The Private Equity Buyout Of Music Production
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- čas přidán 1. 06. 2024
- The financial forecast musicians wished they didn't want.
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Timestampz:
0:00 - Insomnia
1:02 - Disclaimer
2:53 - Native Instruments/iZotope/etc
7:24 - NI Predictions
8:57 - InMusic Buying Moog
11:49 - Moog Predictions
12:40 - Avid
14:00 - ImageLine Buying UVI/Melda
15:21 - PE Buying Sweetwater
17:00 - Sequential/Waves/and Value Inflation Strategies
18:30 - Layoffs, legacy overvaluation - Věda a technologie
![Should We Hate Spotify? [An Objective View From A Professional Musician]](http://i.ytimg.com/vi/MXudOLStaXA/mqdefault.jpg)
![Should We Hate Spotify? [An Objective View From A Professional Musician]](/img/tr.png)
I genuinely just put on a thousand yard stare and fill with rage and hopelessness when I hear the words "aquired by a private equity firm" lol
Can I give you a blink of hope. I do everything in Linux. Writing music : Bitiwig (it cost me $200, with a promotion), Reaper ($60, yeah we can talk a lot about that) used for mixing and mastering, and Shotcut (These peeps FUDGING ROCK) for video editing. Don't give in to what someone tells you to buy. Find yourself in an absolute joy of open software. Wow. I went way too hippy there :D I type this with too much love and respect. There are other ways to get stuff done :D
@@goodchildmusic0 i use linux/unix-like environments for everything at work & have never written a line of code in a windows or mac-os environment... this is all to say, its very good for a professional workflow & I love it for that. But brother, I am not tryina mingle my day job w/ my musical escapism... I dont plan to make the jump to a linux based music production environment, unless ableton makes a linux version that is 10/10.
@@goodchildmusic0 What about hardware? Audio interface, midi keyboard etc. Do these work well with Linux without too much hassle?
@@von... I use a System76 Galagapro 4. Galgpro4. It's an i5, 16 ram, 512 m.2 all on a Donner Livejack. My DesktopPC is a AMD A4-5400k, 24gb ram and too many hardrives to mention. All running a maudio fast track. I paid $200 for Bitwig. They had a promotion after I bought 16. Reaper is sooooo cheap it's dumb. The vst and plugins it comes with are fudging awesome. I guess what I am saying is there are ways out of the big DAWS. Give me any questions you want, PLEASE. There are so many free options to record music, it's AWESOME ❤
I saw there are toooooo many spelling and grammar mistakes on my part. Please feel free for me to correct. My 2 machines: System76 galago pro 4. I5 10210u quad core, 16gbs ram, 512 m.2 + 512 spinning rust. Audio done by a Donner LiveJack. 2nd computer (this is used more for gaming) AMD A6 5400K oc'd @ 4.3ghz, 24gbs RAM, XFX AMD RX460 4gbs, and too many hard drives to talk about. They both run Ubuntu 22.04LTS and are a delite to work with❤
I find it hilarious that a few months ago I broke down the economics of how image line is actually very profitable on reddit, only to be rebuted by a bunch of 12-year-olds telling me that I'm wrong and they're losing money by not being alive service. it was so reassuring that you pointed out that they actually are pretty profitable even though they do not subscribe to the same toxic live service business model that so many companies are poisoning their brands with. thank you so much.
I always figured they were profitable when they tout free updates for life. Few services can offer such a thing without big revenue coming in from somewhere.
Its heartbreaking thinking just to subscription I can finally afford Komplete.
So many neckbeards complain about how fragile it is as a company when asking for updates, lol.
@@SALEENS7GTR5I'm still mystified how they are profitable. I love that they are. And I love my free upgrades. But it is kind of hard to see how it works.
@@SALEENS7GTR5 It was free updates for life 20 years ago. Serum is another "free for life" product that is making good profit for Xfer.
Epic better not screw up Bandcamp, because that is the greatest thing for indie artists.
If only they could fix the Artist App, though… 🫤
They’ll sell it to Spotify so indie artists get an even smaller piece.
That hurt, a lot! At least for me...and even if bandcamp came out saying that they will keep the way they operate, I think is just a matter of time until full changes start to show up.
Bandcamp is also great for me as an causal music consumer. There is actually a lot of great and diverse new music that is promoted there with Bandcamp weakly and stuff like that. And most music played everywhere else is just soulless crap.
@@obsoerver7272watch epic be like "give us 5 percent of each sale and if you are willing to make it 15% we'll put it in one of our games after reviewing the song. And you get a 10¢ royalty on the emote we put it on."
Corporate acquisitions and mergers are almost never a good thing. They're generally a symptom of an ailing society. The amount of buyouts happening lately is really worrisome.
