Web Publishing Model

[Zak Arntson]

I've been giving serious thought to doing online RPG publishing.  Inspired by Adept Press and Memento-Mori, here's my current plan.  I was wondering what y'all thought of it, especially those who are already publishing online:

Three types of product.
1. Freebie - Small concept free for use.  Like a Memento-Mori game.  Short and simple.
2. Playtest - "Shareware" version, free for download, an option to pay on-line. This would be to build a fanbase and work out the kinks system.
3. Full - Pay-for-download version.  Fully detailed, illustration .pdf product.  Each Full version would also have a free "Quick Start" version.

Basically, I would create several Freebie games, then promote one or two to Playtest with the intent to move them to Full when ready.  Rinse, repeat.

What do you think of that model?  I'm worried about scaring people off with a Shareware playtest phase, which is why the download would be free from the site, with the _option_ to pay online.

I'm also wondering what a fanbase would do if the Playtest version suddenly went Full.  Would people who volunteered $$ for the Playtest version get angry about having to pay for the Full version?

I am planning on each Full version also having a Freebie "Quick Start" copy to solve this problem.

(Next comes the issues of running a business - legal, taxes, accepting Credit Cards, merchant accounts, etc.  I know it won't make much money at all, but I'm SURE there's still legal issues all over the place)

[Ron Edwards]

Hey,

I think your model is brilliant, but I have one quibble based on my experience with Sorcerer.

I suggest that your shareware-phase require an active contact from the user to you. Here's how I did it: there was a little one-line fill-in field, into which they typed their e-mail, and then hit the Submit button next to it. This mailed me that e-mail in the body of the message. I then mailed the shareware-version as an attachment.

I strongly recommend NOT having the shareware be a simple download. Yes, you'll get hundreds of downloads, but I think you'll be getting very little reading/using of the game itself, and I highly doubt anyone will send you money. This is opinion, of course, but I'm basing it on the very active, very enthusiastic fan base I developed when Sorcerer was in this phase. People LIKED looking forward to getting the manuscript, from me personally. It meant enough that they really read, really played the game.

I also suggest setting up a forum or a mailing list immediately, and staying active on it. Coupled with the shareware, this is crucial.

Hope this helps or at least bears considering.

Best,
Ron

[Ron Edwards]

Whoops, couple more things.

1) Don't set up any merchant accounts that ask for a start-up fee.

2) What legal issues? Don't worry about it. Just say "copyright" on the material, and warn people not to duplicate it, and you're cool. Keep records of all transactions, so if someone swipes it to sell, you can bust'em - and remember that NO instances of such behavior have been observed.

3) My merchant account allows me to adjust the amount that a person is actually paying (downwards only). So therefore, if someone paid for the shareware, then buys the full version, you just reduce the cost by the price of the shareware - consider it "pre-payment." This is what I'm doing for the book version of Sorcerer.

Best,
Ron

[Zak Arntson]

Thanks for the huge response!  Brilliant!?  You're too kind. I'm just trying to come up with an indie vanity press business model that'll work best for myself.  I'll tackle your response(s) bit by bit ...

---
Shareware Phase
I do like your method of private email, bringing the developer closer to the players and the bonus of letting me track how many people are getting it!

When you set it up as Shareware, how much $$ were you getting?  I figured I won't get much money either, but I'm not against people having the opportunity!

---
Mailing List/Forum
Yes, I think I will petition for a Forum here and maybe on GO once I get my flagship game underway.  I'm thinking of beginning with Freebies, posting the link in places, getting a bit of fan base and picking a popular (or my fav) Freebie for Shareware-hood (and thus a legit reason for press release).

---
Legal Issues
Well, _if_ I ever profit from this, or even offer content for sale, I will have to claim it on my income tax forms.  I have to look into how Washington State handles this, but I may have to get a business license to legally sell something, even if it is for peanuts.  At the very least, I should pay a lawyer for 30 minutes of council.  Unless any of you already know what's going on (and if any of you are lawyers, I'll pay yah for your time!)

