ICv2 Interview Transcript: Paul Levitz of DC Comics, Part 3

Paul Levitz had a long career at DC Comics, starting out as a freelancer when he was still in high school, rising through the ranks to President from 2002 to 2009, and retiring in 2010.  During that time he had an active hand in shaping the Direct Market as well as the comics sold there.  In Part 3 of this interview, he discusses how the advent of Image Comics changed attitudes toward creators’ rights, how Marvel Comics’ purchase of Heroes World changed distribution for DC, and how he thinks comic shops will evolve in the future.  Part 1 focuses on Levitz’s early years, starting when he launched a fanzine at the age of 14 that brought him into contact with creators, retailers, and Direct Market pioneer Phil Seuling.  In Part 2, he talks about the rise of the Direct Market in the 1980s and how DC tailored its content for this new audience, leading to the creation of the Vertigo imprint.

There was a lot going on in the early ’90s, and you mentioned earlier the founding of Image Comics.  What was your reaction?  I think that was ’92.  What was your reaction to this group of really high‑profile creators going off and starting their own thing?
As I said, we’d been expecting it for almost a decade, so it wasn’t a shock to the system that that would happen.  I guess we were happier that it was a group of Marvel creators going off to do it and not a group of our creators.

Maybe that was representative that we were doing a better job keeping our talent happy or maybe just Marvel happened to have the more entrepreneurial guys at that time.  I was very interested that the style of books that they were doing were succeeding as they were.  They were a different feel than the Marvel books.  They were a different feel than the DC books.  We couldn’t get anybody on the DC editorial team to be interested in that.  That was a real challenge as they were exploding.

Different how?
More art‑oriented, less story‑oriented, but also paced a little bit differently.  One of the challenges in the creative world is that we don’t have an enormous language.  You know that Neal Adams and Jack Kirby are to some extent defining poles of what the business is as artists.  You can start saying that Neal is more illustrative and Jack is more cartoony, but that’s not really telling you who and what they are and what their styles are.  There’s undoubtedly an art professor who can give you a more erudite description of that, but within the business, we don’t have a great language.

We didn’t have a great language for why are Karen’s books different than anybody else’s books?  Well, they are.  Why are the Image books different?  Well, they are.  Can you do something like that?  I’ll try, but we didn’t have somebody who got it with that flavor.  We missed an opportunity there, certainly.

Did that affect how you were approaching creators in terms of your contracts, or were you already on that path?
I think by that time we were already offering creator-owned, or what’s described in the field as creator‑owned, titles.  We’d licked that for Vertigo by that point. Look, we were part of Warner Bros.  We were not going to do deals that didn’t include media rights and media opportunities.  We had the ability to exploit that.  We had the ability to make creators a lot of money doing that.  One of the things that is much better about comics today, and was already much better about the field by the 1990s than through the history, is you could make choices depending on what your needs and your priorities were.  We did some things better than any of our competitors, and our contracts reflected some of that.

We were, through most of my tenure, the most successful publisher at publishing things in book format in the comic industry, but we were also in the media business.  We made movies of our characters.  We were affiliated with a big movie and TV studio.  We wanted to be in that business with you.  If you didn’t want to do that, we probably weren’t the right company to be with.  Didn’t mean we did it of every character, but we wanted the ability to do that when the opportunity worked.

You rewarded creators whose work was used in other media, correct?
Most of the ones that were done were covered by their contract, so they knew what they would get.  Where there wasn’t something covering the contract, we tried to figure out what was fair and reasonable and did it and usually got fairly respectable responses from the creators about that.

Sometimes there’s not a right answer to those things.  Zero is never the right answer.  We tried hard to find what seemed to be a fair answer.

