Joe Field: How do Comics do in a Down Economy?
Economics and Comics: Talking Shop
Like any nonessential item, comic books could be considered a luxury in recessionary times. But with a relatively low price point and the ability to transport readers temporarily from their real-life worries, comics have done well historically during recessions.With comics prices rising, and the emergence of the graphic novel, will that stay true with today's economic conditions? I talked to Joe Field, ComicsPRO president and owner of Flying Colors Comics and Other Cool Stuff in Concord, Calif., about his take on comics and the recession.
Newsarama: You've sold comics through a recession before. The conventional wisdom is that comics sales tend to go up in a recession. Does that match with your experience? Joe Field: Doing just a bit of research to prepare for this, I found that there have really only been two recessionary periods in the 20 years that Flying Colors Comics has been open. The first one was in 1990 and 1991, and at that point, Flying Colors really was not a fully mature business. Additionally, that time was still in the wake of the crazy success of Tim Burton's Batman film. From a couple of months before its June 1989 release through the end of '89, Flying Colors did fully 20% of our gross sales in Batman stuff --- not including the comics! There was also the emergence of dynamic new talent driving sales on new comic books, including Jim Lee, Todd McFarlane and others, that started the boom period that would eventually bust in '93 and '94, after the U.S. recession was over. Needless to say, even though there was recession in '90 and '91, Flying Colors grew right through it. The other period of recession in the last 20 years started in late 2000 and came to a fully formed downturn just after 9/11. In Flying Colors' history, we suffered some trying times in business in the mid- to late '90s, but started to see a renaissance in comics that started slowly in 1999 and has built steadily for us every year since. So in both recession periods, it's been my experience that we got stronger when the overall economy got weaker. NRAMA: Of course, a huge change from previous recessions and downturns is, rather than selling entertainment for 20 cents or a dollar, a key portion of many retailers' operations is selling $20 trade paperbacks. Do you think we'll see more price resistance or cutbacks in the current economy? JF: I've noticed that there are big differences between the global or national economy and the comics' economy. There are so many idiosyncrasies involved with comics publishing and retailing. The comics' economy is more severely impacted by what the publishers are able to produce and what the fans respond to — and both of those factors are completely inconsistent from week to week and month to month, let alone year to year, or trying to coincide with the macro-economy. Here's a chart:
'90/'91 '00/'01 '07/'08
Avg Sale $10.50 $22.10 $29.18
Avg Price (periodicals sold) 1.66 2.90 3.29
Comics/Transaction 1.75 3.04 4.3These stats reflect that the price increases from each period to the next had no noticeable effect on how many comics were purchased by our customers. Granted there are other factors that go into this — like how effective our promotion has been, how our customers and product mix have matured, how available stock has been (it was much more of a crap-shoot when there were a dozen distributors), etc. NRAMA: Where do you anticipate more price resistance — reading material or ancillary merchandise like statues and toys? JF: I'm already seeing a softer market for higher-end statues and busts. Toys have slowed a bit. I think that's related to the “cake vs. the frosting” analogy. For most of our customers, comics and trades are the cake, while toys and statues are the frosting. Consumers are most likely to cut from the top layer of frosting first, before they get all the way to reducing the size of their cake. And that’s a bit of what we’re seeing. I’ve always noticed that as certain categories, like toys and statues/busts are saturated by so many different companies having licenses, consumer choices are muddled and the overall category takes a hit. I'm sure that's likely to be the case even more in a difficult economy. There is always a “nesting” factor with economic downturns. We've seen it this summer with the high gas prices, many reports have shown that people have decided to stay home for vacation — they're calling them “staycations.” When readers have time at home, they read! So I'm hopeful and confident that the comics market will weather this storm very well. NRAMA: Have you seen readers shift any of their comics dollars — either to comic store staples like back issues, or to discount merchandise? JF: In tough times, everyone is looking for a bargain. While we have a selection of discounted back issues, we haven't really seen a shift of dollars to lower-priced comics, simply a shift away from higher priced non-essentials. We have also been ahead of the curve in terms of delivering excellent values throughout the store while still not being a discounter. Anyone who makes a $25 purchase with Flying Colors receives a "FlyCo Bonus Pack" which has another four comics in it for free. This has been a great way for readers to find series that they may not be currently reading. And it works out that with every qualifying purchase, the customer here is rewarded with a pack of comics with a retail cover price of $9-14. NRAMA: Will comic-book brick-and-mortar stores be more likely to face competition from online retailers during a tough economy? What’s the best way for comic book stores to compete? JF: I expect online business will continue to grow during the tough times because that is the trend of what’s going on in the U.S. economy, not just the comics’ market. Our competition comes from a variety of sources, not just from online stores that sell comics related stuff. My experience tells me that the more prepared and better-operated brick-and-mortar stores will come through whatever happens in good shape. During the last downturn, from '00-'02, Flying Colors remodeled to better reflect the growing book category for comics. Our sales from '00-'07 at Flying Colors have been up each and every year since. 2008 will likely be the year that breaks the string, although I'm hopeful we'll have a strong finish to an otherwise flat year. And we also remodeled again in early '08 to better maximize our limited space and move even further toward responding to the growing sales of trade paperbacks and graphic novels. It's incumbent upon all retailers to keep finding creative new ways to reach out to find new readers for comics and new customers for us. That is a big part of our jobs! The best way to compete is still to work hard, work smart, listen well and respond to what our customers are wanting. NRAMA: What kinds of programs does ComicsPRO offer to help retailers as they traverse a tough economy? JF: An essential part of ComicsPRO's mission is to help our member retailers reduce the fixed costs we all incur. To that end, we have a real money-saver in our credit-card processing program through Chase Paymentech. Many of our retailers are also taking advantage of preferential deals we have with ADP Payroll processing, Assurant Health, Sports Images for comic supplies, among other member services found here. (www.comicspro.org/services.html) On top of the cost-saving benefits, ComicsPRO members have each other to lean on for advice, for experience and for a way of presenting retailer concerns to the larger industry. Our membership represents many of the finest retailers in the business — many have not only weathered previous economic storms, but have prospered through the tough times. I've been in this business for over 20 years, and I learn from ComicsPRO members pretty much every single day. There really is "strength in numbers" and the best way for comics specialty retailers to get that is by joining and being active in ComicsPRO. Matt Price blogs daily at Nerdage (http://blog.newsok.com/nerdage) and is the co-owner, with his wife, Annette, of Speeding Bullet Comics (www.speedingbulletcomics.com) in Norman, Okla. Related: Comics and Economics: Talking Shop Economics and Comics: Readers Economics and Comics: Webcomics Meeting Atom! Freeman