Comics used to be produced in a model very similar to magazines; comics were sold on newsstands and via subscriptions, and the cost of each comic was low because the comic books were being mass-produced and carried advertisements. Part of the appeal of comic books was their relative inexpense, but there was also a huge incentive for readers to trade comics because there were simply too many available for most people (namely, kids) to keep up on.
That all changed in the late 1980s and early 1990s, when comics went from being newsstand items to collectibles, much like the baseball card market had already done. Comics had traditionally been published on low-quality newsprint with a 4-color process that didn’t allow for a lot of variety. (One of the reasons traditional superheroes are so brightly colored has to do with this lacking palette.) In the 1990s, everyone suddenly began focusing on quality to enhance the value of comics as collectibles. The price of comics shot up, and suddenly, everyone was a speculator. This is often said to have culminated in the release of Todd McFarlane’s Spawn #1, a book that sold over a million copies due to speculation about its future value, but which is still worth about a penny an issue today. (It was a terrible comic, too, for what it’s worth.)
So, the price of comics went up, the value of comics went down, and the entire market for comics crashed. This resulted in many changes for the comic book industry, including the eventual consolidation of distribution under one company, Diamond Comic Distributors. Every comic book store in America was eventually forced to deal with Diamond or deal with no one. One of the reasons this was bad for comic book shops was because Diamond had a “non-returnable product” policy. Retailers had to order carefully, or be stuck with assets that they would have a hard time unloading.
By the time I got on the scene, comics were pretty much dead. Whereas it’d been normal for comics to circulate in the hundreds of thousands in previous decades, now a hit comic was any book that sold about 10,000 copies. Comic book stores were closing left and right, and those that hung on were adjusting their product mix to become focused on collectible toys, tabletop gaming, and Japanese comics and anime.
But even so, I often heard during my time in the comic book industry that the only thing keeping Marvel afloat was its licensing department. The comic books were not really a profitable enterprise; it was the licensing from the comics that kept the entire machine alive. Apparently, something very similar was going on over at rival DC (which was and still is owned by Time Warner). Comic books had become an anachronism, something that only a handful of enthusiasts wanted to keep up with. What’s more, the serial nature of the storytelling has made it difficult to keep up with comics since they tend to ebb and flow in quality and frequently ship late.
Another problem (and it’s a big one!) is the barrier that hardcore fans present. Oddly, fans are never really happy with Marvel and/or DC, and they are probably the hardest group of people to appease. Yes, they spend money, and yes, they are the ones who are keeping comics alive, but they are not a desirable market because they are not growing. Plus, when you factor in the reality that many fans want to be comics creators themselves, you tend to find a lot of fans who keep up with comics to be able to participate in the conversation, but who make demands on publishers for stories that few people really want to read.