We caught up with DC Comics CEO Paul Levitz at New York Comic Con, where we talked about two topics:  Watchmen, and the impact of economic situation on comic sales.  In the economy portion of the interview, we talked about the impact of the economy on comics by format, by channel, on figures, and on the small press.  In the Watchmen interview, we talked about Watchmen supply, new channels, the new readers it’s bringing in, the movie and whether it will meet expectations, and how Watchmen will place in any change in the types of content that are popular in the current economy. 


When we talked about the economy in July, you presciently said there were “wolves in the woods for 2009” (see “Interview with Paul Levitz 2008, Part 1”)  Now we find out it’s…wolf packs.

Really big goddamn wolves.


We wanted to get your read now on the condition of the comic market in this current economy.

You certainly have the very real challenge that the comics business I got into generally did really well in recessions because we were the cheapest habit you could have.  Mom will spend another twenty or twenty-five cents to buy a comic book for her kid because she can’t buy him the fifty cents Matchbox toy or the five dollar children’s book or something like that at the time. 


The core customer that we’ve had for many years who spends a thousand plus dollars a year, if he’s lost his or her job and it’s food or comics, I kinda hope they pick food, so they can last long enough to come back when they have a new job.  We know some of them have gone through that and that we’ll take some hits from it.  My hope is that the number of new customers that we’re attracting to the graphic novel side of the business where the typical customer to us seems like a three, four hundred dollar a year customer, a more sustainable kind of habit, will be growing at a fast enough pace to make up for the number of core people who have to put the hobby aside for a period of time or cut back radically in what they do.  It’s a challenge for all levels of the business. 


We wanted to get your feel on the impact on comics versus graphic novels.  It’s obviously a very different business than any previous downturn because of that mix of product.  What are your thoughts on those two formats and the potentially differential effects from the economy? 

I think the graphic novel only customer (let’s call it that for purposes of this discussion) who as I said we think is a three or four hundred dollar a year customer isn’t likely to be battered too much.  He’ll be someone who will lose their job and really be up a creek and have to be cutting back everything that they do.  But for the vast majority of people that’s a reasonable recreational spend.  Maybe you’ll spend two fifty instead of three hundred over the course of a year, but I think that end of the business certainly will get enough new people coming in at the pace that we’re growing that we’ll see that category continue to grow.  Periodical comics are much more of a challenge because they’re much more centered on the core customer.  This also seems to be a more white collar recession than most of the ones that I’ve lived through.  And more of our customers are in the white collar kinds of jobs historically.  


How many of those 120,000 jobs from the banks that have been lost in New York, how many of those people are comic fans?  Is there a big overlap with those kinds of jobs?

Historically banking’s not one of the areas that we see show up with a real high proportion on our surveys.  We’ve always seen the creative arts, MIS kinds of functions, more of the creative roles in things like advertising show up more often than numbers oriented jobs purely.  But we know from NY area retailers—if you blew out 120,000 jobs some of those were guys who loved comics.  Wall St. was very distinct; it is very distinct.  It’s one of the career paths where you can make a humongous amount of money by the time you’re twenty-five or thirty.  One comic fan that you did have there might be the guy who’s buying every DC Direct resin statue at a particular comic shop.  When he loses that job he knows he’s not going to get another six figure job very fast.  So he’s got to ramp down really quickly.  We’ve got a couple of retailers in the NY area who can sort of tick off, “I know Johnny lost his job…I know Fred lost his job, and here’s what that’s doing to me.” 


You mentioned the figure business.  What do you see as the impact of the economy on that part of the business?

I think it kind of all wraps up in one.


So those were core customers, right?



So basically the same analysis?

By and large.


What do they give up first?  Figures or comics?

I think they probably give up figures before they give up comics because it’s more likely to be available later.  If we’re doing our job right creatively and you like the periodical comics, you want them at that moment so you can be part of the conversation.  Whether it’s an online conversation or at the comic shop with your buddies, or however it hits, (particularly the way the medium’s been working for both DC and Marvel in recent years, where a tremendous amount of the lines are pulled together in these event and weekly and very immediate kinds of situations), I think you want to read those when they happen.  Not six months or eight months later, or in the second edition of the trade paperback or something.


How about differential impact of the economy by channel, comic stores versus book stores?

