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Media Notes / The Great Comics Crash of 1996

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Not really much of an incentive for comic collecting when these "rare" collectibles were everywhere.
Hobbes: How will these be rare and valuable if every kid in America has five copies?
Calvin: We're all counting on the other guy's mom to throw them away.

The great comics crash... of 1996. Actually, it lasted a number of years, from at least Deathmate (1993) to the failure of Marvel's Heroes World deal (1997), but if you need a single year, 1996 is the best one, because that's when the dawning realization that things were about to go downhill started to hit the comic world.

The Crash happened alongside the emergence of The Dark Age of Comic Books, but it wasn't strictly caused by it. Instead, there were two main causes of the Crash: the "direct market" and the collector boom.

The "direct market" was a way for comics publishers to distribute their comics directly to comic book shops. These shops were not covered by The Comics Code and could thus sell books that did not have Code approval. They also served as a convenient gathering place for fans of the medium to meet and discuss them. The direct market was also a big plus for publishers; instead of "stripping" and returning unsold copies for full credit, stores still had the chance to sell their extra copies by tossing them into the back-issue bin. Although direct-market comics distributors had existed since the foundation of Mile High Comics in 1971, the 1990s saw the two major direct-market distributors, Diamond and Capital City, drastically reduce their ordering requirements. This led to a vast number of "comics dealers" springing up overnight, most of them young, inexperienced, and undercapitalized. These actions caused the direct market to jump from 6% of total comic book sales in 1978 to 70% in 1992. But that in itself was a problem: if six comic shops open in the same area around the same time, but only one is run by someone who understands how to run a business, which is likely to survive long term? Probably, none of them. Bad competition is still competition, and too much competition is as bad for long-term business viability as too little. This didn't matter so much when the boom was in full swing and there was more than enough money in comics to go around, but...

The collector boom, though, was probably the biggest factor given its drastic impact on the industry. Over time, early comics had become valuable, mostly because not a lot of them had survived. The possibility dawned on the industry and comic readers that comics being released today could become really valuable in the future. The impact of the collector boom is often overstated for end-level collectors; the real driving force in this regard came from many of the aforementioned "dealers" who over-ordered in massive numbers for a demand that wasn't there even in the boom days. But the comic book industry soaked it up, and thus appeared several marketing tactics to appeal expressly to this collectors' market, like:

  • Series being relaunched with new #1 issues.
  • Issues printed with multiple Variant Covers so that completionists would buy multiple copies of a single issue.
  • Issues sold pre-bagged in plastic, to keep them pristine — completionists often bought two copies, one to read and one to collect.
  • Trading cards and holofoil covers, which usually popped up whenever the editor thought a series needed a sales boost. Indeed, the latter gimmick was so common that some refer to the Dark Age as the "Chrome Age".
  • Massive Retooling of comic series and "shake-up" storylines to generate more publicity for "gimmick" issues. In particular, the 1992 Death of Superman storyline was so hyped in the mainstream media that it sparked a massive rise in comic book speculators — and alienated many of them when the con was revealed.
  • Creating new characters and launching new series for them, launching new series for existing characters, splitting teams like X-Men and Avengers into sub-teams each with their own book. This not only created new #1s (see first bullet) but also "crowded out" shelf space competitors could take. If Superman and Spider-Man have four books each, where is Spawn going to find room to get noticed on the comic rack?

