Is plugin market going down?

[Harry_HH]

I agree that some visual redesign of plugins and website would be great. What I do not agree with is that this will have a significant impact on sales. OK, I would not know until I try.

I think that especially for the smaller developers, with limited resources (often 1-2 man companies), which can not use the product portfolio "volume strategy" (Waves as a typical example), advertising or conventional marketing is not the key element for good sales.

Viral marketing and so called guerilla marketing are most effective this case. BUT if you are not the market leader, to get viral promotion in the long term, you need two things:
1.Constant regeneration
2.Constant innovation

Voxengo is well-known of the quality products. In addition their free plugins are one of the most popular in the project studios, probably the Span and the MSED is installed in more than half of the DAWs.

But what Voxengo today is missing, are high profile (even small things can be high profile) innovations.
Innovations can be new way to do the old thing, totally new area in audio manipulation, new kind of user interface etc. etc.
Voxengo is in many (most?) peoples eyes "the company with good but little boring products".

Lets take an benchmark example: the Sonic Charge is a small developer with only about 10 products in their portfolio. They do not advertise, most likely they do not use Google optimization or Google Analytics actively. They have rarely any sales.
What they have are one of the most distinctive and innovative products, niche perspective and they use small things such as personalization of their products.
I don't know the hard figures in the sales (any of the companies), but they have kept the reputation of desirable quality product developer.

I think that the Voxengo has all the preconditions for the same kind of profile but not without re-inventing the product development and/or the key processes (incl. perhaps CEOs attitude, with all respect).

[pekbro]

@Zephod

Definitely, its harder to command high prices. But that doesn't hold true
for everyone, you're trying to quantify the market in a way its too dynamic for.

[Urs]

Sorry, I didn't come in here for a length comparison of private parts

My message was: I have no indication that conversion rates go down, however I also don't see much overall growth. Which I'm fine with, because we grow a lot more in the retail market beyond our website.

However, the thing that created this plug-in business ecosystem - globalization through the internet - is currently targeted a lot for political reasons in various countries, including two major markets (UK and US). I see a risk that, in a few years these markets may be more difficult to enter with otehrs to follow, i.e. by restrictions to internet payment and data transfer. Now that might make things ugly.

About the other trend, where products are on sale constantly, i.e. where they are falsely advertised at a higher value than they practically sell for, I think this has proven to work for a short time only, until people perceive the sales price as the actual value. I think this is classical non-sustainable marketing by alpha male who sequeeze the company a last time before they go out with a benefit. It's been going on for a while on what I perceive as a large scale, but these companies might indeed have hit a dead end with a market saturation. They have thrift valued themselves. Once someone posts "I got mine for 90% off" in every thread, it's that what sticks. Brand suicide. Hate it and wouldn't recommend.

- U

[pekbro]

Definitely not something everyone can get away with. But its definitely
going on as we speak. I bet they will continue to line their pockets
just fine for some time to come. *deleted sry...cough...

They are not the only ones...

[Urs]

Sure... it'll continue.

So maybe, in general prices are going down, in part certainly due to milk-the-portfolio schemes. But then so does the perceived value of those goods. We'll see more and more "I bought this bundle for blah$, but I only really use these two products", which renders even the best value for money void - especially if many of the products are different renditions of the same set of algorithms.

Anyhow, even if in general prices are going down, that doesn't mean one can't sell a higher valued product at an accordingly higher price. I think one good indicator is that despite amazing freeware out there, people still buy stuff. Price isn't the only factor.

[Zaphod (giancarlo)]

Agreed

[sjm]

Well, if you aren't telling anyone the price anyway, you could just slap a big "70% Off" banner on all your plugins and no one would be any the wiser...

I'm not actually really suggesting you really use such business practices.

[ghettosynth]

Bundling and tiered pricing are effective ways of dealing with the natural declining price of digital goods.

https://praxtime.com/2013/01/06/digital ... t-economy/

It's also misleading to talk about the total number of customers, that has no relevance to you, it's a misguided interpretation of an aggregate metric. Waves knows this, it's why they price their goods all over the place, as salesman like to say "there's a buyer at every price."

This is fundamental economics. If you don't agree, try pricing one of your products at zero and watch the demand for it increase. So, when vendors like Waves temporarily lower their price of some high end product for a day, they're not losing $200, they're taking $50 from some other vendor that they wouldn't have had otherwise. So even if the total number of customers doesn't increase, your overall share can increase and you can still sell products at a high price to customers that can afford it. You simply have to be good at this kind of execution.

Their goal is to minimize the number of professional masquerading as the hobbyist. This can't be avoided to some extent, but, they hedge their bets statistically through the sporadic nature of the sales. If you need product X today because you're a pro, for example, you can't afford to wait for a sale. The also do this through the nature of the long term status of pros, i.e., pros will be more likely to pay WUP because there is a greater chance that not upgrading will impact their business. Hobbyists, on the other hand, are, individually, less stable. Their interests may wax and wane, they might have moved on to something else that's shiny. In any case, if the hobbyists are starting to behave more like the pro in some sense, wup catches them as well.

https://en.wikipedia.org/wiki/Law_of_demand

"I bought this bundle for blah$, but I only really use these two products", which renders even the best value for money void - especially if many of the products are different renditions of the same set of algorithms.