One of the things I love about the comic shop world is that the people are in it because of their passion.  They take hits really well.  So I think those guys will be all right.  They tend not to be people who are over-extended on credit.  They tend not to use credit a whole hell of a lot.  This is what they want to do, and they’re going to figure out the best and the right way to do it and stick with it and find their way through the worst.  I’m hopeful that everything will be fine for the vast majority of them.  The bookstore world or the book distribution world is much more a composite, as we heard at your seminar yesterday.  I guess a couple of librarians talked about their budget cut issues.  That’s been a good growing category we think for the field.  If they’re being choked back because of municipal budgets, are we one of the first things to go, because we’re last guy in, or are we one of the last things to go because we’re one of the hot things coming in.  Depends on where you are and how. 


Certainly the cash squeeze that the bookstores are in has accelerated this whole tendency to skip certain titles.  And I think you’re going to see both for the bookstores and the comic shops a higher set of entry barriers for marginal product.  If you’re a small publisher and you’re doing something cool but it’s an unknown talent, unknown property, and you don’t have a successful lead title to point to to show why you’re there, it’s going to get harder to get somebody to give you shelf space day one. 


It won’t stop somebody.  I sort of smiled past Jimmy Gownley’s booth with the Amelia Rules stuff and delighted in how he’s managed to build that franchise over whatever it is, five or six years, purely on creative quality and a personal voice.  But that’s a really tough stunt to do.  And if it was tough before it’s going to be tougher now. 


When we put out a book that has a very narrow or debatable audience now, we’re much more often hearing, as Bob sets the print run, this chain isn’t taking any, this chain isn’t taking any.  We certainly know there’s a comic shop sitting there that says I can’t afford to have everything that you put out.  I’ll order a copy for my guy who really wants one, my pull and holds, but I’m not going to keep a shelf copy of the book that might take me a year to sell.  It’s a rational decision.


So if Diamond increases its threshold, maybe makes it a little bit tougher for small comic periodicals to get to market, and bookstores are skipping more titles at the bottom end, making it more difficult for new properties to get known, does that accelerate the move to the Web as a way to reach new customers for comic content?

It depends on why you’re going in that direction.  A certain proportion of the kinds of titles that are particularly affected by the Diamond minimum change aren’t being published for any economic purpose.  I don’t mean this to be pejorative of them but they’re descendants of the fanzines in the sense that “I have a passionate desire to tell this story.  I’m happy to take some money from people to pay for some copies but mostly I want to tell this story and get it out there.”  Those things I think have a natural possibility of moving to the Web.  A certain percentage of what Diamond’s change affects though is also entrepreneurial slash optimistic new entrants who are just coming out thinking they can make a good amount of money publishing comic books and prepared to invest a certain amount of energy and time and money to get there and are perhaps willing to say, “So I’m going to get low numbers my first year, my second year, but my third year’s really going to be when I make it.”  I’m not sure the move to the Web works as well for those guys, because the path to success isn’t as obvious.  If you want to stick it out for two or three years no one really can see a clean and easy way to monetize comics on the Web.


You build the audience on the Web and then you sell books.

It’s worked for a few folks.  It requires a lot of sets of skills.  You have to make an interesting comic.  You have to entrepreneurially figure out how to make the book.  You have to find a way to deliver the book to the customer who wants it.


They don’t self-publish necessarily.  I mean they self-publish the Webcomic, but once they can establish they’ve got an audience there are publishers that have been willing to step in and say “we’ll help you reach that audience at bookstores or in comic stores.”

For a few, and we’ve certainly had success with that.  I’m not saying it’s unique by any stretch of the imagination. 


I don’t think that’s such an easy path.  The guys who got there did a tremendous body of work to make that stuff work.  That means either they had really good day jobs or a lot of money saved or a tremendous conviction themselves.  That’s much more challenging than the bottom-tier Diamond approach was.  If you put out a Webcomic and you don’t have fresh new material there on a very regular basis, getting the audience to show up when you have finally gotten around to the new installment is an interesting challenge.  There’s no shelf to browse, to find out that it’s out.  If you can put out an issue once every three or four months from Diamond to a comic shop at least it goes up on a shelf that says, ‘Here’s new stuff.  Take a look at it.’  Getting attention, I think, is one of the great challenges of the Web.  People will find answers and solutions.  As we’ve discussed in other contexts any radical economic downturn accelerates the pace of change.  Part of the change here would be how the Web affects our life because it’s changing everything that we do.  I’m not sure how closely that cross-correlates to the Diamond change.


Click here for Levitz on Watchmen.