Software Pricing

Discussion of music production, audio, equipment and any related topics, either with or without Ableton Live
McQ714
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Software Pricing

Post by McQ714 » Sat May 25, 2013 7:20 pm

How does a company put a price on software? Seems to me like a lot of software is priced way too high. I'm not going to pretend to know the first thing about software sales but I do know a little about supply and demand. I also know there is always a point where people that hesitate to buy something would definitely purchase a product. Now, software is a little different in that it's already developed. All you have to do is provide a download link or duplicate a DVD and shove it in a box. Obviously the download link is cheaper, almost to the point of being free to distribute. Let's take Live for example. At $500, it's a little expensive for someone that would use it as a hobby. But it shouldn't be stripped down just to sell at a lower price point to capture that market, either. Sure, there are a lot of people that would buy and have bought it at $500 and paid ridiculous amounts of money to upgrade as well. But a lot more people would buy it if it were priced lower at say $200 and they would probably continue to upgrade as well. There has to be some lower price point where the new sales would actually make the company more money in the long run. How many of you guys agree?? And how many of you are still using Live 8 or 7 or 6 because upgrade pricing seems to expensive?

Theo Void
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Re: Software Pricing

Post by Theo Void » Sat May 25, 2013 7:40 pm

I somewhat agree. If you think about the fact that soft-ware can be end-lessly copied then supply and demand doesn't even apply to it. A limited supply is what gives something value. Soft-ware's supply is limitless so by the logic of supply and demand it's worth nothing.

But, any soft-ware that's worth using needs constant work, bug-fixes, up-dates, etc. Programmers possess a specialized talent and skill that they need to be paid for. If they were'nt being paid to develop and maintain soft-ware than we probably wouldn't have any soft-ware worth using. So, in that sense I can understand why it's a bit expensive. A computer program is a never ending project. OS's are updated, hard-ware advances and the programmers have to keep up w/ it. Plus the fact that no computer is totally 100% stable. These people have to be paid somehow and I would imagine creating a program such as Ableton requires quite a bit of work.

It seems crazy that you're paying so much $$ for something that does not physically exist to create something that doesn't physically exist. But music is the one thing in life that keeps me going. There's always the open source option but IMHO you're not getting the quality or ease of use of Live. People pay a premium for convenience and (perceived) stability. You could always teach yourself to program and then build an application of your own. But if you did and you succeeded in creating something great, I bet you'd sell it for $500.00 or more.
Just sayin'.
I do think that selling crippled versions of software is a pretty fascist -ish thing to do!! I'm, not a fan.
I upgraded to 9 the day it came out because I was excited about the new features. I don't regret it at all and am over-all satisfied w/ my set-up.

yur2die4
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Re: Software Pricing

Post by yur2die4 » Sat May 25, 2013 11:30 pm

People that really want it, are buying it.

Some individual vst's sell at pretty high prices. I mean, yeah, quality goes into those also, and dedication to one sole purpose (as opposed to an entire audio program), but buy a few hundred, or 60 dollar vsts, it'll add up.

Then there is hadware, which can be at varying levels of flexibility, and could possibly cost an arm and a leg for 'that sound' or that particular method of control/useability.

The price of Live is enough to leave a big enough dent in one's wallet that they have to think about it for a bit, but it is still pretty accessible, even if you have to save up a while.

But yeah, as with anything in the world's brilliantly accessible consumerist market. Everything is out there and accessible, people really are paying for it. Just as they pay for everything else at a cost that seems a little too high when you really think about it. Then hesitate. Cringe. And buy it anyway. Who says the economy sucks??

Theo Void
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Re: Software Pricing

Post by Theo Void » Sat May 25, 2013 11:42 pm

I definitely am NOT a fan of the financial system we have place in the western world. I was watching those Zeitgeist videos awhile back, it's some really interesting stuff. It talks about how the financial system is nothing but a giant ponzi scheme and will not sustain. That the federal reserve is a private bank who owns the world thru debt, etc. Then it talks about a resource based economy where there is no currency. Pretty interesting stuff.

