Thursday, August 17, 2006

It Had to Be Said #4a

The goal of a comic book company is still to sell comic books (even if the majority of their revenue comes from licenses and toy sales).

In response to my last post on the comic book business, Dr. Obvious makes the, um, obvious point:

Sadly though, Marvel doesn't make its money off selling books. It makes its money from license deals. See my post here to see exactly why book sales really don't matter to them. Sadly, this isn't true for retailers, like you said.

True, Marvel makes most of its money from licensing and toys, that's been true since the early '80s at least.

But publishing is still a large chunk of their revenue, so it still matters.

Just looking at the report Dr. Obvious linked to, Marvel made $25.1 million off publishing alone last quarter. Toys and licensing combined equal $65.3 million, so publishing is still over 27% of their total revenue.

That's a lot to endanger with a blown deadline like this, especially at a time when licensing revenue is down.

I am not trying to be chicken little. I really don't think anyone is going to lose their store over this, though it may be tight for some.

But if this isn't a one time thing, or if Marvel AND DC had both allowed their entire lines to slip due to one book coming out late, then a lot of stores would be in trouble, and Marvel today cannot survive without them.

The retail sales alone make Marvel a lot of money. Additionally, the single issue sales support the trades sold in (regular) book stores. No periodical sales, no trade sales. And there goes 25% of their revenue right there. That's deadly.

Even if they could somehow survive a 25% drop in revenue, they can't just fold up the publishing wing and become a storehouse for intellectual property. The comics still provide the ideas for future licensing opportunities and toy designs. No direct market, no new comics. No new comics, no new toys, no new movies, and no new TV shows.

The comics on the retailers' shelves, at least for now, are still the foundation of Marvel Comics as a business. They may not be the majority of the building, but take away those sales and the whole business falls.


Dr Obvious said...

Good points Steven, and nothing I really disagree with. I wish I could blame this on early posting, but it just wasn't that early when I posted.

I should have made the point my point that if the lion's share of the revenue is going to be coming from licensing, going for fewer, high quality issues could well support that better than more, lower quality issues. I don't know if that's the best way to go, or even if they frame their decisions like this, but it seems plausible to me.

It does seem like a bad situation to the already hurting (when is it not?) retail scene.

I'll be leaving in a few minutes to head to a wedding out of town, so I won't be able to comment any more, but there are good points here.

Steven said...

Dammit, you keep inspiring good posts.

The short version is I agree with your point, but it more applies to the comics of tomorrow than today. More later.

Have fun at the wedding!