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AVID (Digidesign) - Letter from CEO ! Audio Interfaces
Old 30th August 2008
  #31
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Quote:
Originally Posted by T_R_S View Post
Because there is no money in Software sales.
I have used Digidesign software since 1986 (QSheet) until Digidesign started selling hardware they never became a viable company. There are dozens reasons why Protools software goes with Digidesign hardware.
1) Driver/Hardrware support and programming
2) Software with features that direct access hardware
3) No real cash income from selling just software.

Apple does not just sell operating systems just like Digi does sell hardware
Protools LE is entry level software don't expect flagship features on it.
Just as an iMac does not have the features of a Mac Pro.
If HD is too expensive you should charge more.
If your job pays $5.00 an hour you probably can';t afford that brand new Lexus SUV.
People seem to have to no problems buying Neve and Pultec EQ's for 5K or more.
If you charge 500-1K/day for your work you will probably find that would no problem affording HD.


i agree except that LE is kinda lost in limbo because m powered is the entry level system
which is not that far away from LE. but they cant put an LE version which will take market share from HD.
Old 30th August 2008
  #32
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BTW. maybe i see it from a post production side which is where digi/avid are most deep in...


but i think from that letter that its not doing something to pro tools or whatever its basically aiming at the FCP market. more specifically.. FCP studio. which has soundtrack pro and color correction all in one at a great price (w/o a mac of course)

in FCP you can do EDL conforms and export to motion or color correction all within FCP.
and this is something post audio guy hate... workin our asses off for a scene and then some producer decides to add a few frames of someting and offsets the whole session.

FCP and sountracks will automatically do this conforms but not PT. so maybe there is a hint of a better integration among pro tools and avid systems.


they also mentioned m-powered series development joining sebelius and pro tools which is just a dumb move not to do it before as they both are doing almost the exact product.
in the namm 08 i ask some folk as m audio about the 003 and they had no idea nor they ever speak to pro tools people.
Old 31st August 2008
  #33
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Quote:
Originally Posted by T_R_S View Post
Because there is no money in Software sales.
I believe Bill Gates (and lots of others) would disagree with you here.
Old 31st August 2008
  #34
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Quote:
Originally Posted by nativeaudio View Post
I believe Bill Gates (and lots of others) would disagree with you here.
True - but it depends on the company.

Digi sells hardware. The software is part of that (or connected to that) - but the software isn't where they make their money.

Just like Apple doesn't sell operating systems - they sell computers - which run OSX.
Old 1st September 2008
  #35
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Quote:
Originally Posted by nativeaudio View Post
I believe Bill Gates (and lots of others) would disagree with you here.
No doubt! Apple as well........ Software is BIG income, and it's a subscription type of service ~ i.e. You know you have a 2 million user base, more than 50% (probably more if its a good upgrade) will continually upgrade every time you have new releases. I'd imagine with Digi it's a 75% upgrade rate.

Look at Apples software income...... pretty dam impressive....... and it fuels hardware sales........ a great model.
Old 1st September 2008
  #36
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Quote:
Originally Posted by nativeaudio View Post
I believe Bill Gates (and lots of others) would disagree with you here.
I think the pro audio software market is a tiny bit smaller

Wal Mart does not have a lot of demand for DAW systems
Old 1st September 2008
  #37
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Quote:
Originally Posted by Sir.Audio View Post
Talking about the Audio side of AVID,

Personally, I believe PT is the BEST, period. But lets not make this a bashing thread nor a X vs. Y DAw thread.. I just said this to express my thoughts.

I also loath Digi for their quasi- covert-ops tactics on HW and LE platform.

I believe they are bullsh*t*ng us once more, because clearly HD is going down the hole as it is simply no longer justifiable to save for these cards.

With the onset of 64 bit OS's, the magic of HD is over. Other DSP's are platform open and cheaper, many way more portable anyway (which is always a plus).

The 48 internal bus, which made HD more "special", is very near to be less than standard, when developer start writing for 64bit.

So to conclude, I think Digidesign thinks everyone is a total fart and can't see through their politics.

Sorry for being so harsh. I really have a love/hate thing going, because I love PT but can't afford HD, and I can't live with the limitations of the LE, so I am forced to be in two situations.

1 - earn less money due to client withdrawl

2 - be a little less efficient in my freelancings, because I am forced to use other DAW's to overcome said limitations, plus actually LOSE money to finance these other DAW's to be up to date, that I DON'T want to use

Digi is clearly giving out candy with very short shelf-life! I'm not buying!

