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Disney buys Marvel: Historical notes on a historic pairing

Monday, August 31, 2009

According to Wall Street sources, the Walt Disney Company will acquire Marvel Entertainment Inc. for $4 billion in stocks and cash. Comics industry observers and fans alike are already discussing the potential implications of the news, and will be for days — but at first blush, it appears to complete, in an ironic way, a trip that Marvel began in the summer of 1991, when Macandrews and Forbes sold 40% of Marvel to the public. [Update: See our timeline of Marvel ownership events.]

That sale created a stock that sparkled throughout the early 1990s speculator bubble period in comics, with Marvel buying additional assets along the way in financier Ronald Perelman's attempt, in his words, to form a "mini-Disney." Dan Raviv quotes Perelman in Comic Wars: Marvel's Battle for Survival:

"It is a mini-Disney in terms of intellectual property. Disney's got much more highly recognized characters and softer characters, whereas our characters are termed action heroes. But at Marvel we are now in the business of the creation and marketing of characters."

And market it did. There were a wide range of acquisitions in that era: trading-card makers Fleer (July 4, 1992, for $265 million) and Skybox (March 9, 1995, for $150 million); comics publisher Malibu (1994) and distributor Heroes World Distribution (Dec. 28, 1994); and sticker manufacturer Panini ($150 million) and magazine publisher Welsh. Marvel, itself, was on television with X-Men and Spider-Man cartoons and was working a mailing list with millions of names of young consumers, brought together through its own publishing efforts and co-branding promotions that put Marvel characters' names on supermarket shelves everywhere. By the end of the first half of the 1990s, Business Week reported, Marvel's stock was one of the five fastest-growth stocks in the first half-decade.

Marvel was doing business with Disney then, publishing Disney comics from 1994 to 1997 — though only using characters in the Disney cartoons appearing in theaters and in the "Disney Afternoon" slate of TV shows — the classic Ducks characters and reprint material remaining at Gladstone. That was one of Marvel's later forays into the "youth entertainment" market during that high-flying period for the stock; it's part of what pushed Marvel's title output high even after the comics market collapse began in earnest in 1994.

By the mid-1990s, of course, the debts incurred from Marvel's string of purchases — plus continuing malaise in the comic-book industry — forced Marvel to file for Chapter 11 bankruptcy protection on Dec. 27, 1996. Marvel emerged two years later after a bitter court fight that found financier Carl Icahn in control of the company for a time; the new firm's publishing slate had shrunk a lot by then, and would continue to shrink further before the comics industry righted itself at last this decade. Disney comics at Marvel were essentially gone by then, Disney's comics offerings in the United States pared back to what was at Gladstone and later Gemstone — and a few properties have landed more recently at Boom! Studios. (Disney's worldwide comics presence, by contrast, has long been more robust.)

Disney's original comics connection, of course, goes back almost as long as comic books have been around. Mickey Mouse Magazine first appeared from Western Publishing in the summer of 1935. That magazine would evolve into the venerable Walt Disney's Comics & Stories, beginning in October 1940. Its publishing history demonstrates the timeline of Disney publishing in general: under the label of Western's distributor Dell until 1962; at Western Publishing imprints Gold Key/Whitman from 1962 to 1984; at Gladstone (a company, by its own name, formed to celebrate classic Disney comics) from 1984 to 1990 — and then came Disney's attempt to publish comics under its own name, from 1990 to 1993. When the aforementioned split of properties between Marvel and Gladstone followed from 1994-97, Marvel actually distributed the Gladstone comics to the newsstand market under the Marvel/Disney imprint, as Brent Frankenhoff shows at CBGXtra.

Disney characters have had a major influence on comics, but notable is the influence of comics on Disney. Donald's wealthy Uncle Scrooge McDuck first appeared in "Only a Poor Old Man," in Dell Four Color #386, in March 1952; the character created by comics legend Carl Barks would migrate back into the larger Disney cartoon pantheon.

Marvel, again, also goes back near the dawn of comics publishing — with the first appearance of the Marvel name on a comic book from Martin Goodman's publishing company 70 years ago. Marvel's route to the 1991 public offering took it through holders at Cadence and, finally, Hollywood production company New World Entertainment when Perelman bought the company in January 1989. New World had intended to spin Marvel characters into films, but its reach was limited — mostly TV movies. It's of note that Disney buys Marvel at a time when Marvel is now a player on its own right in the film-making scene; 20 years ago, the impact of such an announcement would have been much different.

Of the announcement itself, it does appear clear that Marvel's film successes — plus the unraveling of the film rights to most of them, which took a long time — make the company an attractive purchase for Disney, particularly as the audience for its characters skews more male than the probable existing Disney customer base.

