www.forbes.com/sites/robsalkowitz/2019/07/31/where-does-dc-fit-in-atts-vision-for-warnermedia/#7ca2482079b7Where Does DC Comics Fit In AT&T’s Vision For WarnerMedia?
Rob Salkowitz Contributor
Hollywood & Entertainment
Earlier this month at San Diego Comic-Con, returning attendees noticed a major change on the show’s massive exhibit floor. The booth for DC Comics, which had been a massive standalone pavilion in the center of the publishers’ area in the center of the hall, was gone. America’s oldest and second-largest comic book publisher had retreated to the far back corner of the hall, where it was incorporated into the multi-level WarnerMedia exhibit, in the shadow of banks of giant monitors previewing upcoming shows and cast appearances.
The subtext of this move could not have been clearer. AT&T—now the parent company of WarnerMedia and its divisions, including DC Comics (previously known as DC Entertainment), HBO, Turner, and Warner Bros.—does not seem terribly interested in being in the comic book publishing business. It’s telling that in a long profile of AT&T CEO John Stankey this morning in Variety, DC was one of the only WarnerMedia brands that was not mentioned. To the extent that DC matters at all in the company’s future, it’s as a source of owned IP for other media channels and as a lifestyle brand to serve as an ambassador to geek culture.
In terms of pure economics, this makes sense. The entire comics publishing business in the U.S., including periodicals, digital and trade, adds up to around $1.1 billion, according to 2018 estimates by industry analyst ICv2. On a good month, about 35% of the revenue from the direct market goes to DC, along with a chunk of trade book sales for perennial titles like Watchmen and The Dark Knight Returns. That wasn’t ever very much in the Time Warner days, and it’s a smaller drop in an even bigger ocean following the AT&T acquisition.
There’s another ocean in play as well: an ocean of red ink. AT&T’s debt following the $85.4 billion WarnerMedia acquisition stands at $164 billion. The company obviously believes it can monetize the WarnerMedia assets to make that back quickly, but that’s a huge sword hanging over management’s head, and the kind of thing that gets division chiefs thinking about short-term wins rather than long-term strategy.
One place that AT&T does not seem to see any value is in sub-brands. One of the company’s first moves following the acquisition was to shutter several of WarnerMedia’s niche streaming services, including the beloved cinephile outlet Filmstruck, seen by many as a prelude to rolling as much of the company’s media artillery as possible into a mega-streamer to compete with Disney, Netflix and the rest—a move that seems essential given the precipitous drop in subscribers to AT&T’s satellite TV service DirecTV.
But that sentiment has also crept into the publishing side. In recent months, DC has dropped the axe on its prestige imprint Vertigo, the creative engine behind hits like Sandman, Preacher, Swamp Thing, Doom Patrol and Fables. On the eve of Comic-Con, the company announced the cancellation of MAD, the venerable humor magazine that changed the face of American satire and has been continuously published since the mid-1950s. Neither of these was a big moneymaker in terms of month-to-month sales, but both brands occupy some valuable real estate in the psyche of fans. Even if the properties built on that land are in disrepair, it seems shortsighted to vacate the premises entirely.
In place of a robust and differentiated publishing enterprise, AT&T appears more interested in boosting DC as a consumer lifestyle brand. Warner Bros’ efforts to bring DC superheroes to the big screen have been hit-or-miss, and suffer especially in comparison to the gleaming, chrome-plated juggernaut that is Disney’s MCU, but producer Greg Berlanti and his team have developed a creatively and commercially satisfying empire on television with the Arrowverse family of shows (Arrow, The Flash, Supergirl, and Legends of Tomorrow, plus Black Lightning). That success has bled over into several surprisingly great original series like Doom Patrol, Titans and Swamp Thing on the DC Universe OTT service, a legacy project from the last days of Time Warner that has managed to cling to life – so far – in the AT&T era.
DC Universe also features a chat show, DC Daily, in which a gaggle of media-friendly young people enthuse over the latest comics and comic-culture offerings from the company. It’s here that the lifestyle brand goals come through most clearly. The hosts and their over-the-top squeeing about the latest merch represent WarnerMedia’s highest aspirations for its audience – younger, hipper, more ethnically and gender-diverse than the traditional DC comics readership (which is old and male even by the standards of the comics industry), and dedicated to omnivorously consuming everything even loosely affiliated with geek culture as part of their hip, socially-mediated, comics-defined lives.
It’s a well-conceived strategy to combat the encroaching hegemony of the Disney-Marvel-Lucasfilm-Pixar pop culture machine. For all its market might, Disney seems wedded to a very clear vision of market segmentation where the Marvel comics brand (including its animated TV components) must first and foremost deliver Disney the teen male fanbase, even as the separately-managed MCU wipes the floor with all categories at the box office.
DC also has an edge that few people talk about in terms of logo design and iconography. Superman’s “S,” the Bat signal, Flash’s lightning bolt, and the other distinctive marks associated with DC characters dwarf almost everything that Marvel has on offer with the possible exception of Spider-Man’s insignia, and even gives main Disney a run for its money. This gives DC a permanent structural advantage in the lucrative fields of licensed merchandise and apparel that the company has never fully exploited.
So where does all that branding leave the publishing business? A generation ago, faced with a similar situation, DC’s then co-President and Publisher Jenette Kahn appealed to Time Warner management that wanted to dramatically cut back on DC’s current publishing in favor of reprints, saying that the company’s new material was the lifeblood of the company, a source of new fans and new IP without which the characters and related merchandise would decline into obscurity. She won that argument and DC, under her stewardship, ended up minting many of the golden coins in which it still trades, including The Dark Knight, Watchmen and Sandman, despite never being a gigantic engine of revenue within the Time Warner corporate umbrella.
Today, DC Comics is in a similar situation. Following a demoralizing mid-decade move from its traditional home in New York to Warner Bros’ headquarters in Burbank, CA, the company has stumbled through various events and line reboots, milking assets like Frank Miller’s once-fresh take on Batman and post-Alan Moore Watchmen for the last dregs of fan appeal and relevance, and relying on high priced milestone thousandth issues of long-running titles like Action Comics and Detective Comics to make up in dollar share what they are losing in unit share of an increasingly crowded comics market.
Recently, DC co-President Dan DiDio publicly fumed that reissues of comics 30 and 40 years old were outselling current stories featuring the same characters, calling that a “failure on us.” Echoing his predecessor’s warning from years past, he added, “We should be focused on moving things forward, always pushing the boundaries and finding new stories to tell. That’s how we’ll survive and grow this industry.”
Looking to the future of comics publishing, DC had a booth at the recent Book Expo trade show for the first time in more than a decade, touting its new line of teen and young adult material, much of which is published direct to trade rather than sold through comic shops. It’s not the most visible part of the company, nor the most directly tied to the familiar DC brand of superheroes, but it could represent the kind of revenues necessary to keep the business alive under the looming corporate axe.
Faced with a cash-starved corporate master with an unsentimental, “what have you done for me lately” approach to legacy sub-brands and an urgent need to monetize its new media empire through streaming and licensing, it’s not unreasonable to wonder if even Superman himself is capable of rescuing DC Comics as we’ve known it for the past 80 years.
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