We recently conducted our annual interview with Marvel publisher Dan Buckley about the state of the comics business and Marvel's place in it. In Part 3, we talk about whether videogame licenses help or hurt comic sales and the risks and rewards of variant covers and reprints. In Part 1, we talk about the over-all market conditions for comics and graphic novels in comic stores, bookstores, mass merchants, and newsstand outlets. In Part 2, we discuss the way Marvel approaches its mass market outlets as ways to reach new consumers, the relationship between movies and graphic novel sales, and Marvel's graphic novel share and investment in inventory. And in Part 4, we talk about whether Marvel would ever license its comics (like it does toy manufacturing), whether comic-based movies are a bubble, how Marvel is approaching the female young adult market, and the challenges and opportunities for the coming year.
After movies, videogames are among Marvel's biggest licensing sources. We're curious as the publisher whether you think videogames help or hurt the sales of the paper product?
I think it helps. We might be competing with the dollars to a certain degree, but anything to get people that feverishly in support of the characters is a good thing. Our videogame partners have been great partners for the comic book publishing division. We've done co-marketing; we've worked on co-development of characters; we've shared designs. Anything that rounds out the experience of the characters is a great thing, and they do a great job supporting the characters. So hands down it enhances our sales, our perception, and our chance to make another sale. It's up to us to execute and get the product in front of them. It's not up to the videogame companies to do that for us.
The only place we've heard it as a negative is in the online games (and Marvel's massively multi-player stuff isn't really geared up yet). In the last year there have been two new online games, World of Warcraft and City of Heroes, which are a significant level stickier than the previous generation of those games. We've heard retailers say they have customers they haven't seen for three or four months coming in looking all haggard and tired. 'Where've you been?' And they answer, 'Building my characters.' I think there's competition for time, but I haven't heard it of the Marvel games per se.
There is going to be a competition for time. But it makes that person dedicated to the character, and makes them that much more involved. It gives us more of a connection point to communicate with that consumer and get them excited about other products they can get. It's going to be awhile before our massively multi-player game comes out. The announcement for that was made in San Diego. But if it gets people more involved with the characters it's nothing but a good thing.
Turning to the heart of the direct market, one of the things Marvel has changed over the last couple of years is being willing on occasion to reprint books that sell out in their original configuration, and a lot of times you've been doing that with a new cover of some kind. There's a perception that is probably accurate to some degree that some of those second edition books go to satisfy demand that was unfilled by the first one. But some of them are purchased by people who already have the first one who want the additional cover, just so they have that additional piece of art and the collectable. Some people see a risk in that second group in that you're pushing the envelope in terms of how much money they spend on that character or book, and ultimately you hit a limit on what they can spend. What we've seen in this industry in the past is that sometimes when you hit that limit people just throw up their hands and walk away as opposed to cutting back and limiting the number of books they buy. How do you feel about the risk of alienating consumers by giving them more opportunities to buy the same product with slightly varied covers?
Good question. There's no hard and fast rule on how we approach our reprint policy, or even our reorder policies. It really comes down to what kinds of level of support we think we're doing for the product, how big a product do we think it is, so it comes down to a couple of different variables. Most of our variant programs are not that deep in volume. We do target the collector to a certain degree. The collector is very much a big part of our industry, and it's always going to be a part of our industry. That part needs to be satiated. It's my responsibility to provide that for the consumer and also provide it for the retailer to make some money on it. Do we have a scientific formula for what is that edge? I don't have it right now.
I know a lot of people are harkening back to the mid-nineties, to what was going on then, but that was a very different dynamic than what we're seeing here. If the collector wants to get another piece of art, that's fine for the collector. But the volumes associated with that, and the things that are up-priced as far as what kind of product it is, are different. Our bailiwick back in the mid-nineties, as you know, was doing special covers and not providing any extra story, and up-charging the hell out of it. The monthly numbers were much bigger as far as what we were putting out there, and the product we were making wasn't nearly as good either, from a story-telling standpoint.
Yes, they are marketing tools. I won't deny we use it as a marketing tool to generate excitement either around our big programs or books we think deserve more attention. But, for the most part, we're not using it as a big flood for our product. The variant covers we design are very much used to enhance volume of the core group and to drive volume of that core book. If there's a collector group that wants to get hold of something else that's fine. That market is out there. Other people are going after it and using it. Could it be affecting lower tier books for everybody across the board? It could be. I don't know the answer yet and we probably won't have the answer for another six months, seven months, eight months. The demand for it's been pretty good, we've been asked to go after it and support it; but we do bite our lips sometimes and say, 'No, that doesn't fit the number for that book very well. The volume for that against that doesn't make sense, and it isn't going to move out. The more precarious question we do need to ask is making sure we don't screw around with cash-flow for the retailers, because if they get locked up with a certain amount of inventory that's where a real effect can happen.
But that occurs when it stops selling. You don't know when that's going to be until it happens.
That's where we do bite our lips on some books and say, 'No, we've got enough out there for that book.' Some books we expect more volume and we know they should be doing more volume. It's probably more intimidating with the bigger books or mid-tier books that somebody might be promoting the hell out of, but you can tell by the second or third issue if it really helped hold the book up. It's worked several times. Runaways, it worked for us; it's worked well for Astonishing..., it worked well for things like that. You have to use it judiciously, but it is a marketing tool that people pay attention to. It does generate excitement for the product from both the trade and consumer level.