How Many Units Does A Hit Synth Sell?

[whyterabbyt]

O.K., So it's $375,000.00 after expenses and taxes, over a period of
6 years. that's $62,000.00 year.

im not sure how you get there. 3000 copies at an average sale price of $120 works out at $360,000. And that's $360,000 before expenses (which Urs estimated at 50%) and taxes (estimated at 32%).

In other words, roughly two third of half of your $62K per year figure.

[Angus_FX]

@WilliamK - I don't know for certain, but I'd strongly suspect that figure includes various OEM versions bundled with sound cards, midi controllers etc.

@xh3rv - by and large, those boxes sell to people that already know plug-ins and want to use them in different scenarios. The Open Labs boxes seem to be quite aggressively marketed at the hip hop community and no doubt pick up some new custom that way, but they cost big $$$$.

@sonkeysankey - re the $1500 price, I wasn't thinking synths particularly, more comparing to the other instruments a regular muso might buy - guitars, basses, pianos...

That only applied twenty years ago, before VSTs existed, and everything HAD to be in hardware. I would never spend $1500 on one or two synths.

no, because you're exploring sounds with them or using synths as a sound source for entire productions, you need an awful lot of sound sources compared to a lot of keyboard players (a Nord Electro probably covers most of what a lot of M1 customers would need).

There are now tens of millions of computers around, and loads of people want to try making music on them, so they are all potential customers, if the price is right, and if the produce is marketed right

I disagree, the education / knowledge gap there is HUGE, look at how instrument sources are presented in GarageBand to get an idea for where most people are at. You can't sell them a plug-in synth (which requires knowledge of MIDI, ability to play, understanding of plugin and host relationship...) when the competition is "Deadmau5 Instant Desktop Beat Maker" or something.

often times, this might mean getting it into a branch of 'Game' or similar outlet, where they sell Magix products in boxes, at a similar price to a PC game (or less). Volume sales with small profits = big enough profit, presumably, otherwise Magix would have gone out of business ages ago.

If the profit was that great, Magix would have been quicker to make products dedicated to that market instead of re-branding crudely crippled versions of far-too-complex software.

Plus, those mass market retailers are pure evil to deal with from a business point of view. Big box MI retailers are plenty bad enough, but High Street chains and non-MI big boxers are a whole new level of pain. There's a reason you don't find this stuff in those stores.. you think NI wouldn't be there like a shot if they thought it viable?

Look at all the variations on that wretched 'Ejay' thing that I used to see all the time in Game shops, they must have sold tens of thousands of those, I imagine.

Before they went bankrupt, yeah. Hmm.

[Blue Wind Project]

O.K., So it's $375,000.00 after expenses and taxes, over a period of
6 years. that's $62,000.00 year.

im not sure how you get there. 3000 copies at an average sale price of $120 works out at $360,000. And that's $360,000 before expenses (which Urs estimated at 50%) and taxes (estimated at 32%).

In other words, roughly two third of half of your $62K per year figure.

my bad, I did $125.00, not $120.00. Maybe I misunderstood what he was
saying, I thought he was implying that after taxes, expenses, etc,
it worked out to around $120.00 per sale. If that's not what he was saying, than I apologize.

[Ben [Camel Audio]]

Nah, 3000 was taken a few weeks ago... still quite some headroom upwards. I expect to fill that once there's a skin with rendered 3D-knobs (and of course, the switch of the serial scheme in 2.5 has left certain people in disbelief). The pro music market is relatively conservative, many people still prefer to buy boxes in real shops. Things have progressively been changing over the years though and more people seem to accept that some great stuff can only be had online.

Congrats on passing the 3000 barrier I agree that things are changing with regard to attitudes to downloads vs boxed software products - people are becoming more willing to buy download only products. You can see this in other areas too - look at the STEAM distribution system in the games world - thats actually becoming a pretty popular way to distribute products. I think this is a good thing - it saves on unnecessary packaging and shipping, both of which have negative environmental impacts.

