Comics Could Go Mass Market with Disney-Marvel

[goldenboy]

Comics could go mass market with Disney-Marvel

Fri Oct 2, 2009 8:27am EDT
By Eric Yep and S. John Tilak - Analysis

BANGALORE (Reuters) - The wall-crawling superheroes and caped vigilantes of Marvel Comics will soon overrun the streets and take to the skies in the more sedate precincts of the Magic Kingdom.

That might not be a bad thing for comic books.

The $4 billion acquisition of Marvel Entertainment Inc (MVL.N) by media giant Walt Disney Co (DIS.N) announced on August 31 could give the publisher a real shot at expanding its niche comic book business to one that has broad, mass-market appeal.

Marvel's new parent Disney, with a media empire spanning radio stations, cable networks, theme parks, toys and movie studios, could expand the limited readership and restricted retail network that have kept the industry in check.

Low growth projections at Marvel Comics, whose library of 5,000 characters includes Spider-Man and X-Men, are reflective of the near-stagnant North American comic book industry, of which it has the largest market share.

"The industry still has to make new inroads if it's to survive -- from distribution right down to the corner comic shop," said Bob Layton, a writer of Marvel's Iron Man stories. "I have no doubt that Disney may bring in a different distribution model."

Disney's experience with characters and its ability to monetize them are expected to add heft to Marvel's comic book business. It also brings with it money, a promise of investments and marketing clout.

"A large number of comic shops in America are dingy, poorly managed venues, akin to porn shops," Layton said. "The comic industry needs easily accessible venues where young people can casually find and purchase comics, either through subsidies or discount incentives."

Comic book publishers such as Marvel and DC Comics, owned by Time Warner (TWX.N), cater to niche customers, usually teenage boys and older males, through specialty stores that only dedicated fans would visit.

"There is a core group of people that are comic book fans," Arvind Bhatia, an analyst with Sterne, Agee & Leach, said. "But to expand that and make it more mass market probably is the biggest challenge."

Disney can certainly expand the audience with mass market appeal, Bhatia said.

The primary means of comic book distribution in North America is the direct market, which was worth about $437 million in 2008, according to comic-book researcher Comichron.com. Under the direct market system, distributors and retailers buy comics from publishers under the condition that they cannot return unsold books.

Marvel has more than 40 percent of the market, followed by DC Comics, according to Diamond Comic Distributors, the largest distributor of comic books in the United States.

The comic book segment contributed more than a fourth of the Marvel's overall revenue in the second quarter. Movies and licensing make up the rest.

"I see the Marvel acquisition by Disney helping to expand the genre of comic books and remove it from the dusty basement of the world," said Sean Creswell, the owner of Capes Comic Book Lounge in Omaha. His shop derives 45 percent of its sales from Marvel.

"I do see Disney stepping in and offering retailers outside of the direct comic book market incentives for selling Marvel products," Creswell said.

Marvel declined an interview request from Reuters.

"For Marvel, the publishing business has been a nice, steady predictable growth business that contrasted nicely with the vagaries of the film business, which is always a lot more volatile," Caris & Co analyst David Miller said.

So far, the route to Marvel characters' gaining mass popularity has been through movies.

"We would expect Disney, because they are a mass marketer, to move it toward more mass market," said Kelly O'Keefe, a branding specialist and managing director of the Virginia Commonwealth University Brandcenter.

Over the years, Disney has evolved from a creator of popular characters to a major media and entertainment brand that makes a lot of revenue from licensing.

"It's all about content," Bhatia said. "And media companies want to have content. Comic books provide some of that. It's one of the ways to be in control of content that you can exploit in different ways, whether it's comic books or movies or toys or video games. It's a quest for content."

The Disney-Marvel deal shines a light on comic books, and any kind of spotlight on comics is good for entertainment companies, said Scott Rosenberg, chairman of Platinum Studios (PDOS.OB), a comic book publishing and licensing company. "A rising tide raises all ships," he said.

Disney can put comic books in supermarkets and give promotional copies away for free with movies, Rosenberg said.

The risk that a comic publisher runs in going mass market, O'Keefe said, is that some of the hard-core audience might drift away to look for alternative comics.

"The challenges are that Disney doesn't take the edge out of Marvel Comics," O'Keefe said. "Marvel Comics have been famous for tackling controversial subjects. You don't want to see the rough edges of Marvel Comics rounded by Disney."

