Give ‘Em Enough Rope

8 Jan


The Capitalists will sell us the rope with which we will hang them.

By now, you’ve probably heard Apple’s announcement that it will remove DRM from the majority of the songs that it sells on iTunes (with some notable exceptions).,sup>1 And make no mistake, this was Apple’s call all along. Finally, six years after introducing the hilariously-named FairPlay DRM into the world, Apple’s abandoning the experiment. It was fun while it lasted. To recap, the Big Four record labels wouldn’t put their content on iTunes unless Apple wrapped it in DRM, which would render the songs unplayable on any device not made by Apple. And the DRM was crackable that any devoted moderately interested pirate could circumvent it with sophisticated technology like, um, a CD burner.

That’s right, a dying, horrifically mismanaged industry, in an attempt to preserve its oligarchy, winds up instead creating a monopoly… out of someone else. Where have we heard this before?

Oh, right, the comics industry. The only industry that rivals the music biz for ego-fueled incompetence.

In 1989, activist investor Ronald Perelman (not to be confused with the guy who played Hellboy) purchased a majority share in Marvel, taking the company public within five years at a significant profit. Unfortunately, in the process, his increased prices and line extensions taxed the direct market which accounted for 85-90% sales for most comic publishers. As more and more comic stores went under, Marvel purchased a minor distributor, and forced stores (most of which worked with two other distributors) to add a third.2 Predictably, this only worsened the retail bloodbath. Did I mention Marvel was teetering towards bankruptcy at the time?

This ends about as well as one might expect. By the time Marvel had exited bankruptcy, Diamond Comics Distributors was the only distributor standing, and had Marvel (as well as every other publisher) by the balls.

Meanwhile, over in the music biz, four companies, in an attempt to avoid giving up control, would up creating a new power player in the music biz. Any reasonable person has already learned their lesson about paying for content (especially content infected with DRM), and everybody else has just learned that Steve Jobs is holding the music collection on their hard drive hostage for 40 cents a song. You know, for all the talk of how government botches the job, if you want a real world-class bungle, nothing beats a private would-be monopoly.

1 Unless you’re buying movies, TV shows, music videos, audiobooks, or are one of the 50 million people who have previously purchased content on iTunes.
2 For more on this epic fail, Mile High Comics’ “Perelman’s Team Nearly Destroyed The Entire World Of Comics” is a great place to start. It’s written by someone who’s had a horse in the race for decades.

POST SCRIPT: With Borders about to shit the bed any day now, what does this mean for comic publishers (especially the ones trafficking in manga) that have avoided the direct market specifically to sidestep the power struggles outlined above?


One Response to “Give ‘Em Enough Rope”


  1. Long Tail Fail « Black Ships - January 21, 2009

    […] a few posts ago, I was talking about how Marvel’s power play in the comics industry backfired. Now comes news that Diamond Comics Distributors is raising the order threshold for publishers. In […]

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