The news that Marvel Entertainment has signed a new exclusive distribution agreement for the comic book market, ending a partnership with Diamond Comic Distributors after 24 years, has sent shockwaves through the comic book industry — with some believing that the shift might bring about the collapse of the industry as it currently exists.

The new deal, announced March 25, means that Penguin Random House Publisher Services will become the exclusive worldwide distributor for Marvel’s comic book and collected editions in the specialty comic store market starting Oct. 1. Described by both companies as a “multi-year sales and distribution agreement,” exact terms remain unknown, although PRHPS confirmed to THR that it has created a dedicated Direct Comic Market team to handle the Marvel account, headed by newly promoted associate director, comic market sales, Tyne Hunter.

Marvel’s new partnership means that the Disney-owned company is ending an exclusive comic market distribution deal with Maryland’s Diamond Comic Distributors. The move follows Marvel’s biggest competitor, DC, leaving Diamond in June 2020 for domestic distribution, although it remains a Diamond partner internationally. Sources tell THR that Marvel had been searching for some time for a different way to grow the existing comic market.

This isn’t the first time Penguin Random House Publisher Services has dealt with the comic market; it already supplies a number of comic retailers with product as a distributor of collected editions and graphic novels for DC, Dark Horse, Archie Comics and IDW Publishing, although the new deal marks the first time the company will be handling single-issue comics. Despite the new arrangement, Marvel’s book market accounts will continue to be serviced by Hachette Book Group. In a statement accompanying the announcement, Marvel president Dan Buckey said, “Comics are the core of the Marvel Universe, and we are confident this new partnership will continue to grow and evolve this resilient industry.”

Not everyone was necessarily convinced about that last part, however. Much of the worry on the part of retailers is rooted in financial reality. Many store owners are likely to be financially impacted by Marvel’s shift, with a new 50 percent discount level being implemented on product (meaning that retailer cost is literally half of cover price) regardless of order size, as per PRHPS policy. This is a significant change from Marvel’s current arrangement with Diamond, which offers a sliding rate up to 59 percent, with some retailers estimating the change could negatively impact somewhere in the region of half of Marvel’s U.S. market.

Potentially offsetting the discount drop, all shipping costs will be waived under the new deal, consistent with PRHPS policy for other publishers. However, multiple retailers already dealing with PRHPS have spoken out about the company’s shipping, with items reportedly arriving damaged in some form and raising concern that overall quality of Marvel product available to customers will be impacted beginning this fall. (“Most graphic novels that we receive from PRH do not arrive in anything approaching ‘mint’ condition,” as Californian retailer Brian Hibbs wrote recently, to cite one example.) Both Marvel and PRHPS are said to be aware of the problem, and working toward a solution.

In response to the announcement of the new partnership, Diamond Comic Distributors CEO Steve Geppi swiftly released a statement trying to alleviate worries but remaining light on details as to how the company planned to respond to the loss of what was unmistakably its biggest client — although, complicating matters, the statement said that Diamond “will continue selling Marvel products,” neglecting to mention it would do so as a wholesaler with product supplied by PRHPS. Nonetheless, the loss of exclusive Marvel distribution is huge for Diamond: In October 2020, the latest month for which order estimates are available, Marvel made up 62 percent of all comic book product shipped by the company, with closest competitor Image Comics comprising just 12 percent.

The lack of clarity on Diamond’s part is troubling to many inside the industry for one simple reason: If Diamond goes under, so could a significant portion of the comic book industry. Rumors about the financial stability of Diamond had been circulating for some time prior to Marvel’s announcement; the company halted payments to vendors during its COVID-related shutdown last year citing “inconsistent payments from customers,” and former DC president Diane Nelson stated outright that the company “may not even be solvent” when discussing the split between Diamond and DC on social media last summer.  Not only is Diamond the contractually exclusive comic book distributor for some of comics’ largest publishers — including Image, Dark Horse, Boom! Studios and Dynamite Entertainment — it’s the sole distributor of a number of smaller independent publishers as well. The collapse of such a distributor could prove a death blow to many, especially if it owes money to publishers if it goes under.

Hibbs has estimated that as few as six comic publishers might survive such an event, down from the roughly 100 currently represented by Diamond.  Representatives for Diamond tell THR via email that it is not planning to renegotiate existing agreements with publishers, although they added that there “are still details to work through,” and retailers should expect more information as soon as possible. As the industry waits for the Marvel/PRHPS deal to kick in, there remains a lot of uncertainty and speculation as to what, exactly, is going to happen over the next six months. Regardless of what happens with Diamond in any larger sense, most industry watchers expect PRHPS to add publishers to its comics distribution team beyond Marvel.

Within hours of the Marvel deal being announced, speculation grew that DC would soon be announced as a second comics market partner for the distributor, with many noting that the two companies already have a relationship with PRHPS acting as bookstore distributor for DC collected editions. For those hoping that this year would bring some stability to a recovering comic book industry after a turbulent, COVID-impacted 2020, it’s become clear that’s not the case.

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