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Why are software developers killing our industry?

Postby Zukan » Thu Sep 25, 2014 9:43 am

I have recently been in dialogue with some of my associates and one or two have thrown in the towel and taken up other vocations. All this because almost every 2 days I receive these damn 80% off everything deals, and that is apart from companies giving away products that are sold at 240 dollars odd.

Do you guys realise that by offering these ridiculous deals on a daily basis means we can never raise our prices to extend beyond the 'plateau' now regarded as the norm.

I have often offered discounts but only sporadically and the only huge discounted deal I have going is the Samplecraze back catalogue which I ditched over 2 years ago but now offer for peanuts.

Can we please, please, stop this damn madness. You guys are killing us smaller developers and doing yourselves absolutely no favours in the process. It has now got to the point that almost everyone says 'I'll wait until they do a sale'. Madness!
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Re: Why are software developers killing our industry?

Postby Hugh Robjohns » Thu Sep 25, 2014 10:31 am

I feel for you Eddie! It is madness.

The same madness as newcomers to the industry charging ludicrously low rates just to get a gig... and then forever locking themselves into infeasibly low rates for ever more.

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Re: Why are software developers killing our industry?

Postby Martin Walker » Thu Sep 25, 2014 2:14 pm

I totally agree Eddie - I'm getting sick of receiving these 'everything for tuppence for the next two days' emails :frown:

Sometimes you can see a little sense in it - the recent Eventide Ultrachannel freebie will have greatly boosted Eventide's email list so they can better promote future products, but there do seem to have been so many sales that future punters will likely sit around waiting for the next sales before they purchase.

Frankly I'm amazed at the number of people who actually have the cheek to email developers asking when the next sale is going to be, so that they can hang on until then :headbang:


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Re: Why are software developers killing our industry?

Postby dubbmann » Thu Sep 25, 2014 2:37 pm

Everything you say is true, and sadly for producers of IP basically irreversible. I'm in high tech (IBM, Cisco) and it's been true for them as well. 20 years ago the big hw vendors realized that the only high-margin area in the future would be services: IBM,HP, Oracle, etc, all have gutted their product development groups to focus on building out their consulting orgs. HW and SW are basically loss-leaders.

I feel for you, Zuk, but I don't know what you or anyone can do. Back in the 1920s the increasing productivity of farms lead to a depression in the farm economy world-wide. The US government responded by instituting price supports coupled with limits on production. Without the latter the former would never have worked. How can we keep kids with PCs (and now the cloud) from developing programs and selling them for peanuts and driving down prices for even high-quality vendors such as yourself? We can't.

Unfortunately for those of us who've made our living in these markets, we're experiencing a historic inflection point like the printing press or the spinning Jenny. Twenty years ago I was in rural China and saw something utterly fascinating in a marketplace: an old man equipped with a pen and pad of paper taking dictation from an old lady. I watched for a while and realized he was a scribe: the illiterate would dictate their correspondence to him and he'd get a few pennies (well, yuan I guess). I got a glimpse into an occupation that probably existed for thousands of years. No more, I suspect.

The only consolation I can suggest is to watch "The Man in the White Suit", one of Alec Guinness's priceless (bad choice of words, sorry ;-) Ealing Street comedies. Sir Alec played a chemist who stumbles onto a polymer that makes indestructible, unsoilable cloth. The rest of the film is about the efforts of the big mill owners (and workers) to stifle his invention. It had a happy ending but I'm afraid it was just fiction....

Cheers (or not)

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Re: Why are software developers killing our industry?

Postby johnny h » Thu Sep 25, 2014 3:23 pm

I think we've reached a saturation point with audio software. Most built in DAW plugins are totally adequate for the majority of people's needs. There's no need for a million EQs and compressors all doing pretty much exactly the same calculations.

With Eventide giving away their top quality stuff for almost free, plus the continued piracy of software, I feel for the smaller developers.
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Re: Why are software developers killing our industry?

Postby Hugh Robjohns » Thu Sep 25, 2014 3:28 pm

johnny h wrote:I think we've reached a saturation point with audio software.

Not just software! It's the same with mics and speakers too, as well as interface and preamps and other hardware. All doing the same things, to the same standards, at the same fairly well defined cost levels.
All more than good enough (for a given price), and few offering anything innovative or unique. The last thing anyone wants or needs is yet another £200 active monitor! ;)

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Re: Why are software developers killing our industry?

