Numlock Sunday: John Jackson Miller on the huge growth of the comic book industry

This week, I spoke to John Jackson Miller, author and the mind behind the Comichron database. This week, he published the annual state of the comic industry report with ICV2. Here's what I wrote about it:

Sales of comic books hit a new high in 2021, with total sales of graphic novels and comics hitting $1.28 billion in 2020, 6 percent higher than the $1.21 billion logged in 2019. In North America, graphic novels were $835 million, comic books were $285 million and digital comics hit $160 million. On a related note, if anyone also recently finished the Invincible compendiums, holy crap, what the heck was that, please email walt@numlock.news, like dang, I gotta talk about this.

That’s not all, as this week also saw a huge investment firm buy up appraiser CCG, which values the company at a half a billion dollars. The huge interest in collectibles, trading cards, comic books and more has been a major story this year, as investors and collectors shelled out fortunes and made the secondary market for such things explode in popularity.

We spoke about what happened last year in the comic book business, why Blackstone bought a comic book appraiser, and why last year wasn’t the doom for smaller shops that many had feared.

John Jackson Miller can be found at Comichron and on Twitter. Besides running one of my favorite databases and blogs, he’s also an author and has some great stuff coming out, including a new Star Trek book — Star Trek: Picard – Rogue Elements, out in August — as well as a compendium of his work on Star Wars comics, Star Wars Legends: The Old Republic Omnibus, out next week.

This interview has been condensed and edited.

Comichron and your partners at ICV2 released your 2020 comic book sales report. It was a really surprising and very complex year in comics, very tumultuous to say the least, but the number was up year-over-year.

That's right. Part of the key is it depends on where do you work in the business, what the business looked like, because not every part of the business was under the same constraints. The graphic novel part of the market, and, in particular, the young adult part of the market typified by books like Dog Man, these are all part of the book channel which never really shut down, those books continue to circulate and the best selling kids graphic novels had the additional advantage that the Walmarts of the world that are kind of like the music industry where they only stocks the hits.

Places like that, which had been declared essential services, which never shut down and had small selections of graphic novels, they continue to sell all through the pandemic and there's a dynamic that happens where the best sellers became really best sellers. You have that part of the market, which was continuously running. Digital is a sector that has kind of, I don't want to say stagnated, but it had reached its level a few years ago and had not really gone anywhere. But during the pandemic, there's a stretch there where the physical comics aren't coming out, people can't get to the comic shops, and also you have some of the major publishers basically going direct to video.

They basically took their poor selling titles and didn't even go to press at all with them, but they went directly to digital on those. That's supplemented that part of the market and so we have a significant increase in digital downloads, the comics you can pay for and actually get to keep, as opposed to the subscription model comics that are digital. Then the direct market, which, for the first quarter of 2020 was doing fine, it was ahead for the year and then we have in succession, a few things that happened. We had DC's printer Transcontinental had to close temporarily. Diamond, the exclusive distributor for at the time all of the major publishers, it judged that it needed to pause as well, because there were going to be comics piling up at stores that weren't open.

This is exactly the moment that you and I spoke last year.

Exactly it. And what happened is that DC, I think under pressure of AT&T, decided that they could not go without comics. Once they were printing again, they set up two alternative distributors of which only one remains now as a distributor, and basically withdrew from Diamond after about 25 years of being their exclusive partner. They withdrew from Diamond entirely in July. Diamond does come back to print comics again, rather distributing comics again in late May, but everybody is publishing fewer new comic books. The number of new comic books released by publishers dropped 30 percent. It's basically because the second quarter is a wipe out, only three comic books came out in April.

Even as we get into the third and fourth quarters of the year and really up to now, the numbers have not recovered in terms of the sizes of the slate, again, in part, because the publisher weren't in the office. They're making these plans to do the comics six months, nine months, 12 months out, so the pandemic and the shutdown is still playing out.

Compare that with the graphic novel part of the business, where 90 percent of the graphic novels are just reprints. That's just material that's already out there. In a sense, the comic book part of the business is akin to the television shows that were in production last spring, last summer, versus the TV shows that they already had banked up to just stream forever.

Right, in syndication or whatever.

That's the graphic novels. New comics offerings are down about 30 percent, the actual dollar sales are only off by something like 20 percent, less than that. It shows that the publishers did have to cut titles, but they tended to cut from the bottom. They cut the books that were least likely to perform. On average, we've got titles doing better, and it's certainly also the case that as we get into the second half of the year and things start opening up again comic shops begin doing really well with comics. And, in particular, they do very well with something that we don't track and that is a markup, that's the aftermarket.

There is not really an aftermarket for graphic novels because they're in print forever, first printing, second printing, nobody really cares. And, of course, digital, obviously digital is, unless you're doing an NFT of a comic book and you don't think anybody's trying to do, that's not a thing.

But comic books really took off in the aftermarket. You had suddenly stores that had not been doing mail order are suddenly doing it. You had stores that had no new comics coming in, but they had years and years of comics backed up.

And people being stuck at home, like you saw this in a ton of different industries, trading cards, everything. So, the comic book business actually sounds like a lot of these smaller brick and mortar shops that we were very worried about last year, did they get kind of a second wind in the back half of the year?

They did. It's wrong to look at any of these stores as being in 100 percent dependent on new comics. It's just not the case. It's one of the things that they do, but otherwise they've got all this material banked up. And even then, new comics will only be 20 or 25 percent of a number of these pop culture shops' material. Because they've also got the Funkos and Magic cards and other stuff that's out there. Everybody's diversified

Goldmine!

