why are most soft synths and effects so expensive?

[Muff Wiggler]

OK, so there have been two, three if I stretch the boundaries to include something that most hosts include anyway, which still proves my point, doesn't it?

Meridian Pro
MicroTonic
NuBi
eXT
ERA


that's five BONES. Good adding you do down there.

And there's more too. People just forget about them. Look how fast you forgot about three of five.

[Borogove]

Either that, or the whole enterprise is just a kind of glorified computer game industry, in which case the price of the product is grossly overstated.

OT, but:

Computer game development cost: US$5M
Computer game marketing budget: US$5M
Per unit revenue to developer and publisher, after retail markup, distribution cost, manufacturing, and licensing fees is probably around $10 a unit.

So you don't break even until one million units are sold.

Invest less in development and everyone says "eh, it's cute, but not as polished or deep as game X".

Invest less in marketing and you sell less than 100K units.

[LiteOn]

Well, while slowly recovering from a tremendous hangover (caused by a night where I spent another middle-priced VSTi for cool drinks) let my just say two things:

- this is a very interesting, informative AND sophisticated discussion! Thanks to all contributors.

- I was shocked when I was reading about the real sales-numbers, in particular as it was stated already 5.000 (or was it 10.000?) sold units are considered the holy grail. (And, with this in mind, I'm happy to be engineering business software

cheers,
LiteOn

edit: fixed typos

[eduardo_b]

In reading the thoughtful comments being made, I began thinking how the software plug-in market is probably as much illusion as reality. The assumption is that with so many people using computers, and with music being a significant reason now, the market for music creation software should be huge. It is huge, but it's also tiered in terms of how much sophistication is actually needed or wanted.

I bet there are magnitudes more copies of Adobe's Photo Album installed than Photoshop. Album uses the Photoshop engine, but the features and interface are for people who don't want a steep learning curve and have basic needs to manipulate and print photos. That market price point is about $50 or less (street price) for this type of software. The feature set is limited but completely functional for the intended user.

There's no reason to believe the music software side is any different. The number of people able and willing to pay $200 for a soft synth or $400 for a sequencer is simply tiny in comparison to those who might have a more casual interest in playing with creating music on their computer.

This brings up the reality that the number of plug-in developers who will make a living from their business is small, and many of those who stay with it are always going to struggle to make ends meet. There simply aren't enough customers and too many plugs already available in the $100+ price range.

It's obvious from reading the comments of developers here that the support costs for servicing a large user base are so high that it's better to price all but the dedicated user out of that market segment. The other side of this is that the economic future for these developers is limited and close to or at saturation because of this. It's an odd economic model when the largest potential market segment is not the one developers want because they can't "afford" to support it.

So, does this make $200 plugs too inexpensive or overpriced? They're probably not overpriced, but most customers are not going to buy one of each either at these prices. And the number of free synths and effects simply makes it unnecessary for most people to buy high end plugs. They don't need or want them (or don't want them enough to pay for them) to do what they want -- muck about making music.

Warez is simply not the problem. It's pricing. Developers could sell a lot of plug-ins to a lot of "new" customers who don't typically pay for plugs if they priced for volume, but they don't want to do that. The real customer loss is all those who might pay $30 to $50 for a synth, but never $180 to $250 or more. The synths could be less fully featured and simpler to use, and in theory require less support as a result. But I don't see much interest in this market by developers. Not yet.

[Rangtangtang]

Well, I think there is one point everybody is missing and that is it cost a lot of money to buy the computer in the first place and as well time to get use to it. There is not much left in the pocket for other things after that? So, naturaly enough one would head straight for the freeware, and that there being so much of them one might completely forget about the commercial stuff for some time? Finaly, just think about this for a second - Who is smarter, the person who sold me the $25 CM magazine in the first place or a software company such as Steinburg later on?

[bitfreak8]

I Really don't think the synths are expensive. And there's no need to buy one if you're short of cash, because there's sooo much nice free one's out there. The competition for the software companies must be very tough.

For me the problem is I can afford much more than I need, resulting in too much time going to try new ones, and too little time in making music.

On second hand value: If i sell some of my eighites hardware i sure would get just a small fraction of what i gave, but i would not even try to sell my eighties software (it would probably be very tough giving it away).

My conclusion is software has less second hand value. (Anybody want to buy Steinberg Pro-16 for the Commodore 64?)

[Muff Wiggler]

... thanks for pointing out Blacet, looks pretty capable and good value.

no problem. i haven't used a lot of modular stuff, but i have to say the Blacet stuff seems excellent.

-- even so, a fully kitted out system is going to be in the $1500-$2000 range. Not that I don't think it's worth it, just not sure if I can justify it!

As the average VST price creeps beyond the $150 mark....

