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Coronavirus: An "Extinction Level Event" for the Direct Market

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Coronavirus: An "Extinction Level Event" for the Direct Market

Old 04-07-20, 09:55 PM
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Re: Coronavirus: An "Extinction Level Event" for the Direct Market

Originally Posted by Red Hood View Post
Now the bigger problem is that the surviving stores have gone to sell on eBay, Amazon and their own sites, basically flooding the market on all types of books. When Midtown is clearing out recent inventory for $.99 cents you know that things are desperate.
On the other side of the coin, how much of this inventory "flooding" on ebay, amazon, etc .... are from bankruptcy type liquidations ?
Old 04-08-20, 06:52 AM
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Re: Coronavirus: An "Extinction Level Event" for the Direct Market

Originally Posted by morriscroy View Post
On the other side of the coin, how much of this inventory "flooding" on ebay, amazon, etc .... are from bankruptcy type liquidations ?
Not that much. Usually on these chapter 7 bankruptcies, whatever inventory remained is usually sold through estate/bankruptcy auctions, not ebay since then they'll have to pay an additional fee on top of everything they sell.
Old 04-08-20, 02:04 PM
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Re: Coronavirus: An "Extinction Level Event" for the Direct Market

Red Hood is correct - I'm seeing stores dump as much inventory as they can on eBay. It's a good time buying expensive comic-related stuff on eBay. Stores are putting things up for auction and letting them go for prices they wouldn't have considered just a month ago. I'm seeing many cool and rare items come up go for cheap prices. This goes beyond the comic book market, pretty much any retail category dominated by smaller retail shops are selling inventory practically below cost to survive.
Old 04-08-20, 02:21 PM
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Re: Coronavirus: An "Extinction Level Event" for the Direct Market

Originally Posted by PhantomStranger View Post
I'm seeing many cool and rare items come up go for cheap prices. This goes beyond the comic book market, pretty much any retail category dominated by smaller retail shops are selling inventory practically below cost to survive.
(More generally).

I have noticed this for stuff like comic books, and some music cds + vinyl.

Though I have not really seen this (yet) for dvd + bluray.

I suspect this might have to do with the fact that comic books and vinyl are still sold in smaller mom/pop type operations.

In the case of dvd + bluray, the smaller mom/pop type operations were already gone from the local areas and nearby larger cities. (This is why I don't drive to the next town over, to do dvd/bluray shopping). It seems to be dvd + bluray is largely dominated by the giants like wallyworld, amazon, etc ... who don't have to resort to "panic liquidations".
Old 04-17-20, 12:41 PM
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Re: Coronavirus: An "Extinction Level Event" for the Direct Market

There were rumors that Diamond might not open back up until August. This morning, however, the company said they hope to be open by the end of May.

But the interesting development that just hit in the last half hour is that DC announced they will have new books in comic shops starting on April 28. They also released a schedule for the following two weeks...the books are now scheduled to come out on Tuesdays.

It appears DC has found a new distributor.

Last edited by Bob_Bobbson; 04-17-20 at 12:49 PM. Reason: Grammar
Old 04-17-20, 01:34 PM
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Re: Coronavirus: An "Extinction Level Event" for the Direct Market

They've found two new distributors: Midtown Comics (UCS Comic Distributors) and DCBS (Lunar Distribution).

So Bleeding Cool reporters called both UCS and Lunar earlier today. No one picked up, but UCS diverted an answerphone machine for Hal at Midtown Comics. One of the largest comic stores in the US, Midtown Comics of New York also handles Marvel and DC Comics subscriptions as well as comp copies for creators and other talent. Lunar just had an answerphone message with no identification but further investigation identified it as an operation being run by DCBS, the largest mail-order comics company in the US, based in Forth Worth, Indiana.
This is how comics USE to be distributed before the major publishers signed exclusive deals with Diamond.

https://bleedingcool.com/comics/dc-c...-midtown-dcbs/
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Old 04-17-20, 01:45 PM
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Re: Coronavirus: An "Extinction Level Event" for the Direct Market

Originally Posted by The Valeyard View Post
They've found two new distributors: Midtown Comics (UCS Comic Distributors) and DCBS (Lunar Distribution).



