Marvel's Business

iloveclones

spooky....
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I don't know if anyone else is interested in this kind of stuff, but I thought I'd make a running thread about the business end of Marvel. Any comments, links accepted. Here's one I saw on the licensing of the characters from comics2film.com:

With a library of more than 5,000 characters, Marvel Enterprises, Inc., has emerged from bankruptcy to become one of the most profitable character-based entertainment companies in the world. With the success of the first Spider-Man movie released by Sony Pictures in 2002, which garnered more than $800 million in worldwide Box office revenue, Marvel gained global recognition overnight. "It is Marvel's film properties that drive and build brand awareness in the marketplace," notes Tim Rothwell, worldwide president, consumer products, Marvel Enterprises, Inc. "Up until a few years ago we really hadn't introduced that type of blockbuster film property into the marketplace."
But don't mistake Marvel for a one-hit wonder company. The entertainment giant has a slate of titles being released in 2005 and beyond, which, due to their character-rich plots, lend themselves to licensing. First out of the gate in summer 2005 is Fantastic Four with Twentieth Century Fox. The film boasts a diverse mix of superhero characters and, as of press time, more than 60 licensees were on board including Marvel's Toy Biz division (master toy licensee, action figures), Jakks Pacific (arts and crafts, activity sets), Mega Bloks (building toys), Roseart (puzzles), Mattel (games and dolls), Upper Deck (trading cards and TCG), Hallmark (balloons, gift tags, invitations, boxed notes, Valentines, gift wrap), Rand (sporting goods), Kids Headquarters (master apparel partner, boys'/girls' separates, swimwear, outerwear), Sara Lee (adults' underwear, men's and boys' boxer shorts), E.S. Originals (footwear), Disguise (costumes, costume accessories), Activision (video games), Russ Berrie (plush), Spin Master Toys (beanbag chairs, foam furniture, inflatable beds), HarperCollins and Meredith (publishing), and Zooth/ Gillette (power/manual toothbrushes, toothpaste, rechargeable brushes).
"Fantastic Four as a property is special in the Marvel Universe as it features four diverse and appealing characters, each with their own set of unique powers. Therefore, licensees see the potential this property affords them in diversifying their retail mix with lines for each hero and, in so doing, expanding the potential consumer audience interested in their merchandise," says Rothwell. Fantastic Four also will roll out on the small screen in the form of 26 30-minute 2-D/3-D animated episodes from Antefilms Productions. The initial episodes are expected to be completed for worldwide distribution in late 2006. This comes on the heels of Marvel's agreement with Lion's Gate Entertainment to produce and distribute a series of direct-to-DVD animated features starring popular characters from the Marvel library. According to Rothwell, several other properties also are in development for animation.
From a theatrical standpoint, Marvel is covered for the next several years, says Rothwell. In addition to Fantastic Four, X-Men 3 (Twentieth Century Fox), Ghost Rider (Sony Pictures), and Iron Man (New Line Cinema) all are set to roll out in 2006, while Sub-Mariner (Universal Pictures) and Spider-Man 3 (Sony) hit theaters in 2007.
Moving beyond the silver screen, Marvel looks to gain a much greater presence in publishing, entering into strategic relationships with HarperCollins; Simon & Schuster; Meredith; and Dorian Kindersley, Inc.
More recently, Marvel entered into wireless via an agreement with MFORMA Group, Inc. The partnership calls for MFORMA to publish an extensive portfolio of mobile entertainment products based on the universe of Marvel's iconic characters (with the exception of The Punisher family of characters) as they appear in movies, TV, video games, and comic books, which will be available in all domestic and international territories except Japan. As part of the agreement, MFORMA will co-publish selected mobile games with Activision. The MFORMA/Marvel product lineup runs the gamut of mobile entertainment products including action, adventure, RPG and trading card games, images, screensavers, graphics, ring tones, voice tones, mobile greeting cards, mobile comic books, phone functions, virtual character simulations, and community and lifestyle applications. In addition to distributing Marvel content through MFORMA's global network of more than 100 wireless operators in 39 countries, MFORMA also will create and host Marvel Mobile, a branded wireless and online Website. Subscribers to the Marvel Mobile channel will have access to all Marvel Mobile products, plus unique community applications and features, special collectible items, Marvel news alerts and chat rooms, fan clubs, and mobile commerce options.
"The new Marvel is all about strategic relationships," says Rothwell. "In the past, we had as many as 15 different apparel partners in North America; we now are honing that number significantly." The same can be said of all other categories, as well. Notes Rothwell, "Our strategy of consolidating license subcategories with category leaders will help the Marvel brand secure more retail support, increase the distribution of our products, and make Marvel a key franchise for our licensees." This strategy eliminates confusion in the marketplace, says Rothwell. "You don't have people undercutting each other to get the order, so you can get more of a marketing commitment from licensees."
Continued international expansion also is on Marvel's agenda. According to Rothwell, despite the fact that Marvel's brands are global, the company traditionally has been more North American driven. In 2004 Marvel opened offices in London and Tokyo and saw double the international business. "We also are looking at several international territories such as Latin America, South Korea, Malaysia, and India that up to this point we haven't focused on to the degree that we can," says Rothwell. Marvel also looks at tailoring its brands to certain territories. "We certainly want to protect the integrity of our brands overseas," says Rothwell, "but we have allowed local companies a bit more flexibility with characters." In Japan, for example, Spider-Man manga depicts the central character as a young boy.
"It is an exciting time for us at Marvel," says Rothwell. "We are an entrepreneurial company with a lot of talent and creativity. We sit, we talk, and we pull the trigger
 
DBM found this article over at http://www.brokenfrontier.com/columns/details.php?id=228 Here's the full text for part 1:

Out of the Ashes of the Newsstand - Part I: RIP
Column, posted February 28, 2005
Archive



Before I hand the reins of OTB over, a quick note, originally I was scheduled to do a single-shot opinion piece this week. Unfortunately a number of things went on this week that just made it impossible to do it right, and you guys deserve much more than just a hacked out piece! So, since Will ‘Newsstand’ Norris has been doing such a great job and is ahead of schedule on OTB’s first multi-part, in-depth feature, I figured I would just get out of his way! So, without further ado… (C.)

