Milton Griepp has been in the comics industry for 30 years as a publisher,
distributor, retailer and consultant. He once ran the largest direct
distribution comic book company Capital City Distribution. He was involved
with the Internet retail company NextPlanetOver.com and is currently running
ICv2.com, a pop culture industry news Website. Along the way he has also
done lots of consulting on the comic book industry. In this interview we go
through his career and he gives us his analysis of the comic book industry.
He also examines the effect other media are having on comics and whether
manga's popularity will last.
Jamie:
Let's take it from the beginning. I'm sure that like most in this
industry you started as a reader. What kind of comic books got you hooked?
Milton Griepp:
The first comic I remember reading was a Carl Barks Disney comic and I
continued to read those. I also read a lot of DCs. Superboy, The Legion and
Superman were probably the three things I read the most. I inherited a
collection from my cousin that was mostly 50's comics, including a lot of
DC's, and I continued buying those until the 60's. In his collection were
things like the Fox and Crow and other funny animal stuff that I read. When
I got to college, I started reading Marvels and I also read a lot of
undergrounds which were coming out in great numbers at that time.
Jamie:
When about did you get involved in the business end of comics?
Milton Griepp:
From a friend in high school. When we were in college he started a
business advertising in shopper papers in northern Wisconsin, buying
collections, and taking them to conventions and selling them there or
selling them though the Comic Buyers Guide. I started going to shows with
him in the early 70s, about 72 and 73, and working behind the table with him
was my first exposure to comics as a retailer.
Jamie:
When did you move into distribution?
Milton Griepp:
That experience in the comics business got me a job in 1976 with a company
called Wisconsin Independent News Distributors which carried some magazines
and books and had a comic department. I was hired for the comic department.
So that was my first distribution experience. The territory was fairly
limited: mostly Wisconsin, a little of Illinois, a little bit of Minnesota.
Then they went out of business and their business got absorbed by a company
called Big Rapids Distribution Company, which at one time became the largest
direct distributor in the late 70s. I worked for them, also out of
Wisconsin.
Jamie:
I understand you and John Davis teamed up to form Capital City
(Distribution). When about did that happen?
Milton Griepp:
I hired John at WIND and we also worked together at Big Rapids. When Big
Rapids went out of business, John talked me into starting a business that
would handle just comics. Both Big Rapids and Wisconsin Independent News
Distributors had comics as a small part of the company, along with book and
magazine distribution. So the idea that was different was to do something
that specialized in comics. That was in the early 1980s.
Jamie:
I understand at one point a group of smaller distributors all combined to
take Capital to a national distributor?
Milton Griepp:
I don't know where you got that impression.
Jamie:
Milton Griepp:
That never happened, but we did do some small acquisitions. Our first
location outside of Wisconsin was--we bought a little company called North
Eastern Ohio News, which was primarily a comics distributor, based in the
Cleveland area. We did some other small acquisitions over the years but most
of our growth was by sales efforts one store at a time.
Jamie:
I understand Capital was #2 going up to #1 competing against Diamond most
of the way . . . Were you surprised when Marvel decided to pull out, buy Heroes
World and distribute exclusively through them?
Milton Griepp:
Just to set the stage, Capital was #1 until Diamond bought Bud Plant.
Diamond was #2 and Bud Plant was #3 and the combination of those two
companies made them larger than we were. So we were #2 at the time Marvel
did their deal with Heroes World.
I guess in one sense it wasn't a surprise, as Marvel had been making noises
about being dissatisfied with the direct distribution system for a couple of
years, primarily because they didn't think they were getting their due as
the largest publisher. But primarily I was surprised, because I didn't think
anybody would do anything that stupid.
Jamie:
At that time, what did you think would happen to the comic industry?
Milton Griepp:
Well, it was a very dynamic situation. We really didn't know what to
expect, so we ran the business on several tracks trying to prepare for
different contingencies. There was a lot of damage done to the business
during that period. Heroes World was really incapable of distributing
Marvels nationally, so that was happening. Also, at the same time, the
market was declining rapidly after a period of explosive growth during the
early 90's. And other publishers were maneuvering, deciding what they were
going to do in the wake of Marvel's decision. So it was an unpredictable
situation, and it required a number of contingency plans for different
eventualities.
Jamie:
Looking back, do you wish you had tried harder to get DC to go exclusive
with Capital instead of Diamond, with some other deal you could have made
them?
Milton Griepp:
Well, DC came to us and other companies and said they were thinking about
going with a single company for their distributor as Marvel had. And we did
pitch them hard to go with Capital; we couldn't have tried any harder to do
that. We were also trying to convince them not to go with a single
distributor, and we felt they could have taken a leadership position with
the retailers and distributors and united the rest of the industry against
the model that Marvel was developing with the single distributor model. It
would have gotten a lot of good will and a lot of support and I believe that
would have been a very viable and successful action for them.