Regarding piracy: The most successful day of ACE wasn't the day it came out, but the day when a timer driven deep check un-cracked the crack (several thousand downloads on various torrent sites each) for testing purpose. All of the sudden sales spiked up 300% for one day. That IMHO was remarkable evidence that an insane number of people are freeloaders, and not because they can't afford it but because of sheer convenience. Hence abusing piracy as a marketing technique is a great turn of paradigm.

Agreed 100%, certainly downloads != lost sales.. all we can compare is similarly featured, priced and marketed plugins where there is no crack, a good crack or a bad crack.

I can confirm these statements from my experience too. We were able to compare sales before and after a cracked version of CamelSpace and CamelPhat came out and sales went down by quite a significant percentage. Obviously downloads of warez copies are not the same as lost sales, but there is a significant minority of crack users who will buy if there is no crack version available. I would guess that if a product isn't cracked you probably get somewhere in the region of 25% extra sales, depending on the products, its competition etc. There is also a (pretty small) proportion of users who use cracks and then subsequently buy the full version - I think this can perhaps be expanded by creating additional benefits to being a registered user - things like having updates with new features, fixes and extra content which haven't been cracked, user libraries, excellent customer support, tutorial videos... We've also been experimenting with additional features which require access to our webserver - in Alchemy, if you right-click on a knob and choose help, it will take you directly to the relevant section of the online manual - but if you're not a registered user, then this won't work.

I'd happily talk about sales figures, but I realize a tendency of people to confuse revenues with profits. Even family and friends start to come up with slogans ("If I had your kind of money..."), but they don't see that more than 50% are drained for external costs (adwords, trade shows, sound bank percentages, hardware, software, lawyers, lego) and the rest is taxed 40%

I agree with you regarding revenue not being the same as profit, and that this is a common and annoying mistake that people make.

If you look at the development of Alchemy up until release, there was at least 10 man years of developer time, at least 3 man years of sound design time and then on top of that there are loads of other costs such as graphics, sample licensing, manual writing... And thats before you've started considering support and marketing costs. See a list of some of the people involved with Alchemy development here: http://www.camelaudio.com/alchemymanual/credits/ It doesn't take a genious to work out that stuff doesn't come cheap (well I guess my several years of 70hr weeks were, but ultimately I'd like to get paid back for that ) - unsuprisingly, I was in debt when Alchemy came out. So you've got to sell a lot of units before you turn a profit.

Also, this was built on the back (financially) of lots of products created before - like Cameleon, CamelPhat and CamelSpace - and those required quite some commitment for example, when I created Cameleon, I worked 70hr weeks for a year and lived on about £4000 during that year.

$30,000 for writing ONE piece of software, twenty years ago, which sold at $30,000 every year for twenty years, would be a fantastic income for me. Write one piece of software - say it takes me two years (I'm nowhere near intelligent enough to do what VST developers have done, by the way), and it sells for twenty years, at a turnover of $30,000 a year? What would I need to do once I'd finished creating the software, apart from bugfixes, minor updates, and support? Sounds like a good wage for doing that.

My point being, once the program has been written, it's been written. Updates and bugfixes presumably take a LOT less coding hours, than actually producing the original program from scratch.

I think you are radically underestimating the amount of time that Urs has put into the development of Zebra. But if we leave that to one side, I think you are also radically underestimating the costs after the release of a product. Once again, I can give an example of how things have been with Alchemy - in the year since release, we have had one guy working full time on support and testing, plus two developers worth of time working on adding features and fixing obscure bugs, plus around man years worth of sound design work which is given away free - thats 4 man years worth in just the last year. Once again, that doesn't come cheap. Sure, we could have just not tried quite so hard to fix certain bugs, or we could have avoided adding certain often requested features, we could have provided less free extra content or we could have provided less good support, and saved quite a lot of money - but ultimately, I think those things are the right thing to do.

Even if you leave the 'doing the right thing' to one side, then I think ultimately you are rewarded for the good you do in a karmic hippy type way. As a result of doing these things our users are very loyaly - thanks guys (and gals) These things also help to further differentiate your product from the competition, and also give a reason for those who might pirate choose to buy our stuff. We had a good review but not super glowing in EM back in the spring, but then last month they gave Alchemy their best soft of the year award, and I'm guessing a significant part of why we got that is because we've made our product that much better in the 9 months or so since their review.

