Ken Hite Re: The RPG Industry

[goodlookinguratha]

That's just flat assertion; it doesn't even reach the value of ancedote. As I said above, my experience was that even for groups that had pirated material, it never came near the table; there were hardcopies bought of books that were ever used in the game.

But for honest information, we need more than assertion, more then ancedote; we need unbiased statistical information. I suspect that Steve "Conan" Trustrum probably has the best selection of data of anyone speaking up on the web.



The RPG industry is dealing with a different set of issues than the music industry is; there's a lot of difference between a PDF and a book and a social aspect that music doesn't have. Ancedotal evidence like indie labels folding (like businesses do) and people going bankrupt (like people do) strikes me as exceptionally useless for showing that piracy is hurting the music industry. Certainly Janis Ian (her article for people downloading her music) disagreed broadly.

Seriously. Especially ironic considering he has a COMPUTER GAME in his signature (which are NOTORIOUS for piracy)

 

[Dannyalcatraz]

in an alternate universe where their audience didn't pirate the album, how many people would have bought the album?

Even converting just 1/3 of those pirated downloads into sales would have gotten the album to breakeven. Converting just 1/6 would have been bad, but not a bankruptcy-causing event.

Remember, I'm not talking about just one label or one band, I'm talking about multiples. At some point, the accumulation of "anecdotal" evidence of piracy causing bankruptcies becomes real evidence- and I'm at that point. In my personal experience, just under 10 labels and a few dozen bands. In the experience of my colleagues, many, many more.

Furthermore, in the laws of most countries with strong copyright protection, the level of proof required isn't "prove how many people would have bought the pirated material" but "prove how many people aquired the material by piracy."

"predation of your profits"? That's counting non-existent chickens. "people stealing the books instead of buying them" would be more accurate.

You seem to be making a distinction that makes no difference...predation of profits IS (in this case) people stealing the goods, not "non-existent chickens."

Compensation to a producer of goods derived from the loss of sales & profits due to theft is a given in most moral/ethical systems, recognized in economics and codified into law. Since those consuming pirated goods are treating them as economic positive goods by expending time, incurring storage & opportunity costs etc., they owe the creator of those goods at least a nominal rental fee if not the full purchase price.

Again, from Janis Ian's article, "in 37 years as a recording artist, I've created 25+ albums for major labels, and I've never once received a royalty check that didn't show I owed them money." There's an article from someone in the thick of things who finds piracy a boon to the small music artist.

This from someone who negotiates entertaiment contracts (me): Janice Ian signed some lousy contracts and didn't sell enough albums for the companies to recoup their investment in studio time, paying artists for cover art, manufacture, distribution, advertising and "shrinkage" (aka defective product, breakage & theft). Folk has historically been a genre plagued with poor sales. Artists who can't crack 100,000 sales on a release really don't belong on a major label- they will never recoup the company's investment. On a small label (whether indie or wholly-owned subsidiary), the smaller scale of operations will actually lead to albums becoming profitable with smaller sales.

Besides, its not piracy that is the boon to the small music artist- piracy AT BEST gets the artist word of mouth advertising...at the same time as the pirate site gets the same word of mouth advertising.

The REAL boon to the small music artist its the possibility of electronic distribution of their music which reduces costs of distribution significantly and enables the artist to reap a larger share of the sale price of their product as royalties...and each pirated copy still cuts into that.

 

[prosfilaes]

At some point, the accumulation of "anecdotal" evidence of piracy causing bankruptcies becomes real evidence

Not really. Most people doing a study like this without hard numbers are likely to see the results they want. Even if you do have statistics, you're claiming causation, when the best you could do is correlation.

Furthermore, in the laws of most countries with strong copyright protection, the level of proof required isn't "prove how many people would have bought the pirated material" but "prove how many people aquired the material by piracy."

What? The level of proof required for what? The fact is, to prove that piracy forced a company into bancrupcy, you have to show that without the piracy, they wouldn't have been forced into bancrupcy. That's the logical conclusion.

You seem to be making a distinction that makes no difference...predation of profits IS (in this case) people stealing the goods, not "non-existent chickens."

Predation of profits is if you keep your profits as gold and a predator like a xorn eats them. No one is acting like a predator towards the profits; none of these people have any intent (like a predator would) towards the profits.

Besides, its not piracy that is the boon to the small music artist- piracy AT BEST gets the artist word of mouth advertising...at the same time as the pirate site gets the same word of mouth advertising.

Janis Ian said that at the height of Napster, she was getting $2700 a year from people who came to her site and bought a CD and admitted that they first heard of her through Napster.

