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Wednesday, May 22, 2013

Is DC Comics The Next Hostess Foods?

Last year, Hostess Foods went out of business due to years of inept management, obsolete products, high prices and no leadership. A strike by a union who also followed the same archaic approaches to business such as demanding raises from a bankrupt company finally put the nail in the coffin for that storied brand.

When one looks at Time Warner’s DC Comics’ it’s easy to see the same pattern of failed business approaches that led to the demise of Hostess Foods just a year ago.

Many in America will be surprised if Time Warner finally pulls the plug on publishing DC Comics. But I won’t. I see the numerous parallels between Time Warners’ DC Comics and Hostess Foods. And it’s only a matter of time before the storied brand that publishes Superman, Batman, and Wonder Woman, and DC Comics superheroes goes the way of the company that produced Twinkies, Wonder Bread, and Sno Balls.

Like Hostess, DC’s editors are inept, incompetent and mismanaging the brand into obsolescence. One of their Publishers Dan Didio has no publishing experience. The other co-publisher Jim Lee ran his own publishing imprint Wildstorm into bankruptcy in the 2000s. And a third Bob Harras ran Marvel Comics into the ground during the 1990’s.

Compare DC’s decade of dysfunctional editorial management to Hostess who had six CEOs in eight years. Thanks to the high turnover and more importantly the lack of vision, Hostess wasn’t able to create new products for the new generation of consumers who were eating whole grains, gourmet cup cakes and cake pops.

Because DC Comics isn’t being led by a publishing professional with an understanding of the changing post 2008 publishing marketplace, the catalog of over 3,000 characters is being mismanaged. A heavy focus on an obsolete late 1980’s early-1990’s model of storytelling has stagnated sales and creativity at DC. The dark, angry shock and awe model of storytelling which focuses on death, events, and gimmicks, is the comic book equivalent of selling the high calorie-high fat horrible tasting processed Hostess cup cake to a generation of health-conscious consumers who are demanding whole grains, and fresh gourmet desserts.

And Like Hostess’ CEOs there’s a heavy focus on short-term sales at the expense of long-term growth. Gimmicks like the New 52 get sales of DC Comics short term, but eventually those numbers fall back to the record lows before the gimmick in two to five years.

Instead of focusing on developing a long-term plan to rebuild the DC Comics brand for the 21st Century, DC’s editors like Hostesses’ executives only focus on short-term stunts to grab peoples’ attention for a moment.

And Like Hostess DC’s products are clearly obsolete. The publisher continues to focus primarily on producing 32-page comic books in a world where readers want their comic book content in two ways:

In a low-priced DRM free digital format they can trade and share,

Or in a collected format such as a trade paperback, or a hardcover omnibus.

And Like a pack of Hostess Cup Cakes, the price of a DC Comic is just too high for consumers to buy. Before Hostess went out of business in late 2012, a single pack of two cup cakes cost $1.39. A box of Twinkies cost $4.29.

Entenmann’s Hostess’ competition offered a FRESH cake for $4.29. and they offered packed cakes for $2.99. Targets’ Market Pantry brand offered a package of FRESH cinnamon rolls for $3.99.

Today a DC Comic in print or digital format costs $3.99. A competitors’ self-published eBook like from my SJS DIRECT imprint with anywhere from 72-400 pages costs anywhere from 99 cents to $3.99. And just like the case of the Entenmann’s and Target brand Cinnamon roll, the consumer is getting a higher entertainment value per dollar by purchasing the eBook from the self-published author than if they bought the DC Comic.

The Bakers’ Union was the final nail in the coffin for Hostess. Holding onto archaic way of doing business of the 1960s, 1970s, and 1980s they decided to go on strike. Not understanding that the products they were producing were obsolete. Not understanding that the company was bankrupt. Not understanding that the company was going through massive turnover in management. Yeah, they didn’t have a pay raise in years and they were facing an 8 percent pay cut, but they had no understanding of how dire the situation was regarding their employer.

Like the old employees in the Baker’s Union, The out-of-touch older comic fan has no idea how dire the situation is at DC Comics. Nor do they have an understanding of how dire the situation is in the comic book industry. The median age of a comic book reader is inching up from 35 to 40. The danger zone where corporations discontinue products because there aren’t enough customers to buy them.

Many casual readers haven’t touched a comic book in over 20 years. Many former Hostess customers admitted they hadn’t bought Wonder Bread, Twinkies, or any other Hostess product in over 15-20 years. So they never shared them with their kids. That means an entire generation of children who were born after 1994 never heard of a Twinkie or understood what the red, yellow and blue balloons stood for on the Wonder Bread bag.

And the reasons they gave for not buying Hostess products for their children were that the products tasted horrible, made them sick, and that there were better options available for them. Moreover, the nutritional value in a processed, high-calorie, high-fat, high-sugar Hostess product was terrible compared to the whole grain products provided by competitors.

Compare this to those casual DC Comics fans. Fans who grew up with the product have clearly stated they could not share it with their children. Their reasons for not buying DC Comics are that the stories are horrible, filled with disturbing gory illustrations depicting horrific violence, and that there are better entertainment options available for them. And the Social and moral values promoted in DC Comics currently were not what parents wanted to share with their children. Families want DC Heroes to return to being beacons of truth and justice and icons with a clear understanding of right and wrong, but publishers continue to give readers dark amoral characters who live in a gray area.

What’s even sadder about the DC situation is that Hostess still had a distribution network of thousands of retail outlets like grocery stores and supermarkets to stock their products in before they went out of business. Comic book publishers don’t have anything close to that network anymore. People stopped stocking comics in supermarkets and grocery stores over twenty years ago. Today there are less than 1,000 Comic shops in the United States and that number is shrinking. Just a few weeks ago Jim Hanley’s Universe in New York City closed its doors in Midtown and moved to the East Side.

But comic fans continue to believe that their numbers are great. That they can buy all the comics out there. That they have some sort of value. That 100,000 sales is a huge number.

It’s barely a blip on the radar compared to what comics did in the 1940s and 1950s when titles sold 5 million copies a month. Or during the 1980s when mid-tier books sold 250,000 copies a month.

The picture at DC Comics looks grim. But DC Comics doesn’t have to go out like Hostess Foods. There’s still time to save their publishing business. It just requires their management to adapt to the changing marketplace. The Post 2008 publishing world runs under a different business model. And DC Comics needs someone in charge who understands what products work in that marketplace. What today’s customers want. And how to sell them to today’s generation of readers.

Will Time Warners’ executives wake up in time to hire that person? I guess we’ll have to wait until the next Chapter in the DC Comics saga to find that out.

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