UPDATED: Diamond Changes Thresholds for Publishers

According to various sources across the internet, Diamond will be ending the print edition of its Previews Adult Supplement catalog (which lists all adult comics and products offered to retailers from various publishers), and, due to economic conditions, is raising the purchase order benchmark from $1500 to $2500. The distributor began informing publishers of the change last week by phone.

While the change sounds like something that it may not affect readers, the move may result in the disappearance of many small press and independent titles from store shelves unless alternative means of distribution are found, and retailers take advantage of them.

As Slave Labor chief Dan Vado explained in an e-mail (published with Vado’s consent) to Tom Spurgeon, the new $2500 benchmark means that each book needs to generate $2500 worth of revenue to Diamond – a total on a purchase order for the book. In Slave Labor’s case, that means $6000 in retail sales, based on the discount SLG gives to Diamond in order to be listed in Diamond’s Previews and distributed via the company.

Vado continues, “That does not mean that Diamond is going to cancel or not carry books which appear in the Previews but do not reach that benchmark, but it does mean that if you have a line of books which consistently do not meet that mark, you will not be getting your books listed in the Previews for long. “

While the change affects smaller publishers in terms of current product – first issues may meet the benchmark, but later issues may not, it also hits publishers when re-listing their products as “Offered Agains,” to keep a backlist of titles available to retailers, as many of those issues will not reach the new threshold.

Again, Vado: “Diamond is in essence asking everyone to sell more in a recessionary environment or find themselves out of the catalog. Short term, a lot of publishers are going to find themselves with no distribution.”

Perhaps surprisingly, Vado said he is not unhappy with Diamond, but rather the industry that has allowed itself to reach this point – that is, that the comic book industry has no economic basis for long-term survival beyond Marvel and DC. “The next year or so are a critical time for the entire country and the comics business is not going to get out of this unscarred” Vado said, “Lots of people, be they publishers, retailers or creators, who have been around for a long time are going to suddenly with no business left and no place to turn. People, and I mean everyone from fans to creators to publishers to retailers, need to use this as the last wake-up call after years of hitting the industrial snooze button and finally find a way to get together and address our common lifelong problems and find answers to them.”

Read the full text of Vado’s letter here.

In terms of actual numbers, Vado later corrected a blogger’s math (keeping thresholds and benchmarks for retail and wholesale straight is notoriously tricky, trust us) , stating that a typical $3.00 comic would have to sell over 2,100 copies to meet the benchmark. Vado continued, saying that very few graphic novels published by smaller publishers meet that total.

Vado told Spurgeon that SLG will be rolling out a retailer-only website where they can re-order Slave Labor titles, and plans to open the site to other publishers – “in essence trying to become a distributor myself. There might be some opportunity to make money on that bottom half of the scale that Diamond cannot handle right now.”

Diamond last changed its benchmark in September of 2005.

UPDATE Monday January 19 - 3:40pm EST.

At the Comics Chronicles site , John Jackson Miller has played with the math, and figured out what things could mean:

Miller writes:

News circulating that Diamond has increased its minimum purchase order for comics from $1,500 to $2,500 has generated a lot of discussion on the Web, with speculation on where the dividing line might fall.

First, sorry, Chevy Chase, there will be math. First, that $2,500 doesn't appear to refer to the total dollar value of the order, but rather what the publisher will realize from the sale after Diamond takes its share. Let's take 40% for the sake of argument. The total value of dollars at retail for a purchase order to be generated for a single item would be $2500/0.4, or $6,250.

This means this many copies at the following comic book price points:

$2.99: 2,090 copies
$3.50: 1,785 copies
$3.99: 1,566 copies
$4.99: 1,252 copies
$5.99: 1,043 copies
$6.99: 894 copies
$7.99: 782 copies

...and then moving up into trade-land...

$12.99: 481 copies
$13.99: 446 copies
$14.99: 416 copies
$15.99: 390 copies
$16.99: 367 copies
$17.99: 347 copies
$18.99: 329 copies
$19.99: 312 copies

So where does the end of the monthly Top 300 comics list fall? We're still awaiting data for the bottom of the list for December 2008, but the average estimated 300th place item for the first 11 months had sales of 2,779 copies, well above the mark for books at $2.99. Looking back, though, earlier years had lower numbers:

2007: 2,069 copies
2006: 1,796 copies
2005: 1,427 copies
2004: 1,238 copies
2003: 1,403 copies
2002: 1,050 copies
2001: 1,017 copies
2000: 1,758 copies

...and so the average 300th place book would have come in just slightly under $6,250 at $2.99 in 2007. I have added a quick page (which requires a little formatting yet) of the 300th place items from the last 10 years to Comichron, to go alongside the generally more trafficked page listing the Top Sellers Monthly since 1996.

Miller notes that there are many caveats to his rough calculations - many smaller and independant publishers have been pushed out of the Top 300 rankings; $2.99 may not be the right price point to be talking about for smaller (or any) publishers anymore; the chart does not conclusively show a book's total intial order, and Diamond uses its minimum threshold levels for guidance, not as a hard and fast line in the sand.

Miller also has some comments on trades and graphic novels reaching this new threshold - read the full article here.

Newsarama Note: The article originally referred to the benchmark as the purchase order threshold. We apologize for the mistake.