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<blockquote data-quote="Greg Benage" data-source="post: 8873495" data-attributes="member: 93631"><p>I share that concern, but let's probe it a bit. That particular Kickstarter campaign brought in about $1.25 million with 13,000+ backers. Kickstarter takes 5% (someone correct me if that's wrong). [USER=1]@Morrus[/USER] suggests we could double that to estimate total sales, and let's assume those additional sales are all print products through traditional distribution channels at a 60% discount, just to make this scenario as unfavorable for the publisher as we can.</p><p></p><p>So total (net) sales are 1.25*.95 + 1.25*.4 = $1,687,500, and we'll just assume that's all in one year. That's $937,500 above the royalty threshold. Let's further assume that the royalty isn't even graduated--it's a flat 10% of net sales above the threshold, so that's a debit of $93,750 on the campaign. If you're the publisher, would you still do the campaign?</p><p></p><p>If we assume Ghostfire wants a 60% gross margin (that's what FFG wanted back in the dark times pre-Kickstarter), that means their budget to produce the book and add-ons for the campaign is about $675,000. Can you find room in that budget for a $93,750 royalty? I know production standards and associated costs are much higher than they were when I was in the game, but it seems like you definitely <em>can</em>? You'd rather keep the money, obviously, but it doesn't seem like that transforms a viable campaign into a non-viable one.</p><p></p><p>I don't think Wizards is going to go with a flat 10% royalty on net sales above $750,000. But even if they did, I think there'd be reason to expect that campaigns such as <em>Dungeons of Drakkenheim</em> would still happen.</p><p></p><p>ETA: corrected a math error.</p></blockquote><p></p>
[QUOTE="Greg Benage, post: 8873495, member: 93631"] I share that concern, but let's probe it a bit. That particular Kickstarter campaign brought in about $1.25 million with 13,000+ backers. Kickstarter takes 5% (someone correct me if that's wrong). [USER=1]@Morrus[/USER] suggests we could double that to estimate total sales, and let's assume those additional sales are all print products through traditional distribution channels at a 60% discount, just to make this scenario as unfavorable for the publisher as we can. So total (net) sales are 1.25*.95 + 1.25*.4 = $1,687,500, and we'll just assume that's all in one year. That's $937,500 above the royalty threshold. Let's further assume that the royalty isn't even graduated--it's a flat 10% of net sales above the threshold, so that's a debit of $93,750 on the campaign. If you're the publisher, would you still do the campaign? If we assume Ghostfire wants a 60% gross margin (that's what FFG wanted back in the dark times pre-Kickstarter), that means their budget to produce the book and add-ons for the campaign is about $675,000. Can you find room in that budget for a $93,750 royalty? I know production standards and associated costs are much higher than they were when I was in the game, but it seems like you definitely [I]can[/I]? You'd rather keep the money, obviously, but it doesn't seem like that transforms a viable campaign into a non-viable one. I don't think Wizards is going to go with a flat 10% royalty on net sales above $750,000. But even if they did, I think there'd be reason to expect that campaigns such as [I]Dungeons of Drakkenheim[/I] would still happen. ETA: corrected a math error. [/QUOTE]
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