Postby James Perrett » Thu Sep 25, 2014 5:00 pm

It can be just as frustrating from a consumer's point of view. You buy a piece of kit or a program when it hits the right price point and then, a few months later, the price crashes even further. I bought a CD recorder when the price fell to under £1500 but a few months later HP had one for £500. When I bought my laptop a few years ago, it was the cheapest I could find. Now that price point is towards the upper end of laptop prices.

About the only thing that maintains its price is high end hardware that can't be replicated in software.

I find that the only gear I've bought recently have been replacements for things that have broken - or materials for the new studio build. I can't remember the last piece of software that I bought but it was probably Reaper 3 - whenever that came out.
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Re: Why are software developers killing our industry?

Postby Folderol » Thu Sep 25, 2014 7:33 pm

This may come as a surprise, but it also hits those of us hobbyists that like to build/program our own stuff. There have been numerous occasions when I've built something I've been quite proud of, only to discover that I could have bought something for less than a tenth of the price that would do the job better. It used to get me down, but these days I'm inclined to be a bit more stubborn and just go ahead anyway... Not that it's any help to those of you trying to run a business!
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Re: Why are software developers killing our industry?

Postby dmills » Thu Sep 25, 2014 8:54 pm

You just have to get more specialist.

Nobody wants to pay for another bloody compressor/eq/whatever, but there are a huge number of boutique highly specialist tools that are multi kilobuck propositions and worth every penny to someone who needs them.

Everything from upmix/downmix boxes (Telly loves them) to the sort of thing Cedar make their money from, to forensic audio to radio station control and playout can still make you good money, forget the consumer stuff, get your math on and write something to solve an unsolved problem....

Fact is the commodity stuff is commodity and priced as such, a tool to solve a currently unsolved problem however is valuable.

Regards, Dan.
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Re: Why are software developers killing our industry?

Postby Martin Walker » Thu Sep 25, 2014 9:01 pm

Folderol wrote:This may come as a surprise, but it also hits those of us hobbyists that like to build/program our own stuff. There have been numerous occasions when I've built something I've been quite proud of, only to discover that I could have bought something for less than a tenth of the price that would do the job better. It used to get me down, but these days I'm inclined to be a bit more stubborn and just go ahead anyway... Not that it's any help to those of you trying to run a business!

And ironically, this isn't a new thing either - when I was 16 I built an electric guitar at school with help from a teacher. It took me weeks to get all the parts & wood, fretboard, pickups, finish everything to a reasonable standard (for a teenager), install the electronics, and I was chuffed to bits with the result.

The parts cost me a total of £17, and it was only then that a friend admitted "If I'd known you were interested in an electric guitar, you could have bought my Watkins Rapier 44 for £15"

Image

Oh, how deflated I felt :?


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Re: Why are software developers killing our industry?

Postby johnny h » Thu Sep 25, 2014 9:19 pm

dmills wrote:
Fact is the commodity stuff is commodity and priced as such, a tool to solve a currently unsolved problem however is valuable.
For audio plugins the list of unsolved-but-realistically-solvable problems is getting desperately short.
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Re: Why are software developers killing our industry?

Postby dmills » Fri Sep 26, 2014 12:12 am

Not really....

Lets see, the whole upmix/downmix space for starters, and lookie what just dropped thru my letter box, JAES Volume 62, number 7, including papers on "Synthesis of spatially extended virtual sources from a mono source" (Colour me dubious, but the broadcasters might go for it as might the film studios doing re-releases), and "Multichannel downmixing with reduced spectral artifacts", I have not read them yet, but they strike me as potentially leading to interesting places.

There is a whole world of correlation based stuff that has all sorts of potentially interesting places to go and that is largely unexplored as the hardware to go there is a fairly new thing in consumer machines (For playing these games was the GPU made).

Could some of the super resolution beamforming stuff the RF world does have applications to isolating speech from noise in a stereo field? Possibly, the math gets somewhat hairy....

Projects are not the problem, finding the time to sit down with matlab/octave/scilab whatever and actually figure out the math is the problem.

A code to locate impulse noise sources given an arbitrarily located set of microphones is something you could probably sell (Think sniper fire, and an infantry squad carrying some sort of comms device each with a microphone and GPS), specialist but the MOD has a budget.

Plenty of things to do, they just require actual development instead of slavishly copying some old comp or effects box.

As I say, get your math on and read a few papers.

Regards, Dan.
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Re: Why are software developers killing our industry?

Postby The Red Bladder » Fri Sep 26, 2014 4:49 pm

We are moving rather rapidly towards a zero-marginal-cost society and there is nothing you, me or anybody else can do about it! Many very advanced DAWs are to all intents and purposes free, as they either rely on an honesty box (Reaper) or on a simple password (Logic).

