Yeah, there are a few interesting points to be made here. First there is NO cost of producing PDFs.
Except, of course, you have to pay someone to remove the publisher-specific details, the indexing you mention below, not to mention run the server.
All modern printing houses print from PDF. At worst you would want to add some indexing and whatnot. It could hardly cost a couple grand to do this work (I've actually done a couple of these projects, its not expensive).
It's a far cry from zero.
There is SOME minor cost of sales, you have to run the online sales system, so its not perfectly free, but when you consider that the markup on books is probably 50% (at least) and the cost to print is not low either its quite easy to believe that the profit on a PDF is equivalent or higher than on a printed copy.
Profit per PDF, but that doesn't mean the total profit is possible to be higher.
[qupte]Cannibalism of print sales by PDFs IS a legitimate concern, but given the existence of PDFs regardless its probably not that big a deal.[/quote]
That's guesswork. They may have a different view of the subject. Including research that speculation based on what would be nice cannot compete with.
In any case WotC can't sit around in the situation they are in now.
Profitable?
They obviously desire a lower price point for their product as the Essentials line amply proves. Beyond that the ultimate cheap price point is PDFs (or similar) on an ebook reader.
I don't deny they want to offer a lower entry point into the game. But PDFs aren't the way to do so.
Dead tree format is well, DEAD. That business model will linger on for a few more years, but they have to figure something out, and training their customer base to accept and want digital products is the most sensible course.
This is utter nonsense. PDFs are only convenient for a small subset of their customer base. For others, it is terribly inconvenient. Hard Copy has a few advantages, including the ability to display it, the abilty to sell it, and the ability to convince brick and mortar shops to -DEMONSTRATE- it.
Yes, you did forget that aspect, where the retailer actually is encouraged to sell your product for you. Where customers can pick it up and actually look at it.
NEVER underestimate the salability of a physical product you can hold. When e-readers, kindles, and all that sort of things start costing less than 50 dollars, then and only then will you see them being a viable competitor for hard copy books for anything other than a -very- small minority of the consumer base.
Not to mention, what is the market saturation of these e-readers? How many of their potential customers actually have them? Compare that to the number of customers who have eyes and hands.
Basically the whole problem is you have a big old-school company that just doesn't get it. At best they're hoping to hang on with the status quo until the bitter end.
Your doom and gloom is hardly accurate. It's wishful thinking disguised as futurism. I can hold a book. I can't hold a PDF. And your retailers will help you establish a customer base with a physical book.
Its hard to say its stupid, but they are basing their business on a dying business model. Sooner or later (and probably fairly sooner) they'll HAVE to transition.
Brick and Mortar gaming stores are hardly a dying model, the business is having a resurgence due to the increase in salability of other games which can't be sold online.
Has any roleplayer started roleplaying by seeing a PDF being offered on sale? Or has every single new customer of roleplaying products been enticed to do so by PLAYING them.
How does a PDF overcome that barrier?
An ALL PDF roleplaying industry is a dead industry. Because NO ONE is bringing in new customers.
EDIT:
Not to mention, the target demographic for Dungeons and Dragons are younger than the kindle-carrying set. You're thinking it's convenient for a 26 year old, they're trying to sell to people literally half your age. The sort that are more tactile, and want experiences. The Timmies of the world are their target.
You don't sell PDFs to Timmy.