In my questions here at 1993, which, DC had a huge editorial event that year, The Death of Superman.  Image was publishing and there was this kind of explosion from my perspective in the collector market, or people who were buying comics for reasons other than reading.  That certainly fed the sales on Death of Superman and then the return, and all of that culminated in a period when there was a lot more product in the market than the market could absorb.  Can you talk a little bit about that whole boom period and the end of it?
We had a phenomenal run with The Death of Superman, and there was some very successful Batman stuff running through that same period, the broken back and Azrael period.  Our main challenge for that year was keeping stuff supplied, keeping it in print.  We couldn’t do enough.

When we went into our budget meeting that year, it was, “This is the most successful year we’ve ever had.  This is fabulous.  Don’t expect us to do this again next year.  We did our best to collect all the manna that fell from heaven, but this is a unique moment.”

We knew that the market was buying into a tulip phenomenon and that people shouldn’t buy cartons of a comic book as an investment.  That’s never been a good idea.  If you had a time machine and you went back and you bought a carton of Action Comics #1, you would be an insanely rich human being today, but the number of moments when that would have been a good decision prospectively are this small relative to the dynamic of the field.

Unfortunately, every few years, whether it was with the black and whites in the early ’80s or a lot of the stuff that happened with Image and some of our titles and some of the fancy packages that were put together, foil covers and nonsense like that, in the ’90s, unfortunately at times the marketplace moves that way.

There’s a limit to how much you can fight that process and still remain viable in the business.  I think we tried to restrain ourselves.  I don’t know if we did it all the right way.

How did you hear about Marvel buying Heroes World? What was your reaction?
Terry Stewart was kind enough to call and tell me what they were about to do.  I said, “Well, I may forgive you, but I suspect my wife won’t.”  I spent the next six months of my life figuring out how to deal with that, and I knew it would do that much.

We knew it was a stupid move, but the fact that it was a stupid move, there still were ways that that could have been built into something enormously successful for Marvel if they had done it in a smarter way.

Then you made a decision that DC was going to follow a similar path, create a vertical relationship with an exclusive relationship with a distributor.  That was obviously a huge change in the structure of the Direct Market, which was initiated by Marvel but you chose to follow.  Why did you make that decision?
We looked at a number of different paths that could happen.  If Marvel managed Heroes World properly, they would have access to a tremendous amount of information about the marketplace and a tremendous number of tools to work in the marketplace.  There was no way we could do that in a system with a dozen different distributors.

In addition, the financial viability of the dozen different distributors who were out there, if they lost all of Marvel in the process, was pretty suspect.  Some would survive.  Certainly, I would have expected Capital City to survive that, as it did. But the system as a whole did not have enough cash going through it.  Particularly, this was coming at a time when we were coming off a down curve coming off the end of that collector bubble we were just talking about.  We looked at a handful of different ways we could deal with it, including buying a company, going with one of our related companies or companies that distributed other products in the Warner family.

Ultimately, we decided that the best thing to do was to get a very integrated relationship with a single distributor, where we’d shift over from a buy‑sell relationship to an agency relationship, where we could control our pricing and have access to the information and have access to the tools very similarly to what Marvel would have.  And hopefully, be able to manage our economics so that our cost of distribution would go down to what we thought Marvel’s could potentially go down to, if they managed that well.

I guess the biggest question I have about that was, what made you think Marvel could do a good job of turning Heroes World into something that works? [laughs]
You had to make the assumption that they could.  If you’re sitting there in Poland and you’re watching the Russian armies on the border of Ukraine crossing the border, there’s an awful lot of them.  They look really dangerous.  They’re coming from a big country.  They have plenty of money from oil.  We should probably assume they’re dangerous.

In the case of the invasion of Ukraine, they turned out not to be quite as dangerous as they looked to be initially.  Not to be too political, but if the NATO countries hadn’t stepped up and provided an awful lot of backing to Ukraine, Russia was probably dangerous enough to take the country.

Making the assumption that Marvel was stupid was probably not a safe assumption to base your business plan on, because they could afford to hire good people.  Occasionally they did.  They had economic resources from their owner at a level that you could afford to buy companies, could afford to buy talent.

