Veteran comic-book writer Shon C. Bury began his writing career at the tender age of 22—and perpetrated some crap on the industry. But it was the 90s, so it was okay. Career highlights include creating WildStorm's Black Ops with Jim Lee and Dan Norton, working with Colleen Doran on Marvel's Power Pack, and recently completing his first original graphic novel Shon C. Bury's Nox.
Having spent the last three years in the business as a talent agent and owner of Space Goat Productions, Shon has used his 12 years of experience in the trenches to secure big jobs for emerging comic-book talent on such books as Hulk: Aftersmash, Nightwing, New Exiles and Incredible Hercules.
Shon is excited to be writing his bi-weekly In the Trenches column for Comic Bulletin, a site he's long supported in various incarnations.
Not Doomed (Again!)
Part II: Innovate or Die!
By Shon C. Bury
In The Trenches continues its SPECIAL REPORT on the state of the industry. Sit down, throw your feet up, and chill the frak out as comic veteran Shon C. Bury gives you an in-depth breakdown of what's going on in comics and why they're going to be around for a very long time. This is the second of a four-part column. To read the first part, please click here.
Read on...
Innovate or Die! (or... Challenge = Opportunity)
Recently, while reading Thomas Friedman's newest book, I came across a phrase that struck me as deliciously apropos to the comics industry as a whole: "Innovate or die." Of course, Friedman was writing generally about global markets as we move into the 21st century, but the phrase dovetails beautifully with the thesis of this column. I find it particularly relevant in a US economy that (to be gentle) will be a real bitch for most American's throughout 2009. And more so for the low-margin comics industry.
Here's the reality: 2009 is going to be way worse than 2008. More layoffs at big publishers will occur, and many smaller publishers will close down. This is simply just going to occur. The realities of Wall Street and the unemployment rate simply dictate it.
Marvel—coming off a record year of growth—has all but guaranteed that there will be no layoffs in 2009. Good news as DC announces a second wave of layoffs for this spring. But even a company as healthy as Marvel seems to be cannot withstand the Incredible Shrinking Stock Market™ for long, especially considering that they're the only comic book publisher that actually trades on Wall Street.
Let me "quickly" explain to you how I've come to look at comic book publishers over the past few years. There are three main groups of publishers that I like to refer to as "tiers." The Three Tiers™ look like this:
Tier 1: Marvel and DC Comics. Dominating nearly 78% of the market between them, Tier 1 represents a virtual duopoly in comic—and has since the early 60s. That ain't going to change for a long, long time. If ever.
Tier 2: IDW, Dark Horse and Image. Dynamite may soon join this tier. My requirement for this grouping of publishers is twofold: 1) The publisher must consistently own at least 2% of the market, and 2) the publisher is capable of paying its bills within terms. Tier 2, collectively, represents about 11% of the market. A bit more if you count Dynamite, which I'm not yet ready to do.
Tier 3: This bottom tier represents the group of publishers that Diamond Distributions collectively refers to as "Others." I think my term is more polite, but I guess "Others" is better than referring to them as "those fricken guys." This tier represents all publishers who basically 1) have less than 1% of the market, individually, 2) aren't often able to pay their bills on time, and 3) rely almost entirely on Diamond Distributions and the direct market to drive sales solely as publishers of comics. Collectively, they represent the remaining 11% of the market.
One quick qualifier: I do not consider companies like Tokyopop, Viz, Archie, Fantagraphics, or Wizard to be Tier 3. Companies like the above do not rely solely on the direct market to sell their books...and Wizard is a magazine about comics...
Before we get into the meat of this column, here's few more explain-y things:
• I use the Dow Jones solely as an at-a-glance indicator of how the US economy is performing, not under the assumption that all companies publically trade.
• There are two markets a publisher can sell books in: 1) The Direct Market and 2) The Book Trade. Your local comic shop (LCS) is the direct market, buying comics and graphic novels on a non-returnable bases mostly from Diamond Distribution. Barnes & Nobel, Borders, Books-a-Million, and the like are the book trade.