In my opinion, if this email means the end of proprietary HW, track count, ADC and oh-so-many other complaints... I will come here and whip myself to shame in search for redemption...

What do you slutz think?
As you can see by my signature, I agree with most things you have said. As for the magic of 48 bit fixed, there have been DAWs with 32 bit floating point(which can deal with even more than 48 fixed) for many years that dispel that myth from way back. It is too bad that it has become "the standard" because Digidesign has taken great advantage of that, much to the chagrin of their customers. I have been working with 2 PTHD systems for the last two years. We are now dumping them for more reliable and better sounding platforms. I will not miss their pricing, ridiculous proprietary strategy, lack of support, or absolute corporate greed and indifference.
Old 1st September 2008
  #38
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Quote:
Originally Posted by T_R_S View Post
Because there is no money in Software sales.
I have used Digidesign software since 1986 (QSheet) until Digidesign started selling hardware they never became a viable company. There are dozens reasons why Protools software goes with Digidesign hardware.
1) Driver/Hardrware support and programming
2) Software with features that direct access hardware
3) No real cash income from selling just software.

Apple does not just sell operating systems just like Digi does sell hardware
Protools LE is entry level software don't expect flagship features on it.
Just as an iMac does not have the features of a Mac Pro.
If HD is too expensive you should charge more.
If your job pays $5.00 an hour you probably can';t afford that brand new Lexus SUV.
People seem to have to no problems buying Neve and Pultec EQ's for 5K or more.
If you charge 500-1K/day for your work you will probably find that would no problem affording HD.
There is no money in software sales? I'm sure Apple would love to be doing half the business that the "software" company Microsoft does. My software direct accesses my hardware just fine, and is not Protools. If you buy a DAW/hardware package that is as good or better than Protools, you have more money left over for those Neves and Pultecs. Protools does a fine job of doing audio, but don't try and convince us that they are the end all, be all and are beyond reproach! They are just expensive, proprietary, and popular!
Old 1st September 2008
  #39
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Quote:
Originally Posted by T_R_S View Post
I think the pro audio software market is a tiny bit smaller

Wal Mart does not have a lot of demand for DAW systems
You used the Apple reference!!!!tutt
Old 1st September 2008
  #40
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Quote:
Originally Posted by T_R_S View Post
I think the pro audio software market is a tiny bit smaller
Hi TRS--- is that really relevant?

When Digidesign sells a HD system, they generate a lot of money from the software. I mentioned this in another post that disappeared after the resurrection/troublesome days not long ago:

They sell a card that's almost identical to the HD Core card for $2000 (list pirce, if you buy a HD2 or HD3 instead of a HD1). I doubt that they sell the added process cards with financial loss (when they sell a HD2 or HD3 system).

In other words: A card that's almost identical to the core card, with the Pro Tools installer software added (and some copy protection stuff on the core card) goes for $6000 (list) more: $8000 (list).

When Accel cards are sold separately, they are sold for $4000 (list).

In other words, they charge somewhere between circa $4000 and $6000 (list) for the installer DVD (read: software) and a manual, and between circa $2000 and $4000 for the Core card. Roughly.

Not knowing exactly how much the extra components on the core cards cost, I don't know the exact numbers of course (I wrote circa, right...) - but they sure don't cost more than a Mac Pro, which costs $2,800 (list) - including two quad core Harpertown processors/CPU, memory, power supply, graphics card, a 320g drive and a lot more.

It seems that when people buy a Pro Tools core system, Digidesign makes a lot more money on the software than they do on the hardware. Not that it really bothers me... I wouldn't mind having some of the financial skills they have.
Old 1st September 2008
  #41
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Quote:
Originally Posted by Mosby View Post
Just like Apple doesn't sell operating systems - they sell computers - which run OSX.
That's not entirely true either. Apple sells computers that run/include their OS, then they come out with a new paid upgrade OS version about every year. So yes, they sell the OS too. Also, they sell a bunch of other software applications... like Logic. They surely make plenty of money beyond the hardware by selling software too.
---
c
Old 1st September 2008
  #42
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Apple's iPhone App Store, reported 60 million downloads and revenues of $30 million in its first month.
Old 1st September 2008
  #43
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Hardware sells software and software sells hardware.
Old 1st September 2008
  #44
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Quote:
Originally Posted by Beyersound View Post
You used the Apple reference!!
You missed my point
Microsoft software is sold everywhere including Wal Mart. The business market is huge hundreds of millions of users compared to the very small PA market under a million.
You can buy Microsoft software just about anywhere you can't buy much PA software in Walmart but Miscrosoft is sold there.

