How Ronald O. Perelman
This week I want to give my opinion on a critical series of events in the history of the comics industry that I feel have been ignored, or only touched upon in passing reference. Specifically, I want to lay out why I believe that Ronald O. Perelman caused more harm to the comics industry than anyone in history, including Frederic Wertham.
As most of you already know, Frederic Wertham led a crusade against what he felt was the corrupting influence of comics upon America's youth throughout the late 1940's, and early 1950's. The publication of his book SEDUCTION OF THE INNOCENT eventually led to Congressional hearings, in 1955, about the contents of comic books. At least in part as a response to those hearings, several major comics publishers created the Comics Code Authority, a self-policing group that managed to create so many editorial taboos that most comics were turned into boring pap. This vapid editorial material, combined with all the bad publicity from the Kefauver hearings, led to a massive decline in overall comics sales, and the bankruptcy (or voluntary shutdown) of many comics publishers. Sadly, it took the comics industry nearly a decade to recover from Wertham's false and misleading arguments about the effects of comics on young people.
That having been said, I believe that Ronald O. Perelman outperformed Wertham in the harm that he inflicted on the comics industry. When he took over ownership of Marvel comics in 1989, Marvel was coming off of a series of record years of both sales and earnings. Part of that growth in earnings had been based on the popularity of the Marvel line of characters, but even more derived from the fact that New World Pictures (Marvel's previous owner) had raised prices by 50% (from 65 cents to $1) during its 3-year ownership of the company. While these price increases help generate significant short-term profits, they also ate away at the core of Marvel's business, those fans who were purchasing the entire line of comics published by the company each month.
Sadly, Perelman severely aggravated this problem by raising prices by another 100% over the next seven years, and by increasing the total line of Marvel titles from approximately 60 when he took over, to nearly 140 different monthly issues at the peak. Calculating the math in this scenario is fairly easy. In 1985, comics were 60 cents. With 40 regular Marvel titles being printed, it cost a typical fan $24.00 to purchase every Marvel comic book being printed. That left plenty of disposable income left over for trade paperbacks, toys, and other related Marvel goods. Even for collectors of modest means, it was possible to be a "Marvel Zombie" for only $6 per week.
By 1988, the number of Marvel titles had increased to 50, and the base cover price was $1. At a $50 total cost, that was a 110% increase in the cost it took to buy the complete Marvel line in just 36 months. On the retail end of the business, we saw a few collectors dropping out of the business due to these new higher costs, but most stayed. In fact, that was the period when we saw the greatest growth in the number of Independent comics titles, as publishers such as First, Dark Horse, Comico, and Eclipse nibbled at the edges of Marvel's market share.
When Ronald Perelman took over Marvel in 1989, his goal was to expand Marvel's business. He had his team start by increasing the number of titles being published, raising cover prices on a regular basis, and salting the monthly output heavily with special issues that could derive extraordinary profits through such inexpensive means as enhanced covers. At first, it looked like his plan was succeeding brilliantly. Sales and earnings soared as fans purchased huge numbers of these higher-priced books. What we heard in the stores, however, was an accelerating stream of complaints against the high cost of comics. Initially this criticism was focused on the higher-priced enhanced comics, but it quickly became apparent that the higher cost of collecting was forcing many fans out of their chosen hobby.
While we also heard many complaints about the quality of comics being produced in 1993, it was evident that the problem was greater than that one simple element. A survey of the books from that period does show a large number of mediocre titles being published, but there were also some very good ones. So why did so many long time fans quit? The answer seems to be a combination of time and money. Fans who had been purchasing every Marvel title were frustrated that they could no longer afford to purchase the whole line, and were even more frustrated that they didn't have the time to read them all. Rather than cut back to what they could afford, this substantial portion of the comics collecting community simply chose to quite collecting altogether.
By early 1993, Marvel prices were a minimum of $1.25 per copy, with several enhanced issues each month. With well over 100 titles being printed each month, the monthly cost for a dedicated fan to purchase the entire Marvel line was approximately $150.00. It was at this point that the comics market started falling apart at the seams. We noticed it first in our retail stores, as the number of monthly subscribers we were servicing started to fall precipitously. Simultaneously, impulse sales from our new comics racks plummeted, and long-time subscribers began dropping titles from their subscriptions in large numbers. The worst-hit publisher in this decline was Image, with Valiant/Acclaim a close second. Those publishers dropped so quickly that we saw declines as high as 35% per month on certain titles! Given the non-returnable rules of comics retailing, and the fact that our orders were being placed two months in advance, this resulted in a cash flow nightmare. We simply couldn't cut our orders as fast as demand was dropping! We "ate" unsold issues by the thousands...
Had Ronald O. Perelman not been the owner of Marvel at this time, then perhaps the damage of the implosion of 1993 could have been mitigated. Instead of acknowledging that their price increases and title inflation were a significant part of the problem, however, Marvel's management chose to believe that their ills were being caused by a lack of proper marketing of Marvel products by the Direct Market distributors. This led them to make the incredibly stupid decision to buy one of the smaller Direct Market Distributors (Heroes World) and start distributing their comics on their own.
To be continued...
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