Monday, July 23, 2007

Market Share: So What?

Warning: Rambling rant ahead.

The big news from the June sales figures from Diamond was that Marvel trounced DC on market share, 44% to 27% (in dollars). But why should that matter?

In practical terms it doesn't. Unless you hold so much of the market share that you can dictate terms of the market (like Microsoft in operating systems, or Apple in digital music sales), being #1 in market share doesn't mean much. Let's face it, after the Heroes World fiasco, any threats that Marvel might make about leaving Diamond won't be very convincing.

What really should matter is profit. And that's what's missing from all the sales figures, because we have no idea how much it cost to produce any of these comics. Does Marvel make more profit from an issue of The Dark Tower than DC does from Justice League of America? We'll never know.

Sure 52 was a huge seller for DC week after week, but how much did they have to pay Waid, Morrison, Johns, Rucka, Giffen and all the artists involved for each issue, not to mention all the editorial time necessary to push out a weekly series. (There are also opportunity costs involved; would DC's relaunches of Superman, Flash, Wonder Woman et al. have floundered so badly if editorial's attention hadn't been distracted?)

Never mind the fact that the Diamond numbers are just one segment of the total comics market these days, and they present a very short term glimpse at that. I still maintain that one of the most successful comics of recent years must be Fables, given its strong trade sales in both the direct market and regular bookstores, and its seeming evergreen status.

Market share doesn't really mean much. Look at how many years General Motors was the #1 automobile seller in North America, yet for many of those years, especially recently, they were losing money hand over fist.

In my experience, those who tout market share position or gains do so because that's the only good news they have; it distracts from the fact that they aren't making profit.

Unless making profit isn't your goal; which is the case at both DC and Marvel.

Positioned as it is as a minor part of the Time-Warner publishing empire, DC's goal isn't to make money. It's to a) protect the trademarks of their iconic assets (Superman, Batman, Wonder Woman, etc.); and b) generate content that can be exploited by other arms of the empire, like movies and television. Any actual money made from publishing comics is probably nice, but I bet there are many years in which the DC Comics division operates at a loss.

Similarly, Marvel's goal--until recently--was to make money from licensing their characters; now that they're making their own movies, it'll be to generate content that can be exploited on celluloid. Again, profit from publishing comics is nice, but the potential money that comes from a successful Iron Man movie is far greater than any that can be made from an Iron Man comic book.

And where does all of this leave us, the readers? Unless we own stock in Marvel or Time-Warner, it shouldn't matter one lick. As long as there are comics being published that we want to read, it shouldn't matter where the big two stand against each other in terms of market share.


When the big boys are playing market share games, they are likely to push out an enormous number of titles month after month, in the attempt to crowd each other off the shelves. This has two effects: One, Marvel or DC may keep a marginal selling title around a little longer just to keep shelf space (and I stress 'may,' as they are just as likely to cancel it and put something else in its place). Two, they potentially push titles from other publishers off the shelves, other publishers who do rely on profit (or at least breaking even) to survive.

The good news is that the trend--at least in dollar sales--is in growth. But in the direct market served by Diamond, most of the growth seems to be going to Marvel & DC, and there doesn't seem to be much trickle-down. If everybody were playing the same game, "Let's Make Profit," then things might be different. But Marvel & DC aren't playing for profit, they're playing for visibility, operationalized as market share. It's like a bunch of eight-year-olds playing tag on the same field that a bunch of junior high kids are playing tackle football.

Somebody's going to get stomped.

1 comment:

guttertalk said...

If you're a comics fan, there might be another number to consider: number of readers. If sales are increasing, does it necessarily mean there are more readers? No, because it's like page hits and unique visitors for websites.

And as a comics fan, I want to see readership growth, not just sales growth, because I believe that it means a) the long tail effect can occur in which you have niche comics have a potentially better survival rate, b) the industry thrives, not just survives, and c) new tastes and interests come into play.

Part of this is my personal frustration with the comics, many of which are just not very interesting or good, such as Civil War. I no longer have a big pull list, so that I'm not buying as much crap as I have in the past.

Given that DC and Marvel aren't necessarily trying to make a profit from their comics, does that have an impact on whether or not we're seeing more or fewer comics that we want to read? Maybe there is no connection, but I'm not terribly hopeful.