McQ714
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Re: Software Pricing

Post by McQ714 » Sun May 26, 2013 3:50 am

I suppose in the grand scheme of things software is relatively cheap but when you think about it in terms of being duplicated for no more than the first copy already cost, it just doesn't add up. Ableton.. Don't get me wrong. I love using Live! But the fact that you were able to stay in business for the last couple of years, without putting out a new product to sell, says to me that you make too much money. I'm in construction. My company fabricates and installs stone countertops. We sell you a product that is in high demand with relatively short supply. It involves cutting into the earth and polishing a piece of rock to a shiny finish. Then carrying said rock on our shoulders sometimes up numerous flights of stairs to finally place it in your kitchen and glue it all together. Sometimes shit goes wrong and it breaks, which is then replaced at our expense. Bottom line is you have purchased a physical item that cost hundreds of thousands of dollars in heavy machinery and thousands of dollars of labor and supply costs to produce and it cannot be copied for free. But I've probably spent much more on certain software programs and upgrades than it would cost to put granite in your kitchens. And last I checked, software doesn't add equity to the value of your computer.
And if this seems like rambling to anyone, it's because I'm on my sixth IPA of the night.

TomViolenz
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Re: Software Pricing

Post by TomViolenz » Sun May 26, 2013 10:58 am

McQ714 wrote: But the fact that you were able to stay in business for the last couple of years, without putting out a new product to sell, says to me that you make too much money.
I don't think this necessarily follows. They developed a product that was worth buying in 2010 and sold it the whole time through 2013.
I asume there was still a sizeable chunk of people in 2013 who thought the 2010 value proposition was still good enough.
In a way the (probably enormous) amounts of money needed to develop Live 8 had to be amortized over the whole 3 years to be profitable.
I'm in construction. My company fabricates and installs stone countertops. We sell you a product that is in high demand with relatively short supply. It involves cutting into the earth and polishing a piece of rock to a shiny finish. Then carrying said rock on our shoulders sometimes up numerous flights of stairs to finally place it in your kitchen and glue it all together.
Ableton needs to invest in A LOT of developer time. That's people with a rather rare skill set demanding high salaries, office buildings and quite some infrastructure.
Sitting in front of a computer screen, thinking really hard and typing is in this regard not much different than cutting, polishing and carrying expensive rock.
Sometimes shit goes wrong and it breaks, which is then replaced at our expense.
Which is quite comparable to all the evaluation of crash reports and release of point updates.
Bottom line is you have purchased a physical item that cost hundreds of thousands of dollars in heavy machinery and thousands of dollars of labor and supply costs to produce and it cannot be copied for free.
Bottom line is you bought a non-physical product that costs hundreds of thousands of dollars (probably more) in expensive people doing very involved work for a long time.
And last I checked, software doesn't add equity to the value of your computer.
Of course it does. If you sell your computer with expensive software (legally) installed, it will demand quite a premium on the market.

tl;dr

Software development is a different business model.

TomViolenz
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Re: Software Pricing

Post by TomViolenz » Sun May 26, 2013 11:09 am

I think a different question (that you also raised) is, at what point between 0€ and 500€ do the people who use this software illegally (or just don't use it even though they'd like to) go honest and is this price still high enough to make more for Ableton than just asking 500€ of the honest people.
I think the answer to this would interest Ableton themselves very much, is not easy to find and bankrupted quite a few software companies while they tried to find this sweet spot.

Quez
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Re: Software Pricing

Post by Quez » Sun May 26, 2013 2:19 pm

The big problem I have is with low-range wages for high-end / specialized jobs. And also industrial jobs should be more well-paid (aka people manufacturing our electronics goods).

Maybe everything would cost a little bit more, and the awfully rich would be less awfully rich, but still rich, and i think we would appreciate everything we have more. And ultimately, the quality would go up (of both materials, environment and our lives), the waste would go down. Everyone happy.

