With Image gone, what is Diamond’s future?

Yet another redwood of the comics establishment fell yesterday when it was announced that Image Comics would be moving their periodical distribution to Lunar. A move of some kind had been long anticipated, but as John Jackson Miller tweeted, since their 2020 shutdown, Diamond has lost 84% of their comics periodical business, an alarming number by any measure.

The move sent everyone scurrying to their social media of choice with predictions that Diamond would soon be bankrupt or otherwise out of business. With Boom! and Dynamite now their biggest periodical publishers, Diamond has to be doomed, right?

Well, according to most of the knowledgeable people I checked in with yesterday, probably not.

Diamond will most likely survive.

Before I explain more of this, I’d like to direct you to the latest newsletter from Brandon Schatz, one of the Beat’s resident retail correspondents. Brandon does a fine job of breaking things down, and he’s an actual businessperson, whereas I still struggle to understand margins and discounts. Brandon backs up many of the things I heard and explains them very clearly, but just to put my own spin on matters, here are a couple of reasons why Diamond isn’t going to go bankrupt in a few months:

• They knew this was coming. As I reported when I attended the last Diamond retailer summit in October, Diamond was emphasizing other business units besides periodical comics, including Alliance, their games distribution company; toys; collectibles; and Diamond Books Distribution, which still distributes several publishers to the book trade, including, for now any way, Image. While all of this can’t immediately make up for losing so much of their core business, it’s been pretty clear that they were diversifying for some time.

• I was told – and Brandon was also told – that Diamond actually makes a better margin from sub-distributing comics than being the primary distributor. Many comics shops prefer to do business with Diamond, so the sub-distribution game is not a losing one for them.

• Steve Geppi is a good businessman. When he stepped away from Diamond, the new management team made a lot of bad calls…when he returned, things improved. It’s quite likely the company will shrink and not be quite the industry behemoth it once was, but…that was never going to be the way forward, anyway. Diamond is slow to modernize and slow to change, but they also don’t engage in risky behavior. This is a blessing and a curse.

Of course, none of this mean smooth sailing, either. I’d been hearing for YEARS that Image was leaving Diamond, but usually the rumor was that they were going to Penguin Random House. I’d say the odds that Image moves its bookstore distro to PRH are pretty much 50/50, but just guessing.

There is more movement on the distribution side, as Brandon reports, with Universal possibly getting more involved.

Diamond will continue to be a source for Image product, much like they are wholesalers for Marvel, IDW and Dark Horse. In addition to that, official DC direct market distributor Universal will continue to offer Image titles on wholesale, having set up an ordering page roughly a year ago in advance of rumoured upcoming changes. Image titles currently go through their Montreal warehouse where the DC books are processed, while any titles distributed from Penguin Random House go through their Toronto warehouse.

Universal is said to be setting up an American based warehouse in the fourth quarter of the year.

There’s also the matter of DC now being the ONLY major publisher that does not offer sub-distribution. With Lunar starting this for Image, will they follow suit for DC? It’s been years and years since I talked to anyone at DC about their ongoing sales goals, so no idea on that one.

And just as DC is the hold out on one thing, Marvel is now the hold-out on Wednesday on sale dates. Image and DC have Tuesday dates, and “New Comics Day” is as much a state of mind now as an actual day of the week.

The Beat’s other retail columnist, Brian Hibbs, was not happy about this move, as he wrote on Facebook: 

This is a big straw for me. I genuinely wonder if I want to continue to own a comic book store after this news.

 

In case your fingers are too exhausted from swiping on TikTok to click that link, the story Brian is referring to is this from June 2020:

 

Image Comics Publisher Eric Stephenson called DC’s move to cut ties with Diamond Comic Distributors a sociopathic decision.

Stephenson’s comments were in a letter to Image creators that was leaked to various comic book websites. It was in the midst of the pandemic lockdown, when troop rallying statements were necessary. If anything, it gives you some idea why Image resisted leaving Diamond for so long when it was proven that moving elsewhere wouldn’t actually kill the industry.

Anyway back to Hibbs’ post, which has a lively discussion in the comments, including a hint that yet another publisher is moving to Lunar, and Dynamite publisher Nick Barrucci taking umbrage at some digs at their Red Sonja publishing program. But some other salient points were raised: although being a sub-distro gives  Diamond a better margin (maybe), the margins for RETAILERS are worse. Hibbs’ wrote several Tilting at Windmills column about  margins and discounts here and here if you need a refresher course.

As it happened, I had to go to my local comics shop yesterday, JHU, and you can guess what I discussed with the co-owner. They were also concerned about the lowered discount margins that are making periodicals unprofitable to sell. But both my store (located in Manhattan) and Brian’s (in San Francisco) are in extremely costly markets, the two most expensive in the nation, as it happens. Overhead is the killer here.

There’s also the matter Brian brings up of not wanting to do business with Lunar because of its parent company, DCBS. I’d never seen any evidence that DCBS wants to put local comics shops out of business, but they do sell periodical comics at a 50% discount, which brick and mortar stores can’t offer. Parsing all of this out is worthy of a deep dive all its own.

There are many other elements that are in play with Image moving over – no more print catalogs – so I’ll leave it at more to come for now. But a few final thoughts:

Diamond’s March 23, 2020 shut down – ceasing to distribute all new comics to comics shops that had been closed as part of the strict pandemic shutdown –  remains the tipping point for all of this change. To this day you can get a petty good argument going for whether it “saved comics” or was an over-reaction.  What no one can deny is that the revelation that the entire industry had a single point of failure was a shock, and it hastened and emboldened moves that some had been contemplating for a long time.

My visit to my local comics shop on New Comics Day (for now) also revealed the co-owner of the shop greeting his loyal customers by name, chatting with them about the week’s comics and day’s news, and all the other things that make a locally-owned small business an important part of the community. It’s this connection with customers that empowers “New Comics Day” and provides the true strength of the direct market. There might be rhetoric and griping on the internet, but when it comes to community, it doesn’t matter who is distributing the comic books, and we all should keep that in mind.

BONUS: click here for a John Jackson Miller Distribution Timeline!

A comics distribution timeline 🧵:

AUGUST 1, 1995
Marvel begins exclusively distributing comics through its own firm, Heroes World. DC, Image, and Dark Horse go exclusive with Diamond that year in response.

JULY 26, 1996
Diamond buys Capital City, its last major rival.

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— Comichron.com (@comichron) May 24, 2023

And our updated Distribution Score Card – I know it needs more updating, please leave corrections in the comments.