Out of the Ashes of the Newsstand I: RIP

I am starting this article with a disclaimer. I am not an expert on the topic I’m about to discuss. I have a great interest in the industry and have studied it closely. I may be right on the mark, or I could miss it by a mile. The point is to think outside the Box. Hopefully what I say gives others something to ponder, maybe even spark better ideas. Now on with the show…

How many times have you heard someone say, “If someone would put comics on the newsstand again, they would sell like gangbusters!”? Personally, I’ve heard it dozens of times. Before I started researching this article, I’d said it myself a dozen times. I couldn’t fathom why publishers wouldn’t want to take this avenue to grow their business. It seemed like a no-brainer. “Duh, publishers: get your act together!” is what I always thought.

But knowing what I know now, I stand corrected. My apologies to all the times I thought “Duh publishers!” They apparently knew what they were doing. Let me share with you what I have learned:

• Top selling magazines have a circulation of over two million issues per month; the top 2% have a 5+ million circulation.
• There are about 140,000 newsstand outlets carrying an average of 400 titles per outlet.
• In 2000, major magazine retailers earned an estimated $300 million in profits from magazines/periodicals.

So that doesn’t sound too bad, but that was the good news. Here is the rest of what I learned:

• In 2000, wholesalers collectively lost $100 million dollars.
• In 2000, 66% of titles dropped in newsstand circulation; the top 100 dropped by 8% and the rest by 12%. This was a steeper drop than in 1999.
• In 2002, 51% of titles dropped in newsstand circulation. The average decline was 22%.
• In 2004, AdAge.com reported that over 70% of titles had declining newsstand sales.
• In 2000, only 9% of titles had a sell-through greater than 50% (meaning that if 50 copies ship to a newsstand, 25 sell and 25 are returned). 64% of titles had a sell-through of less than 40%.
• In 2002, the average sell-through was 38%.
• In 2000, 78% of publishers/marketers surveyed believed sales would continue to decline for the foreseeable future. This was up from 50% in 1999.
• The newsstand is repeatedly cited as the single biggest challenge facing the magazine industry.

I could continue at length about problems facing the current newsstand system. There are even some experts who believe that in the next 5-10 years, the newsstand system will essentially be dead, except for the few magazines that can sell over two million issues each month. So, is putting comics back on the newsstand still a good idea?

It doesn’t sound like it to me. For example, let’s say Marvel publishes a million copies of Ultimate Fantastic Four each month for the newsstand. The data shows that 62% of those copies are likely to be returned for a full refund; that’s 620,000 issues! Even if Marvel only pays $.30 per issue to print and ship them, they loose $186,000 per month. With a $2.25 cover price, Marvel would only gross about $.90 an issue. Subtract production, printing and shipping costs and Marvel might make $.50 for each extra issue sold on the newsstand. This is a profit of $190,000. The result is a net gain of $4,000 for printing an extra million copies. This is all assuming there is no additional overhead, like paying the person in charge of issuing those refunds. This example also uses one of Marvel’s top sellers and more visible titles. How would a title like District X hold up in the same analysis?

Even with everything stacked in favor of a comic publisher, it’s at best a zero sum game. Factor in declining newsstand sales and sell-through rates and it is no surprise why comics aren’t on the newsstands. There is no money to be made there: more likely, there is money to be lost!

Enough doom and gloom though. I did say I had some ideas that were outside the Box. Armed with some facts, I can understand why publishers don’t pursue the existing newsstand market. I had to let that idea go before I could move on to new ideas. Does this mean we should be frustrated and quit trying? No way! If the current system of newsstand distribution is broken, then it’s time to develop a new system!

In order to get comics back into the traditional retail outlet, the industry will need to be retailer-driven. To develop this new approach, we need to establish the needs of the traditional retailer, the requirements of the publisher, and finally, the requirements of a distributor.

My next installment will get to the meat and potatoes of this discussion… The Retailer!

- Will Norris

Footnote:
We want to be clear, we’re 100% supportive of Comic Book Retailers and this is not about replacing the Comics Stores out there. We all know one of our biggest challenges is dealing with the shrinking consumer base for comics, due to a rather insulated means of distributing. Really, how many non-comics fans walk into a comic shop?

This series is intended from the angle of providing comics as a whole a wider diversity of outlets, and perhaps a higher chance of attracting new fans, or lapsed fans back into the fold by getting comics out there and visible to a broader demographic. The Comic Book store, like a magazine store, will always still attract the major fans who want to have folders or boxes to make sure they don’t miss titles, want to find the best small press stuff, back issues, etc. As a matter of fact, my philosophy is that a wider distribution of comics would help the comic stores by ‘hooking’ fans who will then, inevitably, go looking for more! (C.)
 
Galactus always posts these numbers here,

http://www.superherohype.com/forums/showthread.php?t=142272&page=3

so I thought I'd make a link for anyone interested.

The pnly things I find interesting are:

New Avengers- like it or hate it, this gamble paid off for Marvel (for now anyway) I think you have to wait until sales level off to find out if this were a risk worth taking. And I find it hard to believe that it could have sales this high without a good portion of the old readers on board (again, for now). That was the only thing that really concerned me about this concept, that a good chunk of "established" readers would drop the title.

Amazing Spider-man- the risk that didn't pay off. I wasn't a harsh critic of this story, but it seems as though people are voting with their dollars. I've liked JMS's run, but I think it may be time to say bye-bye and concentrate on FF.

Spider-girl- Coming to a theater near you, "The Comic That Wouldn't DIE!" I have to admit, I stopped buying this around 65 or so and will probably start picking it up again because I addicted a friend's daughter to it. And that's why I think Marvel lets this title stick around. This is the demographic that they'd love to grow.

MTU- Really disappointed because I really like this title. Its drawing Spider-girl numbers but doesn't have the good reason to keep it around.
 
iloveclones said:
MTU- Really disappointed because I really like this title. Its drawing Spider-girl numbers but doesn't have the good reason to keep it around.

Yep.. this is one good book ala old Marvel.... characters, continuity, references to past stories, etc...

But nowadays, people only seem to care about nice story "arcs" that wrap things up nice & neatly after the convenient 4 to 6 issues.

:(
 
iloveclones said:
Amazing Spider-man- the risk that didn't pay off. I wasn't a harsh critic of this story, but it seems as though people are voting with their dollars. I've liked JMS's run, but I think it may be time to say bye-bye and concentrate on FF.


