RPG Now and Drive Through RPG merge

[EricNoah]

I've purchased from both in the past and have had fine experiences with both. I can't really see much of a downside to the move, and if it helps EN World so much the better.

 

[Mark CMG]

I've purchased from both in the past and have had fine experiences with both. I can't really see much of a downside to the move, and if it helps EN World so much the better.

Agreed. Mostly all good, but for the rate increase. It's unfortunate that while helping EN World it might end up hurting EN Worlders as many will find that a lot of their favorite publishers will need to raise prices. And let's not forget that many of the freelance community of artists and writers and others are EN Worlders, too. Ask any of them if they have ever been paid too much and what they can hope to expect when publishers are hit with a rate increase. The answer is obvious. People can support everyone by congratulating OBS on the merger but at the same time supporting publishers and consumers (which describes the bulk of EN Worlders) by asking OBS to rescind the rate increase.

(And, of course, many who produce both PDF and print products will have to increase the prices of both to absorb this overhead hike.)

 

[Odhanan]

My competition as a PDF publisher (as well as other PDF publishers) was other PDF publishers. Blood and Fists competes against Thrilling Tales, not DTRPG.

That's your side of the story, Chuck, and that's all fine and good, but there are other aspects involved in this. If there is only one major distributor, then the distribution (and not the production) is in effect a monopoly. OneBookShelf.com would have a control of the market supply in clear (which is the actual definition of a monopoly in economical terms).

From there, nothing would stop OBS to adjust the average price of PDFs (i.e. the cut they ask on the price of the PDF from the publisher) - lower or higher, since they have no competition in terms of distribution. They could also get much tougher on quality standards.

I'm not saying these are good or bad things. Just that this is a hard fact of monopoly situations resulting from successive mergers. Now, maybe that won't affect the price of the PDF for the costumer (on the short term) but will affect the pay of free lancers and designers who work on a project - and I just can't see this as fair to them.

Now, indeed, whether it's fair or not doesn't change the dynamics of economy and the fact that mergers are a natural part of the rationalization of a market. I just think that's naive or misguiding to present this as an utterly beneficial event for everyone involved in the hobby (customers, designers, publishers, distributor etc).

 

[BryonD]

If there is only one major distributor, then the distribution (and not the production) is in effect a monopoly.

No it isn't.

A monopoly would require the lack of the opportunity for new competitors to enter the market place.
If the merger results in a highly signficant change in the profitability of the storefront then that will immediately create demand and interest in new competition.
If, on the other hand, it results in modest increases in profits then it will simply show to be a good business move within what the market will support.
Another option is that even minor price increases are beyond what the market (either the publisher side or consumer side) will support. In which case this will prove to be a bad move.
I'll bet a small amount on #2, but I really don't have a way to make a good informaed selection there.

It is certainly true that, in the short term, two (or really three) independent outlets are the most favorable for consumer prices. But that does not remotely lead to a position that one outlet merits a monopoly. Not by any distortion of the term. To claim otherwise is a misunderstanding of basic economics.

It is also not automatically true that keeping prices at a minimum for the consumer in the short term is in the best interest of the consumer in the long term.

 

[Odhanan]

No it isn't.

A monopoly would require the lack of the opportunity for new competitors to enter the market place.
If the merger results in a highly significant change in the profitability of the storefront then that will immediately create demand and interest in new competition.

I'm no economist, Bryon.
It is a monopoly to me so long as this new competition doesn't emerge on the market. If you're point is to say that in effect competitors can still arise and challenge the quasi-monopoly of the major distributor, sure! I agree with you.

If, on the other hand, it results in modest increases in profits then it will simply show to be a good business move within what the market will support.
Another option is that even minor price increases are beyond what the market (either the publisher side or consumer side) will support. In which case this will prove to be a bad move.
I'll bet a small amount on #2, but I really don't have a way to make a good informed selection there.

I don't have enough information to judge whether the merger is a good or bad strategic move. I assume it's a good move for the people involved in the merger, obviously, or that wouldn't make sense.

It is certainly true that, in the short term, two (or really three) independent outlets are the most favorable for consumer prices. But that does not remotely lead to a position that one outlet merits a monopoly. Not by any distortion of the term. To claim otherwise is a misunderstanding of basic economics.

I think we are on a misunderstanding here. All I'm saying is that in effect OneBookShelf.com becomes the major distributor of gaming PDFs. That in effect they can thus modify the average price of gaming PDFs or affect the revenues of the publisher, since there is less to no opportunity to distribute the product otherwise.

