This blog, in recent months, has become something of a one-trick pony. Granted, the manga charts are a pretty good trick, but there is much more to comics than obsessing over a top 10 list. Due to the time I invest in the online charts, though — time I had to borrow from other blogging duties — it has been awfully quiet on this blog of late.

Too Quiet.

I should be posting more often, doubly so since I’ve been unable to shame my cohort Bob into resuming his writing and editorial duties… yet… but he pays the hosting bills so I can’t give him too much grief.

I won’t burden you or shame myself with false promises of daily updates. I won’t guarantee the watchlists every Monday, the return of a weekly column, book reviews twice a week, or new, regularly-scheduled features that might never appear. I haven’t made a New Year’s resolution to write more, or to make substantial additions to the resources available on this site. In fact, I promise nothing.

Nothing. So let’s post some nothing.

5by8 #27: Creative Bankruptcy.

I was researching annual reports for my 2007 recap post — tentatively scheduled for March; waiting on corporate financials means that a January post, while timely, is out of the question — when something caught out of the corner of my eye on a Google Finance page struck me as Very Odd. Here’s the blurb:

Marvel Entertainment, Inc. (Marvel) is a character-based entertainment company, with a library of over 5,000 characters. The Company operates in the licensing, publishing and toy businesses in both domestic and international markets. The Company’s library of characters includes…

…let me just cut them off there before they go through every A and B-list superhero on the roster.

Did you catch it? No?

Google cribbed this description from Reuters, which goes on for a fair piece about how successful the characters are: with licenses for films, theme parks, apparel, footware, food, and housewares, not to mention Marvel’s own film production unit which is going to premiere its first two outings (Iron Man and Hulk) later this year.

One has to read four and a half paragraphs in before it is noted that by the way, Marvel is also a publisher of comic books.

Now maybe, I thought, this is just some researcher’s take on the company: If one is attempting to describe what Marvel does, then obviously licensing is a big part of their business. Marvel can’t ignore someone with a blank check when they come knocking to license Ant-Man, or whichever other characters may still left in the bottom of that bin. But I was sure the House of Ideas still remembered their roots, was staying true to their identity as a publisher, as a comic-book publisher — I cruised on over to Marvel.com… and I was disappointed.

With a library of over 5,000 characters, Marvel Entertainment, Inc. is one of the world’s most prominent character-based entertainment companies. Marvel’s operations are focused on utilizing its character franchises in licensing, entertainment, publishing and toys. Areas of emphasis include feature films, DVD/home video, consumer products, video games, action figures and role-playing toys, television and promotions. Rooted in the creative success of over sixty years of comic book publishing, Marvel’s strategy is to leverage its character franchises in a growing array of opportunities around the world.

This is the same ‘about us’ endnote that is appended to all of their recent press releases, in fact.

So it’s a PR blurb, probably written by some flack who wants to push Marvel forward as a Brand rather than a publisher, trying to sell it as a New Entertainment Company. Comics are so, 1992. And sure, Marvel declared bankruptcy in 1996 so maybe they have to front a bit for Wall Street, put a spin on their business so skittish, tempermental investors will continue to support the stock price. This can’t seriously be their core business. I decided to research it further, dig into the last annual report, see what Marvel’s business strategy really is:

Our growth strategy has been to increase exposure of our characters by licensing them to third parties for development as movies and television shows. The increased exposure can then create revenue opportunities for us through increased sales of toys and other licensed merchandise. Our self-produced movies, the first two of which (Iron Man and The Incredible Hulk) are scheduled for release in 2008, represent an expansion of that strategy that increases our level of control in developing and launching character brands.

They call it licensing. I call it autolysis.

Marvel does make mention of the vital need to attract and retain creative talent in that same 2006 report… Oh wait. I’m sorry, they’re talking about the movie business again.

Even in their earnings reports, Marvel seems loathe to admit that they publish books; one has to assume that the funnybooks are part of Content (defined as films, tv shows, consumer products, and “other”), one of three line items. (The other two line items are Licensing and Toys… which for the most part are also just licenses. so…)

DC isn’t any better, really, though Warner makes less noise about licensing because theirs is done in-house and behind closed doors. DC Comics has been owned by some version of Warner since 1969 (when the holding company that bought National Periodical Publications in 1967 then also bought out Warner Bros.) so while Warner can’t be blamed for the 60s Batman TV show, they’ve been responsible for everything since. (Steel, anyone?)

At least the Time Warner annual report mentions that DC is a publisher, though that’s only after the “DC Comics library” is mentioned multiple times in connection with TV, films, animation, video games, and “consumer products.” For your edification (and to play merry hell with Google’s keyword search): the Warner Brothers Entertainment Group is a division of Warner Brothers Entertainment Inc. that includes Warner Bros. Television, Warner Bros. Animation Inc., Warner Bros. Interactive Entertainment, and Warner Bros. Consumer Products Inc. — all of which are tasked, at least in part, with cashing in on the DC characters. Lest we forget, the Warner name comes from the movie studio, Warner Brothers Pictures, which has been known to make a Superman or Batman movie or two. Or Five. After waxing so poetic about the happy Warner family for pages and pages, Time Warner finally gets around to giving DC itself a mention. Well, two sentences:

DC Comics, wholly owned by the Company, publishes more than 50 regularly issued comics magazines and graphic novels featuring such popular characters as Superman, Batman, Wonder Woman and The Sandman. DC Comics also derives revenues from motion pictures, television, product licensing and books.