• When I say "comics" or "comics industry" or some variation of, I am generally referring to only the publishing segment of the respective companies. Not feature/TV/toys/clothing/merchandise/videogames/etc.
Consider yourself all simpatico with me and junk.
Now on to meat!
Where was I? Oh, yeah...things are going to be way worse in 2009. But I'm not bugging and neither should you.
Last week I spoke a bit (a bit?) on how Diamond Distributions' threshold changes will affect the direct market and, generally, how that and other publishing trends are clear indicators that comics as we know them are shifting in big (and in some ways unforeseeable) ways. These changes have been coming for a while. These changes have been necessary for far longer than a while. These changes are going to affect everyone. These changes are good. These changes are opportunity.
The three-legged stool of the comic book industry (publisher/distributor/retailer) is using antiquated business models that have effectively placed the industry in an advanced state of arrested development, exacerbated by the publishing duopoly of Marvel and DC (and the dominance of their superhero books) and the distribution monopoly of Diamond Distributions.
This is, of course, a retardedly simple oversimplification, as each "leg" of this stool deserves a lengthy column of its own to properly discuss how each has "arrested" the industry. That's not the scope of this four-part column, but suffice it to say (for now) that the direct market that grew out of necessity in the 70s to (not an oversimplification) save comics as we know them has since grown into a system that benefits primarily three corporations: Diamond Distributions, Marvel Entertainment, and DC Comics. In turn, these three corporations are propped up by roughly 4,000 retailers who individually run your LCS. This system has grown stale and has stifled not only real competition but creativity and diversity of content as well.
The rocky economy will serve only to accelerate the retooling of these existing institutions and to push distribution and publishing trends to their logical and healthy conclusion as the well-financed Marvel and DC move towards 21st Century publishing models and Tier 2 and 3 get scrappy just to stay alive. And -- regardless of all the Doomsayer-y chatter brought on by Diamond's threshold changes -- those changes will ultimately prove to be the best thing that could have happened to comics right now, at this moment, and (fully unintentionally, I presume) will help drive all this change.
What's driving all this much needed change?
1) A horrible global economy (that we have mostly been buffered from to date).
2) A migration of all media towards a digital world.
3) A realization by publishers that a growing number of readers prefer graphic novels (both front- and backlist) to the flimsy, serialized, 32pp, stapled comics.
How does Diamond's changes help affect these changes? Here's how I look at it (I'm working a recap of what those changes are into the answer, so hang in there): Diamond's decision to cut physical inventory of books and trim the size of their order catalog led to an increase in the purchase order benchmark from $1500 to $2500. Wholesale dollars. In short, each book carried in the catalog must now sell much more than previously expected. This and a few other significant changes have thrown a lot of small press publishers sideways and left them scrambling for new distribution outlets for one main reason: They barely could make the original benchmark of $1500 to begin with.
This seems draconian to many small press publishers, especially those that reside in Tier 3 who are not capitalized enough to market their books properly or invest in original graphic novels.
Diamond's official story is that the economy dictated these changes, but rumor has been percolating for weeks now that the official story ain't the whole story. I don't really care about the cause for the purpose of this column. I'm all about the effect.
Effect 1: Diamond Distributions' recent changes will effectively end the distribution monopoly that it has enjoyed in the direct market since the early 90s.
Effect 2: These changes will kill off a significant percentage of Tier 3 publishers who made the mistake of relying too heavily on Diamond Distribution and the direct market to survive due to their combined lack of capitalization and lack of quality content.
Both of these effects are, in my opinion, good news. Here's why:
On principle, I believe monopolies are bad. Personally, I don't think Diamond Distribution is the Evil Empire or anything, but their death grip on the direct market isn't the healthiest thing we could hope for as an industry that is finally growing out of its historical niche status. 