A friend of ours does a legal thing with companies based in Switzerland, but all this shit is too complicated. I don't want to waste my time having to deal with bureaucrazy only because of greed or because of being "to smart to give it to the state".

I agree with you regarding not avoiding paying tax. I think Urs attitude is illustrative of most of the smaller developers - we're not primarily motivated by money and generally put doing the right thing in terms treating customers right, treating the guys we work with fairly, and paying our taxes, etc beyond making the maximum amount of money.

It's very very rare for an online-only or mainly-online plugin to get past 5,000 units. There are a few that have done it, but only through being on the market for many years.

You can buy a report called MI SalesTrak (not cheap, mind you) that reports on all the majors' sales figures at US retail. Typically (though there are exceptions), online and the rest of the world put together will be about 2-3x that number, depending on the product. There are only 3 plug-ins that did more than 2,000 units at US retail last year, and nope none of them were FXpansion ones Crying or - won't say what they are, buy the report or find someone that has it.

Interesting figures - thats pretty amazing that only 3 plug-ins sold more than 2000 units in US retail last year! The US market represents around 35% of our sales, so that fits with your 2-3x figure.

Regarding our sales figures for Alchemy we haven't sold as many copies as Urs has of Zebra, but we're not doing too bad - but I guess you could all figure that out from our recent GB

question: are private deals (services such as consulting, installations, studio setups, etc.) significant for (some) VST companies? at least for NI it seems to be the case?

I don't know the answer regarding NI, but I would guess that those things are not significant. Certainly for Camel, we make no money from those things. What does make some (though relatively small) amount of money is licensing deals - for example, you get a host locked version of CamelSpace with MixMeister.

The search engines seem to not care about piracy these days which is one of the reasons why i think it's so bad. Everytime i read about a new plugin or app and type in the name to look at the developers website even the suggestions are showing it.

Im fairly sure that if the search engines moved certain words to lower ranks or did not list them it would become less of a problem, sometimes i even see a dodgey site listed before the developers and thats when you know it's bad. My guess is they make money from adverts so as long as it pays them they won't change it, then theres all these new quick file sharing sites so if a developer ever got something taken down another would be up in a few days or whatever.

I understand the arguments about censureship, but what does annoy me is that Google can't even be bothered to implement their own policies. A while back I noticed some sites selling 'OEM' versions of our software. Google claimed to have a policy of removing listings which had misleading titles. I pointed out to them several times that this site was claiming to sell OEM versions of our software in their title, and thus was breaking their rules and should be delisted - I gave them plenty of evidence to. They never got back to me. I suspect they couldn't care less - like most publicly listed companies, they care first and foremost about maximising profit - and in fact, thats the one thing they have legal obligation to do.

Anyway, enough rambling from me - I'd better do some work

Ben

[eduardo_b]

How about that Steinberg claim of over 1 million Cubase 4 sales? Is that real? Ignore me if I got it all wrong...

Where does that number come from? It has to include all upgrades from all versions.

[glokraw]

lotuzia ... you're justifying software theft in KVR. Please don't.

Ermm. He wasn't.

Anyone working for that thieving studio 'mogul' without turning him in to the authorities, whether a musician, plumber, or an IT person, is complicit in piracy. The wages earned by those who look the other way, are tainted money. The rich mogul did not perform armed robbery, but robbery nonetheless. And a witness is a witness.

[glokraw]

sonkey sankey ...we're all bored stiff with your "I know best" thread hogs

lotuzia ... you're justifying software theft in KVR. Please don't.

Everybody else - great thread - one of the best this year

Well I reread my post and I dont think so. I you refer to the part when I say that I understand very poor people to steal, read it this way : If you have a family, need to feed your babies and have no other way to do it than stealing, I understand you will.Thats all. Maybe its more clear like this ?

