Date: Sun, 2 Jul 1995 17:13:04 -0400 From: [g--l--n] at [bgnet.bgsu.edu] (Metroplex) Subject: FtP 533 Administrivia: Thanks to all of you for being patient with me these last few months as I catch up on FtP mailings. I'll be back in school in August (15th to be exact) and will beging regular weekly mailings after that point. Again, thanks and have a happy and safe Fourth of July! Greg THIS IS FIT TO PRINT NUMBER 533: So, it finally happened. DC signed an exclusive brokerage agreement with Diamond Dis-tributors. Heretofore, direct market distributors have purchased the comics they resell to retailers, but Diamond will no longer buy DC products. Instead they will handle and ship them for a fee, functioning as DC's exclusive intermediary with retailers. According to the official press release on this, Diamond says that no other publishers' titles will be dropped and that no retailers will be "forced to place product in their shops." If you are wondering what this bodes for the future of the direct market, you are not alone. Even with my 15 years in the industry, i am left asking many questions. When it comes to answers, your guesses are as good as mine. A dozen small and regional distributors, already cut off from about 40% of their revenue when Marvel became its own distributor, will find themselves losing another 20% now that DC has dumped them. Andromeda, one such distributor, has gone out of business. Who will be next? And next? And next? For Diamond, losing Marvel sales led to the closure of a several warehouses, under the euphemism of "consolidation," but for Capital City, losing Marvel meant that they laid off 1/3 of their work force. They have now lost DC. How much more will they cut back? Can they survive such cuts and still provide full service (such as trucking) to retailers? Image produced about 15% of the product Capital handled before Marvel pulled out. If Image goes with Diamond, Capital will have lost a total of 75% of their income. They will not survive this. Which way will Image jump? Let's theorize that Image goes exclusive with Capital City. Will Dark Horse, Acclaim, Topps, and other mid-range colour publishers follow suit, hoping to preserve the balance of power between Diamond and Capital? If they don't, can Capital survive on Image alone? When Marvel went solo, Capital sued for unfair trade practices but quickly settled out of court. Now they are suing Diamond and DC. The DC suit may be settled by the time you read this, but the suit against Diamond is apparently over more than money. John Davis, one of Capital's owners, has told several folks he intends to take Steve Geppi, Diamond's owner, into court for "full disclosure." Will this destabilize the seemingly independent companies Geppi is alleged to secretly control? Let's say Image goes with Diamond, that Dark Horse, Acclaim, and Topps follow suit, and that Gladstone gets in not because of sales volume but because of long-time friendships. Will Diamond force them to accept brokerage terms rather than buying products outright? If Capital bites the dust, who will pick up the orders they had previously placed with small independent publishers like Claypool, Viz, Vanguard, NBM, Aardvark-Vanaheim, and Warp, companies that each carry 1% or less of the total market share? If Diamond won't take the indies on and Capital folds, how many publishers will go under because they can't take the hit of losing 50% of their revenue for two months running? Capital City or Friendly Frank's could survive by positioning themselves as "King of the Indies," the exclusive agent for a string of small publishers. But are they trying to do this? Not from what i have seen so far. They aren't even providing minimal service to their smaller independent suppliers. Here's proof: In my earlier days in the industry, the demise of a regional distributor like Glenwood or Mile High would set off a feeding frenzy among the remaining competitors. Scarcely a day would elapse before they'd rush in to snap up the retail accounts left unserviced, and many a time they went so far as to cover the defunct distributors' orders on books shipping that week, with merely a verbal agreement. "You deliver the product; we'll locate the retailers," they said. And they did, too. Not now. When Andromeda fell, there was a feeding frenzy for Image products, but Claypool (where i work) could not find one distrib-utor to pick up all the secure orders placed by the retailers Andromeda had previously serviced. The books sat at Ronald's, unclaimed. Could we be looking at the end of the direct market and independent publishing? That's the really big question, isn't it? ==== Fit to Print appears in print each week in Comics Buyers Guide and is available via e-mail. Tell your friends! To subscribe to Fit to Print via e-mail send a request with the words "Subscribe FtP" in the subject header and your address in the body of the message to [g--l--n] at [bgnet.bgsu.edu.] You will be added to the list and receive the next available issue. Back issues are available. FTP to nspace.cts.com and look in the Comics/About Comics/Comics News/Fit to Print directory. FtP is also available on the World Wide Web at http://www.scar.utoronto.ca/~91mithra. Responses are welcome and should be directed to [g--l--n] at [bgnet.bgsu.edu.] Fit to Print is Copyright Cathrine Yronwode. All rights reserved.