Soon, all (or very nearly all) costs will be either fixed or capital costs and high-tech gadgets that once cost thoudands or hundreds of thousands, will either become throw-away items (e.g. cameras) or just another add-on function in some other product (e.g. the tape recorder).

As a businessman, it is your task to find a business model that allows you to earn money from products that either cost very little or nothing at all.
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Re: Why are software developers killing our industry?

Postby dmills » Fri Sep 26, 2014 7:48 pm

Indeed, and I would note that while the product may not make any money, the support contract, certifications, all that stuff very much can.

RedHat for example are not exactly doing badly, for all that pretty much every program they sell can be had for free, the support contracts on the other hand.....

Ignore the commodity market unless you are setup to do the tiny margin and make it up on volume thing, even consumer support is a losing proposition (Most of them will not pay even £60/Hr for support on a program that is critical to getting the tax done on time, and that is only what they would pay for labor at the garage).

Customized solutions for particular customers or markets, together with the support services (Which must go FAR past what a well constructed Google query can find) are the way to go if doing the software thing, you do not see consultants for Oricle, Salesforce, SAP and the like going hungry.

The end result of applying the knowhow may be a product of zero marginal cost, the value is in having somebody apply the knowhow to solve your problem, the code is just a tool.

Regards, Dan.
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Re: Why are software developers killing our industry?

Postby The Red Bladder » Sun Sep 28, 2014 4:20 pm

dmills wrote:Indeed, and I would note that while the product may not make any money, the support contract, certifications, all that stuff very much can.

The end result of applying the knowhow may be a product of zero marginal cost, the value is in having somebody apply the knowhow to solve your problem, the code is just a tool.

Presactly!

We are investing several thousand quid in having a stand at a local music fair, combined with saturation advertising in the catalogue and fair magazine, offering FREE home recording workshops in the studio.

We did a marketing survey that showed that most musicians are reluctant to entre into the recording process, as they do not understand the ins and outs of the whole thing. Home recording seems a mystery, walking into a studio seems expensive.

This should (he says optimistically!) turn hobbyists and professionals into customers that fully understand what they can and cannot do at home and what is the best and cheapest way to get to a great recording.
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Re: Why are software developers killing our industry?

Postby I'd Rather Play » Sun Sep 28, 2014 7:32 pm

Hasn't the concept of discounting, once initial development costs and projected/ expected profits exceeded, always been with us?

The fact that software is "abstract" rather than "material" means the discounting can be all the more greater.

It seems that as a company, once you have reacher a certain size in the industry (Native Instruments or Tesco or U2) a whole different set of market economics seem to apply.
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Re: Why are software developers killing our industry?

Postby Barry Garlow » Sun Sep 28, 2014 7:46 pm

dmills wrote:..The end result of applying the knowhow may be a product of zero marginal cost, the value is in having somebody apply the knowhow to solve your problem, the code is just a tool.


Yes, like a plasterer's trowel. The trowel and hawk can be had for about fifty quid, but someone to use one to plaster out your house will cost thousands.

Well, that's before "Magitrowel".

Yes, the Magitrowel!

I was in my time machine the other day and i thought i'd go forward a hundred years and see what was happening. Anyway, i saw that people were using these Magitrowels. Simple. They just hold the trowel against a bit of perfectly plastered wall and then anywhere they scrape it resulsts in a perfelctly plastered surface.

It aparantly put all the plasterers out of work overnight.

The people who invented Magitrowel made a fortune until someone discovered the secret and posted it on the internet and the bottom fell out of the Magitrowel market. You can get them for pennies.

Oh how the plasterers laughed!
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Re: Why are software developers killing our industry?

Postby desmond » Sun Sep 28, 2014 7:49 pm

Why are "software developers" killing our industry?

I'm sure software devs would love to price appropriately - however, it seems the value of software is continuously being devalued - and that's for the people that actually pay for it in the first place. (It's not uncommon for many folk to not even realise that software is a thing that should be payed for at all.)

We're in the days where someone can spend 6 months developing a niche iOS app, and price it at £2, and *still* have people go "hmm, that's expensive".

Who's doing the devaluing? The developers, or the public who socially decide on what they are prepared to pay for a given product type?

Really, it's more the entitlement society and the "I must get everything for the lowest price possible" mentality, or the "I won't buy something unless I can get a deal, and preferably a better deal than the next guy" one that's devaluing *everything*, along with other pressures such as "it doesn't need to be good, it just needs to be fast. *And* cheap..." and so on.