MTU- Really disappointed because I really like this title. Its drawing Spider-girl numbers but doesn't have the good reason to keep it around.

Okay, lets see. ASM lost readers, so did MKSM, so did USM and Spectacular and so did almost every book in the top 100. Yet you single ASM out? I think your conclusions are incorrect. Okay, whatever but if you looked outside Spidey forum at Hype you'd notice the story was well liked in many places.

Agreed about MTU, those numbers are pretty low but hopefully enough to keep the title around.
 
Actually, because of the atmosphere there, I hardly spend any time in the Spidey forum.

Mostly I made this thread to talk about the cold, hard numbers, whether I like them or not. I certainly know that there were people that liked that story (I'm knda one of them), but you can't argue with the drop in sales after the arc. And I singled it out because that is the main title and the flagship of the company. AND it just had a blockbuster movie to help out. I'm one of the few that LIKED the clone saga (all of it), but I would be foolish enough to deny that a significant chunk of people didn't and STOPPED BUYING. I don't think this even comes close to that, but it might be the first signs of people dropping the title.

Again, I'm not saying it was a good or bad story (artistically), just talking about the numbers.
 
http://www.newsarama.com/forums/showthread.php?s=&threadid=29001


MARVEL RELEASES Q4 2004, 2004 YEAR END NUMBERS
Marvel this morning released its numbers for the fourth quarter of 2004 and the year ended December 31st, 2004. Overall, the Q4 numbers more than doubled compared to 2003. According to the company, its net income rose to $30.1 million, or 27 cents per share, from $13.5 million, or 12 cents per share, a year ago. Sales grew to $100.5 million from $85.7 million last year. Analysts were expecting sales of $86.8 million ($0.16 a share) in Q4 2004. Publishing was up 16% compared to Q4 2003.

The highlights, from Marvel’s release on the numbers:

-- Net sales and operating income increased primarily due to contributions from Marvel's joint venture (JV) with Sony for Spider-Man movie merchandising and to improved international licensing revenues.

-- A shift towards revenues in licensing in Q4 2004 led to company-wide operating margin of 41% compared to 31% in the prior year period.

-- A previously recorded valuation allowance associated with state and local NOL carryforwards was eliminated, resulting in a non-cash, non-recurring credit to income tax of approximately $6.2 million ($0.06 per share), reducing the Q4 2004 income tax rate to 12.7%.

-- 4Q 2004 reported EPS of $0.27 as compared to $0.12 in the prior year period.

From the release as well:


Marvel's Chairman, Morton Handel, commented, "Our strong 2004 operating results continue to reflect the expanding global power of the Marvel brand and an increase in consumer and media products based on our characters. Our consumer product division made tremendous progress during the year in further enhancing our portfolio of licensing relationships. This continuation of our category consolidation strategy, which focuses on teaming with leading partners, improves retail support and long-term sales potential. Of note, Marvel's growing global consumer brand supported a 100% increase in international licensing revenue contributions, to $28 million in 2004.

"Additionally, Marvel continues to make strides in extending our development pipeline for entertainment projects. In light of our success and the increased value of our brand, Marvel has been able to improve the economic terms for new media and consumer product projects. The Company is also moving aggressively into the animated television and DVD markets to increase the support for our brands on a worldwide basis.

"In publishing, following our previously stated strategic goals, we are entering new retail channels. Marvel recently reached a distribution agreement with 7-Eleven convenience stores to introduce marvel comic books, which are specifically designed and targeted at the important children demographic. Finally, our toy division's performance was acknowledged as it was named Wal-Mart's 'Import Vendor of the Year' for 2004."
Breaking things down by division:

Licensing:

Net Sales

Q4 2004: An increase from $30 million in Q4 2003 to $56.7 million in Q4 2004.
Year 2004: An increase from $124.4 million in 2003 to $214.7 million in 2004.

Operating Income

Q4 2004: An increase from $10.2 million in Q4 2003 to $34.3 million in Q4 2004.
Year 2004: An increase from $83.2 million in 2003 to $152.7 million in 2004.

Publishing:

Net Sales

Q4 2004: An increase from $19.0 million in Q4 2003 to $22.1 million in Q4 2004.
Year 2004: An increase from $73.3 million in 2003 to $85.9 million in 2004.

Operating Income

Q4 2004: An increase from $7.2 million in Q4 2003 to $11.6 million in Q4 2004.
Year 2004: An increase from $24.4 million in 2003 to $37.3 million in 2004.

Toys:

Net Sales

Q4 2004: An decrease from $36.8 million in Q4 2003 to $21.8 million in Q4 2004.
Year 2004: An increase from $212.8 million in 2003 to $150 million in 2004.

Operating Income

Q4 2004: An decrease from $14.3 million in Q4 2003 to $2.9 million in Q4 2004.
Year 2004: An decrease from $77.9 million in 2003 to $58.1 million in 2004.

Total Net Sales:

Increased in both the quarter and year, from $85.7 million in Q4 2003 to $100.5 million in Q4 2004; and an increase from $347.6 million in 2003 to $513.5 million in 2004.

Total operating income also increased in both the quarter and year, from $26.6 million in Q4 2003 to $41.4 million in Q4 2004; and an increase from $167.2 million in 2003 to $224.4 million in 2004.

As usual, Marvel’s report gives somewhat short shrift to its publishing division, and this report is no different. From the report:

“Marvel's Publishing Segment net sales rose 16% to $22.1 million due to strength in core comic and trade paperbacks as well as growth in new mass-market retail chains. Marvel experienced slight increases in both the number of comic book titles shipped and the average circulation per title in Q4 2004 compared to the prior year period. Excluding the benefit of reductions in reserves, operating income in Q4 2004 would have been $9.9 million, an operating margin of 44%, compared to an operating margin of 38% in the prior-year period.”

Of note in the above is the report that Marvel saw increases both in the number of titles shipped as well as circulation per title in Q4 2004, a change from earlier in 2004, when the publisher saw an increase in the number of titles published, but a decrease in the total circulation.

Marvel’s main revenue engine, of course (as with any company whose assets are mainly intellectual property) continues to be licensing, as shown in the 89% in Q4 2004 versus Q3 of 2003, due mainly, as the company said, to its deal with joint venture with Sony and international licensing. Marvel’s consolidation of licensees also is paying off, as the company reported that $29.2 million of the licensing gross sales of Q4 2004 was due to such pulling products together under one licensee.