(Editing by Mike Miller)

http://www.reuters.com/article/innovationNewsTechMediaTelco/idUSTRE5912HK20091002

 

[knightrightnow]

I know its been said, but bring on a Pixar Marvel film. That would be pretty sweet

 

[goldenboy]

I'm trying to imagine Marvel going back to the mass distribution of supermarkets and drug stores and 7-Elevens. Maybe that kind of experiment could work if they had more (and cheaper) all ages titles. Seems like no matter what, they've gotta aim young if they want to grow their base readership.

 

[hippie_hunter]

Disney has to lower the prices if they want comics to go mainstream. $3.99 isn't going to cut it.

 

[fifthfiend]

When I was a lad they were $1.25! And came with free Pogs!!

 

[Dread]

When they say that Disney has access to 5,000 characters, that really isn't entirely true. Many "universes" of characters have already been licensed to other companies. Spider-Man & even Ghost Rider are at Sony; X-Men and Fantastic Four (and probably still Daredevil) are at Fox. Paramount was helping Marvel distribute Iron Man, Hulk, and various Avengers films. Universal was involved as well. Disney will own these licenses if the rights lapse; however, since the buy-out was made public, the companies that still have these licenses and who compete with Disney will now make more effort to maintain them. I have little doubt that Fox would have merrily allowed the rights to the Fan Four to lapse had the fact that Disney would then own the Four if they did became a reality. I doubt Sony would really want to hold on to Ghost Rider if they also didn't know Disney would get him if they didn't clutch harder. And so on. I wouldn't be surprised if we heard rumblings about more BLADE or DAREDEVIL stuff to smite Disney a little.

Characters like, say, X-FORCE or Rocket Racer are part of aforementioned franchises, X-Men and Spider-Man, and could not move until rights lapse. Sony would be willing to make a VENOM spin off, just to keep Spidey away from Disney, for heaven's sake. So the proper term is Marvel still has some 3rd and 4th string franchises that Disney could play with. For example, properties like POWER PACK or RUNAWAYS could work very well for Disney without having to change them much, if at all. Maybe even HEROES FOR HIRE becoming a bit of a buddy adventure, a live action superhero version of TANGO & CASH (only with Cage and Fist). But not quite 5,000 characters unless you really think Disney gives an 8th of a crap about, say, the Falcon or Aquarian.

In terms of publishing, Disney has not been successful with it in America; they are, however, a big publisher in the U.K. and it could be possible that more Marvel comics could move overseas. The Euro's worth more than the U.S. dollar, after all.

Honestly, Disney likely sees Marvel as an idea farm and could likely care less about what happens with the comics so long as the comics remain ore for ideas. Before the buy-out, sheer comic sales only made up about 30-40% of Marvel's yearly profits; the rest is from licensing and merchandise. Marvel could charge a dollar a page and I doubt Disney would give a damn. All Disney cares about is that Marvel's characters and properties retain a mass market appeal or potential for appeal. You could cancel AMAZING SPIDER-MAN tomorrow and that would not effect the box office gross of SPIDER-MAN 4 one hundreth of a percent. Peter David did no end of unique things with Hulk during his run, from Gray to Professor, and they didn't effect the public perception of Hulk one micron. If this effects Marvel's publishing arm in any way, they might be encouraged to take a few more creative risks, since any new franchises created NOW would be viable for Disney to grab. When you just got bought out for about 37 times your yearly income, you can afford to give some launch titles some leeway, perhaps. One minor example; despite the sales of the last mini, McKeever could be encouraged to give GRAVITY another go for such a purpose.

 

[runawayboulder]

At least The Spectacular Spider-Man cartoon will be back on Disney XD next week. Hopefully there will be a season 3 now.

 

[Dread]

Yeah. Disney is 100% in charge of that now; Sony is out of the loop. It's up to them and Marvel to approve funding and contact the production crew.

 

[lyc70]

Interesting! I'm sharing them with your kindness

 

[Gamma Goliath]

I can't anything but good coming from disney and marvel

 

[CConn]

Na-na-na-not gonna happen.

 

[iloveclones]

But not quite 5,000 characters unless you really think Disney gives an 8th of a crap about, say, the Falcon or Aquarian.

At least those guys have some kind of a story. I'm willing to bet that 5000 includes characters like Ned Leeds, Deb Whitman, Mrs. Arbogast, and Stevie Hunter. I doubt many people re going to run out and see a movie featuring The Lethargic Lance Bannon!

That article was pretty much speculation, although it was funny to hear Bob Layton's LCBS description. The place I go to is pretty nice, but I've been to the kinds he describes. And a lot of them seem off-putting to those who aren't in the "inner circle."