On another point

the majors at least have a lot of money with which to buy time to possibly find [...] a medium less vulnerable to piracy.

That making a medium much less vulnerable to piracy is impossible should be obvious. Data can always be extracted via analog means in the worst case. The way the computer program industry has gone back and forth between massive lock down and minimal technical restrictions show good evidence that users don't like having to jump through hoops just to play a game or listen to music.

 

[jgbrowning]

This from someone who negotiates entertaiment contracts (me): Janice Ian signed some lousy contracts and didn't sell enough albums for the companies to recoup their investment in studio time, paying artists for cover art, manufacture, distribution, advertising and "shrinkage" (aka defective product, breakage & theft). Folk has historically been a genre plagued with poor sales. Artists who can't crack 100,000 sales on a release really don't belong on a major label- they will never recoup the company's investment. On a small label (whether indie or wholly-owned subsidiary), the smaller scale of operations will actually lead to albums becoming profitable with smaller sales.

What would you consider a good per unit sold return for a recording artist? I was under the perception that artists not on a major label made the vast majority of their profit via playing live (concerts) and that this was even true for most artists on major labels as well.

What I'm saying obliquely is this: if a person is funding the production of their own own material they're starting a small business which is much more likely to fail than succeed in general, regardless of what type of business they're in and regardless of copyright infringment of their exclusive right of distribution of said material.

I'm not sure the causility of copyright infringment leading to lost profit is necessarily true if the artist actually makes the vast majority of their profit off live performances.

joe b.

 

[Dannyalcatraz]

Even if you do have statistics, you're claiming causation, when the best you could do is correlation.

The only measurable difference between the sales of prior releases and the final releases was in illegal downloads. That is, the bands & in question had solid sales-trend data from past releases that was used as a predictor of the potential sales of future releases. Those releases had production runs that would translate into about 33% of the total sales of the most recent prior release- sales would pay for subsequent production runs which would then pay for band royalties. Instead of selling that initial production run, the band's sales dropped under 1000 units (less than they sold before signing with the label) while the pirates moved 10,000+ (as much as the most recent 2 previous releases by the band).

Numbers like that would be enough to get you a judgement for damages in any US court for any industry. However, since the pirates in question were Russians, we couldn't touch them.

And I can guarantee you that every band that has seen a 90% drop in sales between 2 consecutive releases will see a corresponding proportionate increase in illegal downloads. (Bands that simply lose popularity see gradual declines of 30% MAX.)

[/QUOTE]Predation of profits is if you keep your profits as gold and a predator like a xorn eats them. No one is acting like a predator towards the profits; none of these people have any intent (like a predator would) towards the profits.[/QUOTE]



The food of any commercial company is profits, which are the fruit of sales of products or services. You eat my sales, you eat my profits.

Janis Ian said that at the height of Napster, she was getting $2700 a year from people who came to her site and bought a CD and admitted that they first heard of her through Napster.

NOW who is using anecdotal evidence? (And evidence that raises so many questions at that!)

Did they say they heard her at Napster (listened to a sample) and contacted her or did they download her stuff at Napster and feel they should buy her stuff? Were they honest? What did that $2700/year represent- did they buy everything they downloaded or did they download all of her albums and buy only one?

How much would she have made if Napster had been set up like I-Tunes?

Janice Ian has the advantage of being an established artist, albeit one who doesn't move huge quantities of records. She has a long history as a recording artist.

The guys who were trying to break into the biz had no such advantage and wound up selling instruments to pay their debts.

That making a medium much less vulnerable to piracy is impossible should be obvious. Data can always be extracted via analog means in the worst case.

Analog piracy required things like DAT-dubbing decks, etc. It takes time. It takes space. It required physical objects that needed to be transferred from pirate to purchaser.

Once media become digitized, piracy is only limited by bandwidth and download speeds.

There ARE ways to make digital media less vulnerable. Even in the old days, I remember encountering software that could be copied a few times, then became unusable. The programs were designed to erase or rewrite portions of copies beyond a certain point, and rewrite portions of the original if more than N copies were made.

 

[prosfilaes]

Did they say they heard her at Napster (listened to a sample) and contacted her or did they download her stuff at Napster and feel they should buy her stuff? Were they honest? What did that $2700/year represent- did they buy everything they downloaded or did they download all of her albums and buy only one?

Did you read the article? What difference does it make what they downloaded; what matters is that she got $2700 a year that she wouldn't have got without Napster.

How much would she have made if Napster had been set up like I-Tunes?

Less, probably. The advantage of Napster was that the artist comes up on a random search and they got to listen to full songs.

Analog piracy required things like DAT-dubbing decks, etc. It takes time. It takes space. It required physical objects that needed to be transferred from pirate to purchaser.

