Paizo Strikes again, Bestiary PDF to be only $9.99

[Paradox]

http://paizo.com/paizo/messageboards/pa ... age=12#589

Paizo was so unhurt by their fateful decision to sell the PDF of the Core Rules at $9.99.. that they're striking back again.

The PDF of the Bestiary will be available on October 21, for the low price of $9.99.

They do warn that *future* Core Products will be priced in a more traditional fashion (30% off of the cover price).

See the link above for verification.

[Notsonoble]

spiffy, I'll be passing that one around...

This is really gonna help thing I think... and make WOTC look like fools again... Yay pdf products...

I'm just ready for my copy to show up...

[Azhrei]

Excellent.

Now I wonder how much of the Bestiary will make it into the PRD?

[Paradox]

Excellent.

Now I wonder how much of the Bestiary will make it into the PRD?

I don't have a confirmation of it, but I imagine most of it will. Paizo is pretty committed to OGL, as that is how they are allowed to exist.

[Full Bleed]

I still think that a PDF should be about a 20-30% of the dead-tree publications, not 30% off. I think 30% off is an insult (especially when you consider you can score the books for 34-37% off online easily.) Why buy a PDF at 30% off when you can get the actual book cheaper?

So, frankly, I think $9.99 for the bestiary is priced right... with the Core being more aggressively priced, but well within a healthy profit margin for the medium.

PF should lead on pricing, not get greedy and find themselves being undercut or, worse, encourage people to pirate.

[palmer]

Considering the writer/publisher only gets about 25% of the cover price on a conventional product normally, pricing a PDF at 70% of retail comes across as an exceptionally greedy move.

Typically on a $40 item, publisher gets $10, distributor gets $10 and retail markup makes the remaining $20.

Amazon et al offer the big 30% discounts by simply cutting out of their retail markup, facilitated by not needing a brick storefront.

Pricing these at $10 for PDF means they're earning about the same profit per copy sold. Raising the price from there just turns into pure profit, direct to ledger.

50% off for a PDF is the absolute max that should be charged, and 30-35% would be ideal. They still make more profit than the dead trees, but it makes them very attractively priced, very affordable to poor gamers who are more likely to pirate and, most of all... puts them in Impulse Buy range.

I'll drop 10 bucks on almost any game. If I only play it once, it's not an actual loss as I judge things. I still got a couple hours out of the session, better than a trip to the movies.

But at 70% of retail, on a $40 book... that's $28.

For that price, I can pick up a D&D hardcover, in print, at my FLGS. Or I can go online and get it even cheaper.
Sorry Paizo, but at that price point, I'll never bite.
40% of $40 is $16 - significantly more attractive. And 30% is $12, which is impulse range.

$10 for the bestiary is great, but it should be like that for everything. Adventue paths are $20 each... make them $7 in PDF and they'll sell like mad.

What is really annoying is that if you subscribe, you get the print edition at 30% off, and the PDF for free.

This is a great deal, for sure... but what does it say about their margins that they do this? That you can buy the PDF at the same price they are willing to sell the print product for and still turn a profit.

White Wolf is offering their PDFs at 50% of cover price through RPGNow/DriveThru and that's after the site takes a cut.

[Azhrei]

I'm sure some bean counter somewhere came up with this scheme. Or at least, a portion of it.

I can understand that they want the game to spread as much as possible, so selling the PDF at a good price is important.

I also understand that they don't want to order 50k dead-tree copies (or however many they actually ordered) and be stuck with any of them. Pricing the PDF too low could do that.

So they need to balance the cost of producing the PDF against the cost of potentially unsold inventory. That would be a real balancing act, I suppose.

As a publishing company they are obviously focused on the dead-tree version of the product. But they needn't be. If they would focus instead on their costs to produce a PDF, they could price the PDF at their cost to produce it plus some profit. Then price the dead-tree version at cost to produce the PDF + cost to print/ship. I have no idea how the pricing model would work out, though...

