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Why are software developers killing our industry?

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Re: Why are software developers killing our industry?

Postby The Red Bladder » Tue Sep 30, 2014 11:27 am

CS70 wrote:Well, my $.10 is that for software, as with recorded music, a big reason is piracy.

Nothing would be simpler than to stop 'illegal' copying of SW - the big boys in the SW game don't want to, so it doesn't happen. In the DAW market, Logic and Reaper are to all intents and purposes free. Most Adobe stuff was free for ages and ages (just password protected), now it is CS705 a month for everything, from soup to nuts and from arsehole to breakfast time.

Software is cheap, because it carries no marginal cost. In software, the zero-margin society existed from day-one.

I am sure that if Apple thought that it could get away with it, it would bundle Logic and FCP with every Mac totally free.

CS70 wrote: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.

Absolutely and totally not going to happen.

China is in competition with dozens of other countries, think of India, Malaysia, Vietnam, Rumania and Ukraine and don't forget that much of production is being repatriated to the US and Germany. As more and more integration and automation kicks in, labour costs pale into insignificance, compared to technical education levels and proximity to market.

Developing countries are pouring money into technical education, Vietnam's educational budget is 7% of GDP.

China is not just fighting off the developing world. A few countries in Europe are piling into technology. Educational spend in Denmark and Finland are at almost 9%, Norway 7% (UK 5%).

We are moving into a zero-margin society.

It is irrelevant if an automated production line (stamping out boxes containing five chips and an EPROM) is sitting in Texas or China, Scunthorpe or Shanghai.

And what little hardware is left, is rapidly being replaced by software on universal devices, such as computers, pads and phones. In the consumer markets, the tape recorder and the holiday-snaps camera are gone. The cheap video camera has gone and the VCR/DVD player is almost gone. Next to go will be the television, followed by the broadcasters.

Once the television has been replaced by a universal viewing device with direct access to the internet and Netflix, production companies will no longer have to go cap-in-hand to the broadcasters. The gateway function of broadcasting will vanish, just as the big labels disappeared in the world of music.
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Re: Why are software developers killing our industry?

Postby Mixedup » Tue Sep 30, 2014 11:44 am

The Red Bladder wrote:Most Adobe stuff was free for ages and ages (just password protected), now it is The Red Bladder5 a month for everything

Huh? Today, it appears to be £46.88 (a gnat's chuff over $76) pcm for 'everything'. Or £27.34 (a shade under $45) if you're already a CS customer, with a few educational discounts available.
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Re: Why are software developers killing our industry?

Postby The Red Bladder » Tue Sep 30, 2014 12:21 pm

Mixedup wrote:
The Red Bladder wrote:Most Adobe stuff was free for ages and ages (just password protected), now it is Mixedup5 a month for everything

Huh? Today, it appears to be £46.88 (a gnat's chuff over $76) pcm for 'everything'. Or £27.34 (a shade under 5) if you're already a CS customer, with a few educational discounts available.

You are quite right of course - but even Adobe now gives away CS2!
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Re: Why are software developers killing our industry?

Postby Zukan » Wed Oct 01, 2014 8:53 am

Blad, please, investigate the market we're talking about and then offer your pearls of wisdom dude.

Software marginal costs? Please.

You offer a service, not a product and therefore keep applying the same business model to something that doesn't even fit into a service based market..

Let me put this in perspective for you: it has taken us close to 18 months to code and test my vsti. It has taken a team of four people who have been involved in the coding, design and implementation of the product. We have spent a small fortune and countless man hours on this product. I ran out of money around a year ago due to the 'change your business model to accommodate piracy' nonsense. I then offered a stake to my team for continuing and being a part of the product's future.
We, as a business, simply cannot afford to offer our product for next to nothing based on your incorrect and quite naive understanding of the DD market. Not only do we need to recoup costs but we also have enough in reserve to develop the next product.

