A candid and personal examination of the Philippine comics scene from a social, cultural, economic and business point of view.

Sunday, October 09, 2005

Distribution matters

You're naive if you think that everything revolves and stops at the creative process. Creating comics with terrific stories, fantastic art, glossy pages, and fancy computer coloring, does not by itself result in huge sales. You may have created the world's greatest comic but if these aren't properly (and fairly) displayed at the newstand racks, or worse, are displayed in areas catering to the wrong target market, no one will ever get to know, much less read, your magnum opus. Even with the canniest of marketing and advertising ploys your treasured comics masterpieces will eventually be returned UNSOLD by the dealer leaving you with the mistaken notion that the reading public (or your marketer) is to blame.

Making sure therefore, that copies are strategically and widely disseminated to a huge target audience, and of being certain that your copies are always prominently displayed in the racks to ensure brisk sales, is the function of distribution.

It may all sound so simple but it is a very difficult aspect of comics publishing especially for first-time and independent self-publishers with substantially little or no capital.

Once proficiency is attained however, this daunting commercial (and human) task becomes almost a skilled "artform" possessed by a lucky few.

Unlike the creative and controllable stage of comics production where relatively few and familiar players are involved, distribution always involves far too many dealers and strangers scattered all over a given geographical area (often citywide or nationwide). Small and independent self-publishers intending to widen their horizons should take this basic and daunting fact to heart. It takes a considerable amount of time, money and effort to transport those piles of comics to various dealers, and more of the same thing just, to ensure that those copies are always displayed and sold regularly.

No Virginia, not all magazine and comics dealers are saints either. Otherwise, they wouldn't be human. Being human, magazine and comics dealers are prone to moral fallibility just like everybody else especially in a highly competitive atmosphere. We lie. We cheat. We steal. Because of this moral fallibility a print publisher cannot afford to naively and wholeheartedly surrender his fate to the discretion of magazine, newstand, or comics dealers. In order for a comics publishing business to succeed, one must guard against all too real risk of human dishonesty.

And its not just moral fallibility, but economics should come into the picture as well. A single newstand dealer always has limited space to display all of his stock. If he has a large stock of printed publications (comics titles included) chances are, not all will be displayed. And chances are, if the selling or cover price of the comic title doesn't give the dealer a fair or reasonable share, he won't even bother displaying that title on his rack.

Joe Brancatelli, a business journalist hired by publisher Jim Warren in the 1970s to put out a series of articles examining the American comics scene, explains the importance of distribution in this regard:

"After a magazine is published, it is usually sent directly from the printer to a string of local "independent distributors" who have agreed to distribute te book under contract with a "national distributor". Since most local distributors have a geographic monopoly (developed gradually through the years and presently being contested in the court system), he not only receives almost ALL the magazines published, he gets all the comic books published by National, Marvel, Charlton, Gold Key, Harvey, Archie and Warren.

As you might suspect, neither he nor his string of retailers can adequately merchandise all the magazines AND all the comics. More often than not, many books get lost in the shuffle, never leave the distributors' warehouse or never make it from the retailers' bundle to his limited display space. Moreover since comic books offer both independent distributors and retailers an embarassingly poor profit when compared to more prestiguous books like TIME, PLAYBOY, ESQUIRE, COSMOPOLITAN or the others the four-color cheapies are most often left behind.

In 1974 when I was on a cross country assignment for the Gannett newspaper chain, I surveyed 50 independent distributors, and it was their consensus that only about one comic book in four printed actually reaches the retail shelves. Naturally, even if the comic book is the greatest thing since sliced bread reatively, the distribution snafus almost surely guarantee dreadful sales." (Emphasis Mine) (Source: "The Comic Books" by Joe Brancatelli, Vampirella No. 55, October, 1976 issue, Warren Publishing)

The Philippines' magazine and comics distribution system is not unlike that of the U.S. Both countries operate under a market system which, in essence means that everything has to work based on the law of supply and demand, money, and the basic human desire to better his own lot. This is both good and bad. Since the market system is the only system programmed to reward enterprising human endeavor while ignoring the indolent, one is impelled to protect and maintain a level playing field in the market by policing and throwing out the market's rotten apples. If this policing breaks down, inequality and a gradual deterioration of the market structure, and of human survival, would ensue.

The human factor in distribution is thus important. It needs to be constantly checked. For a business to succeed, one must guard against moral fallibilities. To stress, one may create a great looking comic that's a sure seller but if players in the distribution stage commit fraud or by honest inadvertence and mistake, omit to display the comic in his rack, the whole operation will be affected.

