Diamond’s Future Looks Rough

For almost 30 years, Diamond Distributors has been the primary source of single-issue comics to retailers. Many business analysts saw this as a negative aspect of the industry, with many calls for the company to evolve with the changing market. But Diamond’s reign continued unabated, until COVID accelerated what might have been inevitable.

During the pandemic, DC, the second-largest publisher in the industry, broke away from Diamond and made deals with two alternative distributors. Last month, the floodgates broke when AHOY Comics, AWA Studios, Behemoth, BOOM! Studios, Humanoids, Insight, Legendary, Oni Press, Red 5 Comics, Scout Comics, Source Point Press, Vault Comics, VIZ Media, Z2 Comics, and Heavy Metal moved their distribution to the venerable bookseller Simon and Schuster. As everyone was trying to digest this move, Marvel, the largest publisher in comics, announced their move away from Diamond and towards Penguin Random House. In the span of 18 months, Diamond went from the primary distributor of comics to a business in peril. And the damage might not be over. IDW, another major player in the market is working off an expired deal with Diamond, so that publisher might leave in the next few weeks.

Why are all these publishers leaving? Most of it boils down to cost and exposure. Both S&S and PRH offer better financial terms and wider reach than Diamond.

What will be the overall impact on the market? That remains to be seen. It’s unclear if either company can adapt to shipping single-issue comics in the mint condition that comic shop customers expect. Another open question is how easy or hard it will be for independent publishers to secure distribution through these larger companies. And no one knows whether Diamond can survive or what it will look like if it does. But the lesson is as clear as it is cliché.

Adapt or die.

If you have questions about the business or legal aspects of your comic book publishing and you'd like a free consultation, please contact me and we can set something up that fits in with your schedule.

PLEASE NOTE: THIS BLOG POST IS NOT A SUBSTITUTE FOR LEGAL ADVICE. IF YOU HAVE AN ISSUE WITH YOUR COMIC PROPERTY, DISCUSS IT WITH A QUALIFIED CONTRACT ATTORNEY OR CONTACT C3 FOR A FREE CONSULTATION

What the Valiant Movie Deal Means for Comics, Movies and You

By Gamal Hennessy

One of the bigger pieces of entertainment industry news this week focused on the deal between Valiant Comics and a Chinese based company called DMG. The details of the deal haven’t been made clear, but the initial reports suggest DMG has pledged to invest “a nine figure sum” in creating a film and TV universe for Valiant properties. (See Valiant Entertainment Gets Nine Figure Funding for Movie Division)

Paying the Money

In any licensing or production deal, there are at least two sides to the story. On one hand, you have DMG who appears to be trying to get a slice of the lucrative shared universe pie, but it is hard to understand their motives at this point. Why would a Chinese company, with access to potentially billions of creative minds invest so much effort into intellectual property with limited cache? Why not create an original shared universe with less baggage, complications and cost? I understand properties like Iron Man and Guardians of the Galaxy didn’t have mainstream cache before their films came out, but Marvel focused on those properties because they already owned the rights to them. They didn’t have to shell out big money to a third party and then dump more money into bringing them to the big screen. DMG appears to have overpaid to join the connected universe wars.

It could be DMG is using Valiant as a future landing spot for talent it plans to lure away from Disney/Marvel and Warner/DC. Once the established creators see a former minor player as a new deep pocket, they might be willing to jump at the chance to join Valiant’s roster. A move along those lines could shift the balance of power away from Marvel’s dominance in film and DC’s leadership on TV and make the entire industry more competitive.

Getting the Money

No matter what DMG plans to do, the other side of the story is the important piece for producers, writers and creative people of all types. This deal, to the extent it comes to fruition, elevates an unknown independent comic publisher into an international entertainment force. But this transformation didn’t happen overnight. Valiant has been publishing since 1989. Its titles and roster have changed over the years, but their story is a classic example of three concepts I tell all my clients:

• You never know when or how your characters could become popular, so always prepare for potential success by making sure you own the rights (See What Can We Learn from the Success of Guardians of the Galaxy?)
• Always treat your art as an investment and get all the legal protection you can (See Treat Your Art Like an Investment)
• Take a long term view of your work and keep creating even if your first work isn’t a hit (See How to Break In and Stay in Comics)

Of course, the DMG/ Valiant deal could be a complete disaster. It might be the beginning of the end of the golden age of comic book based entertainment (See Can We Have Too Many Comic Book Movies?) But I don’t think so. Film, television, books and interactive media can all share in the windfall of increased interest in new properties. You can get a piece of the pie too, but only if you’re rights are protected.

Have fun.

Gamal

PLEASE NOTE: THIS BLOG POST IS NOT A SUBSTITUTE FOR LEGAL ADVICE. IF YOU HAVE A LICENSEING OR INTELLECTUAL PROPERTY ISSUE, DISCUSS IT WITH YOUR LEGAL ADVISOR OR CONTACT C3 AT gamalhennessy@gmail.com FOR A FREE CONSULTATION.