Also of major importance for the company was the 168% increase in international licensing between Q4 2003 and Q4 2004. The company noted that it expects this segment to grow substantially, due to the efforts of its relatively new international offices.

Marvel’s continuing challenge though remains its toy division, as Toy Biz seems to be firmly under the pendulum swing of property popularity, that is, revenues are up (sometimes way up) when a popular movie is out, down (sometimes way down) when there’s no tie-in movie for toys to be linked. Quarter-to-quarter comparisons exhibit this effect the most, such as the decrease seen between Q4 2004 and Q4 2003 ($21.8 million versus $36.8 million), but the effect is somewhat moderated when comparing the yearly numbers, as up quarters moderate the effect of the down quarters, toy-wise. As such Marvel showed an increase in toys as a segment between 2003 – 2004, from $149.9 million in 2003 to $212.8 million in 2004, attributable mostly due to an increase in 2004’s net sales, i.e., the Spider-Man effect.

From Marvel’s release:

“Marvel's Toy Segment net sales decreased 41% to $21.8 million from the prior-year period primarily due to decreased sales of action figures and accessories based on the Lord of The Rings franchise and The Hulk movies. Spider-Man movie toy sales were $14.2 million in Q4 2004 compared with sales of $11.3 million in Q4 2003. As previously disclosed, a planned increase in advertising and promotion expense ahead of the 2004 holiday season, coupled with lower sales volumes, resulted in a year-over-year decline in the operating margins for the toy division from 39% in Q4 2003 to 13% in Q4 2004. Full year 2004 sales of Spider-Man movie toys were $175.3 million, slightly ahead of guidance of $160 million to $170 million. Marvel toy inventory was only $1.3 million at year-end.”

Also if interest in the report, by moving its offices, Marvel had to pay a $4 million charge for the early termination of its lease, but according to the company, its new lease will generate an annual savings of $1.5 million a year.

At the end of 2004, Marvel had cash and equivalents of $205 million.

As with its reports, Marvel updated investors on its upcoming movie slate. Notable feature development news: X-Men 3 is targeted for a summer, 2006 release; Iron Man is still targeted for 2006; as are Luke Cage, The Punisher 2, and Deathlok. Marvel’s movies for 2007 include: Spider-Man 3 (May 4th), Namor, The Hulk 2, and Wolverine.

Other film projects in development include Ant-Man, Black Panther, Captain America, Nick Fury, Silver Surfer, and Thor. Animated direct to video projects include: The Avengers 1, The Avengers 2, Iron Man, and a yet-unnamed project, all due in 2006 as part of Marvel’s partnership with Lion’s Gate.

The Fantastic Four animated series is due in 2006, while Blade and Brother Voodoo are live action television projects in development.

In regards to video game releases starring the company’s properties, Spider-Man and Friends is due this quarter, while Fantastic Four is due in Q2, Ultimate Spider-Man and Hulk: Ultimate Destruction in Q3 and X-Men Legends II, and Marvel vs. EA in Q4. No mention was made of the reported Marvel MMORPG that is in development.

In regards to guidance for 2005, the company said that licensing is expected to be responsible for 50% of total sales for the year. Other major factors in the company’s 2005 forecast include:

-- Ongoing contributions from the Spider-Man 2 feature film.

-- Contributions from the syndication of the first Spider-Man feature film as well as an advance for the Spider-Man movie expected to release in 2007.

-- Approximately $20 million in license revenue to be derived from the Spider-Man joint venture.

-- The Fantastic Four movie release and related licensing, as well as licensing associated with other entertainment projects slated for 2005 or thereafter, noted above.

-- An estimated $80 million of wholesale sales of Fantastic Four toys by our master toy licensee.

-- Domestic license renewals, including category consolidation efforts, which should exceed $60 million.

-- Domestic licensing overages of $35 million (compared to $37 million in 2004).

-- International licensing revenues in excess of $30 million.

-- Modest top line and bottom line growth from the publishing division.

-- The benefit of interest income versus interest expense incurred in 2004, coupled with a lower average fully diluted share count, reflecting stock repurchases in 2004.

-- Additional expense of $4 million in the second half related to the new accounting required for stock options.

Marvel held a conference call for investors at 9:00 am EST Monday to discuss the report and answer questions.

Topics covered:

The Fantastic Four trailer will be in front of Star Wars Episode III and Batman Begins.

X3 is slated for a May 22nd, 2006 release (Memorial Day), although that may change.

Marvel’s Avi Arad reiterated what he had mentioned at the Bear Stearns conference last week, saying that Elektra was rushed, and as a whole, didn’t work.

As a franchise, Fantastic Four will have the most number of toys of any Marvel toy push in recent years. This is due mainly to there being four main characters.

After seeing weak openings for Blade: Trinity and The Punisher, Marvel will be more careful about placing its films against competition in the future.

As for the Lions’ Gate DVD deal, the studio will provide all the production funding, while Marvel will have final say on the creative aspects.
 
There is an error in the Toys Net Sales data.

Toys:

Net Sales

Q4 2004: An decrease from $36.8 million in Q4 2003 to $21.8 million in Q4 2004.
Year 2004: An increase from $212.8 million in 2003 to $150 million in 2004.
It says "increase" when it should say "decrease".

Go figure...:rolleyes:
 
Obviously, another graduate from the Arthur Anderson school of accounting.....
 
It was probably just written by B...

Nah I won't go there. :D
 
Read you prospectus' again knowing what you know about Enron!
 
http://www.icv2.com/articles/indepth/6540.html

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Jim Brocius of Cosmic Comics on Marvels in 7-11
'Stand-alone Stories the Key to Success'
March 08, 2005



Jim Brocius of Cosmic Comics in Las Vegas, Nevada saw the news that Marvel comics will now be available in 6,000 7-11 stores (see "Marvel Widens Distribution"), and is concerned about whether the content will fit the channel:



In the last 40 years I have bought hundreds of comic collections from hundreds of people. When I was a kid I knocked on every door of every house in my neighborhood to see if the occupants had any comics they were interested in trading for chores. I found comics and other assorted reading materials in every single house (and I mowed a lot of lawns and pulled a lot of weeds and swept a lot of driveways). All the periodicals I obtained had a commonality about them - there were no runs of anything. Indeed, finding three issues in a row of anything was a rarity in the extreme. There would be Worlds Finest #124, #128 and #133, along with the March, July and October Reader's Digest mixed in with the January, April and September Good Housekeeping. What this means is that most people (excluding the far and few between comic addicts such as myself), although readers, were casual readers. Evidence of this was borne out again and again.