Related to but distinct from the collector boom was the "Crisis Crossover." This gimmick had appeared earlier (late in the Bronze Age or early in the Dark Age, depending on how you count) but it was quickly seen as a way to boost sales for books that were underperforming, or just to practically guarantee people would buy every book released that month. Valiant Comics enjoyed some success with this tactic: first get a stable readership for a few titles, then introduce new characters in those titles, who would then get their own titles, with the potential for a built-in audience who'd read about the new character from a character they were already reading. Then their first big Crossover, with a free issue 0 (a free sample to get people hooked), a story that ran through every title for one month, then again in every title for another month, then a special finale issue to end the event, ensuring everyone reading Valiant would buy and read every comic produced for two full months to make sense of things (and perhaps get hooked on the books they weren't reading). DC and Marvel saw how brilliant this was and copied it...too much. Big events became common enough that individual storylines were disrupted, even for characters who had no real reason to be involved in the crossover but still had to acknowledge it (one of many reasons the Clone Saga ran so long was that events like Onslaught were being teed up and resolving both events at the same time was forbidden by executives). While this encouraged fans to check out books and characters they weren't reading, it also alienated fans who felt the stories were suffering or resented having to read a character they didn't care about (or actively hated) to understand what the hell was going on. These events also contributed to the big retools and relaunches, as in "Death of Superman," making some fans feel like the comic universe had just become chaotic and unstable, and there was little point to buying next month's issue since there was a good chance the storyline you were following would be upended by something happening in a completely different book in a completely different place to completely different characters. The interconnectivity of comic book universes, formerly its greatest strength, was being seen as a weakness.

This was also the era of the superstar artist. Popular artists left Marvel and created Image Comics. Marvel then handed editorial control to the marketing department, which led to Onslaught and Heroes Reborn, where Marvel outsourced its comics for a year to popular artists' own studios. Sales boomed based on art, often ignoring writing.

But perhaps the largest influence was Marvel's new owner, one Ron Perelman (not to be confused with Ron Perlman). A "corporate raider," Perelman's usual MO was to buy companies and strip-mine them to line his own pockets, but in Marvel he saw a different opportunity. He wanted to turn Marvel into a "mini-Disney," a multimedia empire founded on well-known and well-loved characters. Around this time, DC was making excellent money with the merchandising for their superheroes, but the comics themselves were losing money, to the point DC almost worked out a deal with Marvel where Marvel would publish DC comics characters (the deal didn't go through, DC revitalized their brand through Crisis on Infinite Earths instead). Perelman probably expected roughly the same thing at Marvel: the comics had to exist so there was a foundation for toys, games, cartoons, TV shows, and so on, but would be barely profitable if that. Instead he found that Marvel comics were actually making money, and quite a bit of it. So, naturally, the logical thing to do would be to make the comics make more money, and when they did, make even more money. This led directly to many of the above gimmicks as Marvel tried every trick they could think of to sell more, more, more, and other comics companies fought to not get left behind. The comic market boomed, boomed, boomed.

But the boom was short-lived, as publishers ignored one basic economic fact: The old comics were selling for such high prices in the first place only because they were extremely rare. For example, the first appearance of Superman in Action Comics #1 was certainly a significant moment in comics history, but there were also only about a hundred or so copies of the original 1938 print run remaining at most — the rest had been thrown in the garbage, recycled through wartime paper rationing initiatives, or otherwise lost. There were valuable "new" collectibles, such as early issues drawn by superstar artists like Todd McFarlane, but those were also relatively rare because no one expected this random new artist to rapidly become a superstar, for this particular issue, one of many released on a regular schedule, to suddenly be a hot collector's item. Conversely, the new "collectibles" were being churned out by the truckload, with lots of fanfare to ensure you knew this was supposed to be a collector's item. Millions of people had bought comics like X-Men #1 in hope that it would become a rare collectible, but since there were millions of copies floating around, anyone who wanted to collect it could get it for a song.

To make matters worse, a lot of the material that was trying to become collectible using these gimmicks was the kind of poorly written Liefeldian rubbish that few believed was worth collecting in the first place. To again draw on the same analogy; Superman as a character has stood the test of time and has gained a cross-generational following through a wide range of appearances beyond the comics medium, increasing interest in his history and origins, whereas we feel confident in saying that Bloodstrike has yet to, and will likely never, demonstrate the same kind of cultural value, appeal or longevity.note  Finally, the artists at Image Comics proved very prone to Schedule Slip; the Deathmate crossover, one of the most notorious cases of this, helped to kill Valiant Comics.note  It's hard to make the case for your work being worthy of being collected when the creators themselves don't seem to feel the need to actually produce it.