I want to do punk rpging, but completely legit.  So maybe it isn't quite punk ethic?  

Okay, did a little research and it looks like filing for a license in Washington State costs 175 bucks, and 59 bucks a year to renew.  I have a feeling I won't make enough to be a legitimate sole-proprieter.  Time to use this email business counseling (http://www.score.org/).  I'll let y'all know the results.

---
Money & Partial Payments
I like that idea of a Shareware payment going towards a final product.  I noticed that you use Verza.  I take it you've had a good experience with them?  Once I get to this phase, I'm going to have to look into some kind of credit card payment option.  I was thinking of Pay Pal, but then noticed your Verza account.  I'm going to look into all my options before deciding on this one.

Also regarding this, if you are going to give people partial credit for a Shareware payment, how do you make sure they are the same person the second time around?  You can't do email address reliably, since those can change.  Your payment system verifies their personal info?

---
Copyright Issues
I'm also concerned about the Playtest version.  I'm thinking about a little write-up in the Playtest version that basically says they are using and helping to improve Copyrighted material, and I can't compensate them for their time.  I can see someone getting upset that I used their suggested rules-change and all they get is a mention in the Final book (no free copy, no $$ compensation).  How did you handle this with Sorcerer?  Or was it an issue at all?

---
PDF Files
Adobe charges 299 for their software.  I can get Easy PDF for 30 dollars.  Or try and learn LaTex and use their Tex to PDF for free.  Any suggestions or other alternatives?

---
Phew!  Okay, new business model:

* Freebie - Html and/or small .pdf
* Playtest - Freebie + email address for playtest manuscript + online payment [optional]
* Full Version - Freebie + pay/per download .pdf/.zip file

[Zak Arntson]

For the record, here's the message I supplied to the volunteer Business Counselor in Washington State.  The confirmation paid said a response would come within 48 hours, but it being a weekend, I'll give it some time.

"Sole Proprietor w/ Very Low/Negative Expected Profit.

Situation: I am planning on selling books online (using a third party Credit Card payment company) as .pdf files.  It is a niche market, and I am planning on profits from less than 0 and certainly no more than 500 dollars per year.  This is essentially a vanity press situation, but I want to operate within the law.

Question: Am I required to obtain proper licensing, even with such low projected profit?  Or can I operate without a license (at least until profits go above a certain dollar amount) and simply claim the profit as additional income on my taxes?"

[Dav]

Don't bother incorporating yourself.  It allows you to claim expenses as deductions on tax returns, but impacts your taxes as direct income (under an S-model, which is what you would use).  You break no laws by not incorporating yourself, and Ron is entirely correct in saying that if you state a copyright, or use the "C-circle" symbol, you are protected under both US and international copyright law.

Incorporation only becomes beneficial to the user after a $300 income, or at certain break points of profit based upon your personal income (you have to make some significant money, however).

Basically, you should report all income from your IP (your game) on your personal income taxes.  You need no reporting income, other than a bank statement, which will be provided to you automatically by your bank in the event that you make enough money to require disclosure to the IRS.

If you want to save money, I can send you my CFP certification number, and I can give you a formal rendering for free.  However, if you want some minor prima facie protection, copy and paste this into your hard drive for dating and verification in the event that you get in trouble, then wave in front of a judge and tell them I said so.  Then they come after me, not you (provided you followed my advice and didn't go on a crime spree or something).

In short, no need for licenses or incorporation unless your expenses are more than $300 per year.  

Dav Harnish


[ This Message was edited by: Dav on 2001-05-13 17:46 ]

[Ron Edwards]

Hi there,

I agree with Dav, and my experience suggests that you are - maybe - getting a little ahead of yourself, with all this concern about your corporate/company status.

Right now, perhaps, your priority should be simply to make a usable game available and provide a way for people to feel involved with it. The profit (if my experience is anything to go by) will not be enough for taxing-institutions' radar screens to care about; to them, we are just selling lemonade on a street corner.