If I make the same dozen or so purchases that I did last year, but on modules instead of VSTs...

12*150 = 1800

[shamann]

I'm one of three guys who registered Tiny God's Murmur Pro

i knew it was bad but...... three???

Nine, now, actually. I may have said three in pure sarcasm at some point, or just after it was first made available. But, again, I don't advertise. It makes a difference.

Well, I was being hyperbolic, since Russell at one point had mentioned it was 5 or 6. At the time of the first update, I'm pretty sure there were only three, though.

Russell doesn't advertise, and he did give an 8-step version away for free, but 9 is pretty dismal nonetheless.

I think this sort of highlights what Bones was saying. One of the reasons prices are going up is that most users clearly don't value things that are free or cheap. Consider freeware donations. How many users donate to the number of downloads? Angus mentioned that with commercial plugins the demo download to purchase ratio is about 1 to 100. With freeware or donationware, it is significantly higher. Look at the case of Nubi as an example.

You know, I was the first person to donate any money to BetaBugsAudio. When I did, they had probably been around for close to year, had been the subject of countless praiseful threads, and their software had probably been downloaded by near half of all the users at KVR.

And I was the first to donate a year later.

Users bitch and moan all the time about price, but they don't stop to support the gifts they've already been given. And they seem easily swayed by hype and gloss. Stylus RMX was voted the best instrument of last year in the KVR poll. Nothing against Spectrasonics, and I'm sure they make quality products, but I have serious trouble believing that it was the best thing around, especially by the margin it was voted last year.

But it's the one that costs $300, appears in adverts in every glossy mag and on every audio website, and gets the hype at all the audio shows. It is the big thing, so people seem to prefer supporting that.

[Muff Wiggler]

One of the reasons prices are going up is that most users clearly don't value things that are free or cheap.

this is a very good point - i completely agree

[HanafiH]

It's obvious from reading the comments of developers here that the support costs for servicing a large user base are so high that it's better to price all but the dedicated user out of that market segment. The other side of this is that the economic future for these developers is limited and close to or at saturation because of this. It's an odd economic model when the largest potential market segment is not the one developers want because they can't "afford" to support it.

Now I do agree with much of what you say, but this point above is the big one. Every technology goes through two stages: the vertical market, where new customers outnumber existing customers, and the horizontal market where existing customers outnumber new customers, and vendors compete by brand.

By my reading of The Music Trades the height of vertical growth in software music making was around 2001-2002. Today the market is saturated, virtually anybody who wants to make computer music is doing it, by hook or by crook. Vendors must either persuade users who are willing to pay to switch brands, or persuade users who don't pay to start doing so.

The dominant market force controlling 'conversion' sales, people who come from the dark side to the light, are network effects and the wider music trade. Network effects are the benefits the vendor brings above and beyond the benefits the product alone delivers, and the benefits the total scale of the user base, both light and dark, create. For example the number of people with a product skill set, the scale of non-vendor voluntary tech support, and the word-of-mouth interaction between 'users'.

Audio software vendors MUST support the chain of trade that brings money into the hands of musicians if they want more money in the market as a whole. I suggested more than three years ago that a viable model for this was: deeply discounted licenses traded against a take on the sale of the music. I get to rent very cheaply a copy of Suchnsuch and in return Suchnsuch Ltd, in a consortium of vendors, gets sole distribution rights on the sale of music created. A half-dozen James Blunts sold on to major labels, and the whole market capitalisation changes radically. There's lots of variations on this basic theme.

This creates a unity of interest between the vendor and the musician in which both benefit from the true scale of the market. The current situation in which gizmos are peddled on the myth of 'all you need is this new thing and you could be a star' is frankly little better than snake oil. If vendors want to take more money, get the musicians more money to give.

[shamann]

By my reading of The Music Trades the height of vertical growth in software music making was around 2001-2002.

I would have figured it to be around 2003. It seemed at that time there was a major next generation of software (z3ta+, Rhino, Virsyn, Xphrase, Reaktor 4, FL Studio rebrand, major Ableton Live release (V2?) etc. Also was when Synthedit started making a lot of plugins) and a lot of new users appeared to be pouring in, reflected in the major surge of people who started coming to KVR.

[FaX]

In reading the thoughtful comments being made, I began thinking how the software plug-in market is probably as much illusion as reality. The assumption is that with so many people using computers, and with music being a significant reason now, the market for music creation software should be huge. It is huge, but it's also tiered in terms of how much sophistication is actually needed or wanted.

I bet there are magnitudes more copies of Adobe's Photo Album installed than Photoshop. Album uses the Photoshop engine, but the features and interface are for people who don't want a steep learning curve and have basic needs to manipulate and print photos. That market price point is about $50 or less (street price) for this type of software. The feature set is limited but completely functional for the intended user.