Neal Adams, superstar comics artist of the 1970s and definitive artist of DC's Batman of that same period, relates in an interview how one of his innovative comics work in DEADMAN, a shortlived 1960s DC comics title that has now achieved cult status among collectors of American comics, was deprived of its expected high sales. The culprit for the low sales on Neal's titles were attributed to unscrupulous newstand dealers. After learning that Neal's work was very much in demand by fans, the newstand dealers would then keep huge piles of Neal's comics work and report them to the publisher (NPP/DC) as unsold. The newstand dealers would later resell Neal's comics at high prices to serious comics collectors. With this circumstance in mind, how else can one explain the conundrum of being a superstar comics artist while one's titles languished and then eventually cancelled after a few issues? Neal Adams:

"CBA: Did the cancellation of 'Deadman" in Strange Adventures come as a surprise?

Neal: They have a concept in the comic book business called affidavit returns. If you send 50 comic books to your local distributor, and he tells you that he didn't sell 40 of them, he doesn't have to rip off the covers or cut the title off and return it to you like he once had to, he has to sign a piece of paper that says he destroyed the 40 copies. It was the beginning of comic conventions and comics dealers in those days and the question you have to ask is, where did they get the books they sold? The place they got them was out the back door and their local comics distributors who invariably had a table in that backroom that had Playboy magazines, Marvel Comics, DC Comics and other magazines. For 25% of the cover price you could buy those magazines. In light of that, Strange Adventures "didn't sell well enough", so they cancelled it. I did the X-Men for 10 issues and they "didn't sell well enough to continue", so they cancelled it. Green Lantern/Green Arrow "didn't sell well enough", so they cancelled it. On the other hand, I have perhaps signed tens, if not hundreds of thousands of these comic books at conventions. On the other hand, the comics that I did covers for--Superman or Superboy--would rise 10 or 15% in sales because I did the covers. That meant that the collectors weren't rapacious enough to collect those simply because I just did the covers but the ones which I drew the insides. That was a very sgtrange phenomenon. The books that were stand out and did really well didn't have better sales than any of the other books; sometimes less. The reason? They were disappearing out of the back of the distributor's warehouses. Why did they cancel the book? I think we may have some dishonest people in the magazine distribution business...or not.

Remember also... when sales weren't doing well, apparently the numbers lowered. When numbers go down and its a good book, in those days fan-dealers would dive in and buy as many copies from the distributors "cash table" as they could.

Mysteriously, the "apparent" sales would continue to drop. DC knew that they had a "hot book", but sales continued into the dumpster. Hell, when I went over to to do work at Marvel, they told me 'Deadman" was the onlyDC book they read at Marvel.

Carmine was baffled and remains baffled to this day, but remember Carmine was publisher in name only. He apparently didn't ever understand howsasles figures worked on "newstand sales".

For those of you care, it works like this: After one month you are told that percentage of your books were returned. As each succeeding month goes by, your returns increase while (obviously) your sales go down. This goes on for a final figure at six months. (Some returns trickle even then.) If returns come in after six months and they're valid, the distributor makes an accomodation. But six months is it. Your sales never rise because sales are based on returns.

Carmine never quite understood sales and "returns", and a lot of misinformation was disseminated at DC in those days, to the detriment of editorial and creative.

Personally, I made friends in the accounting and record-keeping and production departments. after a while I knew more than the editors and sometimes I shared that information with some very confused and misinformed folk.

If you doubt my information, please remember Continuity Comics were on the newstands for about three years and we are a "hands on" publisher. (Source: "Neal Adams interview: A Pitched Battle from Day One" conducted by Jon B. Cooke, from Comic Book Artist No. 5 (1st series), Comic Book Artist Collection Vol. 2, TwoMorrows Publishing, 2002).

Dishonesty in comics distribution is not exclusive to the U.S. The now defunct Philippine komiks industry of the 1970s and 1980s was also prone to this cancer caused and aggravated mainly by the Roces family's monopoly of the komiks industry particularly its distribution system:

"Para sa maliit at bagong tagapaglathala ng komiks mabigat ang problema ng pagdidistribyut. May mga 300 ahente ang Atlas at GASI sa buong Pilipinas; karamihan ay naging ahente ng lumang Ace at mga pahayaganng Roces magmula pa noong 1947. Maraming mga sub-ahenteng kilala ang mga ito kaya't praktikal lamang na makikipag-ugnay sa kanila ang sino mang pabliser ng komiks. Ngunit sa katagalan ng negosyo ng mga nasabing ahente sa mga Roces at sa laki din ng bolyum ng benta nila mula sa Atlas at GASI, malamang na hindi nila pag-ukulan ng pansin ang pabliser na walang pangalan. Ang wika nga ni Ed Plaza, dating patnugot ng Atlas, at ngayon ng Rex Group of Komiks:

"Inalagaan na ng mga distributors (ahente) ang mga sub-agents nito, say about 20 years hawak na nila. Kaya kung magpadala ang distributors sa sub-agents, malakassila sa sub-agents. Kung hindi nila (bagong pabliser) makuha ang services ng distributors, talo ka na doon."

