A Matter of Risk

The direct market has a quiet problem limiting its potential, but it might be a solvable one if everyone can just agree on a few things along the way

One of the challenges the modern comic world faces stems from a great disparity at the core of fandom. Comic movies are massive. The online conversation about the characters and even the comics themselves is huge. Serialized storytelling is at its apex for broader acceptance. Yet monthly comic sales top out in the low six figures, with the vast majority of titles being ordered far less than that. There’s an enormous delta there, and it’s one that limits the single-issue format and the potential growth of the medium.

That incongruence is the nut to crack in the direct market, as most feel sales should be higher if only because of the very pro comic stories environment we live in. This is the type of conversation you hear a lot during conventions, and it occasionally spills into comics Twitter, like when writer Jim Zub openly wondered about this subject on the occasion of the Comic Book subreddit hitting 954,000 subscribers. What causes that gap, everyone asks?

There are a whole lot of factors that play into that, and if you think this piece is going to be about all of them, you’re unfortunately mistaken. That’s more of a book than a longform, and one that may be impossible to answer in full. If I could do that, I’d probably be running my own comic book empire, not writing this article. Instead, I’m going to look at an important factor in that equation, and one I don’t often see discussed when this topic comes up. While it’s not as important as the inherent lack of broader appeal to the floppy format or the cost/benefit conundrum it presents at its core, it’s one of the themes of the year in the comic industry. That theme?

It’s risk aversion, and how everything the direct market has went through in recent years has led to comic shops battening down the hatches to survive, publishers refocusing their efforts to maximize profits in any way necessary, and a disconnect between the two that has created a sector of comics with a ceiling that makes it harder than ever to survive in, let alone thrive. And today, we’re going to be examining what the issue really is, what led us there and what can be done about it, if everyone can just agree on a few things along the way.

Let’s start with the basics: what do I mean when I say, “risk aversion,” at least in this situation? I could just explain it, but instead, I’m going to use two recent examples to show you what I’m talking about. One is designed to explain that subject on the retailer side of the business and the other showcases that same phenomenon in the publisher sector. Let’s start with the former.

House of X + Powers of X, art by Mark Brooks

That’s House of X and Powers of X, the two titles that are kicked off the Jonathan Hickman-driven relaunch of the X-Men line. It may seem bizarre to use these titles for anything besides proof of what works in comics, as HoX and PoX – as they’ve become affectionately known as – are the hottest single issue comics right now by a significant margin. They dominate the conversation both online and in comic shops, they’re selling out seemingly every time an issue drops, and they’re a true rarity in this day and age as both are seemingly organic successes rather than ones fueled by speculators. 1 These are all good things.

The problem lies in the fact that a comic selling out is not universally a good thing, even though it might seem that way. Yes, selling out does indicate that there was enough interest to go through a shop’s entire inventory, and yes, selling out on a distributor level does highlight that this isn’t just a localized thing. They’re hits! This is good!

But these sell outs are a product of retailers limiting their own exposure, as some shops moved through their inventory of House of X #1 in hours or days because they ordered for what X-Men comics usually are for them rather than what they could be. Shops are so careful about managing failure because of current market conditions that it can put an artificial cap on even the most successful titles, ensuring that something as certain as a Jonathan Hickman written X-Men relaunch is handled with trepidation.

House of X #1, art by Pepe Larraz and Marte Gracia

It’s easy to see why that would be the case too. House of X #1 – the title that set the starting levels for all of these comics – had a whole lot going for it. But from an ordering perspective, it had plenty going against it as well. Let’s start with the biggie: in the direct market, single issues are largely unreturnable, meaning that if they don’t sell, that’s tough. Shops eat the cost while your average publisher gets their full share, meaning a disproportionate amount of the risk falls on retailers. While publishers occasionally show belief in their own projects by making them returnable, this was not one of those cases. It was also $5.99, meaning there was a higher cost for ordering and a larger amount of cash shops would be down if these didn’t move.

Those two alone illustrate why this is a problem. Comic shops don’t want to be trapped with unsold inventory and, on titles like House of X #1, they’re offered little recourse. So it has gotten to the point where ordering is all about mitigating risk rather than aiming for growth in the market. I’ve heard it many times before: you can’t order with your heart, you have to order with your head. Shops are trying to walk a tightrope that allows them to sell to their usual customers and still have just enough copies for the shelf for the purposes of discoverability. There’s a small window there, and that’s the land they’re trying to live in. You won’t make a ton of money necessarily doing this, but you also won’t kill your business going that route.

Naturally, most retailers played HoX and PoX in this way, and what some found were rapid sellouts and frustrated customers who just wanted to read the new hot thing. 2 I’ve heard from several shops who quickly saw a wave of customers adding both titles to their pull lists after the buzz exploded with HoX #1, but with those shops unable to deliver because initial inventory was sold through so quickly and the second print’s order cutoff was before the release of the first issue. 3 That leaves plenty of customers wanting, likely searching their areas in hopes of tracking down a copy for themselves.

And due to the weekly nature of the title, this dilemma cascaded forwards, as these absolutely en fuego comics had to try and serve – roughly speaking – the estimated 185,630 potential readers created by the first issue sales of House of X #1 4 with the 101,972 copies that were ordered of the second issue, a decrease of over 45%. It might seem wild to you that shops would order so many fewer copies of the second issue than the first, but again, this is all about risk management. Most titles see heavy attrition with the second issue, as the first issue often convinces readers to not return for the follow-up or perhaps to buy the full story in trade. That seemingly did not happen here. So we had a pair of titles that were already limited to a certain degree because of one manifestation of risk aversion on the retailer side with the first issue, and its potential was even further restricted by another realization of it with the second.

When we ask ourselves “why aren’t orders higher on comics in the direct market?” just remember what a success looks like. These titles are still a hit, of course. But the current environment led to an unfortunate limitation on how many copies were ordered and a struggle to fulfill consumer desires, which could chase lapsed and new readers curious about these buzzed about books away. 5 It’s the snake eating its tail into infinity, leading to a title that does quite well but perhaps not nearly as well as it should.

And this is something that is affecting every comic. When I did my retailer check-in a little while back, ordering tighter was the name of the game. Shops were protecting themselves from inventory that might not move but capping the potential of every title in the process. And I don’t blame them for it. In an era of reluanches, order-gated variants, endless events and a deluge of titles to choose from, you have to make tough decisions about how much stock to carry. It’s essential to profitability and, ultimately, survival. 6 Shops probably aren’t enthusiastic about tightening their belts in this way. But in the face of where the market is, it’s the only responsible decision.

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  1. In case you don’t know, speculators are people who buy comics for the purposes of reselling them for profit.

  2. Some did nail their numbers, of course.

  3. Meaning shops had to order reinforcements before they knew if this title would connect with readers at all, with these second prints naturally being unreturnable as well.

  4. Per Comichron estimates of its orders.

  5. This is naturally an offshoot of the way the direct market ordering system works as well, which I’m not going to get into because I’m trying to keep this article as narrowly focused as possible.

  6. Speaking of that, retailer Brian Hibbs suggests that sales have an upside of 100% return on investment for shops but 400% for publishers. So even the benefits of actual sales are disproportionately not in favor of shops.