On the publishing side, which is what The Comics Chronicles focuses on, it would appear that there are opportunities for new products, and to get existing products into different venues, depending on how quickly synergies can be realized. It's difficult to see how changes to distribution could be on the horizon: Disney may have its own channels to reach the book trade with its products, but Diamond remains the only way to reach the direct market with the volume Marvel requires — that was shown in the Heroes World years — and it could well be that Diamond's specialization in comics gives it structural advantages against other book distributors that might potentially handle Marvel comics to the book trade. An interesting question is the newsstand, in decline for the magazine market in general; Disney may have additional relationships which might help Marvel on that score.

Also, at long last — there is finally a parity between the two major players in the comics industry when it comes to corporate ownership: DC has been owned by Time Warner for years, whereas Marvel had always been either a corner of a smaller conglomerate or on its own; now, the major two comics publishers are owned by two of the largest media corporations in the world.

A developing story for the industry, and certainly an important day in the history of comics — this could arguably be judged the most important single event in comics this decade.

Update: In response to questions of how Disney comics performed at Marvel when it published them, we can look at any of the known numbers from months from September 1996 onward until the end of the deal, in early 1997. It was at the end of the venture, and Disney Comic Hits was about all that was left — we can see it as the lowest-selling Marvel title in September 1996, in 256th place with 6,500 copies sold in the comics-shop market. Gladstone's numbers were similar. However, Disney Comic Hits was clearly a mail-order play as well for Marvel — the Statement of Ownership for the title put average monthly sales for 1996 at 60,732 copies, with a whopping 28,277 copies sold via subscription. Marvel was doing a lot of work with mailing lists at the time; that's an astonishing figure for subs. That may point to another place where corporate synergies might work to develop a sector of comics industry sales; subscriptions are not a major part of comics circulation except for among younger-reader titles, where direct-marketing efforts are more often targeted.

Update II (of a series, collect them all): Noting the $4 billion dollar price tag Disney paid for Marvel, that sale price is probably reasonably close to the number of comic books Marvel has sold in North America in its 70 year-history. The last back-of-the-envelope estimate I ran put the number of comic book copies sold across all Marvel incarnations from Timely to today at somewhere north of 4 billion units. (We might also note that purchase price is the equivalent of more than a billion comic books, if sold at today's prices!)

Another interesting bit of trivia is that, when last I ran a count of how many different comic books had been published in the United States by the various publishers across time, DC led Marvel by several thousand issues. Marvel had more titles with different names, but the typical DC series ran longer. My hunch is that if you were to parse out all the Disney-related comics from their individual publishers — particularly, those that Disney might have the continuing rights to — that probably closes the gap. It's not that meaningful a figure, except to the extent that it increases the reprint library for the fused companies. As prolific publishers go, the Marvel/Disney share of U.S. comics publishing history could thus be something close to DC's, by virtue of Disney's large slate in the Golden and Silver Ages.

Update III: A Title Spotlight is now on the site showing the sole Statement of Ownership that appeared in Marvel's Disney Comic Hits. I have not found any other Statements in other Marvel Disney series; they didn't run long enough. If you have found any, let me know.

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July comics sales: Flashbacks to the past

Sunday, August 23, 2009

And now let's continue our look at what came before July 2009 — when Captain America Reborn #1 topped the charts with approximately 193,000 copies ordered by comics shops through Diamond...

July 2008's top seller was Marvel's Secret Invasion #4, with first-month orders of approximately 175,400 copies in the direct market, just slightly less than the previous issue. Check out the sales chart here.

July 2004's top-seller was Superman/Batman #11, eclipsing other strong contenders including Avengers #500 and Identity Crisis #2. Superman/Batman had final orders through Diamond in July of 143,720 copies. Check out the sales chart here.

July 1999's top-seller was Uncanny X-Men #372, with preorders of approximately 123,200 copies in the direct market. It was another disappointing summer month for the direct market, hoping to claw back from its worst slump then or now. It says something about the relative health of the industry today that comics shops ordered more copies of the Top 300 comics last month than ten years ago — at a dollar value 42% greater! Check out the sales chart here.

Although it's not the title that topped the charts in July 1994, Zero Hour: Crisis in Time was the most memorable phenomenon of the month. DC's five weekly issues of Zero Hour took sixth through tenth place at Diamond. What was the #1 book of the month? There was a split decision between the two major distributors, with X-Men #36 topping the charts at Capital City Distribution and Spawn #23 edging it out at Diamond. With its enhanced cover, the "Phalanx Covenant" X-Men #36 sold for $2.95, a dollar more than the Spawn issue — and it's certainly likely that when newsstand and subscriptions are figured in, X-Men had more copies in circulation. Capital City alone sold 125,550 copies of the issue, and total sales across all channels were probably closer to half a million copies.