The thing is you could be a casual reader of comics then. Absent the continued never-ending stories of today, you could plunk down your 12 cents and walk away with a satisfying reading experience. While you can still be a casual reader of Readers Digest or Good Housekeeping, there is no casual satisfying reading experience possible today with Worlds Finest (read: Superman/Batman).



The 7-11 market, indeed the entire market outside direct distribution (again, with the exception of a very small percentage of addicts) has not and will not embrace the concept of the continued stories. If that were not the case then we'd be seeing continued stories in all the other periodicals. We don't see them. The publishing world has experimented with the format and found it wanting.



Now, I believe comics to be a viable medium in the mass market, just not in the serial format which dominates the direct market. The mass market demands self-contained content. If Marvel (or DC, or anyone else) wants to be successful in the mass market they need to recognize the need to abandon the continued story structure in favor of the self-contained unit which the vast majority of the market prefers. Stand-alone stories are the key to success in the mass market. I hope Marvel is aware of this but I fear they are not. I wish them luck, because if they try pushing continued stories in 7-11 they're going to need it.



The opinions expressed in this Talk Back article are solely those of the writer, and do not necessarily reflect the views of the editorial staff of ICv2.com.
 
He's right.

7-11 customers who are new to comics won't be fans of decompression writing where the story does not progress much from beginning to end of a single comic (see Bendis on DD, Jones on Hulk).
 
I was reading through the second part of the News-stand column, and was trying to think of a better type of display. This is an 'out-of-the-Box' type solution, and possibly too exspensive, but here it is anyway: I was thinking about Toys 'R' Us and how they have those scanners throughout the store so you could get the price on any piece of merchandise by scanning it yourself, and also how a lot of music stores allow you to listen to previews of albums using the same method. What if they kept the comics in the nice plastic cover that we all know and love, but you could scan it and read a partial preview on a monitor. Maybe even as much as half of the comic. This way, while mom is shopping at Target, little Johnny can occupy himself over in the comic section plopped in front of the monitor. Little Johnny then bugs mommy to purchase said comic(s), because life will end as we know it if he doesn't find out what happens. Hopefully, mommy won't drop dead of a heart attack at the price. Some more business savvy people could explain to me the drawbacks.
 
Good thread, I'll come back later and contribute as soon as I've got the time!
 
From Buzzscope (formerly known as Popcultureshock), a former long-time Marvel editor Jim Salicrup talks about Marvel's move to 7-Eleven.

Thank Heaven for 7-Eleven


When Marvel Editor-in-Chief, Joe Quesada, recently spoke at Danny Fingeroth's Inside the Comic Creator's Studio seminar series at the Museum of Comic and Cartoon Art, I was surprised at how many audience members asked him about the recent announcement that Marvel Comics would again be distributed through 6,000 7-Eleven stores. As someone who makes his living working in the comicbook industry, I knew it was big news, but who knew how interested comics fans would be?

Folks have been foretelling the death of comicbooks for as long as I can remember, and we have come frighteningly close in recent years, so such positive signs as this 7-Eleven/Marvel deal are very, very encouraging. Just think of it, 6,000 new outlets - that's about three times the amount of existing direct sales comicbook stores. The possibilities presented here are staggering. For example, and here's something that would have a direct impact on the comic-buying budgets of all Marvel fans, the price of new comics could conceivably go down. The major reason comics cost so much now, is lack of sales, stemming from a serious lack of distribution. Back when the big comicbook bust came in the 90s, the direct market lost every distributor but one and over 3,000 comicbook shops closed forever. In order to stay in business the comicbook publishers were forced to raise prices to survive. With the possibility of selling greater volume, it's not inconceivable that Marvel's cover price could come down to $2.00 or less.

Yet because of the still-fragile health of the industry, it's with guarded optimism that I greet the 7-Eleven news. I spent two thirds of my thirty years in comics working for Marvel, so I'd like to see them do well. Now, as both a comics fan and an editor for a small comics and graphic novel publisher (www.papercutz.com) I'm rooting for this deal to succeed. Anything that makes comics available to a wider audience is good for comics in general. In that spirit, here are few suggestions to Marvel that they may want to consider…

1) At this early point, I'm certainly not privy to Marvel's marketing plans, but word has leaked out that Marvel plans to primarily sell its line of Marvel Adventure titles through the 7-Elevens. The theory is that these books are more accessible to new readers than Marvel's other titles. I don't quite understand this. Ever since Joe Quesada took over as Marvel Editor-in-Chief, hasn't he worked to make every title more first reader-friendly? Wouldn't it make more sense to put your very best titles out there? Whether it's the Ultimate line or the original Marvel Universe titles, wouldn't that be the way to go? Why squander this opportunity on a line of books that haven't been embraced by your primary (direct sales) market?

2) If the response to my first suggestion is that the regular Marvel line, or even the Ultimate line, is considered too continuity heavy for new readers, then I think that's insane. This bit of "conventional wisdom" really bugs me. Just look at the best-selling titles of the last few years, and you'll see that the so-called continuity heavy titles and crossovers dominate the sales charts. And look how many prime time TV series have gotten on board with continuity heavy storylines. Is there a single dramatic series on HBO that isn't a continuing serial? The point is, it's not the continuity, it's the quality of the actual writing. With writers such as Joss Whedon, J. Michael Straczynski, and Brian Michael Bendis on their top titles, why limit their potential audience?