(end of semi-unrelated rant)

For Ableton, they probably have to spread the money they make over the years before a new major revision comes out. And I suppose sponsorship deals and other whatnots keep money in also.

snakedogman
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Re: Software Pricing

Post by snakedogman » Sun May 26, 2013 2:45 pm

The good thing is that there is a lot of competition in the DAW market, which means that there are lower priced alternatives to using Live if you think their price is too steep.
Personally I don't think Live is particularly expensive (though not cheap either compared to similar products) but it also depends on where you live and the kind of money you make. Certainly there are many people who spend way more than 500,- on their various hobby's. Just buying one decent guitar could set you back that. Or a smartphone. Or some hi-fi audio cables ;)

sowhoso
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Re: Software Pricing

Post by sowhoso » Sun May 26, 2013 5:12 pm

i upgraded from Live 7 to 9 standard for $110usd. to me that was a very good deal. when i first bought 7 it was about $200, again a good deal

if you consider all you get with Live, DAW plus plugins/devices etc., and compare that to prices for individual plugins out there i think it is def a good deal, even at $500

when it comes to audio software DAWs are the best deal

login
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Re: Software Pricing

Post by login » Sun May 26, 2013 5:35 pm

Given what you get in software (features) very few products I would consider "expensive". There are plugs like zebra or divas which are a bargain, valhalla stuff too. Then Omnisphere for example seems a little bit overpriced.

Fabfilter also seems a little bit overpriced, as used to be waves, lexicon and UAD.


For DAW's it is harder to say it, Live seems a little bit overpriced (100 les could be ok)because it still has theonopoly over session view, maybe bitwig will change that.

But overall given the huge competition that exists in music software I find prices really competitive, specially for what you get. Just go to a music store and see what a similar budget gets you in hardware.

XSIMan
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Re: Software Pricing

Post by XSIMan » Sun May 26, 2013 7:46 pm

Companies have to sell so many copies of their software per week to cover their running costs and provide wages for staff.

Some like Valhalla plugins are made by one guy so one wage + marketing and web server costs.

Omnisphere is sampled from hardware instruments using the best microphones and done in a studio which have to be bought and hired. The Spectrasonics team is huge that's why there are so many presets of around 11,000. So a lot of wages and production costs to earn back.

Some developers will spend over a year on one plugin to get it's features, sound and character perfected.

CFM
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Re: Software Pricing

Post by CFM » Sun May 26, 2013 8:18 pm

I've always said the way it's going to go is a subscription model... e.g. just like Adobe have done with their creative cloud.

Subscribe to Ableton Live Cloud and while you are paying you get the latest version - no having to upgrade., no payment no use! Could Live 9 be the last boxed version you can buy?

Plus they could charge different amounts for more/less features...

Theo Void
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Re: Software Pricing

Post by Theo Void » Sun May 26, 2013 9:06 pm

CFM wrote:I've always said the way it's going to go is a subscription model... e.g. just like Adobe have done with their creative cloud.

Subscribe to Ableton Live Cloud and while you are paying you get the latest version - no having to upgrade., no payment no use! Could Live 9 be the last boxed version you can buy?

Plus they could charge different amounts for more/less features...
I think this would suck enormously!! I am NOT a fan of the whole subscription model. To hell w/ that! Soft-ware or hard-ware I want to own whatever I buy. What if I'm not on a network?

Also, I don't think Live is that expensive really. As someone mentioned 15 yrs. ago you'd have to spend hundred's of thousands to get the quality studio equipment we now carry around in our backpacks. I realize technology has advanced tremendously but someone needs to be payed for all the hours they're putting in. Coders possess a unique, difficult and specialized skillset. There's NO WAY I could do it (or want to) so that's why I pay someone else to make it for me so I can focus on music.

CFM
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Re: Software Pricing

Post by CFM » Sun May 26, 2013 11:15 pm

Like 'most people' Theo Void I've never really read to licensing on my copy of Live... but I bet it says; oh, yes it does "installing, copying or use of this product do not acquire any ownership rights to the Software". Therefore, Ableton still own the software on your machine :(

So how many would take up a subscription model of Live if to was say £10 per month for Suite or £100 per year?

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