Marvelution – The Shot Heard ‘Round the Comic Industry

By JediCole

The following article is based solely on personal observations from the period covered during a time that I was far more closely connected to certain aspects of the comic industry. This is not a work of investigative journalism so any inaccuracies are unintentional and the result of a personal lack of knowledge on specifics or faulty memory. This is meant to act as a memoir of a period when the comic industry was shaken to its foundations and the whole system of distribution of comic publications was inexorably altered. This is an informative article that shares a story little known by those not directly affected by the events I chronicle here.

If you have a good relationship with the owner of your local comic shop you might have heard the name of Diamond Comic Distributors at least once or twice. As distributors of comics published by the bigger companies (Marvel, DC, Dark Horse, Image) as well as countless smaller press publishers they have a virtual monopoly on that aspect of the comic industry. This is due primarily to distribution agreements garnered over a decade ago with DC Comics that gave Diamond exclusive access to their lines. Image, and Dark Horse quickly followed suite as Diamond was the largest comic distributor in business at the time. But what caused this dynamic shift in the nature of comic distribution that formerly had a myriad regional, national, and international players? You need look no further than Marvel Comics for answers.

Harken back to the late 90’s, the boom age of comics. Image Comics was founded and going full steam ahead. Wizard Magazine was the number one selling monthly comic collecting publication because its price guide assured its readers that their collections would put their kids through college. And Marvel Comics was enjoying print runs on such titles as X-Men #1 that were unrivaled in history. But then Marvel had been taken over by accountants who knew business but nothing of the business of comics. And as a result Marvel got greedy.

The first signs of this were not obvious. It is only in retrospect that a pattern was emerging, and an alarming one at that. It started simply enough with the acquisition of Toy Biz, the manufacturer of X-Men and other Marvel property toys. This would certainly insure that there would always be a Marvel license holder in the action figure market. Then came the purchase of the trading card publisher Skybox, another long-time Marvel licensee. Again it would appear to be a maneuver to keep the brand in front of collectors on all fronts. It was another purchase, that of a paper mill, that really raised some eyebrows. Now the publisher would control the source of their raw materials. It was during this period that Marvel also purchased (and essentially buried) Malibu Comics. This was not for their comic character properties but for their state-of-the-art computer coloring systems. Something Marvel lacked that this tiny independent publisher had despite a rather lackluster lineup of titles. (Does anyone even remember Prime?) Then came the bombshell. “Marvelution!”

This immediately followed their next acquisition, Heroes World Distribution, one of many comic distributors that existed at the time.  Marvelution was the banner under which Marvel Comics launched what they felt was a new age in comic distribution. Publisher owned and publisher controlled distribution. In short, Marvel would no longer sell their print runs to Diamond, Capital City, Friendly Franks, and the other comic distributors that previously existed. They would sell publisher-direct to comic retailers, essentially cutting out the middle man. Or so it would seem. But it did not stop there.

The publishing giant also made overtures toward retail distribution as well. Advertising for mail order comic subscriptions direct from Marvel began to appear in some of their books. These ads incensed some shop owners as they portrayed Spider-Man rescuing some would-be shoppers from a mugger and stating, “This shopping thing sure is dangerous!” The more alarmist of their numbers cried foul going so far as to accuse Marvel of suggesting that comic shops were in the “bad part of town” while trying to rob them of their customer base. While this may seem an exaggeration on the surface, there were also suggestions made my Marvel that they were planning a chain of retail shops similar to the Disney and Warner Brothers Stores in many malls at the time. This would effectively put the publisher in direct competition with their former customers. Looking back it seemed apparent that there were those at the head of the House of Ideas who dreamt of a time when Marvel Comics would own every aspect of their product from raw materials to retail sales.

But the retail aspect was largely speculation on the part of Marvel. Their real focus was MRV, their new distribution company. Overnight Marvel Comics ceased their distribution agreements with all of their distributors, putting them in a legal conflict with at least one of them. The effect on the rest of the comic industry was devastating! Prior to Marvelution, all publishers large and small would set their print runs based on the preorders from all distributors. With each new issue offered two months in advance there was ample time to work out these numbers and set a variable overage to account for damaged books and potential retailer reorders. Then the entire print run would be shipped out to the various distributors who would be stuck with any unsold copies.

Prior to the advent of the “direct market” distributors comics were sold in convenience stores, grocery stores, and newsstands via rack jobbers who would deliver new publications and remove the previous month’s periodicals, billing the retailer only for what sold. Under direct market distribution retailers purchased their comics on a sliding discount scale based on volume and on a non-returnable basis. Thus was the back issue market born! The comic shop owner would buy from the distributor of their choice, often one with a local presence that would allow them to get the books in the store far earlier and would have to place a minimum monthly order. The minimums were reasonable enough that even little “mom and pop” establishments could take on comic books as a sidebar. That is pre-Marvelution.