Luckily, there is still room for quality, and if you can make a good product, and work to tap into a market that respects and values that, and is prepared to pay for it, you can make a go of things. However, it's difficult and the returns are risky, meaning fewer people are going to decide to try in the first place...

...and what it means is more and more indies are targeting "continued survival" rather than a thriving and growing business with good rewards - unless you manage to be one of the lucky ones who hit on something special usually more by luck and timing than anything else.
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Re: Why are software developers killing our industry?

Postby Scramble » Sun Sep 28, 2014 9:17 pm

desmond wrote:Really, it's more the entitlement society and the "I must get everything for the lowest price possible" mentality, or the "I won't buy something unless I can get a deal, and preferably a better deal than the next guy" one that's devaluing *everything*, along with other pressures such as "it doesn't need to be good, it just needs to be fast. *And* cheap..." and so on.


Nah. It's just the usual thing, too many suppliers, not enough demand. (Same as with musicians, only that's the same situation on steroids).
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Re: Why are software developers killing our industry?

Postby CS70 » Mon Sep 29, 2014 11:13 pm

Well, my $.10 is that for software, as with recorded music, a big reason is piracy. Not exactly as bad as for music: there are still some consumers who buy their software (I just bought Sony's video editing package, for example). Mainly it's because the variety of protection schemes for applications makes it less certain that the application you want is available "for free". Anybody can rip a cd, relatively few can crack software. And because, for the general public, there's less of a platform to locate and access pirated software. Notwithstanding that, companies making serious money from software nowadays are mainly ones selling either to businesses big and small (which have multiple reasons for not using cracked software) or developing for proprietary hardware (game consoles, for example), or on protected platforms - like iStuff - where it's harder or inconvenient to deploy pirated consumer software. As with recorded music, all this is enabled by mass-access to computers and internet and the fact that digital information is inherently very easy and inexpensive to copy. But just as recorded music, *why* it can happen is because such thefts aren't really prosecuted at consumer level. So something that could be done is the same as for recorded music: put pressure on governments to recognize the phenomenon and start taking action - exactly like they do for people stealing wares in a supermarket. Without strong limitation for digital theft as for physical one, the economic value of consumer software will steadily head towards zero - even if it's useful, complex and expensive to make. You can see the same trend in practically all information-related fields.. news, books, photography etc. It's only when governments are serious in limiting information access and copying, that it retains its value.

As a side effect, as the software value becomes smaller, market share becomes more important - since each item produces little margin, you have to sell ever more in order to keep or increase revenues. Hence the sales.

There are other effects as well besides piracy of course, but the combination of easy copying, instant distribution and no consequences is a killer.

When it comes to the hardware, imho that's just a temporary condition; the (long term) perspective on prices is to rise. That's because on one side, price pressure is due to competition in a growing market; on the other, prices have been affected by the disruptive effect of a single sourcing point (China). China has increased its industrial capabilities enormously on the last decades, while at the same time being capable of immense amount of industrial output - it literally changed the world. It's gonna last for a while, but sooner or later companies pricing their kit too low will not stay viable and disappear, and there will be fewer players and steady prices (albeit probably lowish, so long accessible manufacturing places at "Chinese" prices keep existing). It's interesting to note that there are other regions (India, for one, but big blocks of East Asia as well) with similar potential capabilities, still unrealized - both in terms of potential output and industrialization; they too are progressing towards the Chinese model - and could replace China even when it stops being as inexpensive as it is now. So how long the "while" is depends on how fast China prices rise and how fast these other countries catch up and replace Chinese capabilities.

Obviously it may well be that some of the price reduction is due to theft of intellectual property in hardware as well (circuit designs etc) but - not knowing that much - it seems to me that lots of designs were readily available or in the public domain already. Innovation suffers as always in these cases, because the return on investment becomes quite small - but there are can a few premium products which still command high prices, and the companies producing those can still try and innovate. Whether or not they succeed depending on the technical complexity of what they attempt, and how much capital they need. If they can't get big enough, innovation stops there as well - but that shouldn't be the case, I guess, for audio-related hardware..

In conclusion: for software, the madness ain't gonna stop anytime soon, I'm afraid. As an independent developer, the wise course of action is to move towards products for the business, possibly enterprise, market (or alternatively, consumer software to be run on playstation, xbox and apple devices :) ) and keep the consumer ones as a showcase at best. Wish it was different - and still as it was when I started learning z80 assembly with my ZX81.. :)
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