Coronavirus knocks out direct market - Diamond stops deliveries

[Robanker]

Diamond's got themselves to blame. You can't effectively hold the entire industry ransom and then declare you're going to extend the supply of new product to struggling shops just because you can.

If Marvel joins in (which they absolutely will if DC is still going strong with it after the dust settles), that's probably it for Diamond having such a choke hold on the industry. What I'm more interested in following this isn't so much if Diamond lives, but how the much-needed competition shapes the industry into something that's hopefully stronger.

[Digifiend]

Marvel has a ton of books slated to come out September 2.

With guys like Miles, Ms marvel & Black Panther having 3 issues set to come out. I can't see them doing digital only with those 3.

While New Warriors appears to be in print with 2 variants.

For all the hate that book got before coming out-it see print over those 3?

I found 5 books with 3 issues coming out.

Looks DC is going to have some competition that month if all those get printed.

Miles should only have two listed for that day - the April issue is out on June 10th.

But no way does any comic have multiple issues out on one day. That's just a placeholder date.

[iron chimp]

I see zero evidence that diamond has any chokehold on the industry. Its just a logistics firm worth a miniscule fraction of 1% of its two biggest customers. I cant see how its engaged in monopolistic practices nor can i see how it ever could given its two biggest companies will account for about 80% of its business.

[LordMikel]

Anyone else wondering if customers are going into comic book stores and asking why there are so few new comics from the past few weeks?

[Digifiend]

I see zero evidence that diamond has any chokehold on the industry. Its just a logistics firm worth a miniscule fraction of 1% of its two biggest customers. I cant see how its engaged in monopolistic practices nor can i see how it ever could given its two biggest companies will account for about 80% of its business.

Until last month, it was the only comic book distributor in the US. How is that not monopolistic? DC ended their monopoly by having DCBS and Midtown Comics enter the distribution business, after Diamond's shutdown (which shouldn't have happened - periodical distribution is considered essential business) stopped them releasing anything. A couple of smaller publishers responded by deciding to self-distribute. And a lot of titles are going to be turned digital exclusive, thereby making Amazon (Comixology owner) the main distributor for those.

[Ascended]

The only way Diamond can be viewed as *not* being a monopoly is because comics are legally lumped in with magazines, and since magazines are distributed by multiple companies, Diamond avoided the label....legally.

But they were absolutely a monopoly within the comic industry itself. And they shut down so a bunch of publishers found new options.

I'm not mad at Diamond for shutting down, it's a damn pandemic out there and most comic shops had to close not too long afterwards anyway. But as I understand it, they were paid for books they didn't deliver and refused to reimburse anyone, they tried to strong arm publishers into waiting and not finding other distributors or going digital (despite the fact that digital readers generally aren't print readers so there was no real threat), and I forget what else. So Diamond can f*ck right off. If they wanted to remain the only distributor for comics, they should've treated their customers better.

[iron chimp]

Until last month, it was the only comic book distributor in the US. How is that not monopolistic? DC ended their monopoly by having DCBS and Midtown Comics enter the distribution business, after Diamond's shutdown (which shouldn't have happened - periodical distribution is considered essential business) stopped them releasing anything. A couple of smaller publishers responded by deciding to self-distribute. And a lot of titles are going to be turned digital exclusive, thereby making Amazon (Comixology owner) the main distributor for those.

Being a monopoly and being involved in monopolistic practises are two different things though.

They have zero power to use expolit that monopoly with the practises normally associated with a monopoly.

However, giving distro to midtown and dcbs does allow them the potential to use such practises given they are both retailers and distributors.

No industry uses a discount retailer as a distributor for a very good reason.

[iron chimp]

The only way Diamond can be viewed as *not* being a monopoly is because comics are legally lumped in with magazines, and since magazines are distributed by multiple companies, Diamond avoided the label....legally.

But they were absolutely a monopoly within the comic industry itself. And they shut down so a bunch of publishers found new options.

I'm not mad at Diamond for shutting down, it's a damn pandemic out there and most comic shops had to close not too long afterwards anyway. But as I understand it, they were paid for books they didn't deliver and refused to reimburse anyone, they tried to strong arm publishers into waiting and not finding other distributors or going digital (despite the fact that digital readers generally aren't print readers so there was no real threat), and I forget what else. So Diamond can f*ck right off. If they wanted to remain the only distributor for comics, they should've treated their customers better.

I agree that didnt look good at all but we dont know what their contracts say.

Eg. Ive sold records on other peoples behalf on ebay. The buyers pay me but at that point it isnt my money to pay to seller. It only becomes my money when the buyer has received the records and is happy - until that point he can claim his money back.

Or in s hypithetical case the shop puts in an order for book x. Unfortunately the shop goes out of business because of the virus and diamond cant deliver the books. Im assuming the shops creditors could potentially persue diamond for the money. The contract between book x and diamond might say we will buy these number of copies for delivery to stores. If we cant deliver then we refund shops creditors and return to the books to you. Obviously a lot of shops closed during the 90s crash so i would imagine there are things in place in the distributors contracts to prevent them being stuck with zero cash and a load of unwanted books.

