In comics, an alternate cover is pretty much what it sounds like: A guest artist produces a different take on what's to come inside the book and the publisher prints a limited number of comics with said cover in hopes of boosting overall sales volume.
"The Walking Dead #100" had 12 covers you could buy either off the shelf or via special promotion. A 13th was given to those who successfully navigated a simulated zombie horror maze at last year's San Diego Comic-Con.
A good many of these editions are now commanding a premium on eBay (EBAY). The SDCC edition and an accompanying poster (both of which were freebies) recently sold for $61.
Now DC Comics -- a Time Warner (TWX) unit -- wants in on this action.
In an exclusive report, MTV's Geek! blog revealed that DC will unleash -- wait for it -- 52 separate covers for "Justice League of America #1" next February. At $2.99 an issue, anyone investing in this so-called "collectible" run will have to shell out a whopping $155.48.
Calling All Superfans
We've seen this sort of madness before. Twenty years ago this month, DC broke records when it shipped more than 2 million copies of "Superman #75," marking the death of The Man of Steel.
Most shops sold out of their copies quickly. Among fans, the event remains notable for a still-infamous variant cover in which some issues were packaged in a sealed black polybag marked with a bloodstained "S".
Still, by 1997, fans had grown tired of the gimmicks and excesses, and comics publishing revenue dropped to $300 million. Brief rebounds in the years since can be traced to other special events, such as Marvel Comics' Civil War crossover saga that ended with the death of Captain America. Or DC's relaunch of all its titles in what has come to be known as "The New 52."
Hooray for Hollywood!
Only recently has the industry seen a more broad-based rebound. Last year, with edgier titles such as The Walking Dead leading the way, comics publishing accounted for at least $660 million in revenue.
And consider Walt Disney (DIS), which should reap billions from the success of summer blockbuster "Marvel's The Avengers." The film's $1.5 billion box office has come on the heels of a crossover comic book series that pits the Avengers versus Marvel's mighty mutants, the X-Men. March's debut of the series easily topped the sales charts.
What Kind of Money Are We Talking About?
Newfound enthusiasm for the medium has led some to view comics as an investment in the same way others seek rare baseball cards or stamps. There's good reason for this: History shows that hard-to-find comics can command huge sums.
Consider that a near-mint copy of the first issue of "The Walking Dead" -- original retail price: $2.95 when it debuted in October 2003 -- fetches at least $750 and perhaps a great deal more for a graded copy in superior condition, according to ComicsPriceGuide.com. (More on that in a minute.)
Alternate covers try to replicate this effect by creating artificial scarcity. A typical example: A retailer that orders 200 of the "regular" edition of a certain book may be rewarded with a variant cover. Thus, the value of this collectible edition (at least temporarily) is the cover price of the regular book multiplied by 200.
Trouble is, there's nothing really special about these sorts of comics. They're just covers. Collectors who already have the regular edition may be loath to pay up for the alternate, thereby sharply limiting demand and crimping precious resale value for the investor.
Therein lies the risk of buying into DC's 52 variants for Justice League of America #1. Any number of collectors could decide to stick with the regular edition and ignore the alternates.
4 Tips for Comic Book Investors
Still determined to speculate in the comic book market? Fair enough. Here are four tips to help you buy for profit:
- Invest in proven titles. The most investable comics are those that have already proven profitable for early collectors. "The Walking Dead" is a great example. Older issues of the series keep rising in value because, as word of the show spreads, demand increases.
- Rarity beats heat. The harder it is to find, the more likely it is you'll be able to command a premium price. That's why some collectors choose to focus on very old comics, including hard-to-find issues from the 1930s, '40s, and '50s, otherwise known as the Golden Age of Comics.
- Avoid autographs. Now that comics have become a sort of alternative asset class, professionals have become stricter about what determines value. Autographs don't typically make the list. Why? Usually, because they can't be verified. Only a verified signature (which almost always means "purchased" through a professional organization such as CGC) will add much in the way of value, and even then that's only if the creator in question rarely signs for fans.
- Buy first appearances. Some of the hottest comics right now feature first appearances of characters that are showing up on TV or in cinema. For example, "The Walking Dead" #19, which features the first appearance of katana-wielding Michonne, now sells for $250 if in near-mint condition. Iron Man #55, which introduces the extraterrestrial terrorist Thanos, who made a cameo appearance at the end of The Avengers, now comes with a $1,000 price tag.
Lastly, consider buying top-of-the-line materials for protecting your rare comics and then, when selling, rely on your negotiating skills to get the best deal.
Motley Fool contributor Tim Beyers owned shares of Time Warner and Walt Disney at the time of publication. The Motley Fool owns shares of Walt Disney. Motley Fool newsletter services have recommended buying shares of eBay and Walt Disney.