The first effect of this maneuver by Marvel Comics was to upset the volume of money all comic retailers had to devote to new comics. MRV had its own minimum order level and discount schedule based on volume. And all they offered were Marvel-owned publications and collectibles. Retailers were forced to meet the minimum order for their distributor of choice for DC, Dark Horse, Image, and other publishers and the minimum of Marvel as well (if they wished to continue carrying the most popular line of comics in the world). The effect was crippling to the smaller shops that had once thrived in the boom period of comic collecting. Marvelution arrived on the crest of the collector/speculator boom when people imagined comic books were a new form of investment. The result was that almost anyone who could come up with a business license and a bank loan could become a comic shop owner and survive the fiercely competitive market. That was when they only had one primary source.

Confronted with Marvel’s sudden foray into self-distribution the other venerable giant of the industry, DC Comics, had to act fast to adapt to the new market dynamic. Realizing the folly of MRV, the suits at DC chose a new path that would change the face of comic distribution to this very day. They ceased all business with every distributor except Diamond, the largest and most well established distributor of the day. What followed was an exclusivity agreement with Diamond that changed the relationship between the two companies and served as a model for other publishers as well. No longer would DC Comics sell their print run to distributors, instead they would maintain control of their published books with Diamond acting as a sales agent to the retail market. This resulted in a less profitable arrangement for Diamond which resulted in a consolidation of their shipping operations and the closure of multiple locations nationally and internationally.

Where DC lead the other two major players followed. Recognizing that Marvel had created an untenable situation in the distribution game Image and Dark Horse also ended their relationships with other distributors and penned exclusivity agreements with Diamond. A few of the larger independent publishers soon followed suit. Maverick small press publisher Dennis Kitchen continued his trademark bucking of the system by deliberately signing an exclusive distribution agreement with Friendly Frank’s, almost as a gesture of defiance against the maneuvering that was forced on the publishing industry. Unfortunately the damage was done and the remaining distributors, lacking access to the biggest publishers in the industry, began to shut down one by one.

Meanwhile at MRV the dreams of a self-distribution empire were dying on the vine. When accountants and business men take over an enterprise that does not conform to business school standards, their attempts to force those standards are always doomed to failure (like the ill-fated Techno Comics publication/retail store venture). Such was the case with Marvel’s efforts. The effect of Marvelution was that sub-distribution, comic shops and other entrepreneurs’ purchasing of comics in large volume from distributors and redistributing them to smaller retailers who could not meet distributor minimum monthly orders, was no longer an option. All retailers had to sign agreements that they would purchase only for direct sale to the end buyer. This coupled with the necessity of having to meet minimums from Diamond and MRV effectively robbed Marvel of a portion of their former customer base. Out of the gate MRV was hamstrung.

Added to the mix was poor management of this new operation on the part of the parent company. MRV regional distribution centers sprung up to ensure timely shipping of Marvel comics to all corners of the U.S. Some were staffed by as few as three people while others had an unwieldy staff of a dozen or more, each processing roughly the same volume of merchandise. There seemed to be no oversight on the part of Marvel into the day to day operations of their various centers. If my memory serves me the entire MRV experiment ended in less than a year. What began with considerable fanfare on the part of Marvel ended quietly with a return to Diamond Comic Distributors. To maintain some portion of the autonomy they previously enjoyed, however, Marvel opted not to have their titles listed in Diamond’s monthly catalog, Previews. The result was Marvel Previews, a separate publication that is a companion to Diamond’s catalog. If you have ever wondered why there is a separate Marvel only catalog now you know.

During the height of Marvelution more and more small press publishers opted to sign exclusive distribution agreements with Diamond. Those that did not take this step still utilized Diamond as their primary resource to get their books into comic shops and the hands of readers. Diamond fell under the scrutiny of the federal government due to their inadvertent monopoly on the distribution market. While they were found not to be in violation of anti-trust laws, the investigation which the government was obliged to undertake despite the obvious circumstances leading to Diamond’s circumstances undoubtedly put a burden on Diamond and cost taxpayers untold amounts of money. All because Marvel was drunk on their success and seeming power in the industry.

So now you know some details of the decisions on the part of one publisher that effectively led to the end of competition in the comic distribution field for all time. Undoubtedly bankruptcy was the fate of most if not all other comic distributors in the aftermath of Marvelution as well as the loss of employment for their employees and even many working for Diamond during the necessary downsizing that followed. DC, Dark Horse, and Image were forced to reconfigure their own business models and take on the ownership of their print runs, the volume of which was greatly reduced as a result. And when the dust finally settled Marvel Comics had achieved nothing of value.

Perhaps it is only fitting that all of this occurred at the tail end of the comic book fever that had gripped the nation for nearly a decade and led to such antics as comic shops hiring armed guards to usher their shipments of the Death of Superman issue into their stores. It was the heady days of the bagged comic, the multiple covers, the foil enhancements, the embossing, and the myriad other gimmicks that ruled the day. The industry was destroying itself in so many small ways it is little wonder that one portion consumed another in the process. Marvelution has certainly left a lasting mark, though most people are unaware it ever happened.