3) If on the other hand, it's a question of presenting only all-age friendly content to this audience, then I have a few more suggestions. First, I'd suggest Marvel to rethink its position regarding the Comics Code Authority. Marvel has more than enough political weight to get the Code to revise its outdated all-or-nothing approach and adopt a ratings system similar to what Marvel currently has. Marvel has the right idea, they just do a very poor job of explaining what their ratings mean. I have no idea what "PSR" means, and there's no clue anywhere inside the comics themselves. The current system of differing ratings systems for different publishers is precarious at best. The Comics Code could be a very valuable tool for the comics industry, especially for manga publishers, and Marvel has the clout to make such a positive change possible. Further, there's no reason Marvel couldn't produce, like the movie and music industries do, cleaned-up versions of their top-sellers. For people who want their Marvel Comics in their original "uncensored" states, they'll have plenty of direct sales stores or online suppliers, such as our good friends at Mid-Town Comics to go to. But just as movie studios edit films for airlines and broadcast television, and record companies re-mix CDs for K-Mart and Wal-Mart, I see no reason why Marvel couldn't edit certain titles to reach a larger audience.

4) Less pin-up style covers. If Marvel really wants to reach a larger audience, let's see more covers that actually reflect the individual comic's contents. Yes, a cover featuring a well-drawn Spider-Man on a rooftop is nice every now and then, but hey - it doesn't hurt to feature the hero in jeopardy, or even in battle with a super-villain. There certainly have been some fine examples of such covers by some of Marvel's top artists in recent years, so let's just see more!

5) Finally, bring back Bullpen Bulletins and letters pages. If a new reader does pick up a Marvel comic for the first time, these pages can help tremendously to welcome him into the fold. A Bullpen Bulletins-style page can cross-promote the other Marvel titles on sale at 7-Eleven, and the letters page can provide further reasons to come back for the next issue, with a well-written next issue blurb.

I do have another idea for Marvel and their new 7-Eleven distribution deal, but I'm going to save that one for next week. In the meantime, I'm going to dig out my collection of plastic Marvel 7-Eleven Slurpee cups and drink a toast to the success of Marvel's latest venture.

Cheers! Or should that be -- Excelsior!
 
Wow, what a crappy name change. Pop Culture Shock was much better. :(

It'd be cool if they just did away with Marvel Adventures altogether, since it'll inevitably confuse readers who pick up on them and want to get into the "real" Marvel comics later, but the fact that they're selling anything out of 7-11s again is good.
 
Marvel Age will fail in sales for the same reason DC's lines of cartoon-based books don't sell terribly well; most kids don't think of themselves as kids and know when a book is being geared for kids. They often would find it "for babies" and want to get in on the real stuff. That's what should return to newsstands, Toy's R Us and other related stores.

In the 90's I saw Toys R Us selling packs of random Marvel/DC comics for a set price, and I wonder how well those sold.
 
http://www.icv2.com/articles/home/6760.html

Marvel Leads Licensing Growth
In 2004 Rankings
April 22, 2005

Marvel Enterprises was the most dramatic gainer in the annual License Magazine list of the Leading Licensors in 2004, moving from #69 in 2003 to #4 last year. The worldwide retail sales of its licensed products rose from $189 million to $4 billion. In addition to building licensing streams around its movies, Marvel plans to develop sub-brands, including Spider-Man and Friends for pre-schoolers, and Marvel Babies for infants. Marvel is also targeting specific international markets for 05, including Latin America, Sourth Korea, Malaysia, and India.



Disney and Warner Bros. Consumer Products continued in the top two slots, with Warner Bros. movie and TV lines, many of them based on DC Comics characters, providing strong prospects for '05.


Nickelodeon/Viacom Consumer Products is #3, and Sanrio (Hello Kitty) is #5 in a tie with Marvel. Other notable companies with pop culture retail implications in the top 25 include 4Kids at #9 (Yu-Gi-Oh!, Teenage Mutant Ninja Turtles, One Piece), and Pokemon USA at #24.
 
Marvel Enterprises was the most dramatic gainer in the annual License Magazine list of the Leading Licensors in 2004, moving from #69 in 2003 to #4 last year. The worldwide retail sales of its licensed products rose from $189 million to $4 billion.

That's a little bit of a jump, isn't it? Just to put those numbers in a little broader perspective, here's the top 20 with descriptions for the first 10:


1. Disney Consumer Products
Worldwide ◆ $15 B
Andy Mooney,
Chairman (818) 567-5947
Disney Consumer Products (DCP) will further expand programs
for core brands Mickey Mouse, Winnie the Pooh, Disney Princess,
and Power Rangers and introduce new properties That’s So
Raven, W.I.T.C.H., JoJo’s Circus, and Baby Einstein. Efforts to
broaden exposure for Mickey Mouse include appearances as the
Grand Marshall for the 2005 Tournament of Roses Parade and
the Cherry Blossom Parade in Washington, D.C., as well as a new
Disney Channel television program targeted at the preschool set
planned for 2006. Pooh’s Heffalump feature film—in theaters
February 2005—introduced a new character, Lumpy, to the 100
Acre Wood for the first time in 40 years. Additional Pooh television
specials and direct-to-video releases are planned in 2005.
Disney Princess will benefit from the platinum-DVD release of
Cinderella. A new line of Cinderella consumer products will
launch in 2005 as an incremental Disney Princess program
across all major retailers. Other initiatives: refresh and introduce
new items to the food and consumer electronics categories while
introducing a new infant electronics business. ✯

2. Warner Bros. Consumer
Products ◆ $6 B
Karen McTier, EVP,
Domestic Licensing, Global Toys, Publishing, &
Themed Entertainment (818) 954-3008; Jordan
Sollitto, EVP, Worldwide Marketing and International
Licensing (818) 954-7807
Warner Bros. Consumer Products (WBCP) kicks off 2005 with
a stable of theatrical and television properties. Delivering more
Batman action than ever, WBCP will capture the essence of the
Caped Crusader in all his forms with a product line inspired by
this summer’s theatrical release, Batman Begins; Warner Bros.
Animation’s television series, The Batman; and classic Batman,
straight from the pages of DC Comics. WBCP will satisfy
consumers’ sweet tooth with the magical world of Charlie and the
Chocolate Factory. Merchandise based on Harry Potter and the
Goblet of Fire is sure to cast a spell on fans. Tim Burton’s stopmotion
animated fantasy film, Corpse Bride, will be supported by
a creative product line. Television continues to be a growing,
asset-rich part of WBCP’s portfolio with such series as Hi Hi
Puffy AmiYumi, Justice League, Krypto the Superdog, Teen
Titans, Codename: Kids next Door, and Scooby-Doo. ✯