I'm not as convinced as most that kids (and by kids, I mean their parents) won't pay 3-4 bucks for a comic. Those little buggers seem to con them into anything. How much do parents shell out for Video Games. One system (and many households have more than one) plus two games goes for around, what $400-500. That's equal to 20 subscriptions (240 comics!) Although, I'm sure people who pay probably up to a thousand a year on video games/systems would be shocked SHOCKED at how expensive comics are. (I know you'll disagree with me Dread, but you have to agree that people make no sense whatsoever when they spend money. Having a smoking habit probably costs as much as most people's comic habit, but I know smokers who are stunned at what I shell out on comics. )

That being said, if Disney/Marvel is serious about getting it into the mass market: work on a real content-download method. If there were an affordable Kindle/Sony reader AND content that I could own legally, I'd be buying both today.

Wow, Dread must really affect me. I only meant to come in and make one little snarky comment!

 

[Spider-Vader]

This is good with me. There's no comic shops close to me, so I have to get my comics from paperbacks.

 

[Drz]

At least The Spectacular Spider-Man cartoon will be back on Disney XD next week. Hopefully there will be a season 3 now.

Yes please!

 

[Sawyer]

I want a Marvel store dammit. There are Disney stores... I want a Marvel store.

 

[chiefchirpa]

I bet Marvel store is inside their plan.

 

[Dread]

At least those guys have some kind of a story. I'm willing to bet that 5000 includes characters like Ned Leeds, Deb Whitman, Mrs. Arbogast, and Stevie Hunter. I doubt many people re going to run out and see a movie featuring The Lethargic Lance Bannon!

That article was pretty much speculation, although it was funny to hear Bob Layton's LCBS description. The place I go to is pretty nice, but I've been to the kinds he describes. And a lot of them seem off-putting to those who aren't in the "inner circle."

I'm not as convinced as most that kids (and by kids, I mean their parents) won't pay 3-4 bucks for a comic. Those little buggers seem to con them into anything. How much do parents shell out for Video Games. One system (and many households have more than one) plus two games goes for around, what $400-500. That's equal to 20 subscriptions (240 comics!) Although, I'm sure people who pay probably up to a thousand a year on video games/systems would be shocked SHOCKED at how expensive comics are. (I know you'll disagree with me Dread, but you have to agree that people make no sense whatsoever when they spend money. Having a smoking habit probably costs as much as most people's comic habit, but I know smokers who are stunned at what I shell out on comics. )

That being said, if Disney/Marvel is serious about getting it into the mass market: work on a real content-download method. If there were an affordable Kindle/Sony reader AND content that I could own legally, I'd be buying both today.

Wow, Dread must really affect me. I only meant to come in and make one little snarky comment!

I agree that a more sane DL structure is needed. How about; you pay for what you want, and only what you want. Subscriptions are optional, not mandatory for the DL service. So long as you can handle .jpg files, you should be good to go. What a concept!

In terms of your analogy, one problem is one does not get much entertainment value from a comic compared to other "hobby" items. A pack of cards for a game like Magic or Yu-Gi-Oh or whatever is hot that season can provide hours of entertainment. Even the easiest video games at some $40 a pop often will require about 7-8 hours to complete. A comic is $3-$4 often for something that can be read in about ten minutes usually taking a quarter year, if you are lucky, to reach a narrative conclusion. It's a lot to ask for a 21st century audience that hasn't been predisposed to comics by a parent. A kid may, say, love devoting hours to Spider-Man's adventures via movies, cartoons, and video games, but to spend $4 a month reading about him for 15 minutes? Harder sell.

Comics, in a way, have managed to simultaneously be disregarded by many in mainstream society as "juvenile" while most juveniles find them too "old school".

That, and as has been mentioned, people don't read much in general anymore. Anything that isn't a blog or a manual can be a tough sell. Novels at least usually have more prestige. Even the crappiest dime store novel will be taken more seriously by someone reading it on a train than someone reading a copy of V FOR VENDETTA. Just because comics, now called "graphic novels" a lot more, are fodder for movies doesn't mean many adults don't look down on them, and many kids find them to fuddy-duddy.

I do think Marvel needs to market them better, and not in the sort of smarmy, condescending, "suck it up and stop whining, fanboy" manner of the last few years. They need to treat new and old customers as valued, human beings. Again, what a concept!