Yes Apple sells software but you need Apple Hardware to run it.
Logic 5 and all the Emagic Logic plugins use to cost 4-5 times what there cost now.
Yes there is money in software yes Apple sell OS upgrades just as Diigdesign sells plug-ins but they make money profit selling hardware.
Just look at Stienberg trying to get into the hardware market as well. MOTU never started out as a hardware company.
The market does not value software look on eBay what used plug-ins sell for. How much do you think my old copy of Tiger would sell for? Yet my old clunker G5 that's almost 4 years old still sells for around 1K
Old 1st September 2008
  #45
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Quote:
Originally Posted by PMoshay View Post
Apple's iPhone App Store, reported 60 million downloads and revenues of $30 million in its first month.
After they sold $100 million worth of iPhone hardware ...
about 10 million 2G iphones were sold and Apple earned $330 millioin dollars the first weekend the 3G came out.

iPhone 3G Roundup: $330 Million For Apple; Month-Long Inventory Shortage; Free AT&T Wi-Fi Snags; RIM - washingtonpost.com
Old 1st September 2008
  #46
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Quote:
Originally Posted by T_R_S View Post
Diigdesign sells plug-ins but they make money profit selling hardware.
Regarding PT Core systems - for the reasons I mentioned above, there's a lot of profit from the software alone.

Quote:
How much do you think my old copy of Tiger would sell for?
The low second-hand price for previous OS versions doesn't change the fact that Digidesign is capable of charging thousands of $ more for a Core system than they can for a card which is almost identical to the card in the core system. THe difference between those two products is... the software.

The Digi CEO writes that they need to make some changes to the way they do business, and since everybody knows that DSP power is less expensive than it ever has been (and this won't stop), my blind guess is that they will focus more on software - and on non-DSP hardware.

Since eg. a PT HD3 system consists of three cards and a piece of software, and since people have been willing to pay a lot for these systems due to what they offered hardware wise, and since most people who want a PTHD system today already can get what they want with a HD1 system and a fast Mac, they have to change their business model.

Manufacturing, transport, service, getting the needed components (over several years) are all important things when you sell hardware... When you sell software, the expenses are mainly product development / R&D, which are needed expenses when you sell hardware as well.

If you can sell a piece of software for $1000, and a piece of hardware for $1000 - what do you think generates the most profit? How much does it cost to manufacture an installer DVD - $2?

Of course OSX and Windows have been sold in much higher numbers than PT or any other DAW, but the ratio between manufacturing costs for hardware and software production remains the same.

I don't know how much Apple makes on a Mac Pro, but who knows... maybe they would have been even more successful if they sold OS X for non-Apple computers as well, since there are 9-10 times as many people out there who use non-Apple PCs as there are Macs.

Plus - at some point, people will have so powerful computers that most of us won't feel a need to upgrade our hardware as often as we used to. We'll soon be able to buy a a MacBook Touch or a Micro Mac that's fast enough for music production (for most people), so the real winners will be those who can produce music software everybody wants.
Old 1st September 2008
  #47
Interesting to note that we have so many Digidesign accountants on the board.
Old 2nd September 2008
  #48
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Quote:
Originally Posted by nativeaudio View Post
How much does it cost to manufacture an installer DVD - $2?
Wow! i could go to staples and buy some of those even cheaper! ~

Talk is soooooo cheap when it comes to bashing software, people have NO IDEA (unless you are a developer) what it takes to put out/sell a product that other people will RUN A BUSINESS ON.

blah, blah, blah......... Logic, Nuendo, Cubase, Fruity Loops, Garage Band, Performer, Acid....... yea, they're all so much better that the public has just missed it. Yep, the engineering & producer types are easy to get over on.......


Let's see a critic here that writes code and sells a product for a living, that's who i wanna hear from.
Old 2nd September 2008
  #49
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Quote:
Originally Posted by T_R_S View Post
How much money do think it costs Digi to develop a new version of Protools the last upgrade I paid for cost $100.00 it took about 5-6 months to put out 7.4 that's not counting any time for Leopard and Vista development. Software is very expensive to develop and hardware is far less costly to make. Thus hardware profits subsidize software development and support.

They canned 001 because they brought out the 002. You could not put a 001 PCI card into a G5 even. 001 is form 1999 you can't expect it to work forever when it does not work in current computers. No company is going to spend money developing software on 8 or 9 year old obsolete hardware.
Check your facts Mbox 1 works with all versions of Protools 7 including 7.4.2 Leopard and Vista.
I don't know how many times I have to repeat this.
They dropped the 001 so they could force everyone to upgrade their hardware.
They physically wrote the code OUT of the new software, so it simply wouldn't recognize the 001. Proof is the hack that was available that allowed windows users to use the 001.