For instance, my accounting and taxation "life" for Sorcerer begins this past fall, when its expenses began to include my efforts to publish it as a book. Before that time, both expenses and profits were so teeny as to be irrelevant, even on my regular tax forms. (That's why "Adept Press" is a new entity - it only came into existence for tax, ownership, and distributor-recognition purposes.)

A couple last things come to mind, now that I've looked over the thread a bit.

1) Make sure the free-download version is in no way "equal" to the shareware-version. The latter should offer a great deal more material, specifically system/play options and depth (not just setting). And also, when you do make the full, pay-up-front version available, the shareware should be instantly discontinued.

2) You might consider the timeline carefully. For instance, I did Sorcerer as shareware from the fall of 1996 until January of 1999. I've noticed that a lot of people have pretty short timelines in mind, thinking that they can just whip up and sell a game off the net, poof! Plan on over a year and perhaps more before that full version goes up, and let the game live and develop as the shareware version during that time.

Best,
Ron

[Ron Edwards]

And I forgot to address all these issues too. Here goes.

>if you are going to give people partial credit for a Shareware payment, how do you make sure they are the same person the second time around? You can't do email address reliably, since those can change. Your payment system verifies their personal info?

Verza does - I get all the info they had to submit except for the credit card number itself. And I retain the right to withhold the pre-payment option (i.e. they don't get it) if that information becomes obsolete. To use a funny/extreme example, if someone wants the benefit of their pre-payment and they've changed their name, mailing address, phone, and e-mail, and they haven't contacted me about any of that, then tough luck.

>Adobe charges 299 for their software. I can get Easy PDF for 30 dollars. Or try and learn LaTex and use their Tex to PDF for free. Any suggestions or other alternatives?

Hmm - here, I think, is where my punk-sensibilities kick into play. Basically, I make use of pals who have access to Adobe. Volunteer services all the way around, including (to my shock) the amazing job done for the interiors of the published book. In other words, I haven't paid a dime for all the use of Adobe Acrobat formatting that's gone into Sorcerer. I suggest you think in those terms too - and remember, as long as the folks are doing this willingly, and as long as they DID buy Adobe, it's legal as can be.

3) I do suggest looking into PayPal, because frankly, Verza's cut of the take is kind of big. I haven't sussed out WHY it's so big, and I *do* like their services, but if I'm not mistaken, PayPal is apparently more straightforward.

Best,
Ron


[ This Message was edited by: Ron Edwards on 2001-05-14 10:07 ]

[JSDiamond]

Zakarn,
Do not incorporate.  You don't need to. A corporation must have board officers (Treasurer, Chairman, President), it's main appeal is that it allows you to sell shares of your company and it is a separate entity from YOU thereby allowing you to keep all financial dealings separate from yourself.

As a sole proprietor you can still write off your expenses and show a loss for 2 out of 5 years. More than that and it's considered a hobby and your lose your tax-write off status.  

You do not need a business license.  Register a DBA and get a re-sale license from city hall.  Go and set up a business bank account and use you business name.  Write the resale license number any time a business number is required.

All in all it will cost you around $50 and it will allow you to (and this is the most important thing) it will allow you to show a LOSS for the first TWO YEARS.

Save every receipt and write it all off.
50% of meals, 30 cents a mile, and 100% of any related supplies, even a new desk chair if you had your butt in it while writing.

Jeff Diamond  

[Zak Arntson]

I want to thank all of you for your advice.  I wrote a HUGE reply to everyone, but the forum hosed it when I forgot to enter my logon/password ... so ... BIG thanks to everyone.

I appreciate the monetary and business advice.  While I don't expect to make profits or even have to worry about licensing for a few years, I want to be more prepared than not.

Ron, thanks for the concern about my jumping into the business aspect.  I do plan on this being a LONG process, from freebie to shareware to full version is easily more than a year for me.  In fact, the freebie version & dedicated website is a few months away.

I would love to see a compilation of rpg-friendly legal folks and possibly short essays concerning this.  And the Forge is the perfect place!

