Quote:
Originally Posted by eugd  The exchange rate today is rough 1 to 2 (pounds to dollars). You choose which currency you want to pay with (because you just go on their online store to buy the unlock code for the plugin). So it's pretty easy for people to transfer funds to the other currency or find a friend on gearslutz to buy the code for them. So how could they NOT set the US price at $500!? If it was less, everyone in the UK could just paypal me $500US and I'd buy their unlock codes for them. (Plus, not being in the UK they'd pay no tax doing this). |
That's totally OK as far as the manufacturer is concerned...they make their sales. The gubmint might not like that though.
Pricing policy is an interesting discussion in itself. Usually there's a cost of goods sold but in software there isn't (or it's negligible). In software all the costs for the producer are up-front...the first copy costs a few million dollars to make (or however much) and each additional copy costs a few cents. So your profits only appear after the upfront costs are paid off.
You are therefore free to set any price you want, and what you do is set the price that will result in the largest gross revenue figure, whatever that is. You also want to keep an eye on supporting the market as a whole, keeping customer expectations at a certain point and not below lest you cut off potential profit. So while you might find that pricing a given plugin at $100 might net you the largest overall sum, it might set expectations such that people aren't willing to spend $250 on a plugin any longer which may hurt future efforts.
In this case, the customer expectations of the price of a single compressor plugin in USD in the US Market is well below $500...and I predict they won't be getting the largest overall figure internationally as a result of their pricing. 249 sterling (too lazy to find that L character on this US keyboard) may be consistent with UK customer expectations but over the last year the dollar has collapsed, and this pricing will cause a lot of disinterest.
They also have to consider the platform as a whole. I predict UAD will make a major announcement in 2008 (perhaps as early as NAMM) that will finally satisfy the power gap between the platforms. Given the UAD plugins are priced well within US expectations, they are in position to take the lion's share of the accelerated plugin market. The high prices for Duende add-ons, plus the absolute processing limits, and the relatively few choices of plugins compared to UAD or Powercore combine to threaten the whole Duende product. Changing the pricing policy to be more US-friendly would go a ways to bolstering their position.
Otherwise they are aiming for a niche, high-end positioning...but I don't think plugins will have an easy time getting that kind of credibility. People are generally used to pirating plugins, and so "exclusive cachet" is a bit tough to achieve with a product that doesn't obey scarcity economics.
Note also that none of these hardware-accelerated (or
decelerated, these days) plugins are susceptible to piracy, so they can't argue that the opportunity cost of piracy has to be factored into these prices as their native competitors do.
They might want to look at UAD, Apple, Digidesign etc. and start thinking about selling chassis instead of plugins. "Buy a second Duende chassis and get your pick of two additional plugins free." "Buy the new Duende XL chassis and run 96 channels at 96KHz, plus get four add-on plugins free." The chassis are probably made in China which floats closer to the dollar.
But as it is I'm very averse to buying any of these Duende addons at these prices, after how well I feel I've been treated by UAD.