But July 1994 was a "lackluster" month overall, to use the term in Capital's report. Internal Correspondence, speculating on why sales were off in what was supposed to be the peak order month for the year, put the blame on proliferation of titles, lack of quality titles, and cover prices. "Have comics simply priced themselves out of competition with other forms of entertainment?" asked Capital co-owner John Davis. "In the past, fans could afford to buy all of a publisher's releases each month. Given the current $2 to $2.50 price of most comics, that is no longer possible." (Demonstrating it's not a new debate at all — though to be exact, while Capital did figure a $2.51 average price for products in July 1994, that's not a weighted average. The top 50 comics had an average price of $1.90.)

July 1989's top seller at Capital City was Batman #439, concluding Marv Wolfman's "Batman Year Three." It was all Batman all the time in that first full month after the release of Tim Burton Batman film; the top four were another issue of Batman and two issues of Detective Comics. Capital City's preorders on the issue were 108,800 copies, and the true total is at least in the neighborhood of half a million.

Finally, July 1984's top comic book, both at Capital and most probably everywhere else, was Marvel Super-Heroes Secret Wars #7, continuing the year-long mega-cross-over. Next month would come the new Spider-costume...

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Modest recovery continues in July comics sales

Friday, August 21, 2009

The summer seems to be breathing some life back into comics sales figures in several categories, according to The Comics Chronicles analysis of July 2009 comics ordered from Diamond Comic Distributors.

The decline in Top 300 comics unit sales has slowed, and we picked up a few points in Top 300 comics dollars, thanks to six comics above the 100,000-copy mark. There was a generally stronger slate of event comics for July than in previous months, and it was our best month of the year for both Top 300 comics units and dollars so far.

Dollar sales of the Top 300 trade paperbacks continued their June pace, off 9%. Between frontlist comics and trades, the gap narrowed to 4% — and the overall figure, including backlist trades and magazines, appeared to be even or just slightly ahead of last year, by less than 1%.

The aggregate figures:

TOP 300 COMICS UNIT SALES
July 2009: 6.91 million copies
Versus 1 year ago this month: -4%
Versus 5 years ago this month: +13%
Versus 10 years ago this month: +3%
YEAR TO DATE: 42.4 million copies, -9% vs. 2008

TOP 300 COMICS DOLLAR SALES
July 2009: $24.18 million
Versus 1 year ago this month: +3%
Versus 5 years ago this month: +36%
Versus 10 years ago this month: +42%
YEAR TO DATE: $144.46 million, -3% vs. 2008

TOP 300 TRADE PAPERBACK DOLLAR SALES
July 2009: $7.35 million
Versus 1 year ago this month, just the Top 100 vs. the Top 100: -11%
Versus 5 years ago this month, just the Top 100 vs. the Top 100: +34%
Versus 10 years ago this month, just the Top 25 vs. the Top 25: +70%
YEAR TO DATE: $46.44 million; down 9% when just comparing just the Top 100 each month

TOP 300 COMICS + TOP 300 TRADE PAPERBACK DOLLAR SALES
July 2009: $31.53 million
Versus 1 year ago this month, just the Top 100 vs. the Top 100: up less than 1%
Versus 5 years ago this month, counting just the Top 100 TPBs: +35%
Versus 10 years ago this month, counting just the Top 25 TPBs: +43%
YEAR TO DATE: $190.87 million; down 4% when just comparing just the Top 100 each month

OVERALL DIAMOND SALES (including all comics, trades, and magazines)
July 2009: $41.59 million ($44.3 million with UK)
Versus 1 year ago this month: up less than 1%
Versus 5 years ago this month: +49%
YEAR TO DATE: $247.5 million, -1% vs. 2008, +35% vs. 2004

The average comic offered in the Top 300 cost $3.43; the average comic ordered cost $3.50. The median price — the middle price of all 300 comics — was $2.99. $2.99 was also the most common price of comics appearing in the Top 300. The 300th place comic book is again above 4,000 units sold.

While the overall figure for the month is flat or narrowly ahead, a caveat mentioned a few months ago returns this month, because of the heavy degree of promotional discounting done on softcover and hardcovers sold to retailers in the month. While some deep discounting happens in every month, July 2009 saw substantially more than July 2008 — well over than $1 million more books going into stores this month at less than half what the publisher usually receives. This has introduced some error into the “overall” statistic, as there is a wider than usual gap between wholesale and retail sales this month. I have adjusted to remove items that retailers basically got for free so as to keep the year-to-year comparisons valid — but I think the upshot at the end of 2009 will be that retailers wound up with more dollars worth of stock in their stores than the overall sales figures reflect — hopefully, they can turn those books into something close to their cover value.