In short: Rarity and interest are the two forces that make something worthy of being a collectible. It doesn't matter how much foil or how many holograms and "limited collector's edition" banners you slap on something. If it's neither rare nor has lots of interest in it, it will never accumulate value.

The Dark Age likely had a small but noticeable impact. Most parents probably felt that comics like Deathmate, Bloodstrike, and Lady Death were hardly appropriate reading for their young kids (especially with the hypersexualized art of Lady Death and similar Bad Girl Comics). Parents were also likely unpleasantly surprised at buying something like Captain America, which should be a safe, fun, inoffensive book, only to find that the Captain America in those pages was not Steve Rogers, but John Walker. Or buying a Spider-Man comic to find that Peter Parker was angrier, angstier, and more violent than the Friendly Neighborhood Spider-Man they were expecting. Even adult fans, who may appreciate some of the more mature content, might want a break from it every once in while, only to find every comic chasing the new hip thing. While this likely didn't have a huge effect on the market during the boom or the crash, it handily demonstrates the thinking behind the scenes that led to it: in chasing a hypothetically super-lucrative new audience, the executives who ran the comics companies were angering their existing one. And the fans would only get so angry before they just got up and left.

Comic shops ordered massive amounts of issues that they then couldn't sell or return to the publisher. Later entries of series that had started in hot demand had no interest because the issues had been so delayed no one cared anymore. Fans invested in the long-running stories of their favorite characters got fed up with gimmicks, radical changes, and transparent marketing ploys and quit the hobby altogether. Artists and writers fed up with executives and marketing departments who only cared about making money left for greener pastures, only to find there weren't any. Marvel in particular was getting an increasing share of a steadily shrinking market, and soon the bottom fell out, and the market collapsed. Comic companies went from making huge amounts of money to losing more then they had been making, to staunch the flow there were layoffs, and reductions in the numbers of titles being published. With fewer titles coming in every month, and thus fewer titles to sell every month, the comic shops found themselves losing money and many closed their doors, meaning fewer avenues to get comics into the hands of readers, costing the comic companies more money, leading to cancelling more monthly titles, and so on. Many of the smaller publishers went bust or were bought out (including Valiant Comics), and two-thirds of all direct market comic book stores went out of business.

1996 was the year that everyone saw the writing on the wall. It was the following year, 1997, that Marvel filed for bankruptcy, which dealt the industry a massive blow. The filing was partly for reasons unrelated to the Crash (then-owner Ron Perelman was a "corporate raider", having bought the company with junk bonds and dummy corporations, and those debts were coming due), but many of Marvel's financial problems could be traced to the Crash. Marvel had attempted to muscle in on the direct market by purchasing mid-level distributor Heroes World, in an attempt to distribute their comics in-house. This led to a shootout between distributors that ended up destroying Capital City Publishing and left Diamond as the sole distributor for every other comic company. Heroes World bled money and had serious problems shipping issues out on time, which caused many stretched-thin comic stores to go under, further aggravating the industry's woes. In 1997, in the midst of bankruptcy hearings, Marvel finally gave up and sold Heroes World to Diamond, forcing Marvel, who had caused this whole mess, to work out a deal with Diamond, who now had all the bargaining power, to keep getting their comics on what shelves remained to try and keep Marvel from going under completely. Perelman's attempts to turn Marvel into a "mini-Disney" had stalled (he'd shot down potential TV projects out of fear they'd hurt the comics, where he'd quickly surmised the real money was), or each deal on the way to this quickly became a millstone for the company: he bought Panini, but collectible stickers weren't big in America and had just taken a hit in Europe; he bought Fleer, trading cards were tanked by the baseball strike; and his exclusivity-in-perpetuity deal with Toy Biz became a financial sucking chest wound. While Toy Biz made Marvel action figures, they didn't make anything else, and no one else could make anything else. The bankruptcy eventually devolved into a three-way shootout between Ron Perelman, competing corporate raider Carl Icahn (who thought Perelman would only be working so hard to save the company if it was more valuable than Perelman claimed; Icahn soon learned it was even worse, but stayed in apparently as a matter of pride), and Ike Perlmutter and Avi Arad of Toy Biz, with Jim Shooter (former writer and editor-in-chief for Marvel and former founder of Valiant Comics) making his own failed play, and the banks, courts, and Marvel fans caught in the middle. DC, Dark Horse, Image, and other comic companies watched nervously, knowing the fall of Marvel could spell the end of the entire industry.