Kaya't kadalasan, ang bago at maliit na tagapaglathala ay sapilitang nagbebenta ng komiks sa mga sub-ahente na mismo. Magandang plano sana dahil wala nang ahenteng babahaginan ng kita, subalit nagiging isang sanhi ng pagkalugi ng bago at nagsasariling tagapaglathala.

Dahil hindi pa kilala ang komiks nila at hindi pa tantiyado kung ilan ang maipagbibili, binibigyan nila ang sub-ahente ng mas maluwag na kredito at pribilehiyong magsauli ng mga siping hindi naibenta. Sa madaling salita, ang binabayaran lamang ng sub-ahente ay ang mga kopyang naipagbili. Kung minsan pa ay ipinagpapaliban ng sub-ahente ang pagbabayad hanggang sa magsara ang bagong pabliser." (Source: "Ang Industriya ng Komiks: Noon at Ngayon" by Corazon D. Villareal, Kultura Magazine, January 1990 issue).

How then does one guard against dishonesty and honest inadvertence/negligence by the comics dealer? One suggestion provided by Joe Brancatelli is the employment of roving human checkers who visit newstands regularly just to check and make sure that the comics title or titles are being properly displayed. Joe Brancatelli:

"One remedy for the crumbling system--the one that could quickly and cheaply be grafted onto the comic world--was stumbled upon years ago by Generoso Pope, the prosperous and cunning publisher of THE NATIONAL ENQUIRER. Possibly the least credible--but most widely read--weekly periodical in the world, TNE still uses the Pope formula to give it the circulation edge over his two gossips-come-lately, the schlocky NATIONAL STAR and TIME Inc.'s light, airy and superfluous PEOPLE.

Briefly, Pope employs his own 900-person staff of part-time and full-time employees, all with the sole task of making sure that THE NATIONAL ENQUIRER is well represented on the nation's retail periodical racks. While TNE, like every fast-selling magazine, is distributed by a major national company which specializes in periodical dissemination, Pope long ago saw the need for in-house employees to service retailers directly.

Best of all, the system works. THE NATIONAL ENQUIRER sells about 5 million copies a week at 30 cents each--an incredible 260 million copies a year. And, according to GOOD HOUSEKEEPING editor John Mack Carter, the retail check system spells the difference between TNE and dozens of other competing weekly gossip tabloids.

Writing in FOLIO, THE MAGAZINE OF MAGAZINE MANAGEMENT, THE WELL-RESPECTED AND POWERFUL carter said "The importance of this regular policing has been proven in tests of (retail) displays left without checkups. The weekly sale of copies without any checup falls 40 percent."

Pope, Carter continued, has a dream of selling 80 percent of all the copies he prints (most magazines are profitable at the 45% percent mark, while a 50% sale is considered exceptional). "This is not an impossible dream," Carter concludes, "as (NATIONAL ENQUIRER) sales have gone as high as 89 percent and rarely fall as low as 70 percent" (Emphasis Mine) (Source: "The Comic Books" by Joe Brancatelli, Vampirella No. 55, October, 1976 issue, Warren Publishing)

Brancatelli is a little off however. As early as the 1940s, American comics publishers such as NPP/DC comics and EC Comics were already implementing the Pope formula of employing human checkers on newstands nationwide. DC in fact, used the system quite often to ensure its million copy sales levels. This was confirmed by no less than the late IRWIN DONENFELD, former co-owner and editorial director of National Periodical Publications/DC Comics, and son of the late HARRY DONENFELD, co-founder and co-owner of DC Comics. In a rare appearance before the 2001 San Diego Comics Convention, Irwin Donenfeld was asked the following:

"MARK EVANIER: To what extent, at this point, did you keep tabs on the competitors? Did you look at their sales figures closely?