Again, it looks a decent summer, compared to what it might have been. It's not time for Cousin Larry and Balki to do the Dance of Joy, but there isn't the carnage some feared, either.

The historical look back at previous July comics sales will be coming in a separate post soon.

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Diamond July Top Sellers released; Cap Reborn on top

Thursday, August 13, 2009

Diamond Comic Distributors began the monthly roll-out of comics sales information today with its release of the top ten sellers in the month of July for several categories, and the charts find Marvel's Captain America: Reborn #1 in the top slot, followed by DC's Blackest Night #1. With a top-ten chart that includes two more "Blackest Night" issues and 600th issues for both Amazing Spider-Man and Incredible Hulk (also an anniversary for Tales to Astonish, but who's quibbling), the recent spate of comparatively event-free months seems to be past.

As can be seen from the link, these are just the top ten, not indexed; more will come later. We can see from this that only one item was at $2.99 in the Top 10 comics list; all else was at $3.99 or $4.99. Last July — a month with relatively fewer "big event" issues — all but two books were at $2.99. However, Top 300 comics unit sales last July were at 7.2 million copies, one of the better months for the year, so there still could be some steep comparatives overall.

We also see quite a lot of hardcovers in the Top 10 graphic novel list as compared with last July — but it may not make much difference to the overall, since that month included a Watchmen re-release and retailers bought a whopping 19,000-plus copies of the book. (Numerology fans may find something fun in seeing 100 Bullets Vol. 13: Wilt on the list — the latest in a play on numbers in the 100 Bullets TPB titles. 13 is, of course, Wilt Chamberlain's number.)

The Top 10 Publisher market shares can also be seen; the rankings for both units and dollars were Marvel/DC/Dark Horse/IDW/Image/Dynamic Forces (Dynamite). Interestingly, except for Boom and Viz flip-flopping in the unit and dollar lists, the rankings within the two lists were identical. This doesn't happen often, and could be associated with a growing parity between unit and dollar shares between companies. When there was a lot of divergence on pricing, we'd see publishers with much higher dollar shares and lower unit shares and vice versa. We may be getting more cost-covergence as the market looks toward $3.99.

More to come...

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A Marvel Mystery: Fixing a date for Marvel's 70th anniversary

Wednesday, August 12, 2009

Marvel Comics celebrated its 70th anniversary — dating from the shipment of Marvel Comics #1 — on August 11 in a variety of locations, and events are continuing through this week. Some have asked how a specific date could have been fixed for a book that shipped so long ago. In truth, as I said when Marvel consulted me a good ways back to research the date, there probably wasn't a single date.

Comics back then were generally post-dated — like all magazines on newsstands, publishers didn't want newsdealers pulling them off the shelves because they saw a cover date. Marvel was no different. But with Marvel #1, specifically, most copies actually have a black circle over the date, on the cover and inside, with November stamped on it. That suggests to me that they were probably really encroaching on the original October cover date — or, at least, they didn't like the number of weeks left between the ship date and October.

But there's another element in the mix: the "Pay Copy" of Marvel #1, the world's most valuable single copy of a comic book in 2001, before it sold for a lot less in 2007. The book had interior markior markings saying the dates that the Jacquet Studio (which Marvel, then Timely, had bought the art from) paid their freelancers. Those dates are all late July 1939. But it is hard to say that that proves the book has printed and in their hands before July — they could have been recording the earlier dates of payment. (I am guessing they were not paying on publication, but after the work was turned in.) That argues for August or September for the book’s release. And in any event, I'm not sure the date the comic book was printed is the important thing — we could well imagine Timely and its partners having books back from the printers before the newsstand received them.

So the Pay Copy is interesting, but what we really would like to see to prove when it hit standsis a copy with a newsdealer’s date-received stamp. Alternatively, someone could get a look at the Audit Bureau of Circulation’s records for Timely one of these days (though as Timely was just starting, the book might not have been audited). Another route would be to find a newsstand photograph where we can ID something known, like a Life Magazine cover. There aren't a lot of methods for dating something that far back, but those are three.

In any event, I think it is safe to say it came out before October/November, as the cover date says; somewhere between the earliest Pay Copy date in July and, probably, September. But as to a specific shipping day — a day for Marvel to point to for the 70th anniversary — again, I don’t think there is one. The distributors would have all shipped on different days. Even when we do have arrival stamps from comics in those days, multiple ones do not agree. Comics were not regarded as having any timely merit in those days, so the distributors would not have cared when they got the books to their stores (unlike, say, Life magazine). So I don’t think there's a lot of evidence that one day in this stretch is more deserving than another — though if more can be found, it certainly would be of interest!

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