In the end I see DC’s choice as the most conservative option, which is not
surprising as DC is part of a large company and that creates a tendency
towards conservatism. The first instance of conservatism was that they
followed what Marvel had done (Marvel was #1, DC was #2) and they followed
to a single distributor. The second conservative choice was picking Diamond,
as they were larger than we were, and so it represented less risk of losing
business to choose Diamond than it did to choose Capital. So they took the
two low-risk decisions and that led them to Diamond.
Jamie:
How do you think the exclusive agreements between publishers and
distributors have affected the industry?
Milton Griepp:
Well, it's brought stability and I think that's had both positive and
negative affects. On the positive side, considering the circumstances (this
is very important), publishers had a reliable way to reach the market and
through a very profitable company that always pays its bills. Given the
volatility in what was happening to the smaller distributors at the time,
that was a good thing for publishers and ultimately the industry.
It was also good for retailers because they were experiencing the same
upheaval in terms of where and how they got their products. So after the
transition period when Diamond took over the Capital stores after they
bought Capital City, that led to a very reliable system of distribution for
retailers. That was a good thing.
On the negative side, the fact that there were fewer viewpoints at the
distribution level slowed innovation to some degree. I don't know how much
of that effect there was, but you have to assume that a number of companies
all working in that field with a variety of viewpoints would have led to
faster change and more innovation.
Jamie:
After Diamond bought out Capital, did they offer you a position there?
Milton Griepp:
They didn't and I really didn't expect one. I was a CEO and they didn't need
a CEO and they didn't need a COO. They had Steve Geppi as the CEO and a very
capable COO with Chuck Parker. They didn't really have a position that fit
my skills so I didn't expect an offer and didn't receive one.
Jamie:
After that you started working with NextPlanetOver.com. What was that
experience like?
Milton Griepp:
Actually that was a while after the Capital sale, and both before and after
that I did some consulting in the field.
Well, the NextPlanetOver experience was a unique time and place. It was in
San Francisco, and at a venture-funded Internet company at the peak of the
dot com boom. That was a really interesting time and place to be
geographically, from a business history point of view, and from a
technological innovation point of view. It was a really interesting thing to
see.
I'd seen a lot of bubbles before in the pop culture products business, you
know especially when there is a resale market involved. Like the black and
white comics--there was a bubble and then everybody produces them, then
there's too many and then the market collapses. I hadn't seen a capital
bubble of this type, which was that the cost of capital was very low and the
money was flowing into all kinds of Internet businesses. So that was new to
see, and although there were some negative outcomes, the experience was very
positive. I learned a lot about private equity, learned a lot about
technology and the Internet.
Capital was a very technologically progressive company; even in the early
90s we were doing order uploads and using electronic communication with our
customers. But this was on a different level, because we were on the real
cutting edge, at that time, of the development of e-commerce technology. So
we sold off the company at the end and that was a negative, but the
experience of being there at that time and place and how much I learned was
very positive, on balance.
Jamie:
There was controversy at that time, particularly when they were being
located at the same warehouse Diamond was shipping comics from. What did you
think about that at the time?
Milton Griepp:
Well, it wasn't really located at the same place. Diamond was doing order
fulfillment for NextPlanetOver. NextPlanetOver bought merchandise from
Diamond and rather than Diamond doing one big shipment to NextPlanetOver
they shipped it directly to NextPlanetOver's customers. That was a very
efficient system in that it gave NextPlanetOver access to a large inventory
and allowed the company to offer that to its customers without being in
possession before it was being purchased.
It was on the original model that Amazon was built on--an inventory-less
model where the product was offered, then acquired from a wholesaler at the
time of sale. So from a business point of view I think it made a lot of
sense. There was some controversy from the reaction from retailers thinking
NextPlanetOver had a special deal that was going to hurt them. But
ultimately there was very little threat to brick and mortar retailers from
that arrangement. The controversy boomed and then tailed off. It wasn't
unexpected and ultimately didn't affect our business.
Jamie:
Out of the whole ordeal what did you learn about trying to sell comic
books online?
Milton Griepp:
I wouldn't really call it an ordeal. There were certainly parts of it that
were an ordeal, but over-all there were also some positive things about it.
From my first involvement in the company, I wanted it focused not on
selling comic books online (periodicals), but on selling graphic novels,
toys, apparel--selling the things that customers bought other than comics.
Comics are really too cheap to sell through a traditional shopping cart
model where you are selling, at that time, a two dollar product one at a
time. It just wasn't an efficient model and ultimately we did change the
orientation of the product mix to emphasize the other product lines that
Diamond also offered.
