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The health of the comics industry took a hit and almost collapsed when the speculator bubble burst in 1994. At least 19 publishers went out of business, as well as two thirds of comics specialty stores in the US closing up their shops.
Up Next:The Modern Age (1994 - Present)
A lot of smaller comics publishers that we didn't take the time to detail in the "Birth of the Indies" write-up didn't make it past the crash of 1994. Axis Comics, Blackball Comics, Comic Zone Productions, Continüm Comics, Dagger Comics, Fantagor Press, Majestic Entertainment, Ominous Press, Revolutionary Comics, and Triumphant all ceased publication in 1994.
What caused the crash? There were a lot of #1 issues, variant covers & gimmick books published in the early 1990's. There was an influx of buyers from outside the traditional comics market who were buying up multiple copies of issues thinking they'd be worth a fortune one day. Publishers were printing and selling over a million copies of some issues. Speculators were buying comics as though they were stocks, looking to get rich. The publishers fed this frenzy by putting out limited "gold" covers, hologram covers, embossed covers, etc. The gimmicks were selling very well, but were not rare and were not investment-grade blue-chip stocks. Ultimately, the speculator boom resulted in a bust that almost killed the direct comics market when the speculators realized that the comics they were hoarding were never going to be worth hundreds or thousands of dollars and they all stopped buying comics as "investments" and the market for these hundreds of thousands of "investment comics" vanished almost overnight.
What was the flaw here? Basic supply and demand. If there are a million of something and buyers are preserving them with an eye towards reselling them later they're not exactly rare. When the speculators realized that their "investments" were not appreciating they left the market. They were not buying comics to read. Once the perceived value was gone, the speculative buyers were gone right along with it. Comic shops that were used to ordering massive quantities of books to sell to the speculators (and they were buying them on a non-returnable basis) found themselves sitting on huge reserves of unsold comics that tied up their cash reserves. Thousands of comic book shops went out of business and there was a contraction in both sales and the number of collectors as a lot of people moved out of the hobby.
1995, 1996, and 1997 continued to be very rough years for comics. In December 1994 Marvel Comics acquired Heroes World Distribution Co. in an attempt to set themselves up to distribute their own comics, which would reduce the market share of other distributors by one third. The change took place in July 1995 and had a ripple effect that almost wiped out the comics direct market. In 1996 Diamond Comics Distributors acquired Capital City Distribution, and in 1997 Heroes World went out of business with Marvel Comics returning to Diamond Distributors, making Diamond the 'only game in town' supplying the comic book direct market. Comics had weathered the storm but it had been a rough couple of years.