There's no reason to believe the music software side is any different. The number of people able and willing to pay $200 for a soft synth or $400 for a sequencer is simply tiny in comparison to those who might have a more casual interest in playing with creating music on their computer.

This brings up the reality that the number of plug-in developers who will make a living from their business is small, and many of those who stay with it are always going to struggle to make ends meet. There simply aren't enough customers and too many plugs already available in the $100+ price range.

It's obvious from reading the comments of developers here that the support costs for servicing a large user base are so high that it's better to price all but the dedicated user out of that market segment. The other side of this is that the economic future for these developers is limited and close to or at saturation because of this. It's an odd economic model when the largest potential market segment is not the one developers want because they can't "afford" to support it.

So, does this make $200 plugs too inexpensive or overpriced? They're probably not overpriced, but most customers are not going to buy one of each either at these prices. And the number of free synths and effects simply makes it unnecessary for most people to buy high end plugs. They don't need or want them (or don't want them enough to pay for them) to do what they want -- muck about making music.

Warez is simply not the problem. It's pricing. Developers could sell a lot of plug-ins to a lot of "new" customers who don't typically pay for plugs if they priced for volume, but they don't want to do that. The real customer loss is all those who might pay $30 to $50 for a synth, but never $180 to $250 or more. The synths could be less fully featured and simpler to use, and in theory require less support as a result. But I don't see much interest in this market by developers. Not yet.

I think some good points are raised here bar the last
paragraph I've "bold" highlighted.

Jon from CoFX did some stupendously deep synths Kubik 2 , Vectrik etc at very low prices (sub $50).... along with a swag of decent freebies like Rock & Ensembler.
Energy XT is very competitively priced.
As are a few others.
IE: MicroTonic
Their pricepoint to synthesis power ratio is huge.
Still hasn't stopped assholes putting them up on warez sites.
So I don't see that as a valid arguement in real world practice.
Jon has superb customer service also I might add.
You can't tell me that some or many of these smaller dev's aren't hurt by warez distribution.
The price to warez ratio arguement just doesn't hold IMHO for what it's worth.

[shamann]

Jon from CoFX did some stupendously deep synths Kubik 2 , Vectrik etc at very low prices (sub $50).... along with a swag of decent freebies like Rock & Ensembler.
Energy XT is very competitively priced.
As are a few others.
IE: MicroTonic
Their pricepoint to synthesis power ratio is huge.
Still hasn't stopped assholes putting them up on warez sites.
So I don't see that as a valid arguement in real world practice.
Jon has superb customer service also I might add.
You can't tell me that some or many of these smaller dev's aren't hurt by warez distribution.
The price to warez ratio argument just doesn't hold IMHO for what it's worth.

I can't say to what extent warez plays a part, but we all surely agree it doesn't help.

But regarding CoFX, that's a prime example against low priced synths. Jon stated publicly more than once that his user base wasn't huge and that he had to focus on delivering frequent new products to make sales rather than expand on existing products. And now CoFX is all but retired and Jon has moved on to a bigger league with the Papen stuff.

[anzoid]

Audio software vendors MUST support the chain of trade that brings money into the hands of musicians if they want more money in the market as a whole. I suggested more than three years ago that a viable model for this was: deeply discounted licenses traded against a take on the sale of the music. I get to rent very cheaply a copy of Suchnsuch and in return Suchnsuch Ltd, in a consortium of vendors, gets sole distribution rights on the sale of music created. A half-dozen James Blunts sold on to major labels, and the whole market capitalisation changes radically. There's lots of variations on this basic theme.

You seem to be talking about sponsorship of some type. But would the software makers be able to support that kind of model? Wouldn't they want to 'invest' in people with a proven track record rather than giving great discounts to people who might one day, possibly, eventually make it big time. They may never make retun on investment - certainly wouldn't if they sponsored my music...

The big sponsorship deals go to the big artists - they get all their instruments etc. whilst a no-name guitarist would be lucky to get a set of strings.
Would it (or could it) be any different for computer musicians?

Having said that it would be great if it could happen.

[HanafiH]

They may never make retun on investment

Well that's the risk we all take isn't it?

Nobody donates money to donationware? Whatever makes a developer think it's any different for musicians? I've had over a thousand combined listens and/or downloads of my music from AMPCAST but not so much as a single farthing earnt. Sales? An email saying thanks would be a first.

The old mp3.com did so very well salami slicing pay-per-play cents for independent musos that Tiscali (I recall) bought them out to shut them down. What would you rather have? A slice of something or bugger all? A large consortium of developers AND musicians creating the largest independent download site using the mp3 business model.