DC Comics has changed the comics market permanently... exactly twenty-five years after the last time they did it. The Batman publisher just ended an exclusive distribution deal with Diamond Distributors, choosing to work with several smaller distributors, after a series of decisions kicked off by the COVID-19 pandemic. When DC first entered the exclusivity deal, it created the current method that comic books are sold; the company's decision to break from it may recreate it all over again.
For the duration of the 21st century, comic books have gotten to stores via the 'direct market', a setup where retailers get better deals for ordering books in exchange for those books being nonrefundable. The direct market pushed the industry into specialty shops who could thrive off this business model by selling off unreturnable 'back issues'. In the mid-90s, Marvel bought out a company named Heroes World to serve as the sole distributor of Marvel comics. This put pressure on everyone else: retailers needed to make up for the extra cost of ordering from their regular distributor as well as Heroes, while other distributors sought exclusive deals of their own to make up for lost business from Marvel. When DC signed up with Diamond Distributors in 1995, every other major publisher followed suit. When Heroes World folded a year later, Marvel jumped aboard, giving Diamond a virtual monopoly on comic book distribution in North America.
The ground began to shift when Diamond shut down operations in March of this year. The pandemic put stress on every level of the comics industry, leading the distributor to halt processing new material. In April, DC announced that they would work with other distributors to put their comics back on shelves. What happened to the exclusivity deal? In May, Diamond founder Steve Geppi explained that DC had renewed their contract a year and a half prior and placed a clause allowing them to work with other distributors as long as they gave two months' notice. When Diamond shut down, they "exercised that option" and drew up plans with two new companies named Lunar Distribution and UCS Comics Distributors.
As THR reports, DC recently sent an email to retailers explaining that the publisher would be working with these two companies moving forward, as well as with Penguin Random House. The email described the decision as "intended to improve the health of, and strengthen, the Direct Market". Penguin Random House, one of the largest publishing companies in the world, will handle graphic novels and collected editions for DC. Lunar Distribution and UCS are newly-created arms of Discount Comic Book Service and Midtown Comics, two wide-reaching comic book retailers who already possessed robust mail-order systems.
Where does this leave Diamond? The company is still very much in the loop. DCBS and Midtown are two of the distributor's biggest customers, meaning all non-DC comics the pair sells will still be handled through Diamond, who has already resumed shipping out titles from Marvel and other publishers. While larger chains like Midtown are doing well, smaller comics shops may struggle with the change. Retailers get discounts for large orders from a given distributor; dividing a weekly order among multiple companies creates the same cost issues that Diamond's monopoly was invented to quell.
The comics market has been a flagging beast in recent years, yoked to a single entity. The pandemic tested that to the breaking point and the result has changed the face of the industry. It's up to everyone in the system to ensure that change is for the better.
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