Once media become digitized, piracy is only limited by bandwidth and download speeds.

The point is, if you can listen to a song, you can turn a song into a digital format.

There ARE ways to make digital media less vulnerable. Even in the old days, I remember encountering software that could be copied a few times, then became unusable. The programs were designed to erase or rewrite portions of copies beyond a certain point, and rewrite portions of the original if more than N copies were made.

That's a lot harder to do with modern systems that don't let programs twiddle the hardware anymore, and it's trivial to break. And the point is if you annoy users too much, they'll download hacks to break your encryption that stops them from playing the music on their Ipod or in their car, or stop buying from you all together. That's what the history of computer programs tell us.

 

[Steel_Wind]

That's just flat assertion; it doesn't even reach the value of ancedote.

Would the massive decline in the overall price level for collectible RPG material from prior years be "flat assertion" too?

Books used at the table do tend be purchased; it's the books that aren't used at the table that get pirated all to hell.

 

[Dannyalcatraz]

What difference does it make what they downloaded; what matters is that she got $2700 a year that she wouldn't have got without Napster.

Assume, arguendo, she's selling her CDs for $10 each.

In one case, 270 people liked what they heard/downloaded on Napster and bought 1 CD each, and she makes $2700 in sales. She hopes they like her enough to come back and buy more of her stuff.

In another case, 270 people liked what they heard/downloaded on Napster, downloaded her 25 album catalog, and for whatever reason bought their favorite one from her website. She makes $2700 in sales at her website, with $64,800 of her music in the hands of the downloaders. They have no reason (besides the law and their sense of ethics) to pay her to acquire the other 24 albums- they already posess them. One can hope that they'll listen to the law and/or have a well developed sense of ethics and will buy legitimate copies of her work...but what are the odds?

Just because you don't know you've been ripped off doesn't mean you haven't been ripped off.

Less, probably. The advantage of Napster was that the artist comes up on a random search and they got to listen to full songs.

The advantage I-Tunes gives you is that if someone downloads a complete track or disc, it gets paid for. You get your royalty.

I don't know that hearing the whole song is a significant advantage. In PURELY anecdotal evidence, I'll cite my own shopping pattern: I don't need to listen to a whole song or even whole album to decide if its worth my money to purchase it. A sample of 15-30 seconds is enough to give me a good idea if a song is generally something I'd want to listen to.

I cannot speak to the importance of a "random search," though I know I tend to browse a lot in music stores, and find all kinds of stuff I like.

That's a lot harder to do with modern systems that don't let programs twiddle the hardware anymore, and it's trivial to break. And the point is if you annoy users too much, they'll download hacks to break your encryption that stops them from playing the music on their Ipod or in their car, or stop buying from you all together. That's what the history of computer programs tell us.

I don't know that an "autoerase" code is really twiddling the hardware. And really, its not going to "annoy" the user who follows the rules, just like exploding dye-pack security tags only affect those who steal the merchandise, not the legitimate consumers.

As for the rest of it, I can't help people's ethical failings.

 

[Hussar]

Heh, ask Sony about DRM and see where it gets you. Several million recalled CD's because their DRM was so badly written (and pirated to boot) that it was ten times worse than most viruses?

But, that's another issue.

The point is, the value of royalties for the majority of artists is a fraction of what they make from concerts and the like. Labels make money from albums, not bands.

 

[Dannyalcatraz]

Heh, ask Sony about DRM and see where it gets you.

It was poorly written crap. That a plan was poorly executed does not invalidate the soundness of the plan.

The point is, the value of royalties for the majority of artists is a fraction of what they make from concerts and the like. Labels make money from albums, not bands.

I never said otherwise, but the various revenue streams go hand in hand.

Most bands get about 3x the share of the profits from tours as compared to royalties, and even more from merchandising. But if your album doesn't sell, you don't get to headline the major tours, and nobody shells out money to the T-shirt company to make shirts with your band logo on them (unless its you). Bands like KISS and NKOTB were only marketing powerhouses because their albums went platinum. If, as we say, your album "goes wood," your annual income stream from marketing will be less than the price of the instruments you own.

Of course, there are also opportunities like being a studio or house musician, small gigs, soundtrack work and so forth.

But this raises the crucial difference between the musician and the game designer: unlike the musician, the RPG designer has only one type of revenue stream- sales of the RPG and its supplements- and each sale lost to piracy hurts. He can't just walk into a game store and say "Hey! I've got this cool game, and I'll let you all play- today only!- for $3" and expect to make any money. There is no viable performance model for RPGs; no merchandising without the underlying game being successful.