DONENFELD: Every day. (laughs) Every day, I got a report on all the salesthat were going on in whatever town it was. We had traveling men and we had local men. The local man would stay in one town, and he'd work all the racks and make sure our magazines were out. These racks were the same we sent to the various stores, to keep our sales up." (Emphasis Mine)

and in the succeeding part of the interview...

"AUDIENCE MEMBER: Why do you think the comic business can't sell anywhere near the number of comics that you sold at the time?

DONENFELD: Very simple...newstands. I live in the city of Westport, Connecticut, with 25,000 people. There are many newstands that sell magazines, and not one of them sells comic books. When I was there, it couldn't happen. I had a local man. He would come in, he would put in a rack, and we would sell comics. The business is different today. Today, the magazine publishers, whatever they publish, they sell out and that's it. They're not returnable. In our day, anythng that they didn't sel, they didn't pay for. So returns were very important, and the percentage of sale was very important. Today, the magazines on the newstands are returnable. The comic magazines are not. They're in a separate category altogether now." (Emphasis Mine) (Source: "There's a lot of Myth out there" Interview of Irwin Donenfeld transcribed by Brian K. Morris and edited by Roy Thomas, Alter Ego Magazine No. 26, TwoMorrows Publishing, July 2003 issue).

The Roces komiks monopoly however, does one better than the Americans in that, most of the banketa newstand dealers and agents were already loyal to the Rceses and their komiks. The Roceses didn't need checkers. They had regular surveys conducted every 3 months where their editors and other personnel would personally travel and visit newstands and inquire what the hottest selling title was and their audience's preferences at the moment. So with this added activity, biased exposure to rack space was ensured to the Roceses.

Yet, even this kind of warped and unfair loyalty has its limits. What goes around comes around. You deal with crooks in a crooked way, they get back to you also in a crooked way. Pretty soon, comics newstand dealers "leased for reading" and on the spot the Roceses' komiks, pocketing the earnings and then returning the unsold (but thoroughly read) komiks back to the Roceses. So even here, the Roceses needed checkers for policing but it was never done.

Joe Brancatelli notes however, that the unique situation of comics (in America specifically) is benefitted by an active fan network. Brancatelli suggests that instead of employing checkers on salary, comics publishers could avail of the comics fan's "volunteerism". To wit:

"Unlike Pope, they wouldn't even have to pay people to do their checking. There are thousands of fans across the country who would gladly volunteer to check newstands, if for no other reason than to assure that they themselves can purchase the comic book they want when it is published. Should some farsighted publisher be so generous as to offer his volunteer checkers a bonus in the way of free merchandise, he would assure a rabid loyalty and devotion to retail-rack checking heretofore unknown in business circles.

The advantages are obvious for both the publisher and the fan, as well as the distributor. For the publisher, once aware of which retail outlets are undersupplied, he can act to rectify the situation quickly, improve his sales markedly--and possibly even keep his job when the stockholders ask him what he's done for them lately. For the fan, he has the satisfaction of knowing the comic-book business needs him as well as just his dollars, and he is also assured of a relatively even flow of comic books. And for the distributor (and retailer), they have an opportunity to increase their own flagging profits and have eager-beaver--unpaid--volunteers doing the work they should have done a long time ago." (Source: "The Comic Books" by Joe Brancatelli, Vampirella No. 55, Warren Publishing, October, 1976 issue)

The idea that volunteerism may be sourced from the comics fans themselves has some possibility especially today when we consider the proliferation of various telecommunications facilities such as the internet and celfones with camera, email, and video functions. Such volunteerism could also help promote awareness and support for Filipino comics publications in particular.

The problem however, at least in Metro Manila, is the 2001 prohibition by Executive Order from the Office of the President, implemented by MMDA circular, prohibiting newstands and sidewalk vendors from plying their trade in the streets without a license, especially their of selling smut publications. Because of this, there are now relatively few banketa newstand stalls in the metropolis. Not a good venue for comics distribution at the moment. Newspaper, magazine, and comics dealers in Metro Manila have formed dealers associations accredited by the MMDA who charge their members license fees. Further, these associations monitor and police the kind of publications that are to be sold in the banketa. In effect, members ultimately pay for their own censorship and monopoly.

The dearth of banketa stalls in Metro Manila's sidewalks, the biggest market for the Filipino Komiks of yesteryear, have certainly placed a dent in this avenue for comics distribution. But knowing illegal vendors, these laws are eventually broken. Only time will tell when they'll come back in unmanageable droves moreso when our present economic crisis worsens.