I really wish some of you would stop this nonsense about 'business model' advice when you know very little about the market and the problems we are talking about. I had the same advice 8 years ago when my business and livelihood took a nosedive thanks to piracy. The same 'change your business model to accommodate piracy' advice was being dished out then and by the same people who simply couldn't come up with the Utopian business model you keep going on about. I have continually asked these wise and enlightened folk 'okay then, what would you do?' This is always met with a Homer Simpson face.

People also spurt on about how these companies have adapted and are making money. Really? I know just about every developer and almost half have gone down. In fact the wonderful coder we have on our team had to fold his company because he got pirated to death.

When I post a thread like this it is a genuine plea to developers to stick together and maintain a price plateau. I set up a group on FB that has only industry pros as members and we often talk about this problem and how to tackle it and none of us have yet to come up with a solution.

The massive price drops you are seeing all over the place have precisely dik to do with 'market moves' or some crafty 'market share grabbing blah blah'. These guys are throwing their last dice as a final act before they close shop. Comparing us small developers to the heavy clout of the NIs of this world is a ludicrous comparison. This is why we are called 'small developers'. We can't wear a 3 year long term plan with heavy piracy and come out of it a winner. It simply doesn't work that way. We are developers: we cannot tour or recoup losses through merchandising, so the usual single/albums argument doesn't apply to us. I'm butt ugly, so touring with my latest vsti in hand with t-shirts of my face aren't really gonna cut it. We create plugins. Sh1t costs a fortune and I for one would like to actually pay my bills once in a while.

Like I said, I'm all ears.
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Re: Why are software developers killing our industry?

Postby The Red Bladder » Wed Oct 01, 2014 10:43 am

Zukan wrote:Blad, please, investigate the market we're talking about and then offer your pearls of wisdom dude.

Software marginal costs? Please.

You offer a service, not a product and therefore keep applying the same business model to something that doesn't even fit into a service based market..

Let me put this in perspective for you: it has taken us close to 18 months to code and test my vsti. It has taken a team of four people who have been involved in the coding, design and implementation of the product. We have spent a small fortune and countless man hours on this product. I ran out of money around a year ago due to the 'change your business model to accommodate piracy' nonsense. I then offered a stake to my team for continuing and being a part of the product's future.

We, as a business, simply cannot afford to offer our product for next to nothing based on your incorrect and quite naive understanding of the DD market. Not only do we need to recoup costs but we also have enough in reserve to develop the next product.

Like I said, I'm all ears.

I understand your frustration and sympathise with your predicament. The fact however remains that marginal costs are the additional costs of MANUFACTURING the last item produced. It is the difference between the cost of making one million widgets and one-million-and-one widgets. It does not include any fixed costs and origination costs such as R&D etc. If a £100 software package is a download, then the manufacturer has no marginal costs - he has, of course, considerable fixed and other costs.

If a software manufacturer puts his package in a nice box and includes a handbook and a DVD, then he has some marginal costs, perhaps £1 or two.

When I post a thread like this it is a genuine plea to developers to stick together and maintain a price plateau. I set up a group on FB that has only industry pros as members and we often talk about this problem and how to tackle it and none of us have yet to come up with a solution.


With the likes of Apple and Adobe just giving away massive sample libraries (which then get thrown together by some berk onto a DVD and flogged for next to nothing on ebay) in order to sell their other stuff, small developers dependant on direct revenue from selling such packages are pushed out of the market.

Add to all that, everybody and their mothers-in-law are making sample libraries, to the extent that I even thought about creating sample libraries as a free promo for the studio, but then realised that I had better things to do with my time. That and the simple fact that there are people out there like you, who do a proper job and package the whole thing better than I could.

There is no solution.

From U2 to Prince, musicians are giving away their music. Many software houses are almost giving away their software. Sound-on-Sound gives away the entire contents of the magazine after six months! Other (less desirable!) magazines give their entire contents away from day one.

