IDW’s Decision to Go with Diamond Spells Trouble for FM

This story originally appeared in PW Comics Week on December. 20, 2005 Sign up now!

by Judith Rosen -- Publishers Weekly, 12/20/2005

Diamond Comic Distributors continues to eat away at those few remaining large comic publisher who are holding out against exclusive agreements. The announcement that four-year-old Idea and Design Works will go exclusive with Diamond in January for both comic specialty stores and bookstores could be the death knell for the only other advance distributor to comic stores, FM International in Madison, Wis.

FM has long been a distant number two to Diamond, which has more than 90% of the direct market. After recent layoffs at FM brought about by IDW's decision to stop carrying FM in October, the company has just two employees, compared to Diamond's 650. And after next month it will have only one major client, Fantagraphics. "We're still here. It's really challenging right now, but we still chug along," FM cofounder Wayne Markley tells PWCW. In fact, FM has been struggling for the past year and a half, since TokyoPop, which represented 20% of its business, signed with Diamond. According to retailers, FM is not shipping during its reorganization, although those who work with FM, like Ron Turner at Last Gasp, say that the distributor is current with its payments.

For its part, Fantagraphics has no intention of pulling the plug on FM by going exclusive. Fantagraphics editor and publicist Eric Reynolds expresses support for FM and the other remaining indie distributors. "They've served us well," he says. "They have a focus on the independent presses. Exclusivity is not something we even talk about."

Some comic retailers, like Chuck Rozanski, founder of Mile High Comics in Denver, accuse Diamond of "benevolent despotism" and are upset by the IDW switch. Rozanski calls it predatory behavior on the part of Diamond, which he says wants to kill off all competitors. "Our previous policy had been to purchase everything we could through FM," he says. "We're going to do everything we can to help them."

Others, like Gahl Buslov, comic book buyer for Midtown Comics in New York City, expect to benefit from the changeover. "The main advantage," he says, "is better stock levels at Diamond. Getting everything from Diamond saves a lot of time. And their shipping time on reorders is minimal and consistent." Although Buslov doesn't order much from FM, he notes that that could change as Diamond's recent announcement that it will cut back on small presses.

The changes at Diamond have led some industry watchers to speculate about the health of another small Diamond alternative, Cold Cut, which specializes in re-orders. "We're doing okay," says Cold Cut co-owner Matt High, who likens the impact of IDW's exclusivity on his business to a mosquito bite. He adds, "We're in the black, and we'll be here for a long time."