Under Serving the Market

A few weeks ago Dave Carter at Yet Another Comics Blog posted about The Long Tail as it applies to comics, specifically in determining where demand is being under served. He breaks down (in a very straightforward way) how the physical limitations of movie theaters limit the number of film that reach their full potential audience and compares this phenomenon to the world of comics. In other words, there comes a point in any industry when outside factors limit the sales potential of the products within that industry. If those boundaries could be removed those products would reach their natural sales level. Dave looked specifically at the Diamond sales charts for single issue comics in August 2006 and found that only the top 45 selling singles are serving their market as anticipated. He then offers some possibilities regarding this incredibly low inflection point, ranging from an increase in readers waiting for the trade or limited rack space to sales lost to other distribution channels.

This is an approach that fascinates me and I went ahead and pulled 10 out of the last 24 months sales data for analysis. Putting each into a log-log plot, it turns out that the inflection point in each is remarkably consistent, falling at between 43-47 in all 10 charts. Then again, we have to be careful when using these numbers for anything beyond pointing and laughing because they're notoriously controversial.

Even so, a few thoughts:

The most common factor in limited a product ability to fully serve its market is a distribution bottle-neck. Because these numbers are sell-in to retailers rather than sell-through to readers, the implication is that any bottlenecks would lie with Diamond or the publishers. This is certainly possible considering the limits on growth due to the relatively low overprints from Diamond's brokered publishers and Diamond's own unwillingness to stock much of their non-brokered publishers' titles in any depth. The bottle neck more likely occurs, however, much later in the supply chain, namely at the retail level. Most direct market comic shops (at least the ones that manage to stay open) base their orders primarily on previous sales patterns. This makes perfect sense, but most shops aim for at least 80% sell through on each title, which means that if orders are based on previous sales, growth is almost be definition limited to 20-25%.

On top of that, most shops have fairly limited shelf space. For example, at MacGuffin most books get little more than one week of full exposure while placed on our new release racks. Unfortunately, because we devote the majority of our shelf space to graphic novels and trade paperbacks we automatically limit the sales window for the majority of titles to one week. In fact, its difficult for us to display more than 70 titles in any given week and we often find that some weeks as many as 100 different titles are released, forcing some creative shelving on our part.

The effect of those waiting for the trade should be fairly consistent across the board and have little effect on creating such a low inflection point. While certainly there are some publishers and imprints that do much better sales in trades that singles (Vertigo and Kirkman's Image books come to mind), that would simply push these books towards the bottom of the sales charts, not throw off a log-log distribution of the other 250 titles in the top 300 each month.

There may not be much in the way of definitive reasons for any of the sales behavior implied by these numbers, but it certainly does give the impression that there's plenty of market that is being under served. It's likely, though, that the reasons for such a phenomenon are so varied that it may be impossible to determine just what impact each has, much less how best to overcome these issues.


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