeah, that is pretty baffling when you stop to think about it. Of course, the comicbook market (in the states) is dominated by the superhero genre, so maybe that has something to do with it.

risingstar · June 30th, 2009, 05:37 AM

I can't pretend to know how close Diamond is to filing for bankuptcy protection or how serious DC might be about buying Diamond. My sense is that there's something off with the idea of one company distributing its main competitor's product. I mean, why would DC want to shoulder that unnecessary responsibility? DC should be about DC. That's it. Any energy spent on supporting someone else's product strikes me as a waste of resources and, well, kinda kookoo for cocoa puffs.

Besides, how can DC not take advantage of such an opportunity to serve its own best interests? DC certainly doesn't owe Marvel any special favors or considerations. Also, I can't imagine DC liking the idea of placing itself in a position to have to cater to Marvel's demands, let alone having to endure all sorts of accusations.

If I were Marvel, I would also have a really hard time supporting a move which presented such a potential conflict of interest. Should Warner's intent to buy Diamond prove legitimate, I wouldn't be surprised to see Marvel make their own bid, if only as a means of self preservation. It's not like Marvel isn't loaded too.

While I also see the sense in buying an existing infrastructure and distribution network, it still strikes me as more trouble than its worth. Why make such an investment when you know there's trouble coming no matter what you do? Is the potential upside so great that it justifies the risk?

As an aside for a moment, didn't Warner already have its own distribution system for its chain of stores across the country and abroad? While the WB stores eventually went under, they still have some experience in this regard. Moreover, I think they may still have some type of distribution system in place to support their online stores.

Although great points have been brought up for and against Warner buying Diamond, my thinking is that the best case scenario for all involved is for a more neutral appearing ownership.

Harper's Dad · June 30th, 2009, 10:03 AM

I recently read a book, Was Superman a Spy (great book by the way!), and it talked about something similar going on in the 1960s with DC being responsible for distributing Marvel's books.

According to the book, DC put a limit on the number of books (8 I think) they would distibute per month for Marvel so Marvel had to go to all of the 2 stories per book format i.e. Tales of Suspense, Tales to Astonish, etc.

Things finally worked out in 1968 and Marvel didn't have to go through DC to distribute their books. Marvel gave all of their popular characters their own titles in 1968 such as Captain America #100, Iron Man #1, Submariner #1, and Incredible Hulk #102 because of the way this happened.

(Sorry if I didn't get something 100% right. I lent the book to a friend and don't have it in front of me.)

risingstar · June 30th, 2009, 10:29 AM

Quote:

Originally Posted by Harper's Dad

I recently read a book, Was Superman a Spy (great book by the way!), and it talked about something similar going on in the 1960s with DC being responsible for distributing Marvel's books.

According to the book, DC put a limit on the number of books (8 I think) they would distibute per month for Marvel so Marvel had to go to all of the 2 stories per book format i.e. Tales of Suspense, Tales to Astonish, etc.

Things finally worked out in 1968 and Marvel didn't have to go through DC to distribute their books. Marvel gave all of their popular characters their own titles in 1968 such as Captain America #100, Iron Man #1, Submariner #1, and Incredible Hulk #102 because of the way this happened.

(Sorry if I didn't get something 100% right. I lent the book to a friend and don't have it in front of me.)

I just googled the book and read the synopses.
It sounds like a great read.
Thanks for directing me towards it!

Tatterdemalion · June 30th, 2009, 01:23 PM

Quote:

Originally Posted by risingstar

While I also see the sense in buying an existing infrastructure and distribution network, it still strikes me as more trouble than its worth. Why make such an investment when you know there's trouble coming no matter what you do? Is the potential upside so great that it justifies the risk?

As an aside for a moment, didn't Warner already have its own distribution system for its chain of stores across the country and abroad? While the WB stores eventually went under, they still have some experience in this regard. Moreover, I think they may still have some type of distribution system in place to support their online stores.

Although great points have been brought up for and against Warner buying Diamond, my thinking is that the best case scenario for all involved is for a more neutral appearing ownership.

Don't fall into the trap of underestimating the supply chain logistics that, for all of its voluminous faults, Diamond has managed to erect. It isn't as simple as an online store fulfilling orders out of a distribution center. Lack of infrastructure is essentially what killed Marvel's foray into self-distribution; they weren't prepared, in terms of management or infrastructure, for the intense and overwhelming demands. Similarly, the establishment of Marvel's own distributor left a major vacuum at Diamond, which was eventually filled thanks to Geppi and co. aggressively courting publishers big and small to sign exclusivity contracts to ensure (a) a steady stream of business and that (b) no one else would get too big for their britches and end up costing Diamond a chunk of the market share.

So, yes, for DC, the potential upside is so great that it justifies the risk. Moreover, the relationship between DC and Diamond is an incredibly strong one, so much so that a buy-out might look something more like a merger. Let's not forget: DC Comics is the only publisher with the contractual buy-out option for a reason.

risingstar · June 30th, 2009, 02:20 PM

Quote:

Originally Posted by Tatterdemalion

Don't fall into the trap of underestimating the supply chain logistics that, for all of its voluminous faults, Diamond has managed to erect. It isn't as simple as an online store fulfilling orders out of a distribution center. Lack of infrastructure is essentially what killed Marvel's foray into self-distribution; they weren't prepared, in terms of management or infrastructure, for the intense and overwhelming demands. Similarly, the establishment of Marvel's own distributor left a major vacuum at Diamond, which was eventually filled thanks to Geppi and co. aggressively courting publishers big and small to sign exclusivity contracts to ensure (a) a steady stream of business and that (b) no one else would get too big for their britches and end up costing Diamond a chunk of the market share.

