As we head into Q4 of 2015, the comics world is facing several challenges. The market is changing and publishers are attempting to reinvent themselves–or at least give the appearance of reinvention. After several years of steady growth, the direct market–over 2,000 small stores that order comics on a non-returnable basis–faces several risk factors. Not all of these may come to pass, but if several converge at once, there could be a cascade effect–and that’s something the direct market needs to be aware of.

Diverging Audiences for Periodicals and Graphic Novels

The traditional comic book market is built on the monthly magazine format, but that may not be the future. Many DM retailers report that new readers are more interested in graphic novels, which account for around 50% of their revenue. In the world of traditional bookstores and school bookfairs, YA GNs have become a huge category—but one not nearly as prominent in the DM.

Switching over to a GN format would cause many changes for publishers: GNs requires a larger and longer cash outlay than serialization. And retailers would need to adapt to the very different inventory management and ordering cycle of the graphic novel. There’s a logistical difference between running a newsstand with a few books and running a bookstore with a newsstand. There are far more newsstands than bookstores in the current direct market.

Changes at DC and Marvel

DC and Marvel have long been called “The Big Two”– together they account for more than 70% of periodical comics sales–and they are the backbone of the direct sales market. However both are relaunching their line this year—starting a number of new books and shaking up their storytelling continuity. These have had varying results–and some stores report Image passing DC as their #2 publisher.

DC is in the worse position, by far, with the DC You line having debuted in June to middling sales. DC Entertainment President Diane Nelson’s adding new duties running WB Consumer Products, and a corporate move to the West Coast leading to many personnel changes have caused more adjustment. DC seems to have become a rung on the consumer product ladder at Warner, as many of their business hires come out of Warner Home Video with merchandising backgrounds, rather than publishing.

At Marvel, the latest relaunch is set for October, but at least the event leading into it–Secret Wars–is going very well. However, retailers and online fandom are unimpressed by a line made up of the same creators and same editorial direction that’s seen big launches fall back to slow sales in 6-8 months. If you remove the massive success of their new Star Wars line, Marvel’s regular ongoing superhero titles have been in a sales slump.

Marvel also seems to be flooding the market with variant covers (limited edition covers keyed to order levels that increase orders, but not necessarily consumer purchases)–over 100 a month starting in October–and retailers have begun to complain about the work and expense involved in ordering.

For retailers, the risk is whether they can survive on lower DC and Marvel sales, overproduction on variant covers ending that fad, and the possibility of getting stuck with unsold variant covers. This is more of a risk for retailers that heavily emphasize DC and Marvel sales to the near exclusion of other publishers, which could be as much as 70% of the storefronts. Could they survive if interest in the Big Two doesn’t stabilize?

The Digital Monopoly

Digital vendor Amazon/Comixology is thought to have over 80% of all digital comics sales in the U.S. and possibly higher, a virtual monopoly. They offer not only the widest selection of publishers, but an exclusive on Marvel periodicals in digital format.

For retailers, the infinite shelf space Comixology and the Kindle offer is the same risk that traditional bookstores have with Amazon and Kindle: instant gratification for the consumer, particularly if you don’t have it in stock. For publishers, the danger is the usual one when you become a captive audience to a distributor: Amazon has the leverage to squeeze if they want to, and the book world is all too aware Amazon is not shy at the negotiating table.

Perhaps the prime example is Audible, whose space in audio books is similar Comixology’s in comics. Audible originally offered royalties for exclusive audio books in the 50-90% range and 25%-70% range for non-exclusive audiobooks that were uploaded by creators. (Think Comixology Submit.) In February 2014, Audible changed the terms to a flat 40% for exclusives and 25% for non-exclusives. Comixology Submit is currently 50%, but that could change.

The Print Monopoly

Diamond is the only distributor of periodical comics to the direct market. Marvel pulled out of the newsstand entirely and only appears at bookstores including Hastings and Books-A-Million that order through Diamond, and DC employs a similar strategy. Diamond may not have been legally declared a monopoly (The Justice Dept. cleared it in 2000), but it’s harder to make the argument that it isn’t and they also handle bookstore distribution for several primarily DM publishers.

Diamond appears to be healthy, but any time there’s a single point of failure, there’s risk and there’s no backup system for Diamond for periodical comics. If some unexpected disaster occurred—their warehouse in Mississippi got hit by a tornado—it would be weeks before anything could be fixed.

Possible Outcomes

Add up these risk factors and the industry could absorb one or two but a perfect storm of misfortune would be harder to weather. In the best case scenario, Marvel’s relaunch sticks with the audience, DC restaffs and regains its footing, the Direct Market retailers embrace risk diversification and increase their stock of independent comics, bookstores continue to expand their graphic novel selections. Comics enter a legitimate golden age. In the worst case, Disney and/or Warner Bros. both tinker with their formula of making monthly print comics and Direct Market retailers face a new and uncertain business model.

The comics infrastructure is better today than it was in 2010-2011 when things were looking bleak, prior to the New 52 relaunch, which had the inadvertent effect of energizing independent comics sales. If New 52 had tanked, there might not have been much left of the DM industry by 2013. Today, digital is firmly in place. There’s a core of retailers that traffic in independent comics and graphic novels. Bookstores have more invested in graphic novels than ever before. Not even the perfect storm can kill the comics industry entirely.

On the other hand, comics are at an inflection point. Monthly comics and graphic novels are threatening to fork in different directions. The major players are struggling to find a stable business model, but the independents have yet to assume real dominance across the entire retail domain. The next six months will go a long way towards determine the industry’s medium-term path.

Todd Allen is a Digital Media consultant and author of Economics of Digital Comics. Follow him at: @Real_Todd_Allen

Corrections: An earlier version of this article stated that Diamond's warehouse was located in Missouri. It is located in Mississippi.

An earlier version stated that all of Marvel's comics are available digitally exclusively on Comixology; only their periodical comics are exclusive on Comixology.