It is also not automatically true that keeping prices at a minimum for the consumer in the short term is in the best interest of the consumer in the long term.

How? Please explain to me like I'm a ten years old.

 

[Vocenoctum]

Unlike many of my peers, I do not consider the PDF business to be separate from the game industry as a whole -- and in the print side of this industry, publishers only make 35-40% of the retail price of a product. The current increase in fees from the new OneBookShelf company would have publishers making 65-70% of the retail price. The reason that some vocal publishers are complaining is because they are accustomed to making 75%.

My point is this: 65-70% is still nearly double what we make on print releases. This isn't going to be a hardship.

Well, what is the average retail price of a print release versus a PDF release of the same pagecount? If I do X hours of work, and produce a HC for $35 and get $14 per copy, or I can produce a PDF with the same X hours of work, which sells for $15/20 and I get $10/13 from it, that doesn't mean the 65% was more than the 40%.

OTOH, if you can eat the 10% without complaint, then why didn't you lower your rate before? Profit is profit, and that money comes from somewhere.

From what I understand, plenty of folks were already in a 35% bracket, so for them the changeover makes little difference except to potentially give them a larger audience if they were not on all 3 sites. For others that have been furthering the market for a while and produce lots of sales, they're getting hit with it.

My main problem with it, is the rate increase seems to penalize the exact folks it shouldn't. High volume long standing publishers that probably bring lots of business that helps sell other PDFs SHOULD get a reduced rate. Setting some arbitrary level system for reduced percentage by total sales would be my opinion.

The flip side of it being that the high volume guys are most likely the ones that draw a regular income, compared to lower volume guys that do it for extra money or fun. For them, you're saying "listen, we know you do a great job, so you're going to take a pay cut".

Also, as has been mentioned, usualy during a merger you save money by cutting redundant staff. The reasons for the % all seem like things the Store should front, not the publishers. The publishers are paying for something down the line, and they're paying directly for the stores marketing, while still being required to do their own marketing.

 

[FraserRonald]

Sword's Edge Publishing will be raising its prices on all OneBookStore sites (RPG Now, DTRPG, ENGS, and RPGNet) to compensate for the increased commissions. This means products will be cheaper for purchase at Steve Jackson Games' e23. We really have no choice but to swallow the increase, but I want to help grow alternative sites to OBS in order to ensure that there are alternatives for SEP (and others) in the event of another increase. SEP will be surrendering a portion of our profits (we won't be exclusive with OBS) in order to try to drive sales to alternate sites.

SEP is very small tadpole in the pool, but if the big fish follow a similar approach, we might see some healthy competition in the PDF market, which will benefit the publishers (lower commissions) and the consumer (lower prices).

 

[Kesh]

Everyone keeps talking about how the consumers are going to be hurt by this.

Hi. I'm Kesh, and I'm a PDF consumer. Not a big one, mind you, but a consumer nonetheless.

Personally, I think this is a good move. Even if publishers bump their prices up 10%, I'm not really going to be hurt. If a PDF I would buy for $15 is now $16.50, it's not that big a deal to me. It might delay my purchase of a $1.50 PDF, but those tend to be impulse purchases to fill out an order anyway.

Having everything on one site is good for me. Not only can I make sure purchases count towards EN World's referrals, I can now get things from multiple game lines that I normally had to go to multiple sites for. Plus, I just need to keep one Wish List organized now, and one search will get me a lot more results than before.

There's still some things I would go to Paizo or e23 for, though, but overall this merger works for me.

 

[Vigilance]

That's your side of the story, Chuck, and that's all fine and good, but there are other aspects involved in this. If there is only one major distributor, then the distribution (and not the production) is in effect a monopoly. OneBookShelf.com would have a control of the market supply in clear (which is the actual definition of a monopoly in economical terms).

Well, I look at it differently, because there was a monopoly when I started writing PDFs, when RPGNow was *literally* the only game in town.

In the 4-5 years since then, we've gone from that one vendor, to 5 (RPGNow, e23, Paizo, DTRPG and ENGS) and now back to 3 (OBS, e23 and Paizo).

That isn't my definition of monopoly, especially not in the broad view.

Chuck

 

[Odhanan]

You definitely got a point there, Chuck.

The question lies in the internet traffic these websites represent. Will the traffic generated by OBS compare to e23 or Paizo? What kind of slice of the market will OBS represent, exactly? I don't have this information. My previous posts assume this traffic will be way superior to e23 and Paizo obviously. Time can prove me wrong.