Yes, they went out of their way to make it in-compatible. Pure and simple.
Old 2nd September 2008
  #50
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Henchman's Avatar
Quote:
Originally Posted by Mosby View Post
True - but it depends on the company.

Digi sells hardware. The software is part of that (or connected to that) - but the software isn't where they make their money.
Nonsense. If the software was free, you wouldn't have to pay for fixes, I mean updates.
And if the software wasn't the "standard" nobody would use their hardware.
Old 2nd September 2008
  #51
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Quote:
Originally Posted by Henchman View Post
I don't know how many times I have to repeat this.
They dropped the 001 so they could force everyone to upgrade their hardware.
They physically wrote the code OUT of the new software, so it simply wouldn't recognize the 001. Proof is the hack that was available that allowed windows users to use the 001.

Yes, they went out of their way to make it in-compatible. Pure and simple.
+1 Tell it like it is brother!!!
Old 2nd September 2008
  #52
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Quote:
Originally Posted by PMoshay View Post

Talk is soooooo cheap when it comes to bashing software, people have NO IDEA (unless you are a developer) what it takes to put out/sell a product that other people will RUN A BUSINESS ON.

blah, blah, blah......... Logic, Nuendo, Cubase, Fruity Loops, Garage Band, Performer, Acid....... yea, they're all so much better that the public has just missed it. Yep, the engineering & producer types are easy to get over on.......
Wait... Nobody is bashing the PT software in this thread, and we're not discussing whether other software is better. What I'm saying is only that it's cheaper to physically manufacture a DVD than a PCIe card; therefore, if you can sell the software for the same price you take for the card, there's more profit in selling software if the development costs are the same. People have their reasons for using PT, but free or cheap/non-profit software isn't one of them. Some of us simply disagree that "there is no money in software sales"... no big deal. :-) Of course software should cost money / generate business...
Old 2nd September 2008
  #53
Old 2nd September 2008
  #54
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Beyersound's Avatar
Quote:
Originally Posted by nativeaudio View Post
Wait... Nobody is bashing the PT software in this thread, and we're not discussing whether other software is better. What I'm saying is only that it's cheaper to physically manufacture a DVD than a PCIe card; therefore, if you can sell the software for the same price you take for the card, there's more profit in selling software if the development costs are the same. People have their reasons for using PT, but free or cheap/non-profit software isn't one of them. Some of us simply disagree that "there is no money in software sales"... no big deal. :-) Of course software should cost money / generate business...
+1 again, he got it right!
Old 2nd September 2008
  #55
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Quote:
Originally Posted by Henchman View Post
I don't know how many times I have to repeat this.
They dropped the 001 so they could force everyone to upgrade their hardware.
They physically wrote the code OUT of the new software, so it simply wouldn't recognize the 001. Proof is the hack that was available that allowed windows users to use the 001.

Yes, they went out of their way to make it in-compatible. Pure and simple
You can repeat it all you want, but there's no evidence that it's true.

Of course they removed the code. They decided it wasn't practical to continue supporting it, so they removed the code to recognize it. There's no conspiracy, it's just common sense.

The fact that someone could hack it and get it to work -- work how much and how well? -- is not remotely the same thing as being able to support that interface on that software -- supporting every feature on every possible supported OS and hardware combination.

The fact is that Digidesign's track record for supporting hardware over many, many releases is excellent. In this one case, the hardware was supported on every new software release for over three years after it was discontinued. Three years! And this is the worst complaint anyone can make about them on this issue!

Mark, you obviously are a sharp guy, but there are some issues where you just let your generalized Digidesign hatred take you into an insistence on total bull****. Let it go, man.

JSL
Old 2nd September 2008
  #56
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Quote:
Originally Posted by PMoshay View Post
Apple's iPhone App Store, reported 60 million downloads and revenues of $30 million in its first month.
Think it through.

That's 50 cents per download.

Apple gives 70% of the revenue to the developer, so Apple gets 15 cents per download -- and that's still not profit.

Apple pays 100% of the cost to design, build, maintain and support the App Store. This is a loss leader for them, not a source of profits. Eventually, they might be able to get it to the point where they make 10 cents per download.

Apple makes about $500 in profit -- not revenue, PROFIT -- from every iPhone sold, most of it from their share of monthly fees with AT&T. (This is partly why it made sense for them to drop the up-front price so dramatically.)