This is how comics USE to be distributed before the major publishers signed exclusive deals with Diamond.

https://bleedingcool.com/comics/dc-c...-midtown-dcbs/
Wait, both are retailers, now they're going to work as distributors? Were the distributing some items before because to my knowledge they were sourced by Diamond.
Old 04-17-20, 06:41 PM
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Re: Coronavirus: An "Extinction Level Event" for the Direct Market

Originally Posted by fujishig View Post
Wait, both are retailers, now they're going to work as distributors? Were the distributing some items before because to my knowledge they were sourced by Diamond.
This is very shady and I wouldn't do business like this with them for 2 reasons. First, they aren't experienced at all being distributors. Second, at the end of the day they are competitors and they will do what's best for them and not what's best for the stores they distribute. Midtown already has a track history of cancelling orders to customers when they have ordered or pre-ordered books that have become hot before release date. There was a pretty big amount of complaints back in 2019 when Midtown cancelled the orders of many customers who had ordered or pre-ordered Batman Damned #1. Their excuse on emails was that they were shorted or that their books had arrived damaged from Diamond. Weeks later, they had plenty of them in-stock at $100-$200 each. People have noticed this trend happening every so often, as recently as Batman #89 and Hell Arisen #3, the first appearances of Punchline. Just for that, I wouldn't trust that they would deliver the goods on time and pristine shape.
Old 04-17-20, 06:48 PM
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Re: Coronavirus: An "Extinction Level Event" for the Direct Market

That's exactly what I was thinking, conflict of interest with them being stores themselves and distributing to their competitors.
Old 04-17-20, 07:03 PM
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Re: Coronavirus: An "Extinction Level Event" for the Direct Market

Chuck Rozanski/Mile High Comics was a distributor for a while in the 70s/80s, though he had to sell his distribution company to wife (Alternate Realities Distribution) after Phil Seuling got Marvel to cut him off and threatened a lawsuit, so larger retailers distributing comics in the DM isn't unheard of.
Old 04-18-20, 12:40 AM
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Re: Coronavirus: An "Extinction Level Event" for the Direct Market

Originally Posted by Trevor View Post
Iíll never understand people saying theyíll quit the hobby if itís only digital. So youíre a fan of paper instead of the actual story and art on it? I understand collector mentality, obviously, but the art is the thing.
The only negative on digital is that you canít re-sell them. Your entire paper collection of 100,000 books in your multiple closets? I have them all on this iPad, where they look better, are slightly larger, will never fade or burn or get stolen, and I paid about 50 cents an issue.
I bought some new Go-Bots comic last time I was at the comic shop. The art, coloring and lettering looked like something that could have been a mini-comic that came with the actual Go-Bot toys from 1983. It was great. If I saw it advertised on Comixology I don't think I would have bothered to purchase a digital issue. The presentation in a physical format is what really made the experience.

This sucks for comic shops. I hope that they survive.
Old 04-18-20, 07:23 AM
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Re: Coronavirus: An "Extinction Level Event" for the Direct Market

Stores complaining about someone stepping up to provide them an option is exactly why comic shops fail so often. Perhaps they all need to die. Comics will survive, I’m not sure this direct market system should.
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Old 04-18-20, 07:47 AM
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Re: Coronavirus: An "Extinction Level Event" for the Direct Market

Originally Posted by Trevor View Post
Stores complaining about someone stepping up to provide them an option is exactly why comic shops fail so often. Perhaps they all need to die. Comics will survive, I’m not sure this direct market system should.
But the reality is that this is not an option. Brian Hibbs, a San Francisco long-time comic book store owner, explains why these new "options" are not options at all. It's a pretty lengthy post, so I'm putting the link

https://www.facebook.com/brian.hibbs/posts/10158321356319042


In addition, from what I've already been shown and told, LCS have 4 days to sign up for this, so it mean, you sign up by Monday or you are out. Second and most importantly, the discounts given per book are between 25-35%, very different from the 50% and up discount that LCS get from Diamond. That discount is before shipping costs kick in, so at the end of the day, the margin for these books is pretty low if you get them from these 2 new "distributors". Basically, there's almost no differece for the LCS to buy from Midtown that for a customer to do the same.