Austrian economics vs Keynesian economics is a topic you can examine closer to get more info, just the tip of the iceberg though
@@lovesiriusblack Tip of the iceberg indeed. The buyout of music production is one tiny piece of a huge long-term macroeconomic disaster which began around 1980. The underlying issues go back way farther than that though, and have repeated again and again through the ages. One could even justifiably say it is _the_ core issue which has driven most of the struggles in recorded human history.
It is a clash of the two big ideologies... the people vs the aristocracy, forward vs back, empathy vs greed, hope vs fear, equality vs hierarchy, Keynesian vs Austrian, etc... in more general terms, it's often called progressivism vs conservatism. And we're rapidly nearing the worst part of that ongoing cycle, as the metronome of history ticks back and forth between the two.
@@ToyKeeper "in more general terms, it's often called progressivism vs conservatism." That is a vast oversimplification. Progressivism simply substitutes the corrupt State for the corrupt corporate aristocracy. In the end, they all feed out of the same food trough.
@@fragmatic1964im not sure how the progressives want more corporate power?
@@fragmatic1964 I've been saying that to people for almost 40 years. No one wants to hear it. We are literally indoctrinated from birth to take sides. We can't face the reality that all sides are doing the same thing with.. just with a different motto.
So you know, this is happening in every industry. Not just music. 2019-present has been a massive power grab
natural progression of capitalism. it will always lead to consolidation
@@the80386 Also a ‘natural’’ progression of useless lockdowns, government overspending/subsidizations, and business closures. What a recipe
in the future all restaurant will be taco bell
Companies are vulnerable to takeover right now because their cash positions are shit.
Billionaires made trillions since the pandemic.
They won. Everyone else lost.
What’s incredible about FL Studio is that they don’t charge for upgrades at all…for the lifetime of the software and yet they are still more profitable than DAWs that do!! 🤯
What was shit about FL Studio wss I bought it, decided I preferred another DAW later, and found my FL license was non sellable/transferrable.
@@EarlyMistthat’s why you get a free trial version before you buy, lol
@@EarlyMistI’ll buy it off you if you still have it. I’ve been using a cracked version for years
@@everyneed3959 my understanding is the license is non-transferable.
@@EarlyMist how would they know tho?
Sweetwater has so ramped up their online advertising since the PE buyout. The GearFest event that felt like a customer appreciation/musician advancement event with known musicians and industry leaders giving seminars over two days, you could talk directly with manufacturers about their products and try them out etc. This year's was only open to CZcamsrs solely for the sake of advertising and giving those CZcamsrs free stuff. No seminars whatsoever and all online. I know plenty will still buy from them, but frankly I'm done with them. Also, reading lots of online reviews saying their customer service has gone downhill since the PE buyout.
Yup. I also won’t buy from Sweetwater anymore.
Wow my mind is blown 😮
Sweetwater's prices are the highest out there too. Many items that are like 4 or 5 hundred sell for a hundred more on Sweetwater. Also many of the reviews seem as fake as Amazon reviews. And if you buy from them their sales reps will stalk and track you down even if you go on an expedition to Antarctica.
That Avid advice broke me. Solid gold Benn.
😂
I gotta say, I've only been watching benn for a couple months now But this man always manages to captivate me and grip my attention, so well spoken, well informed and/or educated, easy to follow and understand and a good sense of humour to go with. Thankyou Benn for your dedication and putting your insomnia to good use!. 🙏
I swear I was going to write this exact thing
Plus he's talking in a calm and intelligent way unlike many other youtubers who scream like beasts all the time. I feel like he's treating his audience as actual human beings.
If you haven't listened to his music under the flashbulb your missing out ❤ I just found his CZcams a few months ago too (:
Went to comments section to write the same opinion!
He is a good human being.
The advantage in the software world is that even if the bigger companies get eaten, digested and (worst case) excreted, the barrier of entry is so low that it takes just one enthusiastic, talented developer to create viable, customer friendly alternatives, be it as a small business or as open source as a hobby.
Doesn’t work like that in the hardware world because the initial investments and risks are much higher, despite crowdfunding.
Still we have companies like Synthstrom Audible, Polyend and Erica Synths.
People could just stop selling out......we bring this on ourselves unfortunately.
That's pretty true .. Yet there is this thing of code base, so much dedicated WORK going into these islands of software, to get ruined, polluted by greed of the new 'owners'
Like a sunk beautiful ship - and software patents make it hard for the original Devs to float something new
Yet people DO seem to have this AMAZING ability to reverse engineer!
Sure anyone can use a basic computer and start working on software. However if you're planning to build anything major you're going to need a lot of time. That means you either already have some kind of funding available to support yourself or you have a regular job during the day and work on your software at night.
Epic purchasing Bandcamp is the most heart breaking news
is not news, it was a year ago. and they are promoting the indie artists music from bandcamp into their games, so I see it as a win, imagine your music promoted to 229 million average monthly players
What negative things has Epic really done to cause concern?