So, yes, for DC, the potential upside is so great that it justifies the risk. Moreover, the relationship between DC and Diamond is an incredibly strong one, so much so that a buy-out might look something more like a merger. Let's not forget: DC Comics is the only publisher with the contractual buy-out option for a reason.

I see what you're saying. From DC's perspective, the move could prove advantageous, if not premeditated. I simply have an issue getting past the conflict of interest scenario. I can't imagine Marvel favoring DC over a more neutral and transparent distributor. It would certainly make for an interesting fly-on-the-wall moment.

P.S. Earlier, the intent wasn't to imply that WB's online function is on par with Diamond's nationwide distribution. Moreso to say that Warner does have at least some experience in distribution as its international chain of stores, at least for a while, received a steady flow of new/old stock and did enjoy some measure of success.

Tatterdemalion · June 30th, 2009, 09:23 PM

Quote:

Originally Posted by risingstar

I see what you're saying. From DC's perspective, the move could prove advantageous, if not premeditated. I simply have an issue getting past the conflict of interest scenario. I can't imagine Marvel favoring DC over a more neutral and transparent distributor.

I'm totally with you on this. In the scenario of "DC purchases Diamond," I'm in full agreement; Marvel, along with other/smaller publishers (presuming they're threatened with strict breach of contract, which seems unlikely given the circumstances), would gradually (if not immediately) exit, whether to collectively establish their own distributor, to erect their individual self-distribution systems, or to plummet screaming into the abyss of failure. I don't think anyone save DC would want to stick around for that, despite the pre-existing infrastructure Diamond can boast. It'd definitely put DC at an even greater advantage, as virtually their entire competition would be left to build equity for their own ventures at their own cost on their own time, and all the while Diamond gets to have a largely ceremonial change of leadership.

Back in '95, when DC and Diamond first ratified their alliance, there were definitely publishers (among them, as I recall, Dark Horse and Image) who loudly voiced their concerns about not just a monopoly, but a monopoly essentially in the lap of a competitor. We've already seen Diamond willingly jettison a lot of smaller publishers thanks to their new order threshold ... there's no telling who would be caught in the line of fire were DC at the helm. For virtually everyone - competing publishers and, I think, fans - a DC-owned Diamond would be nightmarish precisely because it would send almost every other publisher into freefall, with absolutely no certainty that they'd land on their feet.

I guess the one consolation is that right now, Marvel likely has a better line of credit than Time Warner.

Tatterdemalion · June 30th, 2009, 09:32 PM

Publisher's Weekly has a good article on the effects of Diamond's minimum order threshold and does delve into some of the smaller publishers seeking new routes of distribution.

And on that note, Diamond shed books from Manga publisher Yen Press. As the article points out, the books are still being published, but Diamond won't be soliciting them in their future issues. The implication this is something to do with the minimum threshold, but the article states it isn't a 100% certainty.

Gangleri · July 4th, 2009, 06:37 PM

Found/Read about earlier DC/Marvel publishing problems in Brian Cronin's Comic Book Urban Legends Revealed .....

Comics Should Be Good! @ Comic Book Resources » Comic Book Urban Legends Revealed #10!

Quote:

Comic Book Urban Legends Revealed #10!
by Brian Cronin
in Comic Book Legends Revealed

COMIC URBAN LEGEND: DC dictated the format of Marvel comics for more than a decade.
STATUS: True
In the late 1950s, publisher Martin Goodman was expanding Atlas/Marvel’s place in the marketplace. However, they ran into a MAJOR problem in 1957.
They had signed a distribution agreement with American News Company.
However, due to some problems of their own, ANC ceased to distribute comics in Fall 1957!
Suddenly, Marvel was facing a MAJOR problem! They couldn’t publish any comics!
This was, suffice to say, a major blow.
Desperate to get the books back on to the market before too much valuable time had passed, Marvel signed a deal with Independent News, with was a part of the same company as DC Comics !!
Yes, that is right, Marvel was being distributed by the enemy!

Part of the onerous deal was that Marvel could not publish more than eight comics a month (since their comics were all bi-monthlies at the time, this worked out to sixteen titles total, but by the time the superhero boom made the amount of a titles a real problem, Marvel had already finagled themselves to the point where they could have about six monthlies, with about ten comics that they would plug into the schedule at various times).
This became a major problem when they decided to get into superheroes in the early 60s, as they had to slowly phase out their other titles and convert those titles into superhero titles.
Not an easy feat to achieve, certainly.
In addition, this was why Marvel had so many anthologies. They WANTED to have more titles, but they were not ALLOWED to!
The original deal was modified over the years to allow for more titles, and finally, in 1968, Marvel was a big enough sales success (and DC was in a major sales slump) that they were able to negotiate their way out of the deal entirely, allowing themselves to sign with Curtis Distribution.
You may have noticed that 1968 saw the end of Tales of Suspense and Tales of Astonish.
That was because finally, Marvel was completely free to make title decisions fully on their own!