All of this also impacted the consumer base of the medium, which moved increasingly from the mainstream public to a smaller niche market of fans and collectors. There are two dominant stereotypes of the readers of this age, fair or otherwise. The first is the "comic book teenager", an insecure fan who hated any hint of "silliness" in his comics and demanded that they be "adult" and taken deathly seriously, even though the shocking content of said comics only implied immaturity. The second was the "collector", who obsessively and joylessly maintained his collection in pristine condition, with little or no interest in the actual content. The casual fan, the one who impulse-bought a fun-looking comic off the grocery store rack, more or less ceased to exist, driven away by increasing cover prices, blatant marketing gimmicks, chronic delays, and a sharp decline in the quality of storytelling.

Comic book sales hit their lowest point in 2001, at about 67 million copies sold. However, other forces were already in play by then, including the rise of the trade paperback (which, sold in bookstores, nets more money for the companies than the actual comics these days). Dark Horse survived due to its licensed titles (particularly the Star Wars books, which enjoyed a sales boost following the release of The Phantom Menace), whereas Image survived thanks to the low overhead provided by its loose-knit structure. DC survived thanks to being firmly in place within the Time-Warner hierarchy, whereas Marvel got into its next big business — movies.note  Ironically, the movie deals that helped to save Marvel and turn it into a multimedia giant (and future Disney subsidiary) were inked by none other than the man who helped kill the company in the first place, Ronald Perelman. In addition, his attempts to get comic book stores to sell collectible Marvel-themed card sets meant a small card-game company out of Washington had a ready-made market for their upcoming smash hit. Relatedly, the comic shops that did survive did so by shifting from comics to "comics and games," selling Dungeons & Dragons and other RPG rulebooks, Warhammer40k minis, Magic and other CCGs, and creating spaces for players to gather and play these games...which helped the recovery of the comic book industry, as gamers going to the stores to buy their rulebooks or minis or booster packs might again impulse-buy a fun-looking comic off the rack. The Friendly Local Gaming Store was born, becoming a nexus for all nerdy interests.

The effects of the crash are still felt today. Writing for the Trade became the default, with most comics working on a four to six issue story arc formula, which could then be collected as a trade paperback (which nets more money overall). This impacts sales of individual issues: a casual fan is far less likely to pick up issue 2 or 3 of a 4 or 6 part story, and the average fan may well just buy the trades later and skip single issues completely. Adjusted for inflation, comics are making as much now as they did before the boom and crash, except individual issues cost twice as much (adjusted for inflation). The reader base is half what it used to be. While collectible covers and pack-in trading cards have mostly vanished, some gimmicks have remained, notably the Crisis Crossover, with Marvel typically pushing one big crossover event per year. Big status-quo shakeups are still common: replacing Thor with Jane Foster, replacing Logan with Laura as Wolverine, replacing Steve Rogers with Sam Wilson as Captain America. Some enjoy the additional diversity these changes bring, some cry "woke!", some are just annoyed because they were invested in Thor Odinson, not Jane Foster. Sometimes these shake-ups draw in new readers, sometimes they drive away old ones, sometimes they do both. Comics in digital format have been a boon, but the single-issue print comic is still gravely wounded, and only time will tell if it will recover or perish.

SF Debris has a thorough, multi-part examination of the Crash, as well as the Dark Age that led up to it (including significant events in the comics themselves and behind-the-scenes) here.

Alternative Title(s): The Great Comics Crash Of 1996