Merric's view: Thoughts on the Digital Initiative.

[Jürgen Hubert]

That sucks! And doesn't it assume that the DI will be successful?
Yes, it does. But, if you're a company, you have to assume that something will be successful. Especially if you've been researching the matter. I assure you... well, I assume... that Wizards' research on this matter has shown that it is most likely that (a) the DI will be successful, and (b) more people will subscribe to the DI than to the magazines.

This one I have my doubts about. Traditionally, PDF game supplements sell far less than their print counterparts - so why should a magazine be any different?

The main advantage of a digital magazine is that the "printing cost" is close to zero, and thus ratio of the profit when compared to the expenditures is much better...

 

[Jer]

This one I have my doubts about. Traditionally, PDF game supplements sell far less than their print counterparts - so why should a magazine be any different?

There are some things to take into consideration here, though. This will be the first offering by Wizards of "official" D&D product that is only purchasable on-line. There will be no print version of their DI stuff (except for collections, and there is no indication that these will collect everything). In fact, this is one of the few "good" reasons to stop producing the magazines and focus on the on-line DI stuff -- being able to claim to be the only source for periodic "official" updates at a price cheaper than buying supplements is a powerful marketing tool (something that Paizo used to great effect while they had the license for Dragon and Dungeon).

Another thing to take into account is that this doesn't look like its a "buy a supplement" model. This seems closer to a "membership" model, where you pay a fee to be a member to a website for premium content. The content probably won't be updated "once-a-month" as a magazine is, but probably more along the lines of the "daily" updates that the Wizards D&D website gets. And once you "subscribe" you get it all -- all of the stuff that was there before you subscribed, as well as everything that comes out while you're subscribed. If they have a reasonable subscription cost to the site, and if they can keep it going for a year or so, that's a lot of content -- a lot more than buying a PDF for the same cost as a hardcover (as the current Wizards pricing model stands). Plus, as a website, you can have different material than a magazine does -- online tools for managing a campaign or characters combined with even weekly updates and a reasonable price makes the DI package start to look attractive.

(As a disclaimer, I'm still not completely sold on the whole "DI" thing myself. I'm an old curmudgeon and I like my paper magazines, thank you very much. But I can see the potential advantages, and I can see the potential for this to be a big thing. We'll see if it works out in the end.)

The main advantage of a digital magazine is that the "printing cost" is close to zero, and thus ratio of the profit when compared to the expenditures is much better...

That's true. But there are other attractive elements of a digital magazine as well. For starters, you cut out two layers of middle-men who run the newsstand side of the operation -- distributors and newsstand vendors. By cutting them out of the operation you can cut the prices to the readers while still making more money per "copy" sold than you do in a magazine model. You also eliminate returns of unsold magazines as an issue. Also, you no longer have to deal with flaky fulfillment houses for subscribers or with problems with the US Postal Service, who seem to treat magazine delivery as optional in some parts of the country.

 

[Black_Swan]

I'm excited about the digital initiative and I'm glad to see a positive post about it.

Nice analysis MerricB.

 

[Arnwyn]

I doubt we'll see many DI adventures in print form,

This would be extremely unfortunate.

I'm certainly expecting and looking forward to a print compilation of the best DI adventures (and am interested in that print compilation much more than the compilation of best rules articles; though a compilation of the best 'fluff' items *cough*Demonomicon*cough* would definitely get a buy from me).

 

[Jürgen Hubert]

What's the price tag for this thing, anyway? Has there been any word from The Powers That Be?

Pyramid costs $20 for a one-year subscription. Since the DI seems to offer more content - perhaps twice the amount - $40 might not be unreasonable...

 

[MerricB]

What's the price tag for this thing, anyway? Has there been any word from The Powers That Be?

No idea yet.

Pyramid costs $20 for a one-year subscription. Since the DI seems to offer more content - perhaps twice the amount - $40 might not be unreasonable...

So hard to say. It's most likely going to be segmented - the DI covers a lot of areas (including other games). We may well see it marketed as "Dragon Online", "Dungeon Online", "Star Wars Online", "Magic Online*", "Dreamblade Online" and so forth. Well, Magic Online is already taken, but you get the idea.

Certainly, separating DM-only content from player-only content (esp. adventures) would make sense.

Cheers!

 

[Aeolius]

Where is all this magical software coming from? I hear a lot of talk about the possibility of character generators, map editors, campaign planners, etc, that Wizards will offer via their DI, that these are what will differentiate it from just being Dragon and Dungeon on the web. But Wizards have shown ZERO ability (or even interest) in the past to produce quality products for these purposes...

Macintosh compatibility is my primary concern, in this area. Without it, the DI is useless to me.

 

[MerricB]

Assuming WotC and Paizo were the only companies in the D&D 'zine industry (ie, assuming they're in the same industry and are the only firms)

Then Paizo would have about a 17% drop in quantity produced (magazines sold) as well as a drop in magazine price, but consumers would be happier.

A monopoly fixes its price to capture about 50% of its market (with the other 50% losing out). Each firm in a duopoly takes 33% (with the remaining 33% losing out). The more firms involved in the industry, the lower prices will be, and the more consumers there will be.

WotC, though, stands to hold 17% more of the industry without a competitor.

Just a note on your figures: If they're true, the actual loss to Paizo is 34% of their current sales. That's significant. A drop from 50% of the market to 33% of the market is a 34% drop on actual sales. That sort of revenue loss - which actually makes more than 34%, when you consider overhead - is something I don't think they could easily recover from.

Of course, what really complicates this is that we're talking about two overlapping populations. We have X people who would only subscribe to an online magazine, Y people who would only subscribe to a paper magazine, and some people Z that would do either. If Z is close to or greater than Y, and X is much greater than Y, then the DI makes a lot more sense from Wizards' point of view.

Another note to all: if the price of the DI is less than that of the magazines, it's a much better deal for anyone not in the US as we don't have to pay shipping costs!

It cost me about US$75 to get a year's subscription to Dragon, and I had to contend with really, really lousy shipping. I'd get the magazines two to three months after everyone else had them.

Cheers!

 

[Henry]

My only other concern would be how long it will take them to bring the first "virtual products" to the "virtual table." If it's six months, nine months, a year between Dragon's cessation and the DI's first offerings, this would be a bad timing move - striking while the iron is hot is a pretty important step in making sure this initiative is successful.

 

[Henry]

What's the price tag for this thing, anyway? Has there been any word from The Powers That Be?

Pyramid costs $20 for a one-year subscription. Since the DI seems to offer more content - perhaps twice the amount - $40 might not be unreasonable...

Could even be more than that. It costs about -- what? 80$ a year for a combined Dragon and Dungeon subscription currently? You could see a $60 yearly fee announced, which would still be $20 a year less than the print magazines, and therefore discounted from print. So, say, $10 a month if buying by the month, and $5.50 a month if buying for the year?