Immediately following Diamond's changes,
Back in 2005 when Diamond established its initial benchmark of $1500, I thought of it as being akin to Rome's building of the Hadrian Wall. Necessary as it was, it signaled a willingness to expand no further. The new benchmark (plus a number of other changes) was similar to the Romans' abandoning the frontier and returning to Rome to protect it from the Visigoths. In effect, the abandonment of the wall led to the fall of Rome as rival empires were able to spring up unfettered. 
It's an apt analogy. Slave Labor Graphics publisher Dan Vado said as much in a recent interview somewhere on The Google Machines that he thinks these changes will lead to competition for Diamond. "They need to do what they're gonna do," he said. "It sucks, and in the end, what they're going to end up doing is creating the competition they've been trying to squelch for years." Enter Haven Distributors.
Vado speaks from the vantage point of Tier 3 when he goes on to say, "I've done this for 23 years. I can't say we'll make it to the end of 2009. And that's shocking to say because I've lived through a lot of crap." Personally, I think this will be the fate of many Tier 3 publishers, but not SLG. Vado will do exactly what he should do: adapt. It helps that he has books that readers want to read.
Maybe I'm a little Darwinian about this, but I strongly believe—for a few reasons—that many of those Tier 3 publishers don't deserve to kill the trees their books are ultimately published on. Their removal from the print market will save trees, which is good, but this is better: Their removal from the market will strengthen sales for publishers who are willing to adapt to the shifting distribution methods, online and off. Ultimately, it will stabilize the stronger companies and allow them elbow room to grow in the direct market. And hopefully beyond. 
Keep an eye out at The Comic Chronicles for market/dollar share breakdowns over the next few months as the catalog changes take shape.
...
We need to keep in mind that we're entering 2009 after years of growth in the comic book industry. Sure DC's superhero line is hurting, resulting in a loss of just over 3% of its market share in 2008. But Marvel grew in huge, unexpected ways. Hell, Tier 2 even grabbed some of DC's market share of monthly comics. IDW—long a company to watch—looks to have taken most of that Tier 2 growth, eating DC from the bottom as Marvel eats it from the top. 
But this is not the end of DC Comics. Far from it. DC's market loss can be found solely in their monthly comic sales of the 32pp floppies. There's a few reasons for this that require further investigation, but one must not overlook the fact that DC owns the graphic novel sales charts. Their backlist of graphic novels, led once again by Watchmen, took seven of the top ten spots.
DC has long been strong in the graphic novel department, propping their success up on the popularity of Alan Moore's 80s work and their Vertigo line of books. Paul Levitz, DC president and publisher, recently reported a 40% increase in bookstore graphic novel sales in 2008. Marvel, on the other hand, is incredibly weak in this segment.
DC will continue to push their backlist as they develop more "straight-to-trade" original graphic novels and cull content from their webcomic site Zuda. And with their Random House partnership, they're distributing through ever growing diverse channels.
That's smart. The direct market was necessitated by the shrinking newsstands (and 7-11 spinner racks) over thirty years ago. With the emergence of the graphic novel, why would a publisher not be trying to push out of the direct market into the book trade and libraries (and what Levitz referred to as "related trade outlets")? Short answer: They wouldn't unless they lacked content or ability.
Diversity in content and diversity of distribution channels... Seems like DC is building a rock-solid publishing model for the 21st century, even though they've had some editorial setbacks with their superhero line.
Heck, even the direct market LDS has gotten in on the graphic novel game. Although there will always be a market for floppies (especially for Marvel and DC), your LDS knows the value of offering a healthy stock of graphic novels.
My LDS guy, Chuck Messinger of Comic Evolution in Puyallup, WA—who is expanding his business even as I type—recently told me, "We started the store with a strong focus on graphic novels with well over 5,000 in stock, which has increased significantly since we opened." He went on to say, "The recent trend of comic-property optioning in Hollywood has brought in an entirely new customer base, focusing even greater attention on GNs as comic books no longer seem to be as taboo as they have been historically." Chuck's retail experience is not unique.