All these have other revenue streams that are enhanced by the products they are giving away. Bands gig and mags sell on-line pay-per-click advertising.

Without knowing you and your business, I cannot say how you, or indeed any other small software house, solves the problem of being squeezed between Apple and Adobe on the one side and some berk on ebay on the other.

There will be a way though. It could be diversification, identifying new trends, partnerships with other companies (e.g. making plugs and VIs for up and coming DAWs) or it could be something totally out of the ballpark, but having some synergy with existing lines.

How about a SW package that adds VIs specifically for Power Point presentations? It worked for Crystal Graphics, who were struggling with 'Flying Fonts' but took off repackaging the whole thing as a doofus 3D Power Point app!
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Re: Why are software developers killing our industry?

Postby Zukan » Wed Oct 01, 2014 11:08 am

I respect your points Andy but still have no idea how to combat both the piracy aspect and the extreme and desperate cost cutting. With plugins we really don't have a peripheral aspect to explore. With my books and videos I know they get pirated heavily and have tried to use those products as a medium to push my 1-2-1 tuition courses. However, no one is willing to pay the peanuts I ask for and that is because of the way the social trend of everything for free has taken grip and software developers undercutting to the point of 'nothing' does not help.

I am always open to new ideas or existing ways of trying to work my content from a tangent and make it profitable. I still have no answer. BUT, desperate undercutting is a surefire killer, and I see this every day with people saying 'Ill wait for the next sale'.

On an aside, but lateral, I reduced the price of the Samplecraze archive from close to $2000 to $100 and still had emails from 'buyers' asking when I would offer an additional discount. Because I had already made enough revenue from the library from a long time ago I didn't mind offering it at that ludicrous price as it didn't cost me much more (exactly the good advice you gave in your response). I tried changing the prices on my Kontakt modules from $8/module (which is obscene by all levels) to $15/module after the initial introductory price (8 bucks) and people emailed me asking when I would drop the price back down to 8 bucks.

I am not too bothered with samples as I stopped creating sample libraries two years ago as it simply was not worth the effort and time to create them because they were pirated within hours. But plugins are a whole different ball game and entail huge costs. Even if I offer an introductory price to recoup our investment I know it will still be debated by potential buyers because the market plateau is being destroyed by other developers.

End result: poorer and cheaper to produce plugins will become available and top end plugins will command top end prices. This is not good for the consumer or the developer. I would rather charge a fair price and work with other developers to cross promote each other than see a plugin that costs 240 bucks sold for 19 bucks.....
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Re: Why are software developers killing our industry?

Postby Barry Garlow » Wed Oct 01, 2014 12:12 pm

Isn't there a more funamental problem for software developers, trends in music?

I was in a local bar a few days ago, its owned by some friends who are my age, but they have young peole working there. Its a very "arty" place, based loosly around an Amsterdam coffee shop / Spanish tapas bar sort of thing. Its very successful. They do live music now and again, an open mic night once a month, there's a piano. The clientele are mixed and there's everything from ladies who lunch to the after-work crowd and the student crowd etc.

Now the people behind the bar and working the kitchen are young. And they are mostly musos or some other arty types and the owners let them take care of the music. They play off their phones or off the computer, whatever.

What do they play? These kids, what do they love and listen to, their friends, what are they listening to? Well its interesting to me because i've always thought it a bit of a barometer. Its not the cheapest place and their business does rise and fall with the economy even though this is quite an affluent area, but they got hurt in the recession just like everyone else. Picking up now though.

But back to the question. Well, they listen to the same bloody stuff i was lisening to when i was twenty something! They aren't playing new music, they are playing old music and they and their friends are loving the old music.

It don't seem right because "pop" should have some element of rebellion perhaps, but i know more about the music they are into than they do, and in my middle age i would expect to be excluded in some way, on the outside of their "scene". I'm recommnending them bands are they are finding them and putting them on the bar sound system and loving it.

