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Old 13th November 2011
  #29
And, for the umpteenth time, let's do some simple numbers... You start an audio software company. You have ten employees. Say 6 are developers, and the rest cover sales, marketing, management, testing, etc... Let's say the average salary between them is something like $75K a year, and by the time you add in the cost of equipment and space for them, maybe $100K per year. And we are still talking about a quite small company.

So just your personnel costs per year is a $1M, leaving aside all the other costs of running a business, which maybe gets you to $1.25M or some such a year. If you sell a single plugin for $50 each, just to break even you would have to sell 25,000 units per year. And that's just not going to happen for probably 99% of plugins, even in the first year or so when you'll have the most sales. Then the market will saturate and the sales will go down even further.

So that business is already dead and gone because it couldn't make the revenues required. And of course if piracy dropped by that number by 10% or 20%, then you'd be even worse off.

At $250, you only have to sell 5000 of them per year to break even. That's something that vastly more reasonable. And even then, you are just breaking even. When the sales of that product fall off, you have to create more and hope that they also do well, and of course you can't afford to hire more people to help create these new products, so the same folks have to create the new ones and support the old ones, and move them forward every time there's a new OS version or platform they have to support. And of course now piracy is even more of an issue for you as well.


So if you guys would just stop complaining long enough to think through the realities of this business, you'd understand that it's not a big money making market, and that the companies involved, even the larger ones in this market, as small companies by overall business standards, then maybe you'd understand why things are the way they are. Even a company like Waves, which has lots of products, also has a lot more employees than 10, so they still are not going to be some massively profitable company. There are likely thousands of companies out there whose profits per year are almost as high or higher than Waves' gross revenues per year.

If you can't afford it, then that's just tough. There are lots of things that we cannot afford in life and you aren't guaranteed any right to afford all the things you want to have. I'd love a Ferrari but it's not going to happen, and I don't expect them to drop the price for me. There's lots of low cost and/or free software out there to use if you can't afford the good stuff or have a problem with those company's protection policies.