The subscription service model that's been around for many years works well
for selling periodical comics via mail order or via the Internet. Selling
one at a time is just not a terribly efficient model, which was what I
thought going in and that was proven by the results. We did re-orient the
mix to focus on some of the higher-priced items and I'd say that was the
upshot of the learning experience there--that selling comics like backlist
in an "off-the-rack" situation was not a viable business model, but I do
think, as other businesses have proven since, selling graphic novels, toys,
and the higher-priced stuff works fine.
Jamie:
During that time you were also doing some consulting work. Were there any
clients in particular you could name that you worked with?
Milton Griepp:
Well, I'll talk a bit about the categories I’ve worked with. I worked with
publishers, I worked with retailers, toy companies, international consulting
firms, educational firms, educational institutions, investment firms. My
clients generally prefer that I advise them without revealing their
identities.
Jamie:
When coming up with ICv2.com, why did you decide to go as a Website
instead of as a printed magazine?
Milton Griepp:
I had just come out of a Web business, and I learned a lot about it, so I
had this knowledge base on how to do it. It seemed inexpensive to start a
Website as a result of improving technology at the time. When we started
NextPlanetOver, for example, the code for the content area had to be all
written from scratch. By the time I started ICv2, things like the search
function could be acquired relatively inexpensively instead of writing it
from scratch. That learning experience of how to develop the Website
relatively inexpensively allowed saving a non- trivial amount of money.
The reason I wanted to do it on the Web was to use that knowledge, and I
felt the Web was a superior way of delivering news. Obviously it's faster
and more accessible; also it involves the ability to interact with the user,
which does not exist in print. I also believed I could develop an audience
at a lower cost on the Web than in print so it was a classic business
model-driven decision.
Jamie:
Last year ICv2.com did a printed magazine called the ICv2 Retailers Guide
to Graphic Novels. How successful was that?
Milton Griepp:
Actually we've done a number of magazines; I think the number is over 10, in
three categories. We do the ICv2 Retailers Guide to Anime and Manga, the
ICv2 Retailers Guide to Graphic Novels, and the ICv2 Retailers Guide to
Games.
I started pitching the first magazine at San Diego a year and a half ago and
was really surprised at the response, which was that advertisers that were
resistant to the idea of advertising online were receptive to the idea of
advertising in a magazine. I think it's just a matter of preference that
people have established over the years with certain types of media. So that
was a big response on the advertisers’ side.
On the content side, the magazine was also a good fit with our online
content. The online content is very fast; we publish daily, with shorter
articles, primarily news. The print medium allowed us to take a longer view
of things, do more analysis, more features, more in-depth reporting. I think
the two media, online and print, are complementary and we really like the
way they fit together. I think both are important to how ICv2 serves its
audience and advertisers. So online was a good place to start and print was
a good place to expand to.
Jamie:
Despite doing well in bookstores, many comic book retailers are having a
hard time selling manga. What do you think retailers have to do to move
manga like the bookstores do?
Milton Griepp:
Well, I want to push back on the idea that comic stores are having a lot of
difficulty selling manga. Obviously they are selling a lot more manga than
they were a few years ago and I think that's going to continue. The thing
is, some comic stores are a lot better than others at manga, and I think
it's a matter of how they merchandise the manga line, also what their
clientele base is like, and how they retail to their clientele.
The reason bookstores have grown much faster than comic book stores have
over the last few years is that bookstores have a larger female audience and
a lot of the manga content is directed at female consumers. So a comic store
that focuses on superheroes or action adventure material that has a
primarily male audience is going to miss out on a lot of manga sales because
there is a lot of material that doesn't appeal to that action adventure
audience.
On the other hand, I have seen some comic stores do a very good job with
manga. In fact, the best manga stores I've seen are comic stores that carry
far greater variety than the best bookstores. They also have better product
knowledge at the counter than the best bookstores. So I think that comic
stores can be extremely successful with manga, it's just a matter of how
they merchandise it, who their clientele is and how they reach out to their
clientele--a store that is friendly for consumers of both sexes and all ages
(as the manga audience in bookstores is a little bit younger than the
typical comic book store audience). So comic stores can reach that audience,
but historically comic stores have been a male-supported distribution
channel and that presents barriers in some stores.
Jamie:
ICv2.com has been tracking sales numbers for quite some time. Are there
any particular tends you've noticed that others in the industry should know?
Milton Griepp:
Well, first of all there has been a change a little over a year ago in how
Diamond puts out their numbers, how they calculate indexes, and that has
affected our ability to do year-to-year comparisons. Between 2000 and 2002,
we were able to do year-to-year comparisons which were extremely useful,
because it tracked what was happening in comic stores in that period, which
was the first growth that had happened in about a decade. That was really a
good thing to track.