Often when my mate comes over to play drums i drop him at a distant train station to get back to the coast, i listen to dermot o'leary's show on R2 on teh way back. He plays new music, current bands. Its all "human" music. Jo Wiley, 6 Music. Everywhere you look, people are listening to music made by humans. X-Factor, who do they swoon over? Kids with a guitar who can stand up and knock out a good song.

Ok, i'm generalising a bit and there's loads of music around of all kinds but i see that people are bored with boom-tick-woosh-dadadada-boing and they want to hear people playing and singing.

Of course there's still bundles of kids in bedrooms with a Mac or something, but they aren't going to pay for stuff. Part of their hobbyist culture is getting things for free, doing it on the cheap and sticking it to the man.

I can't see any future for yet more and more sample packs and plug-ins and this and that virtual instrument. Just can't see it. I can't even see a future for the lastest wizz bang guitar or modelling device. People want classic intruments and amps, old synths and keyboards. I mean old Jap rip-offs that i used to look at in guitar shops as a teenager are now changing hands for hundreds of pounds. Its crazy! There's one small music shop in the little town near here, and i was talking to the man the other day and he is selling guitars like crazy. What he's after are old ones. He was saying that he has a range of brand new two hundred quid Korean guitars in that are just amazing (and they are) nobody wants them, they want knackered old crap from the 70s.

Go figure.

So i don't know how anyone can make a living out of developing software unless its something totally new like the software to facilitate streaming live performances to walk-round tabletop holographics or something.

Its starting to look like an old business and far from growing and taking in new users it seems to me to be shrinking.

Sorry Zuk. I'm no expert, its just what i see.
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Re: Why are software developers killing our industry?

Postby Zukan » Wed Oct 01, 2014 12:31 pm

Thanks Barry. All insights are greatly appreciated.
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Re: Why are software developers killing our industry?

Postby turbodave » Wed Oct 01, 2014 12:49 pm

I think Zuke, that because you innovate in a relatively niche way, the market doesn't know it wants/needs your stuff. Human nature normally dictates that if you deny people things they will generally pay for the privilege....ie if you stop doing what you are doing it is possible some walking wallet will ask you to create something....the problem is, a business will struggle to survive like this in your market...kinda catch 22....Do you get any bespoke requests? Dave
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Re: Why are software developers killing our industry?

Postby Zukan » Wed Oct 01, 2014 1:26 pm

I do, yes Dave.

I try to balance my time between writing and creating, but the bread and butter earner is teaching.
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Re: Why are software developers killing our industry?

Postby peterdeltablues » Wed Oct 01, 2014 1:49 pm

No comfort, but hand-crafting in the developed world being squeezed out between cheaper labour elsewhere, mass production by large firms and cheap ripoffs is scarely new to business. Think- oh just about any one-person craft production in the UK. Potters, artists. Very very few make a living out of it these days - most have other sources of income to the family, and do it for the pleasure, if they're lucky they cover the costs of materials. Try adding anything even approaching minimum wage and you've priced yourself out of the market. Of course, just as in music or writing, there are a few who make a lot of money, but they represent a tiny fraction. Some activities just cease to be economically viable. Whether that is true of audio software writing I couldn't say, but this thread makes it sounds like it.

Just some thoughts from a different perspective.

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Re: Why are software developers killing our industry?

Postby Zukan » Wed Oct 01, 2014 2:43 pm

Thanks Pete, appreciated.
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Re: Why are software developers killing our industry?

Postby VOLOVIA » Wed Oct 01, 2014 3:09 pm

I do agree with your experience totally, I have three nieces and nephew aged 18-24 and the music that they listen to is the same as my youth! I don't remember when I was 20 listening to Frank Sinatra or Elvis! Bizarre. It appears that the only 'new' music style out there are chat/rap (c/rap) revisits (with exceptions, of course, Ed Sheeran represents a cool new breed of muso, in disguise!)

