No Dice <Nerd Rage>

[Mark CMG]

Any of the above could make the sale of small numbers of pdf's unprofitable.

The costs you claim would exist are negligible and the taxes would be a percentage of the revenue.

 

[mudbunny]

The costs you claim would exist are negligible and the taxes would be a percentage of the revenue.

And the revenue that these pdfs might bring in could be small enough that the costs would no longer be negligible.

 

[Vyvyan Basterd]

The costs you claim would exist are negligible and the taxes would be a percentage of the revenue.

For a small publisher this would be an easy decision. For a company like WotC, the costs of Sarbanes-Oxley compliance on the related accounting could outweigh the value of selling the pdfs. Once you report to a publicly-owned company the costs (and opportunity costs as pointed out by Umbran) grow incrementally.

 

[Mark CMG]

And the revenue that these pdfs might bring in could be small enough that the costs would no longer be negligible.

Rather, the costs would be negligible no matter what revenue they bring in. Judging by the status of WotC on RPGNow and affiliates while they had older edition materials up but before they had 4E materials available, the revenue stream was significant. Now if the argument is that WotC doesn't wish to support older editions, i.e. answer questions through customer service (even if they are not putting out new material in support of older editions), then that's another kettle of fish, but the department is in place and I doubt there'd be much more work generated for them. As to the accounting, that's mostly done on the distributor side, so little in house need be handled. Again, the costs would obviously be negligible.

For a small publisher this would be an easy decision. For a company like WotC, the costs of Sarbanes-Oxley compliance on the related accounting could outweigh the value of selling the pdfs. Once you report to a publicly-owned company the costs (and opportunity costs as pointed out by Umbran) grow incrementally.

Thsi might be applicable if they were starting their company up from scratch but these are practices already in place and the additional revenue stream would not cause huge changes or adjustments to need to be made.

 

[doctorhook]

The opportunity cost may well be the biggest issue here. Any time an employee is spending on supporting those pdfs must be compared to what else that employee might be doing, and what value it might have for the company.

Even if the pdfs were profitable, if the other stuff they might be doing with that same manpower is more profitable, the pdfs lose.

Definitely. To expand what you're saying a bit, we can also infer that the benefit of selling PDFs was less than the cost of continuing to do it, because if it wasn't, WotC would be selling PDFs right now, right? In other words, not only did WotC realise that it's more profitable to do something other than sell PDFs, it also realised that PDFs weren't profitable enough to make it worthwhile to do both -- even if they expanded their production in order to continue selling PDFs, it would still be better to have the new resources working on something else.

 

[Mark CMG]

Of course, if the argument really is that the revenue is not sufficient and that the accounting costs are somehow prohibitive, but they are truly interested in recovering goodwill of lapsed fans, then an alternative would be to just make them free downloads with the other previous edition materials available here -

Previous Edition Dungeons & Dragons Downloads

Problem solved for everyone.

 

[IronWolf]

Thsi might be applicable if they were starting their company up from scratch but these are practices already in place and the additional revenue stream would not cause huge changes or adjustments to need to be made.

Yeah, I agree. WotC already has accountants, folks to monitor sales reports, etc on staff. From the aspect of accounting land it is another product number that will be listed in with reports of sales figures and such. I know when we add other products at my place of employment it primarily consists of accounting and IT adding in some new part numbers and making sure the new parts show up in the reports which are already being looked at my marketing and sales. It isn't adding significant overhead in this area.

Now I am not disagreeing that there is a cost to producing PDFs, just some of the things being tossed out there as an added cost are already handled simply by selling hardback books and such at a bookseller.

 

[IronWolf]

7) Time to monitor pirating sites to see if they are offering your PDF scans
8) Time to enforce copyright policy on those sites (if you do not enforce on products you are selling, you can damage your intellectual property rights).

Don't they already need to be doing this to find scanned copies of hardback books?

 

[Maggan]

I do not think PDF allow for the highest level of graphics actually.

I know companies that have printed high quality rpg books from PDF:s, so I think it is feasible. Maybe not for IKEA catalog printings, but for RPG books it's plenty good enough.

At least that's my initial response. I'll check in with the layout guys tomorrow and see what they have to add to the discussion.

/M

 

[Chrono22]

Here are costs associated with selling PDFs:

1) Time to upload PDFs at Seller Site
2) Time to monitor sales at Seller Site
3) Time to Account for sales in accounting
4) Time to answer customer service questions for listed items
5) Time to post some sort of marketing within the general WOTC marketing scheme for all items sold
6) Time to document the project in internal company reports for internal reporting and cost accounting measures
7) Time to monitor pirating sites to see if they are offering your PDF scans
8) Time to enforce copyright policy on those sites (if you do not enforce on products you are selling, you can damage your intellectual property rights).
9) Time to report copyright results in internal company reports
10) Time to scan additional content (they had not scanned all of it)
11) Time to pay for the portion of overhead costs associated with all of the above tasks

Gee, wiz, that sure sounds like alot! But not really. This sounds like a tiny fraction of the effort it takes to produce even one physical copy of a book.
Umbran's suggestion about limited manpower is good, except that this isn't a case where WotC could do only one or the other.
The profit margin of PDF sales is higher than dead-tree copies. Period. I have to assume their removal wasn't about the profit they might or might not have provided, it was some convoluted and stupid market strategy to prop DDI and the newest edition.

How about C, you've never run a company anywhere near the size of WOTC and do not fully know the costs associated with undertaking such an endeavor and have under-counted the costs of it and think it's just a lot easier than it really is (like most things in business).

Um, it has what, a couple dozen salaried employees? At best? I may not run a business of such a size, but I am employed within one that dwarfs it. And yes, it's not a publishing company, but I think just waving your hands around and saying "it's a business!" is a copout. It's not like WotC is some mega-corp with inscrutable goals. It's a small publishing company.

Old players who won't spend a dime on WOTC products because they don't offer PDFs of older-edition games are not going to draw new players in to new products. They might draw a few (not many) new players into old products, but as I said above those are not particularly profitable. A new customer drawn in through an email about a new product is likely to be much more profitable.

Why stop selling old products in the first place? Why take the stance that old sales necessarily negatively effect new ones? Is there any evidence that Fallout 2 is stopping people from buying Fallout 3?
The front end costs of selling older editions material have already been payed. The books have been produced, the PDFs have been made. And even with 4th edition, the books are printer proofs before they are hard copies.
I'll point out, too, I was an avid MtG player before WotC's actions, and now I don't buy them.

I'm not going to buy that simply because it's a business, WotC's decisions can't be questioned or contradicted, nor do I believe that doing so requires a PHD and 5 years of industry experience. That's a double standard that doesn't apply to incensed customers, apparently.
So, I'll just reiterate: I don't like what WotC has done and will not buy their product until their policies change.