January 3, 2014

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Some Thoughts on Dark Horse, Licenses, and Sales Numbers

Which way to the Marvel Booth?
I: Dark Horse and Its License Legacy

It would be a big surprise to me if I was breaking the news to you that Disney officially announced today that they are moving the Star Wars license in-house to Marvel, starting January 1, 2015.

Dark Horse quickly put out its own release about the news, straight from Mike Richardson himself. Given that anyone with half a brain knew that this was coming, I'm sure that Richardson has had plenty of time to think about how to approach this subject. Still, I thought his comments were classy and respectful, acknowledging the role Star Wars has played in the Dark Horse story (20 years+) and making non-committal references to their plans for their future, with an overall tone of optimism.

Please don't misunderstand me--I fully agree with not revealing plans right now. For all we know, Dark Horse could be talking to BBC about Doctor Who and Sherlock right now, which would go a long way--though probably not as far--to replacing the lost revenue from having George Lucas' baby for my entire adult life. (It would also be amazing. I'd love to see Dark Horse's take on the Doctor and an updated World's Greatest Detective.) Even if they aren't going in that direction and are looking at other concepts, any discussion before the ink is dry would be a colossal mistake.

Or, put another way--a friend asked if I wanted to interview Mike Richardson. Of course I do! But what I'd most like to ask him are questions he wouldn't answer. Nor should he.

At a time like this, there are several ways to look at this news. Obviously, speaking as a Doctor Who fan, I can feel the loss that thousands of Star Wars geeks are feeling right now. Dark Horse has, according to them, done Star Wars arguably better than Lucas. (I am not a fan, so I don't read the series. I've tried here and there, but it's just not something I dig.)

In fact, any of us who love the adaptations currently across the comics spectrum, whether they are based on TV shows or movies, really owe a debt to Richardson's vision. His comments in the release are 100% true:
For those who are new to the industry, Dark Horse revolutionized the treatment of comics based on films. After a history of movie properties being poorly handled with little regard for execution and continuity, Dark Horse took a new approach, carefully choosing licenses and approaching them with excitement and creative energy. Our goal was to create sequels and prequels to the films we loved, paying careful attention to quality and detail, essentially treating those films as though they were our own. Star Wars has been the crown jewel of this approach.
Have you ever tried to read Marvel's original Star Trek comics? God Bless IDW for collecting them, but they are GOD AWFUL. It's obvious they weren't Marvel's priority, whether it was sloppy, careless art or dialogue only a tin ear could love. I'm really sorry if anyone who was involved with those comics reads this and takes offense. But they look like a quick cash grab.

By contrast, the licensed comics of today are extremely sophisticated. They build on the world created by the movie or television property, either by expanding the universe or focusing on a time before or after the primary source takes place. They do things that a TV show can't (like have all 11 Doctors in one story) or in other cases, continue on fan favorites (Buffy et all, anyone?) or provide a monthly show that couldn't be possible due to the actors involved (Movie Trek).

These are no longer the days when slapping a few ideas together or throwing Luke up against Storm Troopers in an unseen battle set just before Jedi will cut the mustard. As fans of these shows and movies and characters, we want high-quality work that uses these beloved things well. They must be innovative and take risks--and this is where I feel Disney might have the biggest pitfall. With so much money riding on Star Wars, I don't know that they'll let creators do the things Richardson and his Small Publishing status might try.

Obviously, this was the right move for Disney. But they're going to have to be careful. They can't just ask Brian Michael Bendis to add another book to his plate and write a buddy comic of Han and Chewie. I can't see the 50,000 or so folks who are buying Star Wars monthly from Dark Horse being okay with a rush job by a set of big names.

Then again, I could be wrong. I guess we'll see. I like my comics to have more nuance, as a rule, but as I'll get to in a moment, the numbers indicate that no matter what the story, there are plenty of Marvel and DC customers at the comic shop who will buy anything with the right name on it. It's quite possible that by throwing a big name artist on the book like Greg Land, regardless of whether he draws the book or uses a lightbox from movie stills, Disney will sell a ton of Star Wars comics. They'd lose Dark Horse's current readers, but could get thousands more to replace them who only care about seeing how Jonathan Hickman deconstructs the Force, instead of looking at whether his story fits what we already know.

Another friend tweeted about how we're likely to get Star Wars.Jedi and Star Wars.Sith and many of the other marketing ploys that, while we as bloggers dismiss as stupid, bring in sales like nobody's business. If Disney has their bean counters on this--and who can blame them if they do?--that might just be what we see. And if people buy it, then that's the right call for them. As I said once in a Newsarama piece (but can be more blunt about it here), it may kill me that DC is turning into the Batman/Superman/Green Lantern/Justice League Show, but that's what sells. The consumer is the driver, and honestly, what we as a group are buying isn't the same things that are critical darlings.