This is a very rushed, without no thought given, decision by DC Comics. Don't get me wrong, there needs to be a competing distributor(s) for Diamond, but this ain't it chief.

Edit: Can anyone see the link to the FB post?

Last edited by IBJoel; 04-20-20 at 09:12 AM.
Old 04-18-20, 08:34 AM
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Re: Coronavirus: An "Extinction Level Event" for the Direct Market

I don’t see a link. I agree it’s not perfect, but it’s a start, and/or an emergency holdover until everything is normal.
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Old 04-18-20, 10:32 AM
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Re: Coronavirus: An "Extinction Level Event" for the Direct Market

Originally Posted by Trevor View Post
I don’t see a link. I agree it’s not perfect, but it’s a start, and/or an emergency holdover until everything is normal.
I don't think is good at all. The best analogy I can give you is that this would be akin to having Wal-Mart and Target distribute all the groceries to mom and pop shots instead of an independent third party itself. There's a conflict of interests, plain and simple.

Last edited by Red Hood; 04-18-20 at 10:38 AM.
Old 04-18-20, 02:10 PM
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Re: Coronavirus: An "Extinction Level Event" for the Direct Market

I wonder if there's more going on behind the scenes, like DC wants to get distribution up and running again because they're afraid that Warner Brothers is going to start looking at them and either downsize them, absorb them into another division, or otherwise radically reorganize them.
Old 04-18-20, 02:33 PM
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Re: Coronavirus: An "Extinction Level Event" for the Direct Market

Originally Posted by Red Hood View Post
I don't think is good at all. The best analogy I can give you is that this would be akin to having Wal-Mart and Target distribute all the groceries to mom and pop shots instead of an independent third party itself. There's a conflict of interests, plain and simple.
Sure, there is a conflict. But would those grocers rather have nothing to sell, or something for a smaller profit in the short term? I donít think the two companies expect shops to switch to their system permanently, At least at these terms initially, this is meant to be a stop gap. Diamond has cut off all shops for two months. This gives shops an option to supply readers their fix. Diamond being a monopoly is bad, plain and simple. Perhaps this is one small step in the effort to fix that.
Old 04-18-20, 03:41 PM
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Re: Coronavirus: An "Extinction Level Event" for the Direct Market

Originally Posted by Trevor View Post
Sure, there is a conflict. But would those grocers rather have nothing to sell, or something for a smaller profit in the short term? I donít think the two companies expect shops to switch to their system permanently, At least at these terms initially, this is meant to be a stop gap. Diamond has cut off all shops for two months. This gives shops an option to supply readers their fix. Diamond being a monopoly is bad, plain and simple. Perhaps this is one small step in the effort to fix that.
But thatís the problem. I already saw the offer from the Midtown side of things and thereís basically no profit in getting these books. The discount they are offering is not worth it. 25-35% discount on floppies is a joke, especially when thereís no information on how much they are going to charge for shipping and how they are going to deal with things like damages and shortages. In addition, DC is almost asking to go with Midtown and dump Diamond which is a ridiculous thing to ask from a company that hasnít done this type of business before. It says a lot that Marvel, Image or any other company has followed suit in doing this type of partnership with Midtown or DCBS.
Old 04-18-20, 03:48 PM
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Re: Coronavirus: An "Extinction Level Event" for the Direct Market