"Innovate or Die."
I simply can't get that phrase out of my head.
Check back next week for Part III of this special report.
Take It From Me (or... Is Shon C. Bury Gonna Have to Choke a B!tch?!)
The least favorite part of my job as president of Space Goat Productions is making slow paying publishers pay me (so I, in turn, can pay the artists I represent). I pride myself on being able to find artists for any budget unless that budget is 0 or "backend." Most the time everything turns out great, but sometimes you run into a publisher who just can't pay within their own established terms. This is unfortunate, but crap happens in publishing and artists can be very understanding. But when a payment creeps up on being eight months late...there is no more room for understanding.
Often Tier 3 publishers are undercapitalized and are quick to forget that they would have nothing to publish without their artists. Of course, there are always new, hungry artists to be found that have no idea about the realities of publishing (and, seemingly, an inexhaustible supply of small press startups who have no idea either).
As you can tell, I'm about ready to start calling some beezees out. But I'm holding back for now.
Just take it from me...Tier 3 publishers are horrible at paying their artists in a timely fashion.
And here's a double Take It From Me for new artists: There is no such thing as back-end pay. NONE.
On My Nightstand (or...The Never Shrinking Reading List) 
I read a lot. Here's a few random things on my nightstand:
Worse Than Watergate by John W. Dean. It's a little dated, written just before the 2004 election, but if you love reading about politics and hate the Bush-Cheney administration you'll like this book.
Ex Machina vol. 2 by Brian K. Vaughn. I really enjoyed the first volume, but it took me forever to get around to the second. It's as good as the first and proves that DC will continue to have a strong backlist of graphic novels based on Vaughn's work, if interest in Allan Moore ever happens to wane. Not as good as Y The Last Man, imo, but good.
Candy Girl by Diablo Cody. A stripper's memoir. What else do you want from me?
Incredible Hercules: Secret Invasion by Pak and Van Lente. This trade is awesome. Marvel has all the great writers right now. Space Goat artists Rafa Sandoval and Roger Bonet pulled art chores on this collection, so I got to see these books being produced from script to colors. Which was awesome. Rafa is one of Marvel's 2009 Young Guns. Because he's bad ass.
His Dark Material: The Amber Spyglass by Philip Pullman. The last of the trilogy and soO good. It's taken me way longer to read this than its awesome warrants, but it's been a busy couple years.
The Absolute True Diary of a Part-Time Indian by Sherman Alexie. Sherman Alexie is great and Absolute is an amazing Young Adult novel with hilarious and sometimes poignant illustrations by Ellen Forney. Must be good because it won the National Book Award for Young People's Literature.
So much more, but until next time... go/click/buy/read...
Pluggin Junk (or...Things You Should Like Because I Like It)
I got a comp of Mike Sangiacomo's graphic novel Tales of the Starlight Drive-In recently. I read some of it in PDF a few years ago, as Mike and I are tight like that. It's great. It's available through Image Comics and can be purchased here.
Starlight has been nominated for best graphic novel by both
The Harvey Awards (pros only) and
The Comic Buyer Guide (open to all ya'll).
Check it out and vote. Mike's a great writer and deserving of success. Plus, the market needs smarter work like this recognized more often.
Much Ado About Watchmen (or...Brought To You By...)
There's been a lot of Doomery about Watchmen's box office receipts. I have a one letter response... R. And an obvious prediction: It's going to do awesome on DVD.
Apropos To Nothing (or...Why Canadian?)
Shon likes Facebook and doesn't understand why his son thinks that makes him Canadian...hrm...
Check back next week for the third installment of Shon C. Bury's four-part special report when Shon talks about reader/retailer trends and what publishers can do to save some money in Not Doomed (Again!) Part III: New Voices and Thinner Waistlines.
Until then, read some archives of In The Trenches or check out Shon's online comic over at Shon C. Bury's Nox. Maybe Dig In and start a thread on this topic...
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