Okay. How? How do you arrange it so that purchasing a hardbound book gets you a free PDF without significant danger of that code getting ganked before you get to enter it? If you think this PDF fuss is a black eye for WotC, how do you think they'd look after the first few dozen customers start yelling about not getting the PDF they were promised as part of the sale? It's pure handwaving to simply say "include a pdf download with the purchase of the book" unless you can explain how to do that in a way that is not _guaranteed_ to infuriate a portion of the buyers.
Now, one can argue that WotC should simply accept the bad PR of customers who bought the book not getting their PDF. One can suggest that customer service resources be devoted to allowing customers to claim that a particular code was ganked, and get a free PDF. Ultimately, WotC decided that this was not worth the heartache compared to simply selling watermarked PDFs- and now that they've decided that selling watermarked PDFs is a mug's game, what has changed to make their original estimation wrong?
No, I'm arguing that WotC should accept that PDFs will be pirated and make allowances for it in their business plan. Accept that some people will not buy your book to get a free or cheap pdf and choose to pirate the pdf. Instead of trying to prevent pdf piracy, concentrate your efforts on selling your products to those who want to buy them, and offer value for the money that can't be matched by pirates. In the retail industry, it is called shrinkage and retailers know that it happens and it is a cost of doing business (IIRC, Walmart's shrinkage in 2007 was estimated at
$3 billion - and they still managed to turn a nice profit.)
Does it really make any sense to turn down, say, 1,000 sales if you know that 10,000 pirated copies will also occur? If it were dead trees - absolutely. PDFs? You aren't out 10,000 books. You are out 10,000 copies of 1's and 0's that cost you nothing beyond the first copy. For physical product, it makes sense to minimize lost sales. For pdfs, you either lose 10,000 while selling 1,000 or you lose 11,000 while selling 0.
They would WotC's competition if they were actually producing content of their own (which they don't). Making modifications to someone else's product does not make you their competition, it just makes you a pirate.
They are competition to legitimate distributors, which not only impacts WotC's potential sales, but retailers' potential sales.
You are missing the point. The *media* and its distribution is the commodity, not the content. The content is still WotC's, they just weren't in total control of the distribution. In the early 3.x days, pirates had a better pdf than you could legally obtain because it was OCRed and fully indexed. The fact that their pdf was better was what drew people to download illegal copies. Until recently, WotC's current PDFs were just as good, but at a higher price point. It doesn't matter whether the distribution was legit or not - consumers chose them because they were better and/or cheaper. WotC *should* have seen it for what it was and produced pdfs that were either more value-added, or were at a lower price point.
I had no problem shelling out hundreds at a time for bunches of $5 pdfs at RPGNow or Paizo. I *did* have a problem paying for full-priced 3.5 pdfs. The go/no-go price point for me is around $15 (I think From Stone to Steel was the most expensive pdf I bought).
Regarding lost sales, see my response (above) to CardinalXimenes.
Now, I am biased regarding WotC's decision. If it were only 4e products, I wouldn't care since I don't play 4e. However, they've removed their entire back catalog. Back catalog sales are where your long-term profit is. Do a quick google search and you'll see that companies selling online
music and movies
make a ton of money off of their back catalog.