Which is why you have to do your own valuation for the products that you buy in a bundle. One thing that is probably being overlooked in this critique of bundles is that they provide utility that you won't necessarily be aware of until you buy the bundle. That is, you may find your needs changing over time or you may not realize how valuable something would have been to you. I can say, without hesitation, that every bundle has had positive surprises. Products that I would never have even demod, let alone purchased, but that I end up using quite a bit, e.g., iZotope vocalsynth. I've lost more utility to individual products going unused than to not being able to extract some value out of a bundle.

So maybe, in general prices are going down, in part certainly due to milk-the-portfolio schemes. But then so does the perceived value of those goods.

However, in some sense, almost everyone has to play. If they don't, their competitors will simply soak up the expendable income of the market. One can try to claim that their products of type Y are worth 5X when everyone else sells them for X, but this will only work if you are truly a market leader, and I mean that in the sense of perceived utility of your product. When two out of three vendors say EQs are only worth $40 then that doesn't just affect the perceived value of those vendors, it affects the perceived value of EQs in general. This is especially true if the vendors that are playing the game are, in some sense, market leaders. Why would a hobbyist pay $100 or more for a brand Z EQ when he can get one with a well known and respected brand name for $40?

[Zaphod (giancarlo)]

When the price race begins, few ones will survive. Generally distributors or providers, not manufacturers (unless you are a market segment leader).
Just take a glance to what happened to music. I've spent literally thousands for music, till the exact moment where apple told me a song costs just .99, spotify told me all music costs 9.9/month and YouTube told me everything is completely free. I would never go back to pay more. It is quite obvious the new business model doesn't work (better: it works for the ones who are not creating content)
Basically you are confirming my thesis: despite the fact many of us are watching a better income, the direction in the long term is a fall. Slow or fast it doesn't matter. There are other niches and solutions. For example developer xxxx could try to sell just the hardware and provide the software for free. The race to the bottom for software is exactly zero, if you could recover costs elsewhere. At this point the former question is not so stupid
I think in this exact moment a lot of companies are building a b-plan (moving to other markets: mobile, other niches, or a disruptive approach to something different).

[FabienTDR]

Subscriptions, bundles... Prices ARE falling. Several years ago I remember an equaliser was on sale for around 1000. Today the market is willing to pay..15? Maybe 29?

Isn't that slightly oversimplified? How many $1000 licenses did one sell back then? 2-300 maybe at best. Not the tenth of thousands you can reach today with adequate pricing.

It's not that products lost value, it's the fact that we had a radical shift away from B2B were ppl are used to declare their costs as expenses (costs really don't matter) to B2C were ppl can't do that and generally operate at a much smaller scale, often without any professional ambitions. The amount of DAW users literally exploded over the last years and still does. The banal issue is that these guys can't declare their costs as expenses. But the advantage is, they come in masses.

IMHO, the overall market has a healthy growth. But a much different one compared to the first wave of audio system "digitalization". It's probably this transition so many companies struggle with (to be clear, I think Voxengo has a perfectly OK pricing, the recent super bundle offer is quite cool).

[Numanoid]

However, the thing that created this plug-in business ecosystem - globalization through the internet - is currently targeted a lot for political reasons in various countries, including two major markets (UK and US). I see a risk that, in a few years these markets may be more difficult to enter with otehrs to follow, i.e. by restrictions to internet payment and data transfer. Now that might make things ugly.

Did the mandatory VAT requirements hurt business ?

[Numanoid]

and YouTube told me everything is completely free.

Free, but crap audio quality.

Music on youtube is like plugin demos with beeps or audio fallouts every 30 seconds.

If you really like a track or album, you want to get it in better audio quality than YT.

[Terrafractyl]

Just take a glance to what happened to music. I've spent literally thousands for music, till the exact moment where apple told me a song costs just .99, spotify told me all music costs 9.9/month and YouTube told me everything is completely free. I would never go back to pay more.

Well as a broke artist who lives off his music reading this thread....
I have to say this statement makes me want to avoid your plugins!!
I would be careful how much you say that to your customers(musicians)

Do you always do what Apple, and Google tell you to do?? To me that is even worse. The way people just fall in line with the system, despite knowing that it is wrong. If people act like you, then for sure the plugin industry is ruined already.

Bandcamp is helping keep music and musicians alive, you should give some back to the people that make it sometimes!

[FabienTDR]

However, the thing that created this plug-in business ecosystem - globalization through the internet - is currently targeted a lot for political reasons in various countries, including two major markets (UK and US). I see a risk that, in a few years these markets may be more difficult to enter with otehrs to follow, i.e. by restrictions to internet payment and data transfer. Now that might make things ugly.

Did the mandatory VAT requirements hurt business ?

LOL, no no. EU VAT handling is a nightmare, while international taxation is much easier.

If it's just about that, the irony is that it will easier to handle VAT when the UK sits outside the EU!

[Aleatoriac]

Do you always do what Apple, and Google tell you to do?? To me that is even worse. The way people just fall in line with the system, despite knowing that it is wrong.

When a critical mass of stupidity is reached in a population otherwise intelligent members of the population are forced to behave stupidly in order to survive. It cannot be justified rationally. That's the power of stupidity