3. Nickelodeon & Viacom
Consumer Products ◆ $4.75 B

Leigh Anne Brodsky, President (212) 846-7066
Nickelodeon Consumer Products has a new name: Nickelodeon
& Viacom Consumer Products, and an expanded roster of
responsibilities that include merchandising for Nickelodeon,
Paramount movies and TV properties, Spike TV, Comedy Central,
and MTV International—all with a greater emphasis on global
brand management. New Nick Jr. series LazyTown gets support
from master toy licensee Fisher-Price with products due for fall
’05. Lifestyle ’tween brand everGirl gains shelf presence with dolls
and doll accessories from Playmates, activity kits from GiddyUp!,
a board game from Cardinal Industries, and exclusive apparel and
accessories at Kohl’s. As licensing agent for Holly Hobbie, the
company plans to reintroduce adult-based products for spring ’05
for specialty stores. New kid-targeted brand Holly Hobbie and
Friends launches as an entertainment and merchandising
property in 2006. New venture Nickelodeon Records expands
the line with a Kids Choice compilation and sound track for Drake
& Josh. The first-ever Nickelodeon Family Suites by Holiday Inn
opens Memorial Day in Orlando, FL. Upcoming movies:
Charlotte’s Web and Barnyard for Nickelodeon Movies; War of
the Worlds for Paramount Pictures. Also from Paramount: a new
line of licensed merchandise based on The Godfather franchise
led by a new Godfather video game from EA Games. ✯

4. Marvel Enterprises ◆ $4 B
Tim Rothwell, President, Marvel Worldwide
Consumer Products Media Group (310) 234-8171;
Bruno Maglione, President, Marvel International
+44 207 025 8401
From a theatrical standpoint, integrated licensing programs are
being built around such properties as Fantastic Four (Fox) in
summer 2005; X-Men 3 (Fox), Iron-Man (New Line), and Ghost
Rider (Sony), all scheduled for 2006; and Spider-Man 3 (Sony)
and Sub-mariner in 2007. The company also is focused on continuing
to leverage its classic character licensing business and
supporting multi-character sub-brands it has developed including
Marvel Heroes, the preschool-targeted Spider-Man and
Friends, and the infant-geared Marvel Babies. A core overall
strategy will be to continue to consolidate license subcategories
with category leaders that can help maximize awareness,
distribution, and retail support for the Marvel brand. On the
international front, Marvel will look to expand its presence in Latin
America, South Korea, Malaysia, and India. ✯

5. Sanrio ◆ $4 B (est.)
Bruce Giuliano, SVP, Licensing (310) 523-1705
A few of Hello Kitty’s friends will join her on licensed
scatter-brained Chococat (1996), cheerful fawn Deery Lou
(2002), and longtime favorite My Melody (1976). The initial offering
will consist of T-shirts, underwear, and accessories, followed
by other soft and hard goods. Hello Kitty will enter the luxe market
with co-branded partners such as Judith Leiber with signature
pieces including a minaudiere and other small accessories. The
newest partner is Kimora Lee Simmons & Simmons Jewelry Co.
The “Hello Kitty Collection by Kimora Lee Simmons” is a line of
fine jewelry due at upscale department stores for summer 2006.
The collection includes earrings, pendants, charm bracelets, and
necklaces with diamonds and precious and semi-precious
stones. Other co-branded collections include the limited-edition
Hello Kitty Nokia phone, launched in January 2005. ✯

6. Cherokee Group ◆ $3.5 B (est.)
Robert Margolis, Chairman & CEO
(818) 908-9868
The Cherokee brand continues to expand throughout Mexico,
Europe, the Eastern Block, and parts of Asia. The Sideout
brand expands in China, while Carole Little and St. Tropez
West grow in the U.S. The company will continue to expand
these brands worldwide as it seeks to further develop All That
Jazz and Chorus Line in the U.S. House Beautiful and Latina
will launch in the U.S. Brand representations include Hot Kiss,
Garanimals, Steven Cojocaru “Cojo,” Popular Mechanics, and
Essence. Cherokee Group continues to explore brand acquisitions
and representations. ✯

7. Major League Baseball ■ $3.5 B
Howard Smith, SVP, Licensing; Steve Armus,
VP, Soft Goods; Colin Hagen, VP, Hard Goods
(212) 931-7900
As part of its MLB Authentic Collection, Majestic Athletic
becomes the official uniform supplier to all 30 MLB clubs and
will introduce a new outerwear program. 2005 also will see
the introduction of Nike Pro Performance apparel. MLB will
continue to market to core fans, as well as continue to reach
casual fans through the Access to the Show marketing program,
which last year partnered with Projekt Revolution and
the Finish Line to create a national promotional platform. Other
goals: continue to focus on the women’s and kids’ apparel
businesses; remain committed to the trading card business
and baseball card collecting with a national marketing
campaign; introduce a back-to-school product assortment
and in-store merchandising while also expanding the memorabilia
category through continued growth and awareness of the
MLB Authentication program. ✯

8. National Football League ■ $3.4 B

Mark Holtzman, SVP, Consumer Products
(212) 450-2000
NFL Equipment (produced by Reebok) and women’s and children’s
product are expected to drive significant growth in 2005.
As part of the 10-year NFL-Reebok partnership, Reebok outfits
all 32 NFL clubs with on-field uniforms and sideline apparel.
Other apparel partners: G-III, Outerstuff, VF Imagewear, Riddell,
and Wilson. Electronic Arts, Microsoft, and Sony fuel video
games, while Fleer, Fotoball, MBI, The Topps Co., Playoff, and
Upper Deck score in trading cards and memorabilia. ✯

9. 4Kids Entertainment (Licensing Agent) ◆
$3 B

* (est.) Alfred R. Kahn, Chairman & CEO
(212) 758-7666
Yu-Gi-Oh! maintains a leading position in the ratings and the
marketplace with new trading cards, toys, and video games.
Since its reintroduction, Teenage Mutant Ninja Turtles has
gained more than 75 licensees and now is among the top three
male action properties at major U.S. retailers. New TMNT products
will continue to launch this year. The relaunched Cabbage
Patch Kids were one of the must-have holiday gifts of 2004. In
2005, CPK “babies” and lifestyle merchandise begin rolling out.
Girls are a focus with support for Mew Mew Power and Winx
Club. A new trading card game is on tap for Winx Club in the
first half of ’05. Magical Do Re Mi, another action-adventure
show for girls, is expected to join the 4Kids TV lineup in 2005.
Pokémon FireRed/Pokémon LeafGreen were among the topselling
video games of 2004. New Pokémon toys and softlines
are due in spring and fall ’05. Nintendo classic characters are a
hit in softlines and accessories. One Piece merchandise is due
to launch in fall 2005/spring 2006. ✯
*Estimated worldwide sales for brands including product categories not represented by 4Kids
Entertainment.