But Disney has a chance to do this right, and make a profit at the same time.  If they put their larger marketing arm into play while still having talented folks like Gabriel Hardman and Corrinna Bechko write the kinds of stories that kept Dark Horse receiving critical acclaim in the world of licensed comics, they could forge a path to a better comic that's still a best seller.

Now that's a galaxy I'd like to be a part of, even if it was far, far away.

II:  The Numbers Game

 Note: All of the information below is gleaned from the amazing, site, Comichron. Any mistakes are mine, but I tried my best not to miss anything. Please forgive me in advance if I did.

No matter how much talk there is about the fact that Dark Horse is more than just Star Wars (and it is--I review tons of their stuff and haven't touched a single Lucas property) and that they have plenty of other characters, both original and licensed, you can't escape that this is going to create a financial hole that they either need to fill or refine. Star Wars-related comics are often the company's best selling comics in a given month. Unless you are Marvel or DC and publishing so many books that losing one book out of the Top 100 is like dropping a $10 in the sewer grate, the absence of a big, consistent presence is going to hurt.

But let's put this in context, first.  I had no idea just how small Dark Horse's part of the Diamond pie is. Assuming I am reading these numbers correctly, here are the percentage of Diamond Dollars against the entire industry for the first month in each quarter of 2013: January (4.55%), April (4.35%), July (5.43%), and October (5.36%). In other words, in any given month, Dark Horse gets about 5% of the total amount of the money generated by comics and trades sold by Diamond.

Marvel's, in January 2013 alone was 34.82%, which means that in one month, Marvel makes almost half of what Dark Horse takes in for an entire year.

That's a little mind-boggling, right? The Big Two are called that for a reason. Even Image's best Diamond month in terms of money was just over 9%. A fan of Dynamite or Boom? Don't look at these numbers, they'll depress you.

It's obvious that companies like Dark Horse have to be smart in order to even stay in business when the numbers look like this. I'm sure trade sales help, and those go beyond just Diamond. While Marvel had 7 of the top ten single issue comics in January 2013, they only carried one of the top ten trade paperbacks. Still, it's clear that their margin is thinner than Marvel or DC.

So how does this relate to Star Wars and Dark Horse.

Let's look at the same months mentioned above.

In January 2013, Dark Horse's top seller was Star Wars 1, selling 39,663 units. Next up is Buffy Season 9 Freefall 17, with 23,219. Buffy spin-offs are 3rd and 4th, with Conan in 5th, coming in at 13,254 for its 12th issue. No other comic tops 12,000 sales a month, which I'm using as a guide because that's around DC's cancellation line for the New 52.

Dark Horse's top trades? Star Wars Blood Ties Vol. 2 Boba Fett Is Dead, Star Wars Omnibus Infinities, and Conan Vol 12, at least in terms of Diamond. None of them cleared 2,500 copies. (The top trade, per Diamond, was Fables Vol 18, selling roughly 9,500.)

April 2013 also puts Star Wars on top for Dark Horse, improving at 45,019 copies. Buffy 20 is second, with 21,901. Three and four for the publisher are also Star Wars titles, with 17,278 and 16,384, respectively. Five is Angel and Faith, at just over 14,000. This month saw Dark Horse rather Star Wars heavy in its top titles, and it's data like this that gives me a bit of pause when I think about how Dark Horse gets around the loss of a property that's giving it sales of 14,000+ units three times in one month, when most of their books fall under that 12,000 line--including all 4 Hellboy related books that places in Diamond's top 300. (Keep in mind none of them directly featured the signature character!)

The top trade was another license, this time about the Alien franchise. It also failed to make it to 2,500 copies sold. but this was a month where no trade topped 7,000 for Diamond, with the evergreen Walking Dead Volume 1 taking that honor. Other top trades for Dark Horse were Conan, Avatar: The Last Airbender, and the first trade of the critically acclaimed (but low-selling) Mind MGMT, which had 1,838 copies sold for the trade, compared to 5,842 for issue 10 of the ongoing series, which ranked 256th for Diamond.

Think about that for a moment. This is a book that gets kudos from everyone and was all over Best of Lists at the end of 2013. It can't get ahead of things like Kiss Solo, Evil Ernie, and Dejah Thoris & Green Men of Mars. No offense to those books, but I didn't see them on any best of lists. When I told you looking at these numbers was depressing, I'm not kidding.

It's also proof to me that somewhere, publishers like Dark Horse are making it work without Diamond's help, using it as a part of the pie and not their lifeblood. There's just no way they can be in the black with numbers like that as the only source of revenue.