Here is the response from the SCORE advisor:

"The license requirement in the State of Washington is not based upon whether
or not you make a profit.  It is based upon your gross sales.  Since you
will be probable selling the largest percentage of your books out-of-state,
you will not have any B & O Tax to pay.  You must however collect the sales
tax for any sales to anyone in the State of Washington.  Check your
telephone book for the nearest Dept of Revenue office near you, give them a
call and get registered.

You will also have to report the income and expenses on your Federal income
tax return on Schedule C.

Good luck, D-----"

[Clay]

Zak,
Ron's suggestion to use volunteer labor is good, but comes with some hidden costs.  I've volunteered on two projects to date, and I'm happy that I did, but conflicts do sometimes arise.

The biggest potential conflict is that your priorities are not the same priorities as the volunteer's.  The volunteer is working on the project because they think it's cool, but it isn't their highest priority. You're working on it because it's your baby.

This fundamental difference can lead to scheduling problems.  In one project that I worked on, the publisher had problems getting deliveries from every last one of his volunteers, including me.  I don't know about the others, but I know that when I ran into a conflict between personal, professional, and volunteer obligations, it was the volunteer work that was pushed off.

If the relationship is handled properly, these problems can be avoided, but you need to be a pretty good project manager to pull it off.  There were a couple of differences between the two projects that may be helpful for you to know about when you're working with your own volunteers.

1) Communication. E-mail is fine for some things, but make sure to use the phone from time to time, especially for important communication.  If you can, meet in person. The closer the contact, the stronger the relationship, and the less likely your work is to get fobbed off.

2) Scheduling. Most people suck at this, especially if they don't have much project management experience.  The general rule that seems to work is figure out how much time the actual work will take, and multiply that number. If you're the only person involved, multiply by 2. If you need some information from other people, multiply that number by 2. If other people are actually involved, multiply that number by 4.  And if somebody else is going to be doing all the work, multiply by 2 again.  That seems outrageous, but it takes into account the differences in scheduling priorities. I've only started to use this theory myself. I learned it from a division VP for Rubber Maid, and it seems to hold water.

3) The people. Pick the right people for the job. For instance, if you're wanting book layout services, use a volunteer who has a layout background. If you're having programming done, use a programmer to do the work. You'll get a better product, and the schedule won't slide nearly as much.  Also pay attention to the person's professionalism.  That's going to affect the quality of the project and the deadlines as well.

4) Understand the politics. For instance, make sure that all of your volunteers hear you praising other volunteers. That lets your volunteers all know that if they do good work, other people will hear about it. It's a sort of indirect ego-stroking, and it works. Keep in mind that negative comments work the same way, but to your detriment.

That's sort of a long list of stuff to keep in mind, but I hope it helps.

[Clay]

TOOLS:

Zak,

You mentioned that you weren't sure about the layout tools to use.  If you decide to produce your own PDF, you'll need to pick a tool.

If you want a very textbook looking layout, LaTeX with dvipdfm is fine. It's also great if you're big into cross-referencing.  I used this for http://www.dominiongames.com">Dominion Rules, which is heavy with cross-referencing. It feels very much like a textbook to me (and at 258 pages, weighs as much, too), even with all of the great artwork.

If you can afford Adobe Acrobat, don't need the complex cross referencing, and don't need a very sophisticated layout, you could get away with building the whole thing in your word processor. The layout won't look as professional as any of your other options, but it cuts down on your learning curve.  You could even forego the cost of Acrobat and use your word processor to create the document, save it as RTF, and then use the inexpensive EasyPDF to turn the RTF into PDF.

If you really want the nice design, you're probably best off to purchase a regular DTP program designed for the size work that you're doing. They all come with an Acrobat license, even the non-Adobe products.  And they're generally pretty easy to use and get nice looking results from.  Best of all, you can generally get demo copies of most of this software for the cost of shipping a CD or less, so you can try it out before plunking down the several hundred dollars that it will cost.


My own personal bias is to using LaTeX, because I'm already familiar with it, and I don't tend to do graphically intense designs. If you do decide to go down the LaTeX road, drop me a line and I might be able to help you out.