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If this was 1994 during the collapse, then you have stores weren't as diversified so they weren't really able to handle that quite as well. But now it's much different. Again, when I see that the comic store channel got smaller this year, when I see that periodicals got smaller during 2020, I kind of look at that as being akin to box office reports from 2020 or the baseball season in 2020, we'll look at it forever with an asterisk.

Media consumption was up last year, even if new releases were flat and it seems like what you're describing with the back catalog, it sounds like that was the case.

That really leads well into the second thing that I wanted to talk to you about. You tweeted out a really interesting transaction that took place this last week. Blackstone purchased a majority stake in Certified Collectibles Group, which is the parent company of a comics grading from CGC. It values it at a $500 million business, and so I was wondering could you tell me a little bit about what this comic grading firm is and kind of why now is the time that that big money is getting involved in this secondary market?

This kind of grading started with coins. I think the core business at CCG is NGC, which is their numismatic company, and that's coins. It was something that started in the previous century where people would slab these coins — slabbing as the phrase we use to mean encasing it in plastic and putting the grade on it and some kind of identifier on it. It went from there to sports cards, and from sports cards to comics.

There was resistance in the beginning when they started around 2000 because people logically said, “why would I want a comic book if I can't open it?” Then a couple of things happened. First of all, people began to realize that there are some old comics that are so valuable that if you were to sit around, eating French fries, the state should take your comics away. Because if you have Action Comics #1, there are a lot of ways that you can read that story, which has nothing to do with flipping through the pages. You know, curling the corners.

Like I can read the Declaration of Independence online, but if I start going to National Archives with greasy fingers, all of a sudden I get yelled at by some cops.

That's one of the dynamics. The other dynamic was that, okay, eBay is active in comics in the late ‘90s, but there was resistance for a long time because no two people graded the same way. Nobody wanted to really put their extremely high value books on there because there was that sort of uncertainty going on.

Well, what grading does, what a third-party grader does, is that eliminates the friction in the transaction and it allows somebody who knows nothing about comics to sell to somebody who knows nothing about comics and specifically nothing about the arcana of grading. When I'm reporting in 2001, we're already seeing slab versions of comics going for eight and 10 times what the guide prices are. It's simply because it's got that symbol on top, and it's got that number on top, and it makes it part of a rare class of books, which they do tell you how many exists. They have a census that says how many copies exist in each grade, very useful to collectors.

I think when it kind of catches on for good is 2002, the Spider-Man movie comes out and there was a wave of interest from outside of our field, baby boomers wanting to buy an old Spider-Man for a conversation piece. And the prices on these things started to really go up. What has happened here in the interim is this kind of grading, it's no longer just CGC. There are other companies that do it, and it's also spread to toys and video games and all sorts of other things.

What has really happened in the last few years, there's a bit of a gamification if you want to use this phrase, for this, where people will get, they'll send in a bunch of copies, but they will only have the best copies slabbed. Or they'll get a copy that has been slabbed with one grade. They will crack the slab and then press or flatten that comic book and send it back in. That sort of thing is going on, and it really went crazy over the last nine months.

I saw a comic book that I signed at my last in-person convention in Richmond in February, which I would have said was worth no more than cover price at the time. Several months later, I saw it sell on eBay in a slab with my signature for $4,000 because it was a 9.8, which is the highest graded version of that comic book and it also had a signature series label, which meant that my signing, it was certified, it was authenticated. That's kind of an exception, but I have seen a lot of these other books go for quite a lot more.

Again, it's all about chasing the best copy or the one of the best five copies or whatever it happens to be. And it has further been hypercharged by an app that has come out in the last few years called The Key Collector Application or The Key Collector app where, all of our old price guides, we used to have everything in it. The Key Collector app just has the hits. It just has the most important comics, the first appearances and the things that the programmer of the site believes are undervalued or nobody's paying attention to. When a TV show was announced, immediately that happened, other places begin to highlight, well, here are all the other appearances of this character, that was just on low-key or was just on whatever else.

That has kind of taken the place of a Wizard Magazine back in the day, back in the ‘90s, which would have called attention to these things. So, that's what's really going on with the aftermarket. CGC in particular, the backlog to get comics back is significant. I sent in some Silver Age books in January, and I'm still waiting and that's not an uncommon thing right now.

They are rushing to hire and expand and it is not a surprise to me that they're both looking for capital with Blackstone, and also that Blackstone would be interested.

It's been just really wild to watch whether, again, it's like baseball cards, trading cards, like just the hobbies explode and it just seems so interesting that these kind of intermediaries, that kind of serve as arbiters of value are suddenly in such high demand. So, it was really cool to see that figure.

Where could folks find you and find your work? I know that you've mentioned that you wrote a book during the pandemic, and you've written a couple books actually, and so where can folks find you?

They can find my Comichron work, Comichron.com is the website. @Comichron is also the Twitter feed, and also the name of the Patreon.

My fiction and comics work, that's at farawaypress.com. @JJMfaraway is the Twitter feed, John Jackson Miller on Instagram and Facebook.

The upcoming stuff for me on that side of things, my Knights of the Old Republic comics, which are the ones that are extremely expensive right now, they are being reprinted in full at 1,344 page volume from Marvel, all of my work, that comes out July 7th for Marvel. It's the Star Wars Legends: the Old Republic Omnibus volume one. And then August 17th, I have a hardcover novel, which is Star Trek: Picard — Rogue Elements and it is the origin story of a Cristobal Rios, the sort of your mercenary captain that we see in the TV show Picard.

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