Back to the numbers: Star Wars, now in its 7th issue, is still Dark Horse's top book. It lists at 41,611 copies. Next is one I don't remember, True Lives of the Fabulous Killjoys, which sold 22,401. While Buffy issue 23 is now thirds, its sales are solid, at 20,768. That's pretty good and means it is holding its audience month to month, and shows Dark Horse can win without the Force. But titles 4-6 are all Star Wars, the lowest of these at just under 14,000 copies. It's that mid-list power that Star Wars shows that concerns me, as I mentioned above. None of the four Hellboy-related books break 10K, and Captain Midnight #1 checks in at 7,783.

It looks a lot better on the trade side for July. Avatar: The Last Airbender is the #2 seller with 7,655 copies. That's incredibly good (remember none of the other sample months have Dark Horse above 2,500), and shows that if they are smart about picking up a "replacement" for Star Wars, Dark Horse can market their way into a loyal fanbase and make up a good chunk of the difference.

I don't want to belabor this, but just a quick note on Dark Horse in October 2013: Per Diamond, their top book was The Star Wars (based on Lucas' original ideas) 2, clocking in at 56,165. Their second was Star Wars 10 (dropping down to 36,019), followed by Shaolin Cowboy 1 at 20, 527 and the $1 special Star Wars 1 with 16,690. What's worrying is that their Conan books are all below 10K this month and the Hellboy Universe stuff is really buried, falling in at 200 and below on Diamond's chart.

Trades, however, are a different story. An Avatar: The Last Airbender book barely beats out a Hellboy one for 5th place, with both clearing 7500 copies each. Four other collections go over 2,000 copies each, including Black Beetle, an original property.

III: Reading the Tea Leaves

Dear God, that was a lot of staring a tables and charts. Assuming you're still with me, what does this all mean?

Well, like many a relationship status on Facebook, it's complicated.

First of all, I'm not getting paid for this, so I did not do a month to month breakdown. So the sample size, which doesn't look at year over year, is admittedly small. However, I can assure you that I did eyeball all the other months in 2013 and this is pretty typical. Dark Horse is deservedly proud for having a better 2013 than any previous year, but you can't look at these Diamond numbers and not acknowledge that at least some of it was due to having two very successful Star Wars comics coming out monthly.

That's gone after this year. And I don't think Captain Midnight-like titles are going to fill that gap, no matter how much I personally enjoyed it, unless it can be done by volume, which means additional expenses for printing, to say nothing of the creative team.

Second, keep in mind this is Diamond only. Dark Horse, like all smaller companies, must have multiple revenue streams, which include its digital division, Amazon sales, and other outlets. Again, since this is not a paid gig, I'm looking solely at numbers I can easily access. They provide a part of the picture, but not all of it.

Third, comics is a funny thing. Walking Dead was a good book, but didn't explode until it went to television for one of the worst adaptations since the Captain America movie in the 90s. While I don't care for the program, it moves one hell of a lot of books now, because of the show. Dark Horse could be in negotiations for a TV series based on BPRD ala Agents of Shield or the Goon movie gets made and now all of this calculus and speculation I just spent several hours on is pointless.

But hey, that's what the internet is for, right?

When I first looked at the numbers, I was gobsmacked at how low any non Big Two publisher's share of Diamond is. It's one thing to hear it reported--which I realize I'm doing now, too--but to look at it for yourself for several hours and see that Nu52 Lobo outsold Sex Criminals, is very sobering.

The first glance shows that Dark Horse is going to take a major direct market hit. They can--and should--be proud of their diverse lineup with great creator driven series like Mind MGMT and Colder, along with licenses like Conan and Buffy. I can't imagine my horror comics life without them, and I look forward to Creepy and Eerie with a rather unhealthy anticipation, when they are about due. But these things are getting killed in the direct market. There's no way to pretend they're not. Top 300 Diamond is nice, but after Star Wars is over, it looks like Dark Horse will have trouble regularly breaking the top 100 more than once.

When you look at the fact that their other titles, while not amazing sellers, are very consistent, the picture looks better. Combine it with digital and trade income, and a picture becomes clear, at least to me: If Dark Horse can find maybe two or three comics, either new or internal, that sell 20,000-25,000 per month, the Star Wars hit will be minimal on the direct side and they may pick the rest up in trade and digital, since they do very well on the collections side, even just with Diamond numbers.

Some of this is going to be up to us as consumers. Do we want Dark Horse to publish more original work, such as Never Ending or Grindhouse? Then we're going to have to show it, because right now, those are losing a lot of steam against even the weakest corporate superhero books.

In the end, publishing is a numbers game. Dark Horse is very smart, and I expect they have a plan. But if we don't take part in it, then Comics only has itself to blame should they have difficulties in the post Star Wars era. Hopefully, this look at how those numbers break out will help folks see the importance in buying what you want to read and enjoy, not just complain about.