It would make sense that any suppliers contract says diamond must distribute the books. This would any nefarious schemes and double dealings by the distributor. At this point diamond might not be in breach of contract and in normal circumstances this would actually be a safeguard for the supplier that diamond will do what the supplier has contracted them to do; ie distribute the books.

I agree tho that on the face of it they should have paid out to their smaller suppliers to keep them in the game and took a hit if the shops claimed their money back or whatever else could happen. It does also look bad that they have both the books and the money. But it may well just ne a case of they cant give suppliers money until all contractual obligations have been fulfilled.

[Ascended]

I agree that didnt look good at all but we dont know what their contracts say.

I agree tho that on the face of it they should have paid out to their smaller suppliers to keep them in the game and took a hit if the shops claimed their money back or whatever else could happen. It does also look bad that they have both the books and the money. But it may well just ne a case of they cant give suppliers money until all contractual obligations have been fulfilled.

It very well could be. As you say, we don't know what the contract says.

And if it turns out that Diamond couldn't have done things any differently for whatever reason/s, then okay. But as it stands right now, knowing what we know, I think Diamond definitely failed to handle things the way they could have. A lot of small businesses that need every nickle lost cash they couldn't afford to lose, and then got forced into a shutdown. These are difficult, unprecedented times and I don't expect anyone to navigate it perfectly but I feel like Diamond basically just shot itself in the foot.

But that's just a guess, because you're right; we don't really know what goes on behind closed doors. But looking at what we *have* seen? My sympathy for Diamond is pretty low. It looks like they got a little over-confident and greedy and thought the industry couldn't get by without them, and tried to get a little extra leverage during this time of struggle.

[iron chimp]

It very well could be. As you say, we don't know what the contract says.

And if it turns out that Diamond couldn't have done things any differently for whatever reason/s, then okay. But as it stands right now, knowing what we know, I think Diamond definitely failed to handle things the way they could have. A lot of small businesses that need every nickle lost cash they couldn't afford to lose, and then got forced into a shutdown. These are difficult, unprecedented times and I don't expect anyone to navigate it perfectly but I feel like Diamond basically just shot itself in the foot.

But that's just a guess, because you're right; we don't really know what goes on behind closed doors. But looking at what we *have* seen? My sympathy for Diamond is pretty low. It looks like they got a little over-confident and greedy and thought the industry couldn't get by without them, and tried to get a little extra leverage during this time of struggle.

I cant really see how they are being greedy.

I would assume the money in its account is legally the shops money at this point. Its the shops money that buys the books from the suppliers not diamonds money and i would assume that money is only authorised to be released when the shops take delivery and that the delivery matches the solicit (ie yr not paying $10 for that 100 page anniversary issue that actually turns out to be a 32 page filler or whatever). One would also assume that the shops money is ringfenced and legally protected so diamond cant use it for other things

Similarly the books arent diamonds - those will still belong to the publisher at this point.

So diamond is stuck with the costs of storing say a million books for months that it doesnt own and the huge headache of millions of pounds in its account that it doesnt own either.

[Digifiend]

No industry uses a retailer as a distributor for a very good reason.

Wrong. I suggest you look at who the main UK magazine distributors are. John Menzies, and Smiths News. Smiths is part of WHSmith - a retailer. Menzies is a former retailer too (they sold their retail business to WHSmith but kept the distribution business).

[iron chimp]

Wrong. I suggest you look at who the main UK magazine distributors are. John Menzies, and Smiths News. Smiths is part of WHSmith - a retailer. Menzies is a former retailer too (they sold their retail business to WHSmith but kept the distribution business).

I should have said discount retailer. Smiths and say ordering direct from penguin books all charge recommened retail price. I can buy 2000ad cheaper from the comic shop than smiths.


When the distributor retails books cheaper than its customers then you end up with no customers. Dcbs already sell books for $2 something an issue i believe. When they are also the distributor they can sell books to their retail arm for less than wholesale to other customers. Effectively every shop would be paying dcbs to undercut them even more and put them out of business.

Its this 'competition' to diamond thats the one who has the potential to engage in monopolistic practises, not diamond.

[Digifiend]

You have no proof that they're actually doing that though, do you? You're making unfounded accusations.

[iron chimp]

You have no proof that they're actually doing that though, do you? You're making unfounded accusations.

Im not making any unfounded accusations. Im saying the potential for monopolistic practises exists for dcbs where it does not for diamond.

If im buying books from the publisher at say $1.50 to distribute why would i charge my own mail order retail arm 50c distribution fees to sell those books especially when both businesses will be run out of the same warehouse?

The retail arm could be selling books for $1.75 each mail order to readers while shops are buying them wholesale at $2. Dcbs can already sell books at $2 to $2.50 (or whatever their prices are now) - remove diamonds distro costs to themselves and they could go under $2 easily.

That and other avenues open up for dcbs that do not exist for diamond.

[Gaastra]