Is the New Marvel Universe a Secret War on Fox Super Hero Films?

by Gamal Hennessy

In the comics industry, the death and resurrection of characters is a fairly common occurrence. Marvel killed Wolverine a few months ago and ended Fantastic Four as an ongoing series a couple months later. DC recently killed Robin and we’re now in his rebirth phase. The death of characters is an accepted element of post-industrial mythology and the business of creativity.  Every so often, something has to be taken away so it can come back with renewed energy.

Killing a comic character is common, but Marvel is doing something a bit more daring with today’s announcement of Secret Wars (See The Marvel Universe is Ending). In essence, Marvel is dismantling all of its various continuities to create a single overarching narrative. This event appears to be in the same creative vein as other universe destroying events like Crisis on Infinite Earths, Heroes Reborn and the New 52. Rather than shake things up with a reimagined world like the Ultimate Universe I saw launch when I was at Marvel, the stakes are being raised, or at least the goal posts are being moved.

But how much of this is the product of business as opposed to art? There’s already been plenty of speculation about the impact Marvel’s recent creative moves in comics will have on the superhero movie industry. Marvel has poured more creative and marketing energy towards the movie properties it owns (Avengers, Guardians, etc.) and has downplayed, muddled or destroyed  properties licensed out to other studios (X-Men, Spider-Man, Punisher). Conspiracy theorists suggest Marvel of using the tail to help wag the dog.

If the comics are the root of the money making movie tree, killing the root might weaken the tree. When any licensed product becomes more trouble than its worth, a movie studio might decide they’re better off giving up the rights. When Marvel reacquired the movie rights to titles like Daredevil and Hulk, the conspiracy theorists saw this as a Marvel’s success. The recent rumors of Spider-Man appearing in the Civil War film also fuels the conspiracy fire. The death of Wolverine and the cancelation of Fantastic Four could be considered a more aggressive move, designed to lower the potential success of the upcoming films, assuming other factors remain constant.

So what will the industry impact be of reconfiguring the entire Marvel mythology? It could be nothing or it may be everything. It all depends on which titles and characters emerge from Secret Wars. If most (or none) of the Fox or Sony characters survive the slaughter, I’d say there was a strong case for the conspiracy theory. But I doubt Marvel will be so blatant. A lot of factors go into the success or failure of a film franchise. Killing off a character in the comics isn’t a magic bullet, Kryptonite or a mystic hammer, but it can provide insight into the mind of the character’s owner.

The insight independent creators should have for their own characters is the same no matter how Secret Wars plays out. You need to treat your characters and stories as business assets. Make your decisions and focus your energy on the properties that work for you. If they don’t, consider shaking things up, even if some of your babies have to die. (See Treat Your Art Like an Investment)

Have fun.
Gamal

Will You Accept Your Assignment?

By Gamal Hennessy

Words in the legal world have different meanings than words in the real world. For example, most people define an assignment as a task, duty or responsibility given by one person to another person. In the world of contracts, an assignment is the transfer of contractual rights and obligations from one party to another party. In most contracts, references to assignments are buried deep in the back of the agreement when your eyes are already glazed over and skipping anything that doesn’t look like the signature line. But certain assignment language can turn a good deal into a bad one right before your eyes.

Musical Chairs

Imagine yourself as someone who makes comics. Also imagine yourself working hard to get your name out there at cons and online. You meet a small publisher and the two of you hit it off. He loves your work and offers you a deal. It’s not a great deal because it’s your first self-published project, but you take it anyway. Your book comes out and you’re as proud as a new born parent.

Your publisher treats you like gold. He goes beyond the language in the contract to support and promote your book. He reports sales on time and he even pays you. Your book and the other titles in his catalog start to get a lot of buzz. Hollywood starts knocking on the door. Suddenly, people are talking about TV, video games and even movies. Your publisher gets an offer for the entire company and he takes it. Now instead of being published by a small visionary publishing company, your book is swallowed up by a big vertically integrated conglomerate.

Your new publisher does not treat you like gold. Your contact at the central office has no idea who you are and isn’t interested in finding out. Your book is buried in an avalanche of content. The money stops. Your book becomes inventory for other media, but it is constantly pushed aside for higher profile properties. Your entire relationship with them is defined by the original unfair agreement and you want to take your book elsewhere.

That’s when you read the assignment clause of your contract and realize there’s a problem.

Types and Options

Assignment clauses boil down into two types; mutual and non-mutual.

• In mutual assignment, you or your publisher could assign your rights in the contract to someone else at a later date or neither of you can ever assign your rights to anyone.
• In a non-mutual type of assignment, only one of you has the right of assignment and the other side is stuck.

Publishers have a vested interest in being able to assign contracts. Their ability to sell their company is based in part on what is in the catalog. A company won’t be worth much if every title can walk out the door after a sale. Because of this and the inherent negotiating imbalance most artists have (See David vs. Goliath) many artists are not in a position to get a non-mutual assignment clause that goes their way. Many of them can’t even get a mutual assignment clause. Quite a few of them are stuck in a bad position.

