DC Comics Drops Diamond as its Distributors

Comics News
DC Comics Drops Diamond as its Distributors
By Hervé St-Louis
June 5, 2020 - 22:59

In a company memo to comics retailers, DC Comics announced on June 5, 2020, that it had severed its longstanding distribution relationship with Diamond Comic Distributors (Diamond) and that it will now relay on Luna Distribution and UCS Comic Distributors for floppy comics and trade paperbacks while Penguin Random House will distribute books. Starting June 8, 2020, DC Comics will no longer fulfil order from Diamond.

DC Comics allied itself with Diamond in 1995 when Marvel Comics bought Heroes World Distribution, the third-ranked American comic distribution. At the time, DC Comics and Diamond’s exclusive relationship was one of convenience to survive to disruption created by Marvel Comics. DC Comics at the time could have chosen to work exclusively with Capital City Distribution, the other major American comic distributor. Diamond purchased Capital Comics in 1996.

Lunar Distribution is an offshoot of online comic retailer DCBS while UCS Distributors is owned by Midtown Comics, a large comic retailer chain in New York City. Both have experience with large-scale orders although not at the level of Diamond. DC Comics claims that both Lunar and UCS can fulfil international orders from Canada and the United Kingdom although unlike Diamond they do not yet have local distribution centres in both countries, nor can they offer high discount rates on shipping the way larger retailers and distributors like Diamond and Amazon can.

Analysis

Looking at the marketing mix (place, promotions, products, price) DC Comics has tackled the place element (location) by making its products exclusive to two distributors for common comics while allowing Penguin to tackle its lucrative book business. The book arm of the distribution was already available to comic retailers. Some respondents have expressed hope that DC Comics and those of other publishers who would choose to distribute with Lunar or UCS could find new retail sites. This would be very difficult at the moment as both distributors must first be able to fulfil the orders of existing comic book stores before venturing into distribution outside of the direct market. They would also need much support from DC Comics to make their wares appealing enough for non-comic retailers.

This brings us to promotion which is mainly DC Comics’ responsibility. The retailers can at most offer discounts but until other comic publishers and producers of related wares such as toys, games, and genre clothing sign up with them, there is little that they can offer in terms of promotion. The product mix from the Lunar and UCS is for now exclusively based on DC Comics. It is unclear if Marvel Comics and mid-level publishers such as Image Comics, Dark Horse, Comics, and IDW Publishing are tied in multiple year contracts with Diamond, forbidding them to seek alternative distribution scheme. Price is where both Lunar and UCS can compete with one another. While DC Comics has suggested a geographic-based method for retailers to order their comics with Lunar in the West Coast and UCS in the East, comic stores can and should pick and choose whichever distributor is the best in terms of service and price.

Several comic retailers did not want to use Lunar nor UCS, viewing them as direct competitors in the comic retail space. However, DC Comics may have pushed them otherwise when negotiations with Diamond overdue payment from unsold comics deteriorated. Many retailers will have to scramble if they want to offer their customers comics from DC Comics, the second-largest comic publisher in the United States.

Lunar and UCS could face a retaliatory attack on Diamond who could want to exact its revenge on the retail arms of both firms. Such action, however, would not endear Diamond with the public and publishers, and would help prop up the new distributors as victims of the former comic book monopoly. As both Lunar and UCS are large retailers, it would hurt the sale of other publishers whose wares are still distributed by Diamond.

What About Marvel?

Marvel Comics has had a business-as-usual attitude scrambling to continue its sale of comics without changing much. The most significant change enacted by Marvel was to make some of its lower-selling comics digital only. Marvel is the largest and most successful comic publisher in the United States. It is now, more than ever, in a very comfortable bargaining position with Diamond. Based on my knowledge of Marvel, it is certain that it will take advantage of this position and secure better deals for itself. Any comic book publisher that is not tied to a multiple-year contract with Diamond also has more leverage today, although, only as much as what Lunar and UCS can handle with other clients.

DC Comics’ Bottomline

Since the firing of Dan Didio in February 2020, DC Comics has been willing to make bolder moves which are paralleled in other parts of its parent company, with the planned release of the Zack Snyder cut of the Justice League film or the release of the Scoob! theatrical movie to digital video-on-demand services. This news is comforting as it indicates that contrary to many unfounded rumours and allegations in the fall 2019, DC Comics does not seem willing to exit the comic publishing world just yet. It’s too bad that it took 25 years for DC Comics to end Diamond’s monopoly.