I've always wondered about RPG companies vs. the Digital Age

[Crafty_Alex]

It's a reality that theft is part of any retailer's business - there's always going to be a shoplifter who finds a way to beat any system a retailer can set up. That's part of the overhead a retailer gets with the MSRP - they buy their books at about 50-60% of retail and so basically double their money on each unit sold if they are selling at cover price.

With software piracy, though, theft has been passed down from the retailer to the content producer, who most times literally makes about 1/3rd per unit that a retailer does. Radically simplifying the math, that in essence means that a pirated PDF can hurt the company suffering the piracy 3 times as badly as it does the retail store.

Stealing from a store means the store will very nearly break even when they sell their next unit. Stealing from a company means they need to sell 2-3 units to recoup costs. Hell, those stores with their heads screwed on halfway decently are also selling a diversity of product, which means they can make up the sales of stolen product A with sales of products B, C, and D. RPG companies don't have that luxury.

Add in the fact that a pirated copy can be replicated dozens or even hundreds of times - when many RPG companies are running on a margin of around 2000 copies/book sold on average - and you have a TREMENDOUS potential to wound or even kill a company through piracy. Imagine if, because one person threw your book up on a torrent or Limewire, you lost 10-20% of your sales. That's ALL coming from your profits too, and with the cost on a short run book, that could amount to 50% of the money you actually make at the end of the day. A sensible businessman, faced with this reality all the time, would fold up shop and go do something that can't be stolen and actively be used to erode the sales of his costly print books.

Granted, this is an extreme case but understanding the margin most RPG companies operate on, it is a bit illuminating.

[Minion]

Am I right in thinking, though, that this assumes the guy who steals the PDF would've bought it had the pirated copy not been available? I'm not missing anything obvious?

That's the bit I'd like to see figures on -- faced with a choice between paying for it and doing without, how many owners of pirated PDFs would've paid up? Where do we actually sit on the worst case (every illegally-downloaded PDF is a lost sale) to best case (pirates wouldn't have bought it in the first place) scale. Course, I realise those figures aren't ever going to exist.

I realise too that a single stolen PDF has the potential to multiply into more lost sales, whereas a stolen book is just one lost unit (unless you scan it). I'm not underestimating the potential for damage, just curious about the actual damage caused.

[Crafty_Alex]

Am I right in thinking, though, that this assumes the guy who steals the PDF would've bought it had the pirated copy not been available? I'm not missing anything obvious?

That's the bit I'd like to see figures on -- faced with a choice between paying for it and doing without, how many owners of pirated PDFs would've paid up? Where do we actually sit on the worst case (every illegally-downloaded PDF is a lost sale) to best case (pirates wouldn't have bought it in the first place) scale. Course, I realise those figures aren't ever going to exist.

I realise too that a single stolen PDF has the potential to multiply into more lost sales, whereas a stolen book is just one lost unit (unless you scan it). I'm not underestimating the potential for damage, just curious about the actual damage caused.

While I do certainly grant latitude to those who D/L a book just to "check a product out" before they purchase it, I would estimate that for every one of those guys they are probably 3 others who never pay for the book OR who refuse to become a customer. A look at a bookstore is one thing - you can usually look for about 10 minutes before you have to make up your mind - but having the opportunity to read an entire book before you decide to buy it still will logically discourage more purchases than encourage them (because the person can gain all the benefits from the book or decide whether he likes EVERYTHING before buying). Either way, it digs into sales on the producer, who, aside from the thrice-damned distributors, is the least able to bear these losses.

Even if pirates would never have bought the book anyway, then they STILL shouldn't have it - you don't pay for a good, you should not benefit from it, and moreover, a pirate who never pays can still turn other customers against a product anyway ('oh, I read that book and it's crap/the designer has his head up his ass/this one idea was so stupid I couldn't bear it/I don't agree with where the line's going/the line's dead/etc etc amen').

[DavalTy]

Not to send the discussion spiraling into much deeper places but digital media and commercial controls for it are THE defining commerce questions of this generation of businesses and business owners. I work for one of the largest media distributors in the world (it's kinda scary: When people talk about controlling information and megacorps that could rule the world, we're it. =) and we're still struggling with it YEARS after it's become an issue. Ironically, my company is currently subcontracting services to a major software licensing corporation and we deal with these questions daily on a billion dollar scale.

The quintessential questions are, of course: How badly does piracy hurt your margins (As Alex spoke on above) and How much time, effort or operating expense can you apply toward the issue? Now: Can you balance the two?

