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The Crash of 1993

As the great comic-book bubble showed, sometimes there’s no recovery from a speculative boom

Jun 13, 2011, Vol. 16, No. 37 • By JONATHAN V. LAST
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Diamond and Capital City were happy to sign distribution agreements with just about anyone. As Chuck Rozanski, the owner of the country’s largest comic-book retailer, Mile High Comics, explained a few years back in a brilliant series of essays about the comic-book bubble, Diamond and Capital City were ready to set up an account for anyone with an initial order check of $300. This aggressive stance had the practical effect of turning many collectors into dealers. Comic book shops proliferated, growing from 800 in 1979 to 10,000 by 1993. Diamond and Capital City were so successful that they drove every other distributor in America out of business.

With all of these comics shops sprouting across suburban America, the two remaining distributors took in record numbers of orders every month. Seeing these orders, the publishers thought they were presiding over a massive boom. So they upped their prices and began publishing more titles, adjusting the supply to meet what they thought was demand. In 1985 Marvel published 40 titles a month, and each book cost 60 cents. By 1988 they were putting out 50 titles for $1 apiece. By 1993, they were offering 140 books a month, selling for $1.25 and up. 

All the while, the distributors kept standing up new retailers, who kept putting in orders, enticing the publishers to produce ever more books. It was an unsustainable loop, but what made the situation particularly perilous was that in the comic-book business, orders are placed months in advance and unsold inventory cannot be returned. Retailers eat unsold books as overstock. (Rozanski estimates that at the bubble’s peak, 30 percent of all comics being published wound up as overstock.) In other words, the loop was structured so the publishers would get negative feedback only after the industry had gone over the cliff and the retailers started going belly up.

Which is precisely what happened in 1993. By expanding their output to hundreds of titles, the publishers had diluted the quality of their product to embarrassing levels. That, combined with the higher retail prices, drove away customers.

Many of the new comic-book stores were undercapitalized and poorly run. The weakest of them folded first, and their demise began a cascade: Publishers saw a rapid and dramatic decline in orders, so they moved to reduce costs by cutting back the number of titles they shipped. Which led to less product for the remaining retailers to sell. Which pushed the stores on the margins of survival out of business. The death spiral was on.

By the time the bubble’s soapy residue washed away, nine out of ten comic book shops in America had closed their doors. Publisher sales of new comics dropped by 70 percent. On December 27, 1996, Marvel, the General Motors of comics, filed for bankruptcy. The market for used comics was flooded with the cadaverous inventories of out-of-business stores. The prices of high-value comics dipped or plateaued. Many lower-value comics (books under $100) saw significant declines. Comics printed during the run-up to the bubble became virtually worthless, as the speculator-driven sales combined with the unsold issues to create a massive oversupply. 

Since the comics apocalypse, some parts of the market have recovered and even thrived. Over the last ten years, the Golden Age glamour books (such as the early Action and Detective Comics) crept into the six-figure range, and a whole host of books, ranging from Amazing Fantasy #15 (the first appearance of Spider-Man) to Donald Duck Four Color #29, began fetching five-figure sums. As the Great Recession dawned in the fall of 2008, the comics market remained reasonably intact. New issue sales dropped precipitously, but then rebounded. The prices of high-value older issues continued to rise. In one three-day span last year, two comics (an Action #1 and a Detective #27) broke records, selling for $1 million, and then $1.075 million. A month later, an Action #1 went for $1.5 million.

But the contours of the industry have changed almost beyond recognition. In 1950, Marvel and DC together sold roughly 13 million comic books a month. In 1968, they put out 16 million a month. Since 1993 the overall sales trend has been inexorably downward. For January 2010, all American publishers combined sold a total of 5.63 million comics.

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