[Notsonoble]

Considering the writer/publisher only gets about 25% of the cover price on a conventional product normally, pricing a PDF at 70% of retail comes across as an exceptionally greedy move.

Typically on a $40 item, publisher gets $10, distributor gets $10 and retail markup makes the remaining $20.

Amazon et al offer the big 30% discounts by simply cutting out of their retail markup, facilitated by not needing a brick storefront.

Pricing these at $10 for PDF means they're earning about the same profit per copy sold. Raising the price from there just turns into pure profit, direct to ledger.

50% off for a PDF is the absolute max that should be charged, and 30-35% would be ideal. They still make more profit than the dead trees, but it makes them very attractively priced, very affordable to poor gamers who are more likely to pirate and, most of all... puts them in Impulse Buy range.

I'll drop 10 bucks on almost any game. If I only play it once, it's not an actual loss as I judge things. I still got a couple hours out of the session, better than a trip to the movies.

But at 70% of retail, on a $40 book... that's $28.

For that price, I can pick up a D&D hardcover, in print, at my FLGS. Or I can go online and get it even cheaper.
Sorry Paizo, but at that price point, I'll never bite.
40% of $40 is $16 - significantly more attractive. And 30% is $12, which is impulse range.

$10 for the bestiary is great, but it should be like that for everything. Adventue paths are $20 each... make them $7 in PDF and they'll sell like mad.

What is really annoying is that if you subscribe, you get the print edition at 30% off, and the PDF for free.

This is a great deal, for sure... but what does it say about their margins that they do this? That you can buy the PDF at the same price they are willing to sell the print product for and still turn a profit.

White Wolf is offering their PDFs at 50% of cover price through RPGNow/DriveThru and that's after the site takes a cut.

I actually saw this argument thrown at the people who run Catalyst Game Labs, who are doing ShadowRun and Battletech. The explained quite handily that this is not entirely so. What goes to the printer is NOT the pdf file they distribute... and the people involved in taking the file that does go to the printer and making the pdf sold to the end user put about 100 hours into each 200-300 page book. I personally think this could be improved on, but I've never seen the process in any real detail. That means 100-200 hours of wages have to come out of that "profit"... admittedly that's not a lot... but when you add wages and hardware or contracts for server hosting, electronic book keeping, and all the other crap tagged on to website purchases (like the fact that the seller STILL doesn't get the entire amount on a credit or debit transaction). 30% off on a $40USD book actually comes out to more like 15 dollars "profit". That's still more than a $40 dead tree... but that's the incentive for offering them in the first place... No company's going to offer a book in electronic format, knowing that it could be spread freely, and therefore reduce the number sold, if it doesn't make them more than the dead tree copy would.

Paizo's odd because a lot of the things that make a PDF distribution are already part of their structure, so many of those costs would be there either way. I'm sure that was something that was considered in doing 10 pdfs for their two big releases. Note that Paizo, and Baen (a sci-fi fantasy publisher who occasionally throws cds with electronic copies of several books into the back of first print hardbacks, and even have a free online library with a little over 100 books) are on the extreme end in the way of offering cheap/free electronic books. Several either don't offer, offer at no discount, or offer at some lesser discount, but slap download limits, valid file time limits and all other kinds of crap on their books. (I'm looking at you O'reily...).

Add Azhrei's argument to this, and suddenly Paizo's 30% is a lot more reasonable. Sure they want to make money. This is their job. It has to pay the same bills our jobs have to pay, and it keeps them busy enough not to have second jobs in the background. You want greedy? Look at CGL's "open beta" of the battletech rpg. Who charges 10 dollars for a Beta release of an RPG in a market who's already had and will have lots of FREE beta's in it's history? Admittedly CGL sells way less than paizo, has to deal with paizo selling their books at a discount, and also has a team who's entire source of income is Battletech, ShadowRun, now Leviathans, and a few other itsy bitsy no name games, and they have to pay Topps for their license to boot.

I think Paizo's done a pretty good job at the balancing act.

[Paradox]

Just a note on subscriptions...

And, I am stepping back, because I do know that I tend to be a Paizo cheerleader, and I want to be objective in my response.