Originally Posted by Josh-da-man View Post
I wonder if there's more going on behind the scenes, like DC wants to get distribution up and running again because they're afraid that Warner Brothers is going to start looking at them and either downsize them, absorb them into another division, or otherwise radically reorganize them.
Warnermedia right now is in the same boat at Time-Warner/AOL was back in 2000. Thereís new bosses all around, lot of changes and lots of micromanaging. DC is part of that but the only reason for them to be doing this right now is because they are trying to take advantage that Marvel nor any other company is going to break out from Diamond and this way they can have the books out there for sale without any competition. But this wasnít thought through enough as the majority pf LCS in the nation are still going to be closed by the end of April and many of them donít have the cash flow right now to do the new ďdistributorĒ thing. In addition, everyone outside the US is fucked cause neither of the new distributors is shipping outside of US.
Old 04-18-20, 03:51 PM
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Re: Coronavirus: An "Extinction Level Event" for the Direct Market

The other "bad" thing is... how is DC going to handle this when everything opens back up? Are they going to reprint these or keep some around, or are these just going to have really low print runs and people will have gaps in their collections?

Speaking from personal experience, once a long time comic reader has a gap in their collection, there's a risk they could lose interest, as stupid as that may sound. A lot of people buy comics out of pure momentum and not always enjoyment of the medium, which makes sense when you look at how many times creative teams change on a book.
Old 04-18-20, 04:12 PM
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Re: Coronavirus: An "Extinction Level Event" for the Direct Market

Originally Posted by fujishig View Post
The other "bad" thing is... how is DC going to handle this when everything opens back up? Are they going to reprint these or keep some around, or are these just going to have really low print runs and people will have gaps in their collections?

Speaking from personal experience, once a long time comic reader has a gap in their collection, there's a risk they could lose interest, as stupid as that may sound. A lot of people buy comics out of pure momentum and not always enjoyment of the medium, which makes sense when you look at how many times creative teams change on a book.
That's a great question because so far, printing is based on Diamond pre-orders and the book's history of selling. For example, Batman sells around 90K per month, so DC will usually print around 10% more, so give or take, they will print 100K. With the new distributors, is DC going to print stuff as it if was for every distributor or are they printing only for Midtown and DCBS first? That would usually be more expensive for DC to do.
Old 04-18-20, 04:33 PM
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Re: Coronavirus: An "Extinction Level Event" for the Direct Market

Originally Posted by fujishig View Post
The other "bad" thing is... how is DC going to handle this when everything opens back up? Are they going to reprint these or keep some around, or are these just going to have really low print runs and people will have gaps in their collections?

Speaking from personal experience, once a long time comic reader has a gap in their collection, there's a risk they could lose interest, as stupid as that may sound. A lot of people buy comics out of pure momentum and not always enjoyment of the medium, which makes sense when you look at how many times creative teams change on a book.
Agreed. Back when I was a floppy collector, missing an issue or two would often lead me to dropping a book I had purchased monthly for years and years.
Old 04-19-20, 09:24 PM
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Re: Coronavirus: An "Extinction Level Event" for the Direct Market

Originally Posted by Red Hood View Post
But the reality is that this is not an option. Brian Hibbs, a San Francisco long-time comic book store owner, explains why these new "options" are not options at all. It's a pretty lengthy post, so I'm putting the link

https://www.facebook.com/brian.hibbs...58321356319042


In addition, from what I've already been shown and told, LCS have 4 days to sign up for this, so it mean, you sign up by Monday or you are out. Second and most importantly, the discounts given per book are between 25-35%, very different from the 50% and up discount that LCS get from Diamond. That discount is before shipping costs kick in, so at the end of the day, the margin for these books is pretty low if you get them from these 2 new "distributors". Basically, there's almost no differece for the LCS to buy from Midtown that for a customer to do the same.

This is a very rushed, without no thought given, decision by DC Comics. Don't get me wrong, there needs to be a competing distributor(s) for Diamond, but this ain't it chief.

Edit: Can anyone see the link to the FB post?
No, it's not showing up.

Here's the full text of Hibbs' facebook post:

So, here's an attempt to help explain why @DC is making all of the wrong moves with their latest announcement. I especially hold Jim Lee DC, DC's current publisher, accountable for this. Hank, Nancy, I also have to call you out here. You three are the visible leadership. Time to answer this.