We knew Heroes World was not the engine that could do it, but people know how to do distribution.  I don’t mean to say that guys like you didn’t build up a unique set of knowledge about our specific marketplace.  You did, and you played a tremendous role individually, you and John and your team, in growing our business, as did the other distributors we were working with.

There were guys like Leon Knize who know how to do distribution, so they charge you $1,000 a day, $10,000 a day.  If you’ve got all the money in the world, and Ron Perlman certainly had all the money in the world, you get yourself a Leon Knize, you have him take a look at Heroes World and say, “This is a hunk of junk.  You need to do this, you need to do that, you need to do this, and this is how you do it.”  It is a knowable thing.  Maybe they wouldn’t have been as good at it as you are, or as good as Diamond was, but they sure could have been competent in a very short period of time if they had made a few right decisions.

Before we get to the next step, talk a little bit about how stores had evolved through the ’80s and ’90s.  There were obviously a lot more of them.  I think the number of stores may have peaked in ’93, ’94.
Probably.

At least for a long period of time.  Talk about how this comic store had evolved in this direct distribution system and how that had built up this huge community of people that were buying comics.
Well, I think the peak was probably 3,500 stores maybe.  It’s hard to define whether those were all comic shops or whether that includes trading card stores and memorabilia stores that were handling comics.

Yeah, I’d agree with you that’s probably ’93, ’94 as the peak.  It goes down to about 2,000 again, below 2,000s after that.  They were pretty battered by the time that the Heroes World debacle took place.  That, of course, further battered them because they were not set up.

These were still basically mom‑and‑pop stores, a handful of five- to seven-store chains, but very intimately owner‑operated.  You might have a staff of people, but there was one or two people who really knew this stuff and knew how to order it, which was the largest single business challenge on a daily basis.  It’s a lot of SKUs that go through that store.

Then you made a decision to go with Diamond as your exclusive distributor.  Why did you make that decision?
We thought they were more likely to succeed in the process than you were.

Two companies were your options?
Once we were going within the comic shop distribution model and not going with a Warner Elektra Atlantic, which was a record distributor and a home video distributor, the question was, we want to go with one of the two strong companies in the process.  You have infrastructure, you have teams, you have good people, and both of you did.  Both of you had some financial strengths.  Apples to apples, we felt that Diamond’s chance of succeeding was a little bit better.

Did the results play out as you expected?
I think pretty—well, the Marvel results played out as we hoped rather than feared.  I think a lot of the guys at Marvel had expressed the fears up front before they did the deal.  I don’t think it was that the people who were knowledgeable about comics were as stupid as the people who were making the business decision to buy Heroes World.  The Matt Ragones of the world, I think, were raising their hand saying, “This isn’t going to work, boss. You sure you want to do this?”

But it could have. We believed that there was high likelihood that Marvel would want to come back into whoever we set up as distributor.  We organized our agreements accordingly.

It was unclear whether there would be enough volume in the business to support two or three distributors being there, either as small ones with a specific geographic market, Comics Hawaii, or that you would be imaginative enough to put enough together to make that work, which would have been wonderful.  We wouldn’t have minded that.

We weren’t enormously surprised by anything that happened coming out of that.  A lot of it, if I can do essentially a commercial, a lot of what we tried to do in the process was fix things that were problems in the market that the multiple distribution system couldn’t fix easily, or that DC didn’t have the leverage to get the system to fix.

Before that shift, if a comic shop wanted to stock Watchmen as a trade paperback, for the most part, they had to order it in a case pack of 18.  Most of the distributors would not sell onesies or twosies to them.  If a comic shop wanted to get two more copies of Watchmen for sale with their shipment the next week, they couldn’t get it because it came from a different warehouse in a different fashion.  If we were going to build the graphic novel business, which we viewed as vital to the health and growth in the field, we had to solve those problems.

If we had a single distributor that we had some business control over, we could set standards that said, “All right, Diamond, if you’re going to be our partner in this, you’ve got to set up to be able to give them onesies and twosies.  You’ve got to be able to do what a book distributor does.”