Back to the VST discussion, I tend to agree that the market for mid-price plug-ins is destined to disappear: the quality of the included plug-ins in any DAW are far superior to the technically ability of most users of making best use of them, away from pre-sets.

Second and last, after bathing for years in the excitement of a professional recording studio on my laptop (Cubase as it happens), I have now abandoned it completely: most 'serious' amateurs like me work on computers all day and I can't stand the thought that tonight, to relax, I go home and start editing to sample level my vocals until one in the morning. I grab my Martin and shout my nonsense for the pleasure of my neighbours until I can get away with it. As I did when I was 16.

Another compressor plug-in? Even for free, no thanks.
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Re: Why are software developers killing our industry?

Postby J_J_Breeze » Wed Oct 01, 2014 7:30 pm

Who are the main heavy discounters that directly compete with your 'Stretch that note' (hip hop / electronic style) product line?

I'm not too familiar with the product sector, but is the likes of FXpansinons Giest selling well and being profitable?

Do these (limited) numbers look okay for SonicCouture?
http://companycheck.co.uk/company/06048455/SONICCOUTURE-LIMI...

Is it possible that you've not got the product perfect and this is a 'winner takes all' market? Will refining the product with testing and honest feedback from users help you?

I own a fashion band, in my experience in a completely different sector I've found that when we get the product right (as in best in UK, or for some niche products the best in world world) we make healthy profits. If we don't get it right we make weak profits...

Just another perspective that I hope might be helpful.
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Re: Why are software developers killing our industry?

Postby turbodave » Wed Oct 01, 2014 8:43 pm

Zukan wrote:I do, yes Dave.

I try to balance my time between writing and creating, but the bread and butter earner is teaching.
I hear ya!! ( said the drum teacher with 10,000 students) :headbang:
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Re: Why are software developers killing our industry?

Postby johnny h » Thu Oct 02, 2014 12:54 am

Zukan wrote:I respect your points Andy but still have no idea how to combat both the piracy aspect and the extreme and desperate cost cutting.
..
On an aside, but lateral, I reduced the price of the Samplecraze archive from close to I respect your points Andy but still have no idea how to combat both the piracy aspect and the extreme and desperate cost cutting.
..
On an aside, but lateral, I reduced the price of the Samplecraze archive from close to 000 to 00 and still had emails from 'buyers' asking when I would offer an additional discount.
..
I am not too bothered with samples as I stopped creating sample libraries two years ago as it simply was not worth the effort and time to create them because they were pirated within hours.
So you've done exactly what you are complaining other developers have done; drastically reduced the price of older work in an attempt to get new sales on an old product.

But plugins are a whole different ball game and entail huge costs.
To you, perhaps. If you already have your algorithms perfected, as Eventide did 20 years ago, the marginal cost is close to zero.

End result: poorer and cheaper to produce plugins will become available and top end plugins will command top end prices. This is not good for the consumer or the developer. I would rather charge a fair price and work with other developers to cross promote each other than see a plugin that costs 240 bucks sold for 19 bucks..... 000 to Zukan00 and still had emails from 'buyers' asking when I would offer an additional discount.
..
I am not too bothered with samples as I stopped creating sample libraries two years ago as it simply was not worth the effort and time to create them because they were pirated within hours.
So you've done exactly what you are complaining other developers have done; drastically reduced the price of older work in an attempt to get new sales on an old product.

But plugins are a whole different ball game and entail huge costs.
To you, perhaps. If you already have your algorithms perfected, as Eventide did 20 years ago, the marginal cost is close to zero.

