Comic book industry gets a reboot (2/13/15)

The S&P 500 Index set a new record today, and the Dow closed above 18,000 for the first time in 2015 as the price of oil increased and the eurozone economy grew in the fourth quarter. 

The Dow rose 46 points, with 16 of its 30 components gaining; the S&P 500 Index added 8, led by the energy sector; and the Nasdaq was up 36. Advancers outpaced decliners by nine to five on both the NYSE and the Nasdaq. Treasury prices weakened. Gold futures increased $6.40 to close at $1,227.10 an ounce, and the price of crude oil gained $1.57 to settle at $52.78 a barrel after data from Baker Hughes showed U.S. oil rig counts continued to fall. 

For the week, the Dow advanced 1%, the S&P 500 Index gained 2%, and the Nasdaq rose 3%. 

In Earnings News:

-       Insurer American International Group Inc. posted weaker-than-expected fourth quarter earnings, due in part to low interest rates and refinancing expensive debt. Earnings fell 67% to $0.46 a share from $1.34 per share last year. Adjusted earnings were 97 cents a share, lower than the $1.05 expected by analysts. AIG’s shares (AIG) gained 2.88%.

-       Two social games developers announced earnings today with very different results. Zynga, developer of “FarmVille,” lost 5 cents a share in the fourth quarter and warned that it is expecting a loss in the first quarter as well. On the flip side, “Candy Crush” developer King Digital posted fourth quarter earnings of 57 cents a share, beating estimates. Shares of Zynga (ZNGA) fell 16.17%, but King (KING) jumped 13.3%.

-       Higher ad sales from Thursday Night Football and mid-term elections led to an increase in CBS Corp.’s fourth-quarter earnings. The company posted income of 77 cents a share, beating estimates of 76 a share. CBS’s stock (CBS) rose 3.57%.

In Other Business News:

-       U.S. consumer confidence fell sharply in February due to the lack of wage growth and higher oil prices, according to preliminary data from the University of Michigan’s consumer sentiment index. The reading dropped to 93.6 from January’s final reading of 98.1. Economists expected the number to remain stable. 

-       Germany’s economy bounced back in the fourth quarter and posted a 0.7% gain after a 0.1% decline the previous quarter, shaking off concerns that the country might be heading into a recession. For the entire year, the country’s GDP grew by 1.6%. Overall, the eurozone’s economy increased 0.9%. Out of the 18 member countries, only three saw their economies contract in the fourth quarter: Greece, Cyprus, and Finland. 

-       Costco Wholesale Corp. and American Express are ending their 16-year agreement in which American Express was the only credit card accepted by the wholesaler. Costco cited cost as the primary factor. The move will affect one out of every ten American Express cards and is expected to impact the company’s results for the next two years. Shares of American Express (AXP) dropped 2.98%.

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Earlier this week, my 10-year-old son asked me if he would have to stop liking comics when he grew up.

I rolled my eyes and said, “You just spent dinner discussing Marvel’s plans to integrate Spiderman into their movies, the new all-female Avengers, and Captain Marvel. With your 40-year-old mother, who, may I point out, initiated the conversation. No. You don’t have to stop liking comics.”

The comic book industry itself has grown up and matured over the years. When you walk into a comic book store, you’re just as likely to find entire families like mine in addition to the lovable geeks from The Big Bang Theory. And moms and dads aren’t sitting idly in the corner, waiting for the kids to make their picks and leave … they’re flipping through issues themselves.

Back in the 80s, comic books were the equivalent of Beanie Babies. People enjoyed reading them, but they would also buy multiple copies as investments, hoping that maybe one of those copies would become as valuable as “Amazing Fantasy” volume 15, which introduced Spiderman (and sold at auction in 2011 for $1.1 million). As we’re all too aware, bubbles like this are prone to bursting, and that’s what happened to the industry in the mid-90s when hundreds of comic book stores closed and sales dropped by 70%. Even the super hero of the industry, Marvel, faced bankruptcy at one point.

After a few boardroom battles, Marvel began to regain its footing and started focusing on movies, distributing X-Menthrough Fox and Spiderman through Sony. After receiving just a small percentage of the profits, but seeing what huge potential there was, Marvel started producing movies under their own name, launching Iron Man in 2008. Disney purchased Marvel for $4.3 billion in 2009, opening up an entirely new market for comic books and super heroes.

You can’t turn on the television or go to the movies without being exposed to these characters. 2014 saw 12 comic book adaptations for the big screen and five shows on the fall TV schedule. Even the critically-acclaimed AMC show The Walking Dead is based on a comic book series.

It’s obviously big business now. The movies make billions of dollars. Sales of comic books and graphic novels reached $870 million in 2013. And the industry is doing more to make sure it’s not recreating a bubble. They’re working hard to make more of their content accessible to people from all walks of life, which is one of the goals of a new series of comics launching this summer from DC Comics. 

So, no kiddo. We do not have stop liking comics. We’ll be like Stan Lee, rooting for Captain America and Spiderman, even when we’re 92 years young.