Alzrius
The EN World kitten
A little while ago there was a reposting of a Dear Wizards of the Coast blog post which said, in the form of a truly huge wall o' text, that WotC should take up a print-on-demand publishing model for their previous edition materials.
Now, we've all heard people making the case for WotC to do this. Hell, I did it myself in my own love letter to WotC thread. Since then, though, I've been thinking about some of the few things we know for certain about how WotC operates, about how print-on-demand (and PDF) publishing work, and I've come to a conclusion.
Print-on-demand would be good for the community, and WotC in the long run. But it'd be bad for WotC in the short run, and that's why they'll never do it.
Let's look at what we know. Rick Marshall, who worked at WotC for some time (including when the transition to Hasbro happened) mentions that Third Edition D&D was originally structured as a loss leader to initially grow the community.
Now, let's look at what (admittedly little) we can surmise about print-on-demand publishing. The conventional knowledge is that it's a modest start-up cost, and then you sit back and let the money trickle in until you've turned a profit under the long tail. So what's the problem?
Well, the problem is that this "modest start-up" cost is not inconsiderable. As others have pointed out, print-on-demand products still require the printing materials (e.g. printing plates), but there's a very real possibility that WotC doesn't have said materials for some (quite possibly a lot) of the older materials. In that case, having access to printed copies or old PDFs doesn't matter - new printing plates have to be made, and that takes time and money, especially if there is a lot of material that has to be set up again in this manner.
There's also a question of the older artwork, in terms of who legally still owns it. This may not be a problem, especially since WotC was selling PDF copies of their old materials without any lawsuits being filed (that we know of). Still, it's something that they'd have to at least look into; time and money, again.
We won't even get into the issues with non-standard printed materials, like poster maps.
Further, it's not enough to just make those materials available and not say anything - this service then needs to be advertized, and that's a continuous cost. You have to get the word out, particularly to older and lapsed players who may not check the WotC website or EN World much, if at all. You've got to make at least a modest effort to make sure people know that these old books are available, and that's an investment.
Incidentally, even PDF publishing is not immune to some of these not-so-minor costs. Yes, WotC sold PDFs before, but I recall some complaints about the nature of those scans...because that's what they were, scans. They often weren't optimized for PDF format, lacked bookmarks and hyperlinks, and weren't given Optical Character Recognition. All of those things take time and effort, which is money.
Let's take a sharp turn here to what Ryan Dancey has told us about how Hasbro has structured WotC and set their annual sales targets.
So this gives us a peek into the corporate mindset among the D&D team at WotC - that they're perpetually behind the eight ball. They need to make at least $50 million annually - not counting any licensing revenue from the computer/video games - or face the very real possibility that all of D&D will be shut down and they'll all be looking for new jobs (or, I suppose, transferred elsewhere).
This mad drive to increase revenue is, incidentally, the reason we see the annual layoffs at WotC. As Jeff Grubb once blogged about, there's a reason this happens (almost) every Christmas.
So what does all of this have to do with loss leaders and long tails? In short, everything.
It's likely self-evident by this point, but if you look at the idea of "setting up a loss leader that will cost us a fair amount of money this year, and over the next several years, that will eventually have a chance of growing the community and thus increasing our revenue," and compare that to having to work under extremely difficult annual projections that force you to maximize profits each year, you can start to see why those two positions aren't compatible.
Imagine being the guy who makes this pitch at the next meeting among WotC staff. Imagine telling people that you think they should enact a plan that will absolutely cost them money - and thus, jobs - over the next five years or so before, you hope, it begins to turn a profit. How much support is that idea likely to get from your colleagues? Even if you're willing to lose your job over the ensuing budget cuts to pay for this idea, how many of your co-workers are going to feel the same? For that matter, does your idea even have more of a chance of bringing in revenue than other short-term ideas that can be implemented right now without (as big of) a loss?