1) Most of the country is shut down, and WILL NOT be ready to open on the date of 4/28 that DC says they'll be shipping comics again. In San Francisco, we're at a minimum of first week of May, and I'm fairly certain we won't be allowed to open to walk-in business without semi-extreme rules until well into June.

2) DC, itself, is in Burbank California, and they're not able to go into the offices themselves.... again, probably well into June, and, again, there will probably be significant rules in place from California about who can do what and when and how -- possibly mandatory temperature checks, etc. The *notion* that they're expecting us to be "open" when *they* aren't is horrifying to me.

3) The "distributors" that DC has picked are NOT. It is Midtown and DCBS, the #1 & #2 *retailers* of comics. These are COMPETITORS to the overwhelming majority of Direct Market retailers. There is nothing in place to protect competition, there's no guarantee of sales or (more importantly) payment-terms.

4) We've been given FOUR DAYS to set up accounts and get right with our new Overlords (being in Cali, we're "assigned" to DCBS.) Sorry, you can't unleash an entire new way of doing comics in that short of a time span. I have genuine and serious questions about being forced to do business with an entity that I personally consider a "bad actor" in comics, and to hand them key business documents like my resale license. Where's our contract?

5) Margins are shitty enough that making a profit in comics retail is pretty hard to begin with, and everything is magnified and multiplied when all you can do it mail order. It's even harder for me in SF, where my cost-of-rent and cost-of-labor are considerably higher than most of my peers. I've been doing the best mail order I can (probably pretty shitty) from https://comix-experience.myshopify.com/, but the BEST CASE HERE is that I am working three times as hard, for no more than one third of the revenue. And that's with $20 graphic novels being the primary thing we're doing. I absolutely, positively, in no way can *profitably* sell $4 periodicals via mail order -- that's not the business we are in.

Please, understand, I've got the credit card info and (emphatic) permission-to-charge from most of our pre-order customers... but without the walk-in, this is IN NO WAY enough cash flow to even pay for the labor to handle it. Let alone COGS, let alone rent and utilities, etc.
And that's assuming that everything goes PERFECTLY... which, History has already told us, IT ABSOLUTELY WON'T

6) DC is asking us to ABANDON Diamond. They claim they've "cancelled all orders" (though, honestly, can they even do that?), and that we have to buy from Midtown and DCBS. Diamond and Steve Geppi specifically have acted as the "bank" of the Direct Market, saving and protecting the great mass of retailers again and again and again.. Do I have some problems with DCD's operation? Sure: I'd be an idiot not to -- but on the balance they've done more to preserve DM retailers than ANYONE EVER, so "walking away" from them in this time of challenge is completely entirely a non-starter for me

ESPECIALLY FOR DCBS. Are you crazy? They are literally our enemy. Why not ask Amazon to distribute to us?

7) The very notion of changing to a Tuesday release is pure "fuck you" to the channel that, I'm pretty damn sure is two-thirds of the mechanism of their cash-flow.

8) They could have not chose a more half-ass and broken way of releasing comics -- the ONLY way to make money doing periodicals is to depend on the "economies of scale". Just WRITING THE ORDER for the five comics nomatively on-sale on 4/28 would cost me more money than I could ever hope to realize from them. That wouldn't even begin to account my costs to receive those books, the labor to handle sub, the additional new labor to send those books out.....Same for the following three weeks.

9) And what about the SHIPPING COSTS on this tiny slate of garbage? If it's more than "free", then our already low margins are shot to shit

I REMEMBER HEROES WORLD -- the COSTS of doing business with a fraction of the sales of a universal distributor makes it so you can NOT sell that line profitably for most retailers.