The subscriptions are somewhat invaluable because they provide raw data in terms of what size the print run should be. Getting closer on target to an optimal print run size, to them, is worth the free PDF. Not only that, but if you have a hardcopy of the book, your incentive to buy a PDF is 'lessened' anyway (note I didn't say eliminated, because some people would want both regardless, but it is diminished).

It's an incentive for a near guaranteed sale of the print product.

[Full Bleed]

I'm not going to buy into PDF's increasing the risk of overprint. The publisher can, if they choose, be very conservative about inventory management. The way the market works is that they solicit a product well in advance of getting actual orders for it, so they know exactly how many books they have sold before going to print and they can choose their margin of overprint (and profit) from that number. That's going to be different for every company and product, and being too aggressive has put more than one publisher out of business.

But, worse case scenario is that they have a runaway hit, like the Core book, and they have to go to a reprint ASAP with re-order numbers. Even then their over-print margin can still be tightly controlled if this happens, and it's the exception, not the rule that this is going to happen. The existence of the PDF option should mitigate the problem, not exacerbate it.

All I'm saying is that the 30% off cover is a way to make significantly more from the PDF than the dead-tree book. And while I applaud them for pricing the Core and Bestiary correctly, I'm not going to pretend that they did me (us) any huge favors by pricing it "right".

I've made no secret that I want PF to succeed... especially at 4e's expense (because WotC is worse and I don't like the direction it's going.) But PF is making a mistake here... and if WotC is smart, they'll seize on this, open up a direct-only PDF store-front and undercut PF, smugly stating, "Who's being a greedy corporate slug now?" Heck if WotC did it at 40% off, they'd look like heroes in comparison and be raking in massive profits (and still be significantly overpriced!)

If I was Paizo, I'd lead on this issue and leverage my strength by setting the standard. (Besides, they actually have an even better reason to keep PDF profit margins low... to keep WotC out of the PDf market while they strengthen their position there.)

[Paradox]

FB.. I haven't even finished reading your post and I don't know what to say. You turned what I was saying around 180 degrees.

What I said was that subscription PDFs help minimize the risk of an overprint, not increase it as you said in your first sentence.

The existence of the PDF option should mitigate the problem, not exacerbate it.

Exactly, you got what I said backwards.

EDIT: And let me clarify.. I was not speaking about the larger PDF market, but rather I was speaking specifically why Paizo gives a free PDF if you subscribe to the Print Product. More of a response to Palmer's annoyance about the way the Subscriptions work.

They trade off the PDF for more accurate data to avoid an overprinting, not create one.

Second Edit: NEVERMIND.. I see you might have been actually responding to Azhrei and not me.. My apologies... NEVERMIND.. move along...

[palmer]

The explained quite handily that this is not entirely so. What goes to the printer is NOT the pdf file they distribute... and the people involved in taking the file that does go to the printer and making the pdf sold to the end user put about 100 hours into each 200-300 page book. I personally think this could be improved on, but I've never seen the process in any real detail. That means 100-200 hours of wages have to come out of that "profit"... admittedly that's not a lot...

No. It's chump change.
100 hours sounds like a lot until you realize it's not.
A 32 page adventure by WotC in the 3rd Ed days would take a 3-4 weeks (so 120-160 hours) for the writer, and 2 weeks for the editor (80 hours) in the R&D phase.
This is 200+ hours for only thirty two pages.
So triple it for a 96 page "Adventure Path" length product.
We're now up to 600 hours in design and development. Lets split the different on your 200-300 pages = 100 hours and call it 2.5 pages an hour. That gives us 40 hours to PDF-ify this 96 page document, bringing total

But those costs are still minimal!

We'll assume all staff involved (writer, editor, PDF dude) are making $46k a year, which is about $23 an hour (which is still high for the industry).
640x23=$14720. Lets call it $15k even

Now at this point, we have paid entirely for writing, editing, and PDF-ifying a 96 page book. For WotC, this would go to a 10k print run at the least. We can assume that both WotC and Paizo can move that many units.
So we divide $15k by 10k units and get a dev cost of $1.50 a copy. The actual printing will probably run a buck a copy.