Now we're just getting to the end of the first year with Diamond and its new
numbers. Once again, the first month we did comparisons for, the market was
up and that was a good thing. In the long run, Diamond using actual numbers
instead of pre-orders for their index is going to be very positive because
it's a much more accurate snapshot of the market.
In terms of overall trend analysis, by looking at the comic stores and other
channels, the biggest growth is graphic novel sales in bookstores. The
biggest thing happening there is that bookstores are replacing newsstand
distribution, which collapsed for comics in the last five to ten years, as a
feeder system into comic book stores. In other words, consumers are exposed
to comics in book stores and if they want to find a broader range of titles
they'll end up in a comic store. Before, it used to be that happened from
magazine-type outlets and newsstands, convenience stores, those kinds of
outlets, where people pick up a comic book and then find their way to a
comic store later. I think that's a huge, huge shift in the comic business.
I mentioned earlier the fact that younger readers and female readers are
finding comics in bookstores and that's a hugely positive trend for the
entire industry. Opening up the market to female readers to a greater
degree doubles the available pool of consumers.
Getting younger kids reading comics is positive because it will hopefully
build lifetime consumers. The comic market has been aging dramatically for
the last 10 to 12 years, and this can reverse that trend. Those are really
positive things happening in the comics business, the fact that the business
in comic stores is also growing, those are positive things.
I think we're seeing a greater impact of other media on comic sales,
specifically movies and television. Obviously the Batman movie had a huge
impact on Batman product sales in the late 80s and early 90s, but now
there’s a whole plethora of media influences on comic sales just in the last
few years. Smaller movies like Ghost World and American Splendor, something
like Road to Perdition or From Hell and the mega-blockbusters like
Spider-Man, Hulk, and X-men, those have all been really positive events for
comic sales.
On television now, not only are there a number of cartoons being done based
on American comics but the anime, which is tied to manga, are also
popularizing those properties to a great degree. So movies and television
are having a much greater impact than they had in the past, which is
obviously a very positive thing for the comics business.
There is a bunch of positive trends sort of coalescing in the industry and
it's a good time for the comic business.
Jamie:
I noticed that movies don't seem to help the superhero comics quite as
much as do the independent comics.
Milton Griepp:
Spider-Man and Hulk moved a lot of product through all channels and it
lifted Spider-Man graphic novels to the top of the charts. The bookstores
moved a lot of Spider-Man product, as did the comic stores, so I think there
is a connection. Recent Marvel movies have shown that. I think it doesn't
always work that way, The Punisher, for example. The early indication is
it's not moving product quite as well as Hellboy is. So I think it depends
on the combination of the movie and the material.
Jamie:
How do you see the comic book industry changing in the next 5 years?
Milton Griepp:
I see the comic audience growing in a number of demographic groups,
including adults that are interested in comics as literature. Certainly
there is a pop culture aspect to them, but comics are being taken more
seriously as real literature. This has been going on for a while, but for
the last couple of years we've really accelerated that trend. And at the
same time, we see the market for comics growing among younger readers,
girls, and women. Comics being reviewed by book reviewers in the literary
establishment also opens up an even larger, more serious reading audience of
adults. So again we see multiple audiences in which the comics medium is
growing. So I think those are very positive trends.
Another aspect that is unlike some previous growth trends of the comic
business: none of this is being based on the after-market value, so the
risk of collapse in the business due to a collapse of after-market values or
overproduction or whatever just isn't there in the same way as was there in
earlier growth periods. That again is a very, very positive trend.
Jamie:
So you don't think manga is just a fad then? (laughs)
Milton Griepp:
It's been going on too long to be a fad. The Japanese stuff has been growing
since the early 80s, so you can't take a 25-year trend and say "It's a fad."
Jamie:
Milton Griepp:
Certainly there are times where it gets super-hot and then cools off.
Pokemon was a huge phenomenon and it exploded, then there was space for a
while and shrinks back a little bit, but I don't think it's a fad. I wrote
something in 2000-2001 that said something to the effect that we're
witnessing a change in world culture, in the sense that more and more pop
culture is coming from Asia. You can almost say that as American culture
took over from British as the ruling popular culture, now we're seeing a
move towards Asian pop culture.
Hollywood is not going anywhere, American television is not going anywhere,
American comics is not going anywhere; but there is a growing influence in
all markets from Asian pop culture. Something like Kill Bill is ostensibly
an American movie, but it's got elements of Hong Kong action movies, little
pieces of old American movies, there is anime in the first volume.
You can see the Asian influence growing in American pop culture in
so many ways. So that's another reason that I don't think manga is just a
fad.
Regards,
Jamie Coville
2004-05-02