At least BandCamp is slightly better than SoundCloud, but only by a slim margin.
As an Ashevillian I’m super sad that the Moog factory is in peril especially since I know people who do/did work there. They say they’re going to keep operating as normal, but that never ends up the case with these buyouts.
"Nothing is going to change" is the anesthetic applied to a workforce so nobody leaves while all the tribal knowledge is siphoned into something that can be given to a cheaper workforce.
Just wanted to sat that I very much appreciate the amount of effort and research that goes into these videos. It's great to see messages like this delivered in a concise & well-researched manner. Keep up the awesome work!
I am interested (and frankly relieved) that Arturia was not mentioned here. I really hope nothing bad happens to them, because I love what they do.
They were bought by EMZ partners in 2019, but they see to be doing fine.
@@waltercruz2044 Arturia is still owned at 80% + by the CEO and the employees
@@michelnassarofficial That's good to hear!
@@macronencer yep! All decisions are still made internally :)
@@macronencer yeah, and in 2021 EMZ even kicked a shout out article on their website to Arturia's success, and called themselves the reference minority.
You should talk about the time when Fruity loops changed to FL studio, which was also around the same time Apple buys emagic, and hired some people from sound forge , which gave us Apple Loops. That was a gig changing point for computer music as well.
Thank you for covering this story. There is so little music instrument trade journalism and these are important stories.
I think one reason why smaller software and plugin companies suffer financially nowadays is because the market has started to be saturated. Not only with competitors and competing products, but even in regards to a company's own product line. I mean, how many more string libraries do you want to release if you've already put out 10 or 20 different ones in the past ? So, in that sense i can understand why a subscription model would be more profitable for those companies (as that way, they don't have to constantly come up with new products as the existing ones can generate revenue for years), just that i don't think the average customer is really willing to have to pay for 10 different subscriptions a month.
These kind of monopolisation efforts (including those by investment firms buying out whole back catalogs of artists etc) are really depressing, as in 9/10 it's not about providing better gear, better payouts for artists or more choice for consumers - it's solely about maximizing profits no matter what. That's why Akai and Alesis keyboards have almost the same features, or why everybody in the music software world seems to push a subscription model, or why most of NI's products are clearly focussing on the mainstream paint-by-numbers music making market nowadays. The low point so far for me has been the aquisition of Bandcamp, as that one is one of the few alternatives to streaming services that artists are left with. If indeed NI should buy Spitfire Audio and - god forbid - integrate them into their subscription thing though, that would be at least as depressing.
Right. I feel the same way about doing 3D modeling using Sketch Up. They used to be a free part of Google but then split away and you could buy a version and use it for a long time. Now though it is a subscription and is pretty expensive for someone like me just doing it as a hobby. I've not got any music software subscriptions and hope to avoid it in the future.
Everything is a subscription now. You'll rent for life!
@@sandiahead This message was brought to you by Blackrock. Eat ze bugs uman😂
Rentier is where they want it but - no thanks. I'd prefer GPL with donations as a future model predicated on free and abundant energy sources coming on line and liberation of humanity from Debt Serfdom.
I saw FL Studio at the beginning and was scared they got bought out, but then realized it was the opposite. Good to see they are growing even more! I feel like UVI and Melda are in good hands.
It isn’t just the music industry, PE has absolutely gutted the medical field. As some that worked in M&A for PE (buyside), i realized at one point that PE is making a deal with the devil.
5:53 I saw the punch line for the sea turtles joke coming in advance but I still laughed 😄😄👏👏 fantastic
Yeah, I was like '…you smartass' :) and wouldn't want him to be any other way.
The amount of research you did for this, and the completed vid deserve a gott dam award, thank you for making this.
Ditto - I pinned it on my Social Media's as people need to SEE this - I only knew a HINT of the murky skullduggery... Thanks again
FL being referred to as an overwhelming UI really shows how far we've gotten since Fruity loops 4. oh how the mpc keyboard producers would laugh at us for using it lol . Now it's a structural component for all music..... I'm old
I remember when 9th Wonder admitted he used it and it was such a big deal on forums at the time. lol. I was always thinking who cares Little Brother is dope. idgaf if 9th samples from cds and uses Fruity Loops
@@devote wowww I Soooo remember that. What a time it was. That was SUCH A BIG DEAL. where did the time go.
I'm trying to concentrate, but I'm still reeling that Akai, Alesis, Alto, Denon, Headrush, M-Audio, Marantz, Numark, Rane and Moog are all owned by the same company. That covers nearly every mainstream electronic and DJ brand.
Just wait until you hear about Disney…
I'm a working musician and I hate subscription models - I just won't do it. Flat out. Thank you for this video - very informative. ♫
Agreed. Would be great if there was something that worked like a subscription service