Besides, there has been a change of urban lifestyle in urban centers of the country. Today, because of the worsening economic crisis most people limit their expenditures on travel whenever they can. And when they do decide to travel, they try to go straight to their destinations like supermarkets, malls, and especially the corner sari-sari store.

Other than the few licensed banketa newstand dealers, there are now more modern book, magazine and newstand dealers (i.e., Book Sale, Emerald Headway, Binondo Marketing, Filbar's, and others) that have stalls strategically situated in areas frequented by the Class A, B, and C crowd such as shopping malls, supermarkets, mass transport terminals, and schools. Most of today's globalized Filipino and licensed foreign comics with a "westernized" flavor are actually found in these stands.

The die-hard comics fans of the late 1960s and early 1970s unwittingly helped contribute to the fall of newstand comics sales in America by compelling newstand dealers to "steal" huge portions of comics titles before returning the "unsold" portions back to the publishers. The newstand dealers then sell the stolen pieces through the backdoor and onto the waiting, sweaty hands of die-hard comics fans at exorbitant "collector's item prices". This situation, aggravated by other complications some related previously by Joes Brancatelli, sent wrong sales signals and information to the publishers leading to the unfair cancellation of some titles.

Eventually, the newstand sales for comics in America dried up. Where now, can American comics be distributed? Ironically, the distribution problem was saved by the same die-hard comics fans themselves when they formed the so-called "direct market". By the late 1970s, many comics fans in the U.S. became dealers and formed stores that sold nothing but comics. These establishments came to be known as comics specialty shops. Many independent titles such as Elfquest, Cerebus the Aardvark, Sable, and new independent comic publishers such as Eclipse, Star Reach, First, and Pacific, thrived and sold their comics here. It was a new distribution system for comics.

Seeing this, Marvel and DC began entering the direct market in the early to mid-1980s and their sales began to perk. The direct market operated under an arrangement wherein a comics specialty shop would buy comics "at half-cover price" DIRECTLY from Marvel and DC. This certainly helped solve a lot of problems. Pretty soon, comics specialty shops mushroomed in the U.S. as well as comics distributors who specialized in purchasing comics at discount from comics publishers and of "distributing" them to the comics stores.

It all came crashing down in the mid to late 1990s when Marvel tried to monopolize the direct market by buying out one of the huge comics distributors at the time: the now defunct "Heroes World" and of compelling comics specialty shops to sell mostly Marvel comics and having all other comics publishers have their titles distributed through Heroes World (for a fee). Dominoes started falling until eventually, a lot of comics specialty shops in America closed down until today, only a few remain controlled by the one remaining humongous comics distributor: DIAMOND which is partnered with DC Comics.

This little detour in history shows that the establishment of a direct market by comics fans as a DISTRIBUTION alternative to the newstands, is what helped save the American mainstream comics industry in the late 70s and 1980s. A similar arrangement could be established here in the Philippines by Filipino comics fans (assuming of course there are Filipino comics titles out there that's worth the trouble) with the historical precaution that Filipinos should guard against monopolistic actions by comics publishers or other entities.

But comics specialty shops are also notoriously known for nurturing a market of "comics fans" with limited interests and genres. In short, the potential for growth, of attracting new audiences and introducing innovations is stifled when we limit ourselves to the enclosed "artform" mentality of the geeky comics fan and creator. This would mean then, selling and distributing the comics medium to a wider mass audience. But how, considering the moral fallibilities and honest inadvertences of the banketa newstand dealer, and the bias of most upper class bookstore and magazine dealers?

One possible solution is the introduction of the comics vending machine. This is not at all strange. In France and Japan, two of the great comics producing nations in the world, comics and graphic novels (even pocketbooks) are sold through comics vending machines. French and Japanese comics are mostly thick and in BOOK form. If strategically placed in key secure and pilot areas, an alternative distribution system for comics could be developed. The vending machine itself can even serve a double purpose by having its sides available for outdoor advertisement which means additional income for the comics distributor or publisher. With some modifications, this specialized vending machine for comics could also serve as a survey machine recording the needs and wants of a particular reader.

In closing, it is hoped that the short observations above have made one aware of the unique problems comics distribution entail. Distribution is a separate specialization, and logistical operation in itself. If one is serious about promoting comics as a form of media, specifically as print media, the distribution aspect cannot be set aside flippantly. Companies that concentrate only on comics distribution have shown to be more profitable than comics publishers. It is where most of the money is considering that you don't just distribute the title of one comics publisher but of ALL comics publishers. If there's any creativity and innovation that ought to be done in the Philippine comics scene, distribution should be of paramount concern.

Distribution matters.


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