Bottom line, one single iPhone sale is more profitable to Apple than 5000 downloads from the App Store. And when we say "there's no money in software sales, that's what we're talking about. The purpose of the App Store is to drive more iPhone sales, which are obscenely profitable.

Microsoft is a fairly unique example, in that they managed to be in a position where nearly every piece of hardware sold required purchase of their software. I don't think there is another example of a company making money off software in that way -- the next-closest example is Quicken and Quickbooks.

Almost all other successful software models are based on high-end professional software, and those are a brutal business -- ask anyone. Adobe basically at the competition, and possibly wouldn't have survived had they not done so. Avid probably should have bought some of these other companies up a while ago.

JSL
Old 2nd September 2008
  #57
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Quote:
Originally Posted by jslevin View Post
Think it through.

That's 50 cents per download.

Apple gives 70% of the revenue to the developer, so Apple gets 15 cents per download -- and that's still not profit.

Apple pays 100% of the cost to design, build, maintain and support the App Store. This is a loss leader for them, not a source of profits. Eventually, they might be able to get it to the point where they make 10 cents per download.

Apple makes about $500 in profit -- not revenue, PROFIT -- from every iPhone sold, most of it from their share of monthly fees with AT&T. (This is partly why it made sense for them to drop the up-front price so dramatically.)

Bottom line, one single iPhone sale is more profitable to Apple than 5000 downloads from the App Store. And when we say "there's no money in software sales, that's what we're talking about. The purpose of the App Store is to drive more iPhone sales, which are obscenely profitable.

Microsoft is a fairly unique example, in that they managed to be in a position where nearly every piece of hardware sold required purchase of their software. I don't think there is another example of a company making money off software in that way -- the next-closest example is Quicken and Quickbooks.

Almost all other successful software models are based on high-end professional software, and those are a brutal business -- ask anyone. Adobe basically at the competition, and possibly wouldn't have survived had they not done so. Avid probably should have bought some of these other companies up a while ago.

JSL
But that's 1 month of revenue...... the software stays a valid seller till the next upgrade, then sells again.
It's a pretty good way of getting some stable income and keeping your customers don't you think?
and by the way, no software no hardware sales...... so you choke yourself
Old 2nd September 2008
  #58
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Quote:
Originally Posted by Henchman View Post
I don't know how many times I have to repeat this.
They dropped the 001 so they could force everyone to upgrade their hardware.
They physically wrote the code OUT of the new software, so it simply wouldn't recognize the 001. Proof is the hack that was available that allowed windows users to use the 001.

Yes, they went out of their way to make it in-compatible. Pure and simple.
That's same Logic as why Digi does not make Protools HD run on Apple G3 hardware. The Mbox 1 is still supported BECAUSE it works on current available hardware.
I spent a few years doing software development and support. If you clearly do not understand Digi's reasons for no long supporting the 001 as they now longer support obsolete hardware like Protools NuBus, Protools III PCI and Mix. I have an 8 year old Pro Control and it still works with all the current stuff. You can still use ADAT bridges, 882 and 888/24 with HD (That stuff is 10 years old) Digi has always supported older hardware as long as possible.
I go over the reasons why 001 is gone just so you can get grip
001 Never worked in G5 slots, Extensive testing is required for Digi to support current versions on old obsolete hardware. This is time consuming and expensive.
Digi came out with 002 to replace 001 and offered hardware upgrades. ( I wished Apple did that)
Calls to support - Expensive service the more hardware and systems you support the more calls you are going to get at upgrade times . Digi gives 30 days a free support for LE software update purchases. Writing in one line of code may be you think is all it takes but if you as software support company have to be responsible to customers for supporting a piece of software. Writing for older machines can prove difficult when you have to balance computer speed VS features etc. Also writing code for unsupported OS's is hard for developers as well when they need to get support from Apple.
As adevoper you have to draw the line in the sand at some point.
Digi made all the write moves
Use Firewire and USB for interface for long term support.
Provide customers with an cost effective upgrade plan.
Old 3rd September 2008
  #59
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Quote:
Originally Posted by nativeaudio View Post
WWhat I'm saying is only that it's cheaper to physically manufacture a DVD than a PCIe card;
Unfortunately the first DVD of that software probably costs about million dollars to develop. You need to go to business college.
Old 3rd September 2008
  #60
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Waves sells mostly software and to my knowledge have been making quite a bit of money. In fact whenever they try and get into the hardware market they tend to fail. (APA).

But whatever, its neither software or hardware that makes a company or product better or successful. Its the resulting product. Would apple sell as many computers or iphones as it does without os x and the great iphone interface? Would digi sell as much hardware as they do if they had crappy software?
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