9a) I STOPPED RACKING MARVEL COMICS DURING HEROES WORLD, AND MY SALES WENT UP

(this

10) Seriously? This is your "re-launch" slate? DAPHNE BYRNE, THE DREAMING, second prints, and some Wal-Mart comics? What the serious fuck is wrong with you DC? YOU HAVE AN OPPORTUNITY TO REDEFINE DC FOR THE NEXT DECADE, and your choice is clear out the pile of mediocrity the editors have already committed to? SERIOUSLY? You having that little faith in what DC can be says more to me than almost anything else.

11) If they do this, my only possible response can be "well, I guess most new DC periodicals are subs only". This will cut ~60% of their sales at Comix Experience, forever. Listen: every single copy of HAWKMAN or JUSTICE LEAGUE ODYSSEY, and probably upwards of ninety percent of their output that I order for the rack is a PURE GIFT TO DC COMICS. I've LONG THOUGHT I should stop subsidizing Marvel and DC's excess for, realistically, something like 90% of thier output.... and you actually want to give me a clean, simple and actionable reason? REALLY?

12) In even the best possible world (and we're not -- this is a DARK timeline, yo), mainstream superhero comics are supported by the faith of the retailers on the balance. Is your faith in DCBS and Midtown so absolute? IS IT REALLY?

13) The business model of Midtown and DCBS is largely based on massive discounts, and undercutting the asking price of the cover price. Changing that would seem to be a incredibly dangerous idea, in what will almost certainly be lower demand on the other side of this. If you ask me, going the other way with Minimum Asked Pricing (MAP) is the much smarter way to go. The people who are the new "distributor" should not be the people who also sell for 40%+ off. Not if you want to have physical stores representing your output.

14) Non-American accounts are just thrown to the wolves? Really? REALLY?

15) There is no world in which creating "haves" and "have nots" is ever a good idea. #EverEverEverEver

16) I'm calling it now, in terms of how it actually plays out: Heroes World 2: Electric Fuckaloo. Those who do not learn History, etc etc

17) I've learned this last month: I DO NOT WANT TO BE A MAIL ORDER BUSINESS. It is a horror-show, and a low-margin one at that. Just trying to EVEN VAGUELY "compete" with a "free shipping" at $50 means sometimes I'm just giving away 20% or more of my profit on shipping, depending on the size/shape of the books. It is FLATLY impossible to pay RETAIL rent and wages in California, DC's home state, on that velocity and volume. Can't be done.

18) We are not "open". We are not allowed to be "open" in California. Most states that sell the MOST COMICS are not allowed to be open. DC is not allowed to be "open" in California. There is no way for me to legitimately sell comics to anything other that preorders (which sure as fuck should be the minority for any legitimate retailer, if you ask me, if you want "comics" to be here in another decade)). SO WHY IS DC RELEASING COMICS???????????

I'm not on board. In fact, I am so not on board that this would permanently poison my relationship to DC Comics, and impact their long-term sales here unless they change their direction.... not just within my individual store, but everything I can ever do when I interact with both my peers and the consumers I serve.

I would truly regret that.

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Old 04-19-20, 09:53 PM
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Re: Coronavirus: An "Extinction Level Event" for the Direct Market

So I'm still not sure what to believe. Another retailer said that Diamond was still going to distribute these after the fact.

As far as the lineup that Hibbs isn't impressed with, some seem to think that it's by design: they held off a big Batman issue, for instance, and it seems like some thing this is just to have comics still coming out, and the fact that it's "minor" comics is so the B&Ms who don't go for this don't feel left out. But I'm not sure what to think, there are opinions all over an nobody seems to know exactly how this is going to work. If this is just a band-aid to get some stuff distributed while Diamond is out, and these will be solicited via Diamond anyway, I don't see it as a huge deal. If they're really trying an alternate avenue to replace Diamond and putting it in the hands of DCBS and the like, I can understand why retailers are not happy.
Old 04-20-20, 06:58 AM
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Re: Coronavirus: An "Extinction Level Event" for the Direct Market

Reading more on his Facebook. Hibbs is being completely selfish here. He wants publishers to not make any product until all stores are open to walk-in traffic. That’s absurd and unrealistic. Complaining about having choices. Calling Geppi a hero, smh.

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