This is why, ultimately, I think that WotC will likely never embrace a print-on-demand model for their older books. I suspect it also had something to do with the demise of their pay-for-download PDFs, and how we haven't seen anything in that front in several years now (though there are likely other factors at work where the PDFs are concerned). Ultimately, the immediate money issues are an insurmountable barrier, at least under the current conditions that the D&D Team has to operate under.
I'd love to see older D&D materials that you could print-on-demand. I think it'd be good for the hobby, and good for WotC, over the long term. But the short term costs are too much for them to bear.
Now, we've all heard people making the case for WotC to do this. Hell, I did it myself in my own love letter to WotC thread. Since then, though, I've been thinking about some of the few things we know for certain about how WotC operates, about how print-on-demand (and PDF) publishing work, and I've come to a conclusion.
Print-on-demand would be good for the community, and WotC in the long run. But it'd be bad for WotC in the short run, and that's why they'll never do it.
Let's look at what we know. Rick Marshall, who worked at WotC for some time (including when the transition to Hasbro happened) mentions that Third Edition D&D was originally structured as a loss leader to initially grow the community.
Rick Marshall said:By the time third edition was released, I doubt Peter seriously thought D&D would become a big money-maker for Wizards in the future. Certainly, in the present he treated it as a loss leader designed to strengthen the RPG community. The game store bled money, and Peter was fine with that; he thought of it as a well-deserved thank you to RPG players.
When the Hasbro financial folks got a look at the bottom lines for D&D and the game stores, they were appalled at the money Wizards was losing to support D&D - but these are the sorts of decisions most accountants and MBAs cannot comprehend. From our perspective it made perfect sense, since the income from Magic: The Gathering was enough for Wizards's needs (a sentence that must sound like gibberish to a bean counter, I'm sure - what is this word, "enough").
Now, let's look at what (admittedly little) we can surmise about print-on-demand publishing. The conventional knowledge is that it's a modest start-up cost, and then you sit back and let the money trickle in until you've turned a profit under the long tail. So what's the problem?
Well, the problem is that this "modest start-up" cost is not inconsiderable. As others have pointed out, print-on-demand products still require the printing materials (e.g. printing plates), but there's a very real possibility that WotC doesn't have said materials for some (quite possibly a lot) of the older materials. In that case, having access to printed copies or old PDFs doesn't matter - new printing plates have to be made, and that takes time and money, especially if there is a lot of material that has to be set up again in this manner.
There's also a question of the older artwork, in terms of who legally still owns it. This may not be a problem, especially since WotC was selling PDF copies of their old materials without any lawsuits being filed (that we know of). Still, it's something that they'd have to at least look into; time and money, again.
We won't even get into the issues with non-standard printed materials, like poster maps.
Further, it's not enough to just make those materials available and not say anything - this service then needs to be advertized, and that's a continuous cost. You have to get the word out, particularly to older and lapsed players who may not check the WotC website or EN World much, if at all. You've got to make at least a modest effort to make sure people know that these old books are available, and that's an investment.
Incidentally, even PDF publishing is not immune to some of these not-so-minor costs. Yes, WotC sold PDFs before, but I recall some complaints about the nature of those scans...because that's what they were, scans. They often weren't optimized for PDF format, lacked bookmarks and hyperlinks, and weren't given Optical Character Recognition. All of those things take time and effort, which is money.
Let's take a sharp turn here to what Ryan Dancey has told us about how Hasbro has structured WotC and set their annual sales targets.
Ryan Dancey said:Sometime around 2005ish, Hasbro made an internal decision to divide its businesses into two categories. Core brands, which had more than $50 million in annual sales, and had a growth path towards $100 million annual sales, and Non-Core brands, which didn't.
[...]
Core Brands would get the financing they requested for development of their businesses (within reason). Non-Core brands would not. They would be allowed to rise & fall with the overall toy market on their own merits without a lot of marketing or development support. In fact, many Non-Core brands would simply be mothballed - allowed to go dormant for some number of years until the company was ready to take them down off the shelf and try to revive them for a new generation of kids.