End result: poorer and cheaper to produce plugins will become available and top end plugins will command top end prices. This is not good for the consumer or the developer. I would rather charge a fair price and work with other developers to cross promote each other than see a plugin that costs 240 bucks sold for 19 bucks.....
Top end plugins are way cheaper than they were - check the Lexicon PCM bundle. The problem is basic demand and supply economics. There is falling demand, partly because everyone and his dog already has as many EQs, compressors and whatever to last a lifetime and partly because the increased quality of inbuilt DAWs has rendered many third party plugins redundant. On the supply side, there are an absolutely crazy amount of plugin developers all doing very much the same thing.

Prices are going to continue falling and more developers will be forced out of the market.
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Re: Why are software developers killing our industry?

Postby Zukan » Thu Oct 02, 2014 8:49 am

J_J_Breeze wrote:Who are the main heavy discounters that directly compete with your 'Stretch that note' (hip hop / electronic style) product line?


None. I am not concerned with the STN products as that will all be changed to accommodate the new plugin. My concerns are on pricing the new vsti but there are no comparables in the marketplace to gauge the best price for the product.
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Re: Why are software developers killing our industry?

Postby Zukan » Thu Oct 02, 2014 8:54 am

johnny h wrote:
Zukan wrote:I respect your points Andy but still have no idea how to combat both the piracy aspect and the extreme and desperate cost cutting.
..
On an aside, but lateral, I reduced the price of the Samplecraze archive from close to
Zukan wrote:I respect your points Andy but still have no idea how to combat both the piracy aspect and the extreme and desperate cost cutting.
..
On an aside, but lateral, I reduced the price of the Samplecraze archive from close to 000 to 00 and still had emails from 'buyers' asking when I would offer an additional discount.
..
I am not too bothered with samples as I stopped creating sample libraries two years ago as it simply was not worth the effort and time to create them because they were pirated within hours.
So you've done exactly what you are complaining other developers have done; drastically reduced the price of older work in an attempt to get new sales on an old product.
000 to johnny h00 and still had emails from 'buyers' asking when I would offer an additional discount.
..
I am not too bothered with samples as I stopped creating sample libraries two years ago as it simply was not worth the effort and time to create them because they were pirated within hours.
So you've done exactly what you are complaining other developers have done; drastically reduced the price of older work in an attempt to get new sales on an old product.

Nope. The product I have on a heavy discount is both 2-3 years old and discontinued. Personally, I dropped it ages ago but customers wanted it back online.

I am talking about current products that are released and then heavily discounted in no time at all.
If a company decided to drop their prices, like PSP did, on older products then that is not a problem at all. If anything, I support all the developers and their products and we are the smaller companies that can't cope with the huge price cuts for newly released products.

Johnny, read up a little on the costs entailed in creating a sample library and developing a software. Two different things entirely.

Also, I am talking about plugins and not sample libraries.
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Re: Why are software developers killing our industry?

Postby Zukan » Thu Oct 02, 2014 8:57 am

johnny h wrote:
To you, perhaps. If you already have your algorithms perfected, as Eventide did 20 years ago, the marginal cost is close to zero.


Considering that I helped develop a number of those algorithms years ago for the H3K series I should know, and again I am not concerned about old technologies being reused.
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Re: Why are software developers killing our industry?

Postby Zukan » Thu Oct 02, 2014 9:00 am

johnny h wrote:
Top end plugins are way cheaper than they were - check the Lexicon PCM bundle. The problem is basic demand and supply economics. There is falling demand, partly because everyone and his dog already has as many EQs, compressors and whatever to last a lifetime and partly because the increased quality of inbuilt DAWs has rendered many third party plugins redundant. On the supply side, there are an absolutely crazy amount of plugin developers all doing very much the same thing.

Prices are going to continue falling and more developers will be forced out of the market.

First decent observation by you and I totally agree.

Prepare for poorer quality products saturating a market that is already saturated. However, what you fail to realise are the costs involved. The price points charged today barely recoup R&D.

Your argument that everyone has plugins in their daw etc is a valid point, but it doesn't stop people still purchasing more plugins. The same thinking behind the hardware we buy again and again and.....and try to emulate via software.
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