This is for an item with a $20 cover price, mind you. Now the FLGS has a retail markup of 50%, and the distributor wants 30%, so $6. That leaves $4 for the publisher, which is $1.50 profit per unit. Great.

So now we have it where the company makes a profit if they sell for $4, which is 80% off the cover price.

Lets say that they use, oh, Indie Press Revolution for PDF distribution. (I choose them, because their rates are public). IPR wants 20% off selling price as their cut.

And Paize prices at 70% of retail, which in this case is $14. So IPR takes $2.80 per sale of a $14 adventure path PDF.
This leaves $11.20 for the publisher. Minus $1.50 in dev costs is $9.70 in pure profit.

Over 6 and a half times the profit per unit compared to print. You make even more by not having to pay printing costs.

If they sold it at 50% retail? That's $10. IPR takes $2, leaves you with $8, and your profit is $6.50. Still 4 times as much.

So 30% of retail? That's $6. IPR takes $1.20, leaves you $4.80 and a profit of $3.30 in the end.

What price do they have to charge to make the same $1.50 profit on the PDF as the print?
The $20 print item needs to sell in PDF for Three Dollars and Seventy Five Cents. $3.75, which works out to a whopping 18.75%

So pretty much, anything over 20% of retail becomes pure massive profit.
And this is why charging 70% rankles so much.

Add Azhrei's argument to this, and suddenly Paizo's 30% is a lot more reasonable.

It's not reasonable when you look at every other company out there, where the standard price point for a PDF is 50% of the cover price. Even RPGNow suggests 50% as a price point.

But here's where the "unreasonable" really rears it's head.

Pathfinder Chronicles: Gods and Magic for $13 in PDF.
or
Pathfinder Chronicles: Gods and Magic for $12.23 in Hardcopy. And free shipping if you spend $25 (ie get a second item).

It's unreasonable when your print edition sells for less than your PDF edition. And there is no way around that.

[Notsonoble]

Amazon makes pennies per sale... I'm not sure I'd compare their prices to anything for "reasonable" when the sale's volume of the person being compared is less than 1% of amazon's sales.

I have no idea where you got your figures, but i got mine from the people who actually did the work on Total Warfare, Techmanual, and Tactical Operations... I was using their figures... they spent 100+ each, (Randal, herb (don't remember his real name right now), and others) on the pdf... and literally thousands of hours before that.

Their numbers come out to 1.2 hours per page on just pdf work. That's the last edit, adding bookmarks, hotlinks, and all that mess...

96 pages, yeah about 100 hours... and our guy here at the hospital gets 20 bucks an hour for that kinda work... and he works for the state... government jobs pay crap.

Even from there your numbers come out about the same... but if Paizo sold Adventure paths for 3 bucks as your suggesting NO ONE WOULD BY PRINT... why the hell would you. For that mater why the hell would paizo print books in the first place.

And I'd be seriously seriously surprised if any of them were being paid 46k a year... That's less than my dad makes (with only an associates in general studies, and 20 years networking experience)... in a city known for having the lowest pay in the United States. He can barely make ends meet, and would be royally screwed if the house wasn't already paid off. They're in Seattle... 46k a year would mean they all live in slum apartments, probably as roommates to make rent and food.

I suppose its possible its that low, at least one of the guys working for CGL has openly twittered problems keeping his home properly cooled in the summer, so they're probably not making a whole lot. CGL is also a lot smaller (in dollars) than Paizo, and a lot bigger crew... if you count all the contract writers they've got (20 listed for battletech alone, but I know some of those have done one a single piece purely freelance.)

Paizo, aside from Baen (which is a novel publisher, and under a few different rules) charges the least for PDFs of any place I buy books. Oreily charges full, CGL (through battlecorps) charges full, and the few other places I've purchased one or two books charge between 15 and 20 less than print. The odd people out on that was the press that Monte Cook did Ptolus with, pdf was right at half off cover.