At the point of the original Hasbro/Wizards merger a fateful decision was made that laid the groundwork for what happened once Greg took over. Instead of focusing Hasbro on the idea that Wizards of the Coast was a single brand, each of the lines of business in Wizards got broken out and reported to Hasbro as a separate entity. This was driven in large part by the fact that the acquisition agreement specified a substantial post-acquisition purchase price adjustment for Wizards' shareholders on the basis of the sales of non-Magic CCGs (i.e. Pokemon).
This came back to haunt Wizards when Hasbro's new Core/Non-Core strategy came into focus. Instead of being able to say "We're a $100+ million brand, keep funding us as we desire", each of the business units inside Wizards had to make that case separately. So the first thing that happened was the contraction you saw when Wizards dropped new game development and became the "D&D and Magic" company. Magic has no problem hitting the "Core" brand bar, but D&D does. It's really a $25-30 million business, especially since Wizards isn't given credit for the licensing revenue of the D&D computer games.
So this gives us a peek into the corporate mindset among the D&D team at WotC - that they're perpetually behind the eight ball. They need to make at least $50 million annually - not counting any licensing revenue from the computer/video games - or face the very real possibility that all of D&D will be shut down and they'll all be looking for new jobs (or, I suppose, transferred elsewhere).
This mad drive to increase revenue is, incidentally, the reason we see the annual layoffs at WotC. As Jeff Grubb once blogged about, there's a reason this happens (almost) every Christmas.
Jeff Grubb said:So they pass out the budgets for next year and now the departments have to plan. Yeah, some of that planning involves going back and telling the guys with the budgets that this makes no sense and sometimes that works. More often it involves figuring out what goes overboard in order to jack up profitability.
[...]
But much of the time, it comes down to manpower reduction. Layoffs. And if you're talking about a creative industry with a in-house creative staff (a rarity, by the way), that will involve removing some of the same talent that has gotten you there in the first place.
[...]
OK, fine, but why Christmas? Because corporations also drag their feet. Inertia is a powerful thing, particularly when you have do something rotten like deciding who gets shown the door. So things go through a lot more processes than they intend. So if your budgetary process starts in June with the end of Fiscal in December, and you try to find some way to make the numbers work without canning someone, you wait for it. Maybe things will work out. And when they don't you have to make the tough decisions late in the year. Multiply that desire and hope against all the layers involved in the task of removing people and you can see why it happens so late in the year. Merry Christmas.
So what does all of this have to do with loss leaders and long tails? In short, everything.
It's likely self-evident by this point, but if you look at the idea of "setting up a loss leader that will cost us a fair amount of money this year, and over the next several years, that will eventually have a chance of growing the community and thus increasing our revenue," and compare that to having to work under extremely difficult annual projections that force you to maximize profits each year, you can start to see why those two positions aren't compatible.
Imagine being the guy who makes this pitch at the next meeting among WotC staff. Imagine telling people that you think they should enact a plan that will absolutely cost them money - and thus, jobs - over the next five years or so before, you hope, it begins to turn a profit. How much support is that idea likely to get from your colleagues? Even if you're willing to lose your job over the ensuing budget cuts to pay for this idea, how many of your co-workers are going to feel the same? For that matter, does your idea even have more of a chance of bringing in revenue than other short-term ideas that can be implemented right now without (as big of) a loss?
This is why, ultimately, I think that WotC will likely never embrace a print-on-demand model for their older books. I suspect it also had something to do with the demise of their pay-for-download PDFs, and how we haven't seen anything in that front in several years now (though there are likely other factors at work where the PDFs are concerned). Ultimately, the immediate money issues are an insurmountable barrier, at least under the current conditions that the D&D Team has to operate under.
I'd love to see older D&D materials that you could print-on-demand. I think it'd be good for the hobby, and good for WotC, over the long term. But the short term costs are too much for them to bear.