Saturday, April 11, 2009

Thoughts on the Greg Leeds interview and piracy.

Greg Leeds, President of Wizards of the Coast, recently granted an interview to EnWorld about the cessation of PDF versions of their products.  If you haven’t read it already, I highly recommend you take the time to read it before continuing on.

I am sympathetic to Mr. Leeds concerns about piracy.  After all, a lot of work goes into these books, and Wizards of the Coast has a right to make a profit on their work.  Unfortunately, I believe that Wizards of the Coast is taking the absolute wrong path by removing PDF’s from the market place.

In fact, I would argue that Wizards of the Coast’s PDF strategy was flawed from the beginning, which is why piracy of their books became so rampant.  The history lesson that the recording industry has taught us is that when the people want something and they cannot obtain it for a reasonable price, they will turn to illegal methods to acquire it.

Wizards of the Coast’s PDF products were extremely overpriced, both on an absolute scale and when compared to the rest of the marketplace.  They charged full cover price for their PDF products, which meant that the PDF’s could not even compete with the dead tree versions of their products available on!  Considering that the PDF versions of their product do not incur printing or shipping costs, this seems like highway robbery.

A more reasonable pricing structure is already being used by many of their competitors in the marketplace.  New releases on PDF cost about $10 less than their dead tree versions.   This price is maintained for six months or so, then dropped by about $5.  Eventually the price settles anywhere between $9 to $15 dollars for older material.

This pricing structure helps them recoup costs in the beginning by selling the PDF at a higher price point while the book is new and demand is high.  Dropping the price over time encourages purchases when demand is lower, an incurs very little additional cost to Wizards of the Coast.

Of course it should not be surprising that Wizards of the Coast did not come up with a reasonable price structure, since they seemed to be reluctant to be in the PDF market place in the first place.  Wizards did very little to promote sales of their PDF products.  They did not promote the PDF versions of their product on their website, which would seem a logical venue.  Another tactic would be to provide a one time code with the dead tree version of there books which could be used for a $5 discount on purchase of the PDF versions.  The opportunities to cross-promote the PDF versions of their product seem endless.  The fact that they did none of them shows where their priorities were.

As I said earlier, when people cannot get what they want at a reasonable price through legal channels they will turn to illegal methods like piracy.  The inverse is also true.  While some people will always engage in piracy, many will turn against it when offered a reasonable alternative.  iTunes and the MP3 Store have proven this in the music industry.  Wizards of the Coast could have turned around their legal PDF sales as well.   Price restructuring, ease of access, and working with their partners to improve distribution channels would have been required.  It would have been hard work, but the payoff would be a robust PDF business.

Instead they chose the easy route.  They have declared the business “too hard” and shut down all legal options for their customers.  I fear that this choice will cost them dearly.  Their customers now have no option except to turn to piracy for digital copies of their book… and trust me, they will.


Todd said...

You hit the nail on the head! Scanned PDF's of all manner of game books have been commonly available for many years now, and will just make a quick comeback.