 

[iloveclones]

I agree about the hard sell, but any comic fan can attest that the experience is really more than 15 minutes. The challenge is getting that across to newbies. I always tell people how teachers were always asking me why I had such a good vocabulary back in school, and I loved trying to convince them it was because of comics. I'm sure I'm not alone in that kind of story.That's the kind of idea that Marvel/DC/Image/etc has to get into the mainstream.

It's funny that you mention reading on a train. I was just on 2 10hr flights on a 2 week vacation, and I took 5-6 novels with me to burn through (finally made a dent in SK's Dark Tower series!) But, as big a comics fan as I am, I didn't bring any GNs. And the reason is simple...not enough bang for my buck. It's just too much weight to carry to carry with you. And that's just the nature of the medium. But I would have loved to carry some kind of Kindle to read my comics if that were an option. These companies need to realize that problems always, always reveal opportunities. But (and here we agree) they need to listen to the fans. Not what they like, but listen to their *****ings. I can almost guarantee that the company that sovles the DL problem will thrive.

 

[TheCorpulent1]

I was reading several levels above my age level throughout elementary school because of comics.

I don't know substantial this rumor might be, but I would really love to see comics become appealing to the mass market again. At their best, comics are easily one of the most fun forms of entertainment. It'd be lovely if scores of others actually took notice and enjoyed them as much as we do.

 

[iloveclones]

Comics are a GREAT, yet sadly underutilized, teaching tool. I'm in the process of learning Russian again(I took classes years ago, but need some day to day refreshing. My trip this summer showed my how little I remembered) I suggested to my girlfriend that we start reading some Ultimate Spider-Man that I have copies of in Russian together. My thought was that from the pics, you already have an intuitive sense of what's going on, and the words re-inforce and expand that. Same thing that was happening with english when I was 10. I tried it the other night. It's slow going (and you really can't read for pure enjoyment of it) but I was already able to pick up on the meaning of some words without looking them up. I'll let you know how it goes.

 

[Dread]

I do agree that comics are underutilized reading tools. As I mentioned above, novels, even the crappiest ones (which, narratively, are little more complex than an average comic) seem to get more mainstream prestige. In school, the model is to get kids reading books, even if many of the novels assigned most children find boring, but they are assigned because they have always been assigned. They become a rite of passage, a hazing ritual. "I had to get past MOBY DICK when I was that age, and so must you!" The irony is that many "picture books" for very very young children are close to being a comic; mostly illustrations with only a few lines of text or dialogue, just at the bottom of a page instead of in boxes and balloons.

The other problem is most comics are made for older audiences. Not just in terms of language or violence, but in general continuity. A 7 year old trying to jump into any issue of ASM at random will be hopelessly lost and confused. Even a MARVEL ADVENTURES title will be no better, and kids know that's "kiddie" and avoid it.

Yes, Marvel, they KNOW that line is TALKING DOWN TO THEM and AVOID it. Children know when an adult is talking down to them and most children do not see themselves as children. They want to be adults or act like adults. Therefore, they won't read Baby Spider-Man. They want to read the adult Amazing Spider-Man. Alas, when the story is Part 3 of 4 and it involves a villain melting people's faces atop of continuity so twisted you'd need an accountant to figure out, and the X-Men are far worse, then it becomes a failed experiment for the child. Tossing our a freebie SAGA now and then doesn't help.

Ironically, collections of the older stories still do well with this audience; simple enough for a child to understand, but complicated enough for an older person to get. Now, of course, the entire comic industry relies on older fans who have been collecting a while and know everything, so this dynamic really can't and shouldn't be reversed. But those in charge need to be aware of it if they ever make a new plan to address this age gap. Short of, literally, ensuring every one of their readers breeds via a dating service.

 

[fifthfiend]

You need to stop smoking crack so hard, MA comics are awesome.

 

[Dread]

My point is that they're intended for children, but most kids will realize they're "kiddie comics" and avoid them unless deliberately handed them. Same reason why I avoided the .99 Spidey cartoon comics as a kid and stuck with ASM.

 

[iloveclones]

I know what you're saying, Dread. In my day it was Spidey Super Stories. They were almost an expanded version of those Hostess ads. But the Marvel Adventure line seems to be a bit different. I had a sub to the Avenger one for a while and really enjoyed it. And sub-wise, if I remember right, the MA line posts the highest numbers in terms of subs.

 

[TheCorpulent1]

I tended to avoid the comics aimed at younger readers as a kid, too. I wanted to read "the real" Spider-Man and Avengers and such.