10. National Basketball Association■ $3 B Sal LaRocca, SVP,
Global Merchandising Group (212) 407-8000
The NBA’s merchandise business remains strong despite the
decline in popularity of retro apparel. The league reached a $125
million agreement with Spalding for the largest equipment deal in
sports history and announced a comprehensive electronic
games strategy. The NBA was the first sports league to develop
mass-market programs with Wal-Mart and Target, and initial
sales indications are positive. With the growing global popularity
of the NBA and the increase of foreign-born players on current
team rosters, the percentage of business outside the U.S. has
risen to 25 percent of total sales. The NBA has seen strong sales
increases in Europe with Champion, New Era, and Unk; in Asia
with Reebok apparel; and in Latin America with new non-apparel
licensees. The NBAStore.com launched three new foreign language
online stores in two versions of Chinese, Japanese, and
Spanish. In December 2004, the NBA Store achieved records in
daily, weekly, and monthly sales; units sold; and number of visitors.
Key business drivers include the continued popularity of the game
as All-Stars such as Shaquille O’Neal, Tracy McGrady, and Vince
Carter changed teams; the emergence of young players such as
LeBron James, Dwyane Wade, and Amare Stoudemire; and the
play of new teams such as the Phoenix Suns, Seattle
SuperSonics, and Washington Wizards. ✯

11. General Motors ◆ $2.9 B
12. The Collegiate Licensing
Company ■ $2.8
Mattel Brands Inc. ◆ $2.4 B

13. United Media ◆ $2.4
14. HIT Entertainment ◆ $2.2 B
15. NASCAR ■ $2.1 B (est.)
16. Westinghouse ◆ $1.9 B (est.)
17. Universal Studios Consumer
18. National Hockey League ■ $1.5 B

*Due to the current labor dispute, the NHL could not provide updated sales numbers.
19. Liz Claiborne ◆ $1.4 B (est.)
20. 20th Century Fox Licensing &
Merchandising ◆ $1.4 B
 
http://www.newsarama.com/marketreport/MvlDCShowdown.htm

While online fandom is taking sides and placing bets on who will win the upcoming summer sales derby between Marvel and DC, Marvel Comics may just be making that they're actually the Secretariat of this two-horse field.

Most readers that follow the sales charts fully expect a summer showdown at the top part of the chart. Books like All-Star Batman & Robin and Superman, Green Lantern, and the various Countdown to Infinite Crisis titles going head-to-head with New Avengers, the Ultimate titles, the remaining issues of Astonishing X-Men’s first year, and of course, the sprawling House of M.

But a closer look at Diamond March Market Share report indicates DC appears to have a tough road ahead making up their rival's considerable lead in the overall sales race.

According to the publisher, Marvel's 48.96% market "Unit Share" (the percentage of raw books sold) and 41.6% dollar share (percentage of dollars generated for all products sold) for actual March 2005 sales (as reported by Diamond Distributors) are the highest and second highest shares recorded by Marvel or any comic book publisher in at least seven years.

If going by Diamond's publicly released monthly sales charts going back to April 1998 (the earliest chart available in Diamond's online archives) is an accurate indication, Marvel may have a compelling case.

According to the charts reviewed by Newsarama, in June 2004 Marvel scored a rather anomalous 45.49% in dollar share, its highest ever dollar share percentage, with March's 41.6% being the second highest. And apparently no publisher - including Marvel - has achieved higher than a 48.96% unit share during that 04/98 to 03/05 timeframe, a full 7-year period.

"From a combined dollar-share and unit-share standpoint, March 2005 was our best month in years," Marvel Publisher Dan Buckley told Newsarama. "Our creators, working with our superb editorial staff, are producing simply phenomenal work. We couldn't be prouder."

According to Newsarama's review, Marvel's closest month came in January 2004 when they scored a 48.20% unit share, the highest publisher percentage until last month.

The publisher also told Newsarama the percentage "spreads" between Marvel and DC in March 2005 (the difference between their market shares) of 20.64 percentage points in unit share (48.96 vs. 28.32%) and 15.91 in dollar share (41.60 vs. 25.69%) respectively are historical highs. This was also confirmed by Newsarama.

Industry followers may note that prior to December 2001 Diamond only reported sales based on retailer "Initial Orders" (which didn't account for advanced reorders or reorders, a relative DC strength), as opposed to Actual Sales. Between 12/01 and 12/02 Diamond reported sales charts based on both methods, until phasing out the Initial Order chart altogether as of January 2002.

However, prior this time and due to a variety of factors - including a post-bankruptcy weakened Marvel and the fact that publishers like Image and Dark Horse were grabbing much larger market share percentages than they are currently - Marvel and DC rarely opened up large Initial Order leads on one another in either the dollar or unit percentage category. It's very unlikely (though unconfirmed) that prior to December 2001 either publisher recorded the sort of Actual Sales market share percentages or spreads registered last month.

Either way, any publisher accounting for almost 50% of the number of comics and graphic novels sold in one month is rare and perhaps unprecedented territory in the contemporary single distributor/Diamond era.

March 2005 also drifted into uncharted waters in terms of the make-up of Diamond’s Top 25.

Though giving up the top spot to the $1.00 Countdown to Infinite Crisis and the #7 position to Superman #214 and fueled in part by the six issues of their X-Men: Age of Apocalypse event that all shipped in March, Marvel claimed 23 of the top 25 books for the month, also a high-water mark going back to at least April 1998.

Only again in January 2004 when Marvel scored 22 of the top 25 has any one publisher took as many of the top 25 chart positions as Marvel did last month.

Both Marvel and DC can only hope March 2005 will be the beginning on precedent setting spring/summer season in a number of ways. Though retailers and all publishers not named Marvel or DC can only hope the big two’s escalating market shares are achieved through increased sales and driving new customers into comic shops, as opposed to just grabbing a larger share of the same static reader base.
 

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