Anyway I had the impression what I wrote was merely a charge against piracy, but sorry if I offended you. If some other people feel the same than you I'll just edit and remove my post

LtZ

Thievery is a condition of the heart, in the U.S. huge corporations routinely used pirated software suites and Operating systems, rather than buying site licenses. The poor
who steal, rather than humble themselves in a welfare line, church, or benevolent mission, will also steal in better situations. Witness the catastrophic welfare fraud in the California. Its freaking PARADISE, and its going bankrupt because thieves control
the low end, the government, the high end, and everything in between.

[Hitch]

Well, it seems that Urs, Angus and Ben have failed to woo me. It strikes me that I've inadvertently invented my own version of a Group Buy.

Fabfilter Twin is looking increasingly attractive...














All in jest. I'll buy one of them at the end of spring. I'm such a tease.

[yellowfever]

So, lots of smalltalk and BS on here and some interesting input from respected devs, but, How Many Units Does A Hit Synth Sell?

[koalaboy]

So, lots of smalltalk and BS on here and some interesting input from respected devs, but, How Many Units Does A Hit Synth Sell?

Maybe enough to feed a small family but not enough to save the global economy, apparently.

And it depends on the price.

So, the best answer would be: 42

[neverfall]

sonkey sankey ...we're all bored stiff with your "I know best" thread hogs

lotuzia ... you're justifying software theft in KVR. Please don't.

Everybody else - great thread - one of the best this year

Well I reread my post and I dont think so. I you refer to the part when I say that I understand very poor people to steal, read it this way : If you have a family, need to feed your babies and have no other way to do it than stealing, I understand you will.Thats all. Maybe its more clear like this ?

Anyway I had the impression what I wrote was merely a charge against piracy, but sorry if I offended you. If some other people feel the same than you I'll just edit and remove my post

LtZ

Thievery is a condition of the heart, in the U.S. huge corporations routinely used pirated software suites and Operating systems, rather than buying site licenses. The poor
who steal, rather than humble themselves in a welfare line, church, or benevolent mission, will also steal in better situations. Witness the catastrophic welfare fraud in the California. Its freaking PARADISE, and its going bankrupt because thieves control
the low end, the government, the high end, and everything in between.

"Thievery is a condition of the heart?" Always? Never a condition of circumstance?


Or survival? I'm not talking pirating software here. With mention of a welfare line and mission I know you're not either.

[Meffy]

This isn't HPC. Please keep the politics out or the thread will be locked.

[glokraw]

I think hardware will always outsell software because hardware is a more intimate piece of gear. It's physical, you can really get in touch with the piece and learn it inside-out by touch. Software on the other hand is pretty much always very similiar looking, there's always competing freeware alternatives and you have to have controllers to map the controls too. Not every midi controller is the same either so not all functions might be mappable or as effecient, as opposed to hardware units, all the controls are specically built for it.

I personally still prefer software for it's quick ease of use and saves space. Of course, most will rather still have an actual hardware unit, than a piece of flat software on the screen.


It's like acoustic instruments (guitars, bass, wind instruments,...). If you can play them, it's a no brainer to choose the actual phsyical instrument over a software based version. Your just fooling yourself if you think it's the same thing.

There may be some stable relationship between the number of midi-capable keyboards,
and softwares that need or benefit from them. There are times I need to just turn it on and play, but being able to quickly load a project with lots of softsynths, can't be replicated easily in hardware. A good sax guy I know, is always looking to jam, the
aerobic part of playing the horns can't be matched at the keys, although some vocals
from instrumentalist can get close.
Cheers

[Karmacomposer]

So, lots of smalltalk and BS on here and some interesting input from respected devs, but, How Many Units Does A Hit Synth Sell?

Define a hit synth. Synths you THINK were hits probably are not. Just because everyone in the world is talking about something does not mean they have bought it.

Which synths do YOU think were hit synths?

Mike

[neverfall]

This isn't HPC. Please keep the politics out or the thread will be locked.

Yes bad move to involve politics on this site period considering that some 'kinds of people' aren't allowed to defend themselves when others can't handle a sensible alternative viewpoint.