We were able to make those changes happen, some of which were really important to growth.  At the same time, we could have operated at that time, as Marvel was trying to do with Heroes World, and saying, “You can’t handle anybody else,” but we said, “No.  Take on anybody you want, exclusive or non‑exclusive as the case may be.  We’re not trying to put anybody out of business.  We’re not trying to get anybody out of the marketplace. We want access to these tools.   If you want to give them to somebody else, as long as you’re not giving them to them on better terms than you’re giving them to us, that’s OK, but we need these tools to be able to compete in this changing marketplace.”

If you feel you were successful in making the Direct Market a better fit for book format product, why did comic stores lose share of that business for the next 20 years?
They may have lost share, but they gained volume dramatically.  If they lost share, they lost share because bookstores are a convenient place to buy books if you’re a casual purchaser.  We began to have people reading graphic novels who weren’t weekly purchasers of comics but wanted to buy 6 to 12 graphic novels over the course of the year.  They didn’t even make it in terms of a decision to say, “I want to buy 6 to 12 graphic novels,” it’s just “Every now and then I see a graphic novel I’d like.  I buy a mystery book, I buy a graphic novel.”  Well, they were already shopping at Barnes & Noble or Borders or Books‑A‑Million.  Once those outfits were your competitors, they were in better geographic locations often as retailers than the comic shops in their town, and they developed some competency at racking it and stocking it in a way that worked.  I’m not sure if prior to the success of manga, it’s accurate that they were losing share of that.

I’m looking at the total numbers, which definitely include manga.  There have been periods when manga was bigger and smaller.  They obviously had a big boom in the mid‑aughts and then dropped down to a fraction of that size around 2010 and beyond until the last couple of years.

I buy the convenience argument.  I guess my main question is, I want to see comic stores.  It would be great if comic stores could achieve that same ubiquity.  Bookstores have definitely shrunk in number since then, and you have online competition, which is everywhere, so that’s not something you can duplicate as an individual comic store.

Just curious what your thoughts are for the future and the role of the comic store in this market in which the graphic novel format is the more popular format.  Can comic stores ever be the dominant channel for comics and graphic novels, or is it inevitable that they’re more of a smaller play that’s the hardest core of the community?
I teach in a master’s in publishing program at Pace.  One of the guest speakers we had a few years ago was the guy who at the time was heading the book industry study group.  He was doing his guest lecture, “What is the bookstore of the future?” This is really at the time that the eBook was beginning to grow.

He said, “The bookstore of the future is a fetishist place.  It’s for people who really love high touch, high feel, care about the physicality of the books, are passionate about the books they buy.”  Is that not a comic shop?  The strength of the comic shop is the owner’s knowledge or the manager’s knowledge, the curation of it.

To the extent that we sell more graphic novels to casual purchasers, the comic shop’s not going to be dominant because it’s going to have a very hard time affording real estate to be heads on against a Barnes & Noble.  To the extent that we’re selling graphic novels to people who decide they like graphic novels, the comic shop has enormous advantages.  I don’t know what the split is now. I don’t have access to enough detailed market information that I have a theory about the split between those two types of customers as opposed to the retail sides.  I know that we crossed the point where there were more casual customers than there were devoted customers probably 2006, 2007, I would guess somewhere in that time.

That’s OK.  The job of a comic shop owner, I think, is to try to convert casuals into dedicateds, and then to offer the better experience.  A lot of comic shops do that in their different areas. Is it an easy way to make a living? God, no, it’s an incredibly hard way to make a living. Being a retail proprietor in America is a really tough way to make a living.  I don’t think that’s unique to being a brick-and-mortar comic shop.  Brick and mortar is having a very tough time in this world.  The shift in Internet purchasing is dramatically affecting all sorts of brick-and-mortar retail.  But I think there’s a very clear success path for the comic shop as the independent bookstore that has a specialty in comics and the popular culture shop that specializes in this flavor of the culture with some broadening out as best they can.

