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Apple software subscriptions in the future?
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And those OSX updates are not free for the same reason. Once a year, way too often, we have a new OSX and the hardware and software needs to be replaced or updated. Getting a “frozen” system for a couple of years is a real achievement. Pressure on developers and the user base. One reason I bought the 2012 Mac Pro Tower. Four and probably five different boots on it soon. Who needs to pursue a software rental model when hardware is so profitable? Works for Apple, and Blackmagic is copying. All this, and I’m still an Apple fan.
Jim Wiseman
Sony PMW-EX1, Pana AJ-D810 DVCPro, DVX-100, Nikon D7000, Final Cut Pro X 10.2.1, Final Cut Studio 2 and 3, Media 100 Suite 2.1.6, Premiere Pro CS 5.5 and 6.0, AJA ioHD, AJA Kona LHi, Blackmagic Ultrastudio 4K, Blackmagic Teranex, Avid MC, 2013 Mac Pro Hexacore, 1 TB SSD, 64GB RAM, 2-D500: 2012 Hexacore MacPro 3.33 Ghz 24Gb RAM GTX-680 960GB SSD: Macbook Pro 17″ 2011 2.2 Ghz Quadcore i7 16GB RAM 250GB SSD -
[Tim Wilson] “but it took Jimmy Iovine at Beats (producer for Springsteen and Stevie Nicks, head of the most influential and profitable record label of his era)”
Not to get too petty, (who me?) but since when was anyone other than John Landau considered Springsteen’s producer? Not to disparage Iovine, who is a music industry giant.
Herb Sevush
Zebra Productions
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nothin’ attached to nothin’
“Deciding the spine is the process of editing” F. Bieberkopf -
After thinking about this, there is a downside to the approach Apple and Blackmagic is using. You want to use Resolve? Want to use this awesome editing software from Apple? Your hardware options are somewhat, to some extent, much more narrow, the proprietary variety. Of course, this extends into other industries to be sure.
For example, just talked to an elevator guy and companies like Otis are heading in that direction as well. Car industry might be next. Adobe does not make or sell hardware which is one reason subscription only came about. Might not agree with their business model but that is the way the ball bounces. No hardware that you are being tied to or a platform as is the situation with Motion.
That along with the fact that many or a few, based on your frame of reference is why there is an increase in software going rental only. Avid, in my opinion, takes a more sensible approach. Adobe, it is pay your rent or forget about it approach. Not something I am comfortable with. Carry on!
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Even the printer companies – who developed the model of hooking you on cheap gear and then making it up in the ink – are adding subscription. HP offers an ink cartridge subscription plan.
– Oliver
Oliver Peters Post Production Services, LLC
Orlando, FL
http://www.oliverpeters.com -
[David Mathis] “Adobe does not make or sell hardware which is one reason subscription only came about. “
I honestly doubt that’s the reason subscription came about.
Part one, electronic banking changed everything. The ability to do ACH hookups changed everything. It fundamentally changed the relationship between consumer, bank, and service vendor. The bank is no longer a party. You can’t tell them to stop a payment because you aren’t a party to the transaction any longer. The contract between the vendor and the customer with no middleman anymore. Sounds efficient, but the result is to limit customer protection, big time.
As to the other reason, my suspicion is that a few bigwigs were drinking in the locker room after a round of golf, trading “My business model is a LOT more profitable than yours” stories.
And the insurance industry guy mentioned that with ACH billing, they had huge numbers of people paying monthly, in FEAR of being dropped, but month after month not actually getting anything except a few pieces of paper in exchange for the river of cash flowing in. He likely bragged that when their was a claim, they had whole teams of experts who could figure out how to deny them and rivers of 6pt type in their contracts to provide them with legal outs. And if you got old and finally in class where you were likely to actually have insurance claims – they’d raise rates so high that you’d be forced to shop around, with the result that they’d lose a large percentage of their older customers without ever having to pay out anything! BIG SCORE!
The software company guys knew that they’d actually have to deliver a functional product that their customers could use, but the idea of an income stream that was divorced from any actual product use or even functionality was just way too tempting to ignore.
This does not imply that honorable software companies won’t deliver quality products to encourage subscription. They most certainly will. This is just the money part of the deal.
“Make subscribing easy – make unsubscribing difficult – decouple from the customer if at all possible – and we’ll be a little bit more like Bob the insurance company exec who just bought his 3rd yacht.”