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From a business standpoint, licensing makes sense. As intellectual property, it has no physical costs (and you already underpaid the creative talent for it, decades past in most cases) and the market value is astronomical, compared to what it is: A name, a costume & colour scheme, a couple of paragraphs of description. Add on to that the established fan base. Hollywood is out of ideas and has been for years, but they still have gobs of money and they’ll practically throw it at you if they think they can squeeze 89 minutes of video out of your character, with an option for two sequels.

The problem with licensing is that while it makes business sense this year, it represents a finite resource. You can split it into a lot of chunks — steaks, roasts, stew meat, soup bones, dog food, hot dogs, leather, glue — but you can only sell the cow once. And maybe you shouldn’t make selling cows a priority if you’re supposed to be in the milk & cheese business.

To Marvel’s credit, they’ve woken up to where the real money is in making a Superhero movie: The Movie. Ticket sales, DVD rights, movie tie-in marketing — all good stuff. And they’ve set up a film unit to do exactly that: The new Iron Man and Incredible Hulk movies are the first film products coming out of Marvel proper, and look to be pretty damn good. I may even have to suspend my personal embargo on the American entertainment industry to go see these in theaters.

It’s a really smart move. I’m not sure if I’d bet the farm on it, though.

The film facility enables us to independently finance the development and production of up to ten feature films, including films that may feature the following Marvel characters, whose theatrical film rights are pledged as collateral to secure the film facility:
• Ant-Man
• Black Panther
• Captain America
• Cloak & Dagger
• Doctor Strange
• Hawkeye
• Iron Man
• Nick Fury
• Power Pack
• Shang-Chi
• The Avengers
• The Incredible Hulk

That’s from Marvel’s 2006 AR; the ‘facility’ isn’t a studio or building, in this case it’s a debt facility - what most of us would call a line of credit. They’re putting up the movie rights for Hulk and the Avengers et al., perhaps losing them permanently (Marvel doesn’t say) if they default, but they can borrow up to $525 Million for that. Beats what I can get from the pawn shop for my saxophone, I tell you. This represents most (all) of the remaining bankable characters, though — and honestly, Ant-Man? His only power is turning small, right? And the ability to tunnel through sand when between two sheets of glass. And he could, um, talk to ants I think. Screams summer blockbuster to me, whoo boy.

You can still only sell the cow once. So you make a movie, and it makes a mint. And so do the sequels. And the DVDs. And you retire rich, rightly so. But what about the company? What about the much vaunted Comic Universe that each publisher claims is so frickin’ special? (so special that it merits –or excuses?– a yearly miniseries-with-crossovers to reboot it or whatever in the hell the Big Two keep doing.)

Films are nice (and profitable) but it’s a move in the wrong direction. People watch a film, and may even love it, but they’re not packing the Comic Shops afterward to buy the books.

The Big Events may be a misguided approach, too. How many reboots can the market sustain? Is anything permanent anymore? (I should perhaps put permanent in quotes because, hell, it’s fiction but I hope you know what I mean). I think these so called events are already over and done with because there is no way for a first-time reader or even a casual fan to pick up one of these continuity- and obscure-reference-heavy series and understand it. Or more importantly, to care. With all the cross-overs and prequel and sequel miniseries I don’t even know which order I’m supposed to read stuff in.

##

Dear Marvel: You do not run a Character Company.
Dear DC: You don’t run a Character Company either, but you are pwned wholesale and don’t have options. Keep on Keeping On, I guess. That, and publish more manga. Thanks.

DC already sold out, they’ve been bought and paid for since ‘67. Marvel has put a price tag on everything and has even resorted to pawning their future to pay for big budget movies in an effort to cash out faster (and presumably before the public looses interest, or the fan base gets too old).

Yes, you can sell the characters. Multiple times, even. You might even make a lot of money at it, which makes me look stupid for commenting on the issue and calling it a bad idea. But it’s a Bad Idea to make licensing the core of your company.

Characters plus setting plus theme plus plot equals story. We can throw style in there too, even moreso for comics than for other narrative forms, and arguments can be made whether conflict is synonymous for ‘plot’, merely a part of it, or worthy to be mentioned on it’s own. Dialogue and action might also deserve their own powerpoint slides, but I’m digressing and I think most can see my point by now: Characters are just components — not finished products, not stand-alone properties.

Characters star in stories, in books — comic books in this context, though the future of comics-as-books (trade paperback originals? digital delivery of 32 page pamphlets?) is up in the air and who knows what comics or the market will look like in 10 years — and yet with all that said at the end of the day I don’t think that any self respecting publisher should be calling itself a “Character-based entertainment company” or referring to it’s “library” and “history” as it’s primary asset and the only part of the business with potential for “growth”.

You want to sell me something, sell me a story. You can’t sell me Superman, Batman, Spider-Man, or the Hulk because I (we) already own them: These characters live in my mind. You really should know that because you put them there. They’re Icons. They’re Mythology. Hard to put a price on Jungian archetypes when we all own them collectively. We don’t buy Superheroes, we buy superhero stories — and if you can’t give us good stories we’re not going to be buying anything.

If all you can do is give up and hand the character to someone who can tell a story, I suppose I have to support that. Obviously you’re creatively bankrupt and have no other options. But I hope you can see that you’re giving up the family dairy farm to become a slaughterhouse and meat packer — and I think you’re running out of cows. Ant-Man the Movie? Really?

Reading and references:

Wiki: Marvel, DC, Warner
Fortune Magazine, May 2007: Marvel’s making movies
The Stanford Daily, May 2007: The Hollywood Cape Machine
Journalista, March 2003 — yes, almost 5 years ago — “The sound you hear is a dull knife sawing diligently on the throat of Marvel’s golden-egg-laying goose”
Marvel’s 2006 Annual Report (pdf)
Time Warner’s 2006 Annual Report (pdf)