[Azhrei]

We'll assume all staff involved (writer, editor, PDF dude) are making $46k a year, which is about $23 an hour (which is still high for the industry).
640x23=$14720. Lets call it $15k even

You can call it whatever you want. I call it "low".

You didn't factor in any other overhead. In today's world, health benefits for employees can cost up to 30% of their salary! So an employee paid $23/hour costs the company closer to $35/hour after you factor in vacation, health, 401(k), employer half of FICA, and so on. And I notice you didn't add in any artwork costs to your numbers...

But none of your number crunching regarding employee costs really matters anyway. There will be some products that bomb and those that do require that all products have prices that cover the failures. A company that has been in business as long as Paizo will know what their lower limit is for profitability. Then like any business, you price your product at that point or higher, charging what the market will bear.

Add Azhrei's argument to this, and suddenly Paizo's 30% is a lot more reasonable.

It's not reasonable when you look at every other company out there, where the standard price point for a PDF is 50% of the cover price. Even RPGNow suggests 50% as a price point.

Many of the PDFs out there are black and white, with less than stellar artwork, and less than stellar editing. In other words, bargain basement creation costs lead to bargain basement prices. That may be fine for toothpaste shipped from China, but many people don't like shopping at Wal-Mart or the Dollar Store.

It's unreasonable when your print edition sells for less than your PDF edition. And there is no way around that.

Here's someone who never heard of a short sale or teaser sale. (j/k)

Amazon sells you product at $12 and says you have to buy $13 more to get free shipping. But if I buy the PDF I spend a total of $13. How does it save me money to spend another $13 at Amazon? For most people the answer is, "I get more product." That's a falsehood. You're shelling out twice as much cash to get a product you want and one that you may/may not want. Why do you think Amazon has free shipping in the first place? You don't really think it's free for them, do you? It's just a way to get you to their web site so that you'll buy crap you don't need.

I'm not going to defend Paizo's pricing on PDFs versus dead-tree except to say that they are a business and I'm sure they have bean-counters that have run all the numbers and they know what the market will bear in terms of prices. Could they do it for less? Probably. Does that mean they should?

Let's turn this around and put you in Paizo's place.

If your salary requirements for employment quoted a figure and someone offered you that amount, did you charge too much? In other words, could you have done the work for less? Probably. That doesn't mean you should. I charge clients what I think they can afford; there is perceived value in the price paid. I drive a nice car because I'm expected to, I ration my time to produce scarcity, and I charge more than others in my industry because if I didn't I'd be working more and making less.

You charge what the market will bear. That's capitalism in a free market society. And ain't it great!

[Full Bleed]

I get the "charge what the market will bear" philosophy... my point is that Paizo is giving WotC a huge opening to exploit. They can make a healthy profit and set the market. It's a missed opportunity. Well, that and they are losing sales and promoting pirating with that lame 30% discount.

Amazon can take lower margins because they move a lot of product, but these game books aren't loss-leaders. They're making profit. Amazon probably gets these book direct from the publisher at around 36% of retail... if they are buying from a distributor (which I doubt), it's probably closer to 45%. So even at a 34% to 37% discount (pretty standard for them), it is well within their margins of pulling in a very healthy profit (especially at their volumes.)

But that's not all that relevant anyway. Amazon exists and no matter how cheap they are, or how slim their margins are... if the publisher of the book can't significantly beat Amazon's dead-tree prices with their PDF prices then they need to be recruiting outside the Special Olympics.

Maybe I'm just not keeping up with the times, but I still don't understand why the margin of profit should be so much higher for the PDF than it is for the dead-tree publication. If there is a premium to be placed, it follows that it should come on the back of the dead-tree. The cheaper product should be promoting the more expensive one. Have we really come to the point where the the dead-tree publications are promoting the higher priced "premium" PDF product? Who knows. Maybe that's Paizo's best kept secret.


PS: Paradox, yeah, I wasn't commenting on the subscription system they have going... Only on their PDF business model.