Your Mission, If You Choose to Accept It…

The rights to catalogs change hands more often than you might think. Aspen Comics recently acquired the rights to Big Dog Ink. A few years back, DC acquired Wildstorm and integrated that entire universe into the New 52. In what is perhaps the largest catalog acquisition in recent memory, Disney bought Marvel and Star Wars. As comic properties become more lucrative (See Making Comics Isn’t Really About Comics Anymore) more publishers will see value in having catalogs they can assign.

Your response to this situation is threefold:

• Understand what kind of assignment clause you are dealing with and what options you have to walk away from a new publisher in the event of a sale
• Negotiate for the best overall contract you can get upfront
• Understand your long term success will be based on the language in your contract as much as, if not more than, your relationship with the publisher.

In some cases, you might want to have the rights to your book assigned to another company. Just understand the process and work to adapt the contracts you sign to the goals you have.

Have fun.

G

PLEASE NOTE: THIS BLOG POST IS NOT A SUBSTITUTE FOR LEGAL ADVICE. IF YOU HAVE A LICENSEING OR INTELLECTUAL PROPERTY ISSUE, DISCUSS IT WITH YOUR LEGAL ADVISOR OR CONTACT C3 at gamalhennessy@gmail.com FOR A FREE CONSULTATION.

Can We Have Too Many Comic Book Movies?

by Gamal Hennessy

Last week was typical in the new normal of comics based entertainment. The latest news from the new seasons of Agents of Shield, Arrow, Flash, and Gotham leaked across the internet. Hints about the new Daredevil Netflix series competed with news about the Powers, Lucifer and Supergirl TV shows (See Superhero TV Roundup). Deadpool got a launch date for his film and a plot synopsis was leaked for Age of Ultron. New comic news comes out almost every day in 2014. Where does it end, and what does this new world mean for the creators of this work?

The Reality TV Link

There was a time before the current “golden age” of television where unscripted or “reality” TV dominated the pop culture landscape. It began with experimental shows like MTV’s Real World and then expanded into things like Road Rules. A few years later, shows like Survivor, the Bachelor and American Idol became prime time staples. That prompted a flood of reality programming. The category got so big it had to develop subgenres to create differentiation. They had makeover shows, celebrity shows, and competition shows. Every network felt the need to jump into the category. Networks like the History Channel and Food Network created shows having little or nothing to do with the channel’s original purpose. The phenomenon became so big MTV itself morphed into a reality TV station. For all intents and purposes it abandoned music videos altogether.

The Tail That Wags the Dog

Consider the evolution of comics based entertainment over the past twenty five years. The success of films like Batman in 1989, Spider-Man in 2002 and the Avengers franchise in 2013 have made this genre of film one of the most financially successful genres in the history of movies. (See IMDB Highest Grossing Films of All Time). When you add the success of TV series like Smallville and Arrow to the equation, not to mention animated series like TMNT, Batman, Justice League and X-Men and you have a content avalanche that’s only gaining momentum. We’ve reached the point now where some universities are devoting college classes just to the comic book movie phenomenon (See New College Course for the Marvel Universe). The industry has come a long way from the sad days of films like Howard the Duck and Spawn.

But how far can this momentum take us? Consider this:

• Unlike reality TV, it will take more than a box office flop (or even a series of flops) to stop it. Green Lantern, Punisher and Ghost Rider taught us that.
• It won’t come from a lack of “A  List” characters. Iron Man wasn’t a household name before RDJ got to it and no one knew who Guardians were before last year.
• It’s not just a game for Marvel and DC, since Wanted, Sin City, Kick Ass and Walking Dead have shown independents can take their titles to the screen too.

Will comic film and television get their own awards category at some point? Which network will abandon its original mandate and become a comic entertainment channel? The questions seemed silly ten years ago. Now it doesn’t seem so farfetched. In the world of comic entertainment, comics are becoming the bottom priority, not the top (See Making Comics Isn’t Really about Comics Anymore)

Forward Thinking

What does all this mean for the aspiring writers and artists? I think there are three takeaways anyone in the industry should keep in mind as they build their careers:

• Opportunities beyond traditional comics are continuing to grow not just in terms of TV and film, but in the areas of video games, streaming video and other forms of entertainment
• While the chances of translating any given property into a mainstream market release is still rare, it is essential for creators to know and protect the rights they have in the comics they create
• The amount of quality entertainment coming into the marketplace can raise the bar across the industry and drive innovation in art and story quality.

We might be living in the golden age of comic entertainment, but it will take creative expansion and prudent business choices to keep the momentum going.

Have fun.

Gamal

PLEASE NOTE: THIS BLOG POST IS NOT A SUBSTITUTE FOR LEGAL ADVICE. IF YOU HAVE A LICENSEING OR INTELLECTUAL PROPERTY ISSUE, DISCUSS IT WITH YOUR LEGAL ADVISOR OR CONTACT C3 AT gamalhennessy@gmail.com FOR A FREE CONSULTATION.