Plugin Alliance business model

[martinjuenke]

Looking at the amount of cheaply traded Plugin Alliance plugins here in the Sell&Buy, I wonder if PA generates the big chunk of their revenues through the 20$ transfer fee...
Flooding the market with sales and vouchers and then earning lots of dollars through their grip on the second hand market.
Interesting!

[thecontrolcentre]

Except that the monthly voucher pays the transfer fee for at least one plugin bought secondhand each month. I've yet to "pay" for a transfer. I imagine PA are just trying to make a living (for themselves & their developers) in a totally saturated market. I like how they do things, and have built up a large collection of their plugins over the last year or two. Without the flash sales and vouchers, and a healthy second hand market, I doubt I would have even demoed their stuff (UA accepted) ...

[tedannemann]

Nonsense and short-sighted. How could this be a lucrative business model? What about the iLok transfer fee of $25 then? Dude, kvr is only a microscopic tiny part of the whole MI industry. This doesn't reflect anything at all.

[mutantdog]

I expect a large part of their longer-term plans will involve bringing more companies into the alliance. I think its safe to say that Unfiltered have gained quite a substantial fan-base over the last year and that will probably be used to entice other devs to join. The pick-pack will likely be geared toward tempting customers to purchase higher-end premium effects while the vouchers and flash sales will serve to generate sales for back-catalogue products.

Assuming that KVR can be treated as a microcosm of the larger music software market, PA are certainly more popular and more often discussed than they were before the voucher promo was launched. We may not see as many crazy bargains as we did last year but here we are still talking about them.

[Mathematics]

Looking at the amount of cheaply traded Plugin Alliance plugins here in the Sell&Buy, I wonder if PA generates the big chunk of their revenues through the 20$ transfer fee...
Flooding the market with sales and vouchers and then earning lots of dollars through their grip on the second hand market.
Interesting!

Absolutely not. If anything, it's an old marketing strategy to generate revenue which dates back to the seventeenth century when the rise of consumer culture was in its seminal stages in Europe. As it was then, it is now, a simple strategy based on invoking human greed...like everything else you know from living on earth: sale signs, 2 for 1 promos, BOGO deals, etc..., Marketing 101. If you think about it, giving thousands of people a valueless string of characters costs PA virtually nothing at all. Considering that most of the vouchers distributed only will equate to a minimal reduction for an otherwise, exorbitantly priced piece of software, it's safe to say that they're just positively stimulating their financial gains. I doubt you'll be seeing them on the cover of Forbes as the next owners of Snapchat.

Put the pitchforks and torches down for a second. Yes, I said their software is exorbitantly priced but in the context of the conversation, it's an appropriate word to accentuate the contrast of the insignificant value of the vouchers in this conversation against the value of the products for which the vouchers are applied to. In other words, it's my way of saying...screw the vouchers and what they're doing to make a buck and let's talk about something more significant.

Besides that...much love to you all.

[ATS]

The prices have been extremely low with the vouchers a lot of times.

[martinjuenke]

Nonsense and short-sighted. How could this be a lucrative business model? What about the iLok transfer fee of $25 then? Dude, kvr is only a microscopic tiny part of the whole MI industry. This doesn't reflect anything at all.

Boy, there is no iLok involved if you don‘t want it...

[shonky]

The prices have been extremely low with the vouchers a lot of times.

Those days are long gone, seen items that I bought for under a tenner which would now set me back well over £50 even with voucher (and this taking into account only a $10 reduction in voucher over the last couple of months).

I now have most of what I wanted from them, and a few things that I picked up that I don't use much simply because they were cheap. Consequently, they've gone from getting some money each month from me to zilch, but then I guess that selling fewer items at higher prices offsets the loss from the more thrifty purchaser.

[Bodhisan]

Dude, kvr is only a microscopic tiny part of the whole MI industry. This doesn't reflect anything at all.

This. Even on eBay, the resell of licenses is very scant.

[GreyLion]

Oops. Double-post.

[GreyLion]

All IMHO --

It's the typical problem with the demonetization of anything that can be digitized. Value approaches zero, and anybody who gets too far behind the curve on that simply doesn't make a sale.

Music-making software prices across the board began to drop precipitously in 2008, and they haven't stopped. Most of us old-timers could point to dozens, if not hundreds, of examples of this.

PA decided that the small per-unit income they'd get from all the deep vouchered sales would outweigh any potential lost sales at higher prices. I suspect that they were right. Lots of us bought lots of plugs that we wouldn't have otherwise.

Now that they've spent more than a year vastly increasing their user base and recognition, we're in the next phase. They've saturated their base to the point of diminishing returns.

They're back to regular prices, likely with deeper cuts around the holidays, and an attempt to transition to a subscription model with their $29/29months marketing. I think that the only way they have a chance of making that work is to push the plugs that were never demonetized, as well as bringing in other devs.

The only way that you can avoid demonetizing is to have plugs that either offer something unique and desireable, or are considered among best-in-class.

I have no idea how this is going to work out, but I think it's going to be VERY hard to pull off. I think we'll know before the end of the year, because their cash flow has probably zeroed out during this transition.

Or I'm completely wrong...

Incidentally, my personal dividing line on buying plugs these days is whether the GUI is scalable, because I'm on a 4k monitor, and I think that future is just about here, certainly enough so that tiny plugs will lose significant sales over this issue.

And I don't use my PA plugs any more because I can't make out the letters and numbers.

[MogwaiBoy]

What GreyLion said

The sales and vouchers got a lot of people through the door. I wouldn't be surprised if their balance was very good.. obviously they are doing fine because they are releasing new plugins and signing up new brands.

[plexuss]

What GreyLion said

The sales and vouchers got a lot of people through the door. I wouldn't be surprised if their balance was very good.. obviously they are doing fine because they are releasing new plugins and signing up new brands.

And it looks like Dirk moved BX to LA or opened a 2nd office there. So there was some infusion of capital coming from somewhere.

(Why a german would want to move to a 3rd world country like the US is beyond me)

[martinjuenke]

What GreyLion said

The sales and vouchers got a lot of people through the door. I wouldn't be surprised if their balance was very good.. obviously they are doing fine because they are releasing new plugins and signing up new brands.

And it looks like Dirk moved BX to LA or opened a 2nd office there. So there was some infusion of capital coming from somewhere.

(Why a german would want to move to a 3rd world country like the US is beyond me)

Me as a German can fully understand that move...

[MogwaiBoy]

And myself as someone who hit the jackpot by being born in the best country on Earth, I also understand ^_^