It’s all about money. That’s how business is setup to work in the modern era. Automate income. Limit loss. That we’re given good products is often an accident and more a reflection of pride than economic motivation – because this is the era where if you can legally decouple yourself from any and all risk of not making a buck, or from pesky customer service, it pays to do so.
Sad, but HUGELY profitable.
Know someone who teaches video editing in elementary school, high school or college? Tell them to check out http://www.StartEditingNow.com – video editing curriculum complete with licensed practice content.
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[Bill Davis] “I honestly doubt that’s the reason subscription came about.”
The reason is multifaceted, but companies like Apple or Blackmagic driving down the cost (perceived value?) of software certainly plays a roll. Do you think Apple’s $1199 FCS suite (or more recently a one-time fee of $400 for X) had no ripple effect in the NLE market? If Resolve wasn’t tied to BM hardware do you think a nearly fully functioning version of it would be given away for free? What about Microsoft’s new approach with Windows 10? I’m sure it had something to do with Apple giving away OS X for years. When the iTunes store first launched Jobs said in an interview that he didn’t fear competing online stores because competing stores didn’t have the iPod. iTMS was a break even/loss leader service designed to move Apple hardware.
A hardware race to the bottom gutted the computer industry in the ’00’s and now we are seeing a software race to the bottom.
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Not sure Andrew. I’m still of the opinion that after Apple proved the fully electronic software distribution model with the iTunes Store, they likely have more profit from a sale of X than they ever did with FCP Studio. Packaging, transporting, warehousing and flooring boxes of physical product likely are up a huge part of the Studio $1200 price tag. Trading a click for $$299 ($399 with add ons!) is a different profit generating ballgame entirely. It wasn’t any ‘race to the bottom for Apple. It was leveraging smart investment in an all electronic distribution system and knowing what the new game was before their competitors.
Know someone who teaches video editing in elementary school, high school or college? Tell them to check out http://www.StartEditingNow.com – video editing curriculum complete with licensed practice content.
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[Bill Davis] ” Packaging, transporting, warehousing and flooring boxes of physical product likely are up a huge part of the Studio $1200 price tag. Trading a click for $$299 ($399 with add ons!) is a different profit generating ballgame entirely.”
True but operating the entire App Store or iTunes Store operation with the e-commerce aspects isn’t zero cost either.
– Oliver
Oliver Peters Post Production Services, LLC
Orlando, FL
http://www.oliverpeters.com -
[Bill Davis] “. Packaging, transporting, warehousing and flooring boxes of physical product likely are up a huge part of the Studio $1200 price tag.”
I’m sorry Bill, but those costs at that volume don’t equal $800 per unit, closer to $80 per unit, if not $8 per unit, with $800 being the price difference between a unit of FCPS and FCPX.
FCPS was clearly more profitable per unit than X, but the difference is no more than a rounding error considering Apple’s overall budget.
Herb Sevush
Zebra Productions
—————————
nothin’ attached to nothin’
“Deciding the spine is the process of editing” F. Bieberkopf -
[Bill Davis] “Packaging, transporting, warehousing and flooring boxes of physical product likely are up a huge part of the Studio $1200 price tag. “
Physical distribution is not that expensive and Apple’s MO long predates X.
For example, with their old Pro Apps they routinely acquired expensive apps and then released them for a fraction of the price. Shake and Color were probably the most extreme examples. Shake used to be cross platform and cost about $10,000. After Apple bought it the Windows version got axed, the Linux version remained full price and the Mac version got a 50% price cut. Eventually the Mac price was $500 and the Linux price was $5000. Color, in a former life, was a $25,000 application that got rolled into the FC Suite at no additional charge.
[Bill Davis] ” It wasn’t any ‘race to the bottom for Apple. “
Sure it was. They set the bar unprofitably low. What else would you call that?
From the Jobs interview:
“We would like to break even/make a little bit of money but it’s not a money maker,” he said, candidly.So now we have it on record: the music store is a loss leader. Jobs said Apple would pay its dues to the RIAA, then seek to make money where it could, from its line of hardware accessories. When the conversation turned to rivals such as eTunes and Napster, Jobs said: “They don’t make iPods, so they don’t have a related business where they do [make money]”.
https://www.theregister.co.uk/2003/11/07/your_99c_belong/
Is Apple the only company doing this? Of course not, but to say Apple is not a player in this game is unreal.
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