Different stores have come up with their own different solutions to it.  One of my friends was talking about the world of Funko Pops and the percentage of his business that was going to that in the last couple of years.  Not my thing, but it’s working.  If it brings in that audience, that’s great.  On the other hand, I was in a very new comic shop last weekend here in Westchester County and talking with the owner and he had almost no graphic novels in his entire shop.

That ain’t going to work for the long run, but it’s wonderful when you see the ones that do work, and there are so many that do.  They’re each their own reflection of their owners’ taste and style and priorities.  Whether it’s Brian [Hibbs] doing his book clubs as a solution or Aw Yeah, which has a lovely little children’s section and is opposite the train station in their town and can bring people in through that casually, everybody’s got to find their own path, but I firmly believe the paths are there and it’s a viable business model.

It would be good if the publishers were working a little harder to support them.  I’d like to say that we did a better job of supporting our retail partners in my time at DC than any of the major publishers are doing today, and I think that was a big part of our success.  I’m a believer in stakeholder theory, that all of the stakeholders in your business are entities that you’re responsible to, and you will only really succeed fully if they will succeed.

That was a great summary of the role of the comic store.  Talk a little bit in general to summarize your role in the history of the Direct Market and what you’re most proud of in that career.
I’m proud of designing that original credit plan that broadened DC’s presence in it.  I’m proud of the decisions we made on formatting and pricing that helped make things like Dark Knight and Watchmen crack through and succeed.  The formats we created, the way we were able to maintain inventory on our titles.  I think we did a better job on that by far than any of our competitors for a long period of time.  I’m proud of the series of experiments we did, whether it’s Vertigo and Milestone, both of which are at this point creative legends, or the things that didn’t work, Minx or Paradox.  Paradox didn’t succeed as a publishing venture ultimately, but gave us two successful and brilliant movies out of it.  A lot of what we did in the publishing of that, things like Stuck Rubber Baby is a brilliant and important book that was just probably a decade ahead of its time.

A lot of things that we did that didn’t work, I’m as proud of as the things we did that did work, because you’ve got to try things.  Jenette had enormous courage as a creative leader and a business leader for the company.  Both of us together were committed to building for the future for what the business could be, each working in our own different way on the puzzle.

You left DC as an executive a while back and have been involved in the comics business creatively since then.  Talk a little bit about your last, most recent decade—hopefully not your last decade, your most recent decade—and where you are today.­
I stepped away from the desk at the beginning of 2010.  The company was being more fully integrated into the movie division and was going to be moved to California.  I’m a terminal New Yorker.  I wasn’t going to go to California, and I did not believe that integrating it more fully into the movie division was a good decision.  I had told the guys that over the years.

I stayed a consultant to DC or Warner Brothers for about a decade thereafter.  Wrote a lot for DC.  When my exclusive writing period for DC ended, I did a couple of graphic novels for Dark Horse that I’m proud of, particularly proud of the one called Brooklyn Blood.  If you’re not carrying that in your comic shop, please think about reordering. It’s still in print. Good book. Working on a new one for them now.

I went on the board of BOOM! and worked with them to improve some of the things that they were doing.  They’ve been growing nicely as a company in the decade or so that I’ve been involved with them.

I do consulting.  Periodically, somebody who wants to get involved in the comic book industry shows up in one fashion or another and rents me out for a day or an ongoing period.  I try to keep my hand in.  And I do a lot of teaching, which gets me out of the house and gets me among young people with energy, keeps me conversant with how the language is changing.  I have a lot of fun with that.  It’s particularly fun as a college dropout to be teaching at colleges and grad schools.

You seem to gain a lot of satisfaction from that.
There’s not a lot of things you can do that are revenge on something that happened 40 years previously in your life or 50 years previously in your life, where you can go back and say, “See, I told you this would work out OK.”  My mom’s not around for me to tell her, “See, it was all right,” but she got to see that.  She got to see me teaching at colleges and got some satisfaction out of that before she was gone.

Source: ICv2