The interesting thing about this is that while digital piracy is a new-ish concept, the basic business principles applied in dealing with it are the same as they've always been: Technology does not change business. It only accelerates it.

All that said, if you can't adapt, you will get hurt. One of our biggest divisions  used to be the 800lbs gorilla of CD distribution and due to the industry's slow uptake on digital media, it's basically been VENTING profits for years.

For now, the print divisions are safe but only because pirating literature is not nearly as "sexy" as software, audio or video.

I believe the DRM question was asked at a Crafty seminar in GenCon SoCal last year and Pat's answer was simply: "We're not going to worry about it."

From the corporate goon planning a global media blackout from the castle on the hill, believe it or not this isn't a bad idea. For a shop like Crafty, they could spend years and fortunes chasing their tails trying to prevent it and in they end, may spend more then they stand to lose.

All this makes me wonder if I should stat up my compy and start something...sinister....

I wonder how my bosses would feel about becoming Masterminds...

Ty

[Minion]

Even if pirates would never have bought the book anyway, then they STILL shouldn't have it - you don't pay for a good, you should not benefit from it,

Oh, I agree absolutely. I'm certainly not trying to split pirates into 'good pirate' and 'bad pirate' categories. Piracy automatically equals bad, no argument whatsoever. It is never justifiable. I was just curious about (probably unattainable, even in theory) hard numbers on the damage it causes.

[ThunderMonkey]

I seriously doubt it creates that much damage, in regards to hard numbers and the impact to sales. Some, but not enough. If there was a strong impact you would have seen publishers take more extreme or drastic measures to protect their product.

In regards to literature, what piracy does is bring the medium to a format that is not readily available to many people. If there's a demand for certain books and some cannot access it, because of lack of funds or a book out of print, etc., someone is going to find a way to get it.

That's how the whole mp3 began. It began as a trade of music in an electronic format, now it's a huge industry. Of course, music has the resources of ASCAP, and movies have MPAA, to help (or hinder) them create some sort of standard. Literature has no such group or lobby to protect it.

[Maldroth]

Well I have a friend that is a huge piracy advocate. Its almost disgusting to talk to him about it since he is fully against any form of copy protection since it hinders his use as a consumer, and that includes his ability to pirate said material.

As someone looking to get published that is a very annoying attitude to see.

Companies that don't take any small measure of protection really open themselves up to losing more than the normal share to piracy.

However it is a double edged sword you don't want to restrict the product so much that its difficult to use.

Our office sends out a monthly digital database product. No protection, I've said since the begining there should be some measure of copy protection, if nothing else to prevent the disc from being copied. It was disregarded until they notice a few places in the same area cancel subsription. Later it was found out only one was buying the CD now and making copies for the other places to save money. Only then did copy protection get a serious look here.

Digital books is a tricky area since just viewing the item on your computer screen isn't always the prefered method of use. Some like to print it out to read. Others like to print only certain pages, some want to make a copy for back up purposes or one for their desktop and one for their traveling laptop.  All would say are fair use of the product.

[Aragathor]

he is fully against any form of copy protection since it hinders his use as a consumer, and that includes his ability to pirate said material

Piracy is bad, and I'm not an advocate of it. But then when I buy CD's and I'm not able to use them because of copy protection, I start to think about the whole issue from a different perspective.

[Gatac]

There's no right answer here. The balance of power has shifted. The scales will swing back and forth a few more years before we reach a new equilibrium. In the mean time, there'll be excesses in both directions.

They don't call it disruptive technology for nothing.

Gatac

[GlassJaw]

Piracy is bad, and I'm not an advocate of it. But then when I buy CD's and I'm not able to use them because of copy protection, I start to think about the whole issue from a different perspective.

And that's real problem with DRM.  DRM assumes the user is already a pirate and makes it difficult for consumers that have purchased something legally. 

People who want to be pirates will remain so regardless of DRM.

If anyone is really interested in this topic and its implications to the digital consumer, I highly recommend the site www.arstechnica.com.  It's hands-down one of the best tech news sites on the web.

[Argonnite]

Trust me, the DRM I've developed is safe for your computer.  It really is.   

[GlassJaw]

Trust me, the DRM I've developed is safe for your computer.  It really is.   

Thanks Big Brother.   

[Krensky]

Trust me, the DRM I've developed is safe for your computer.  It really is.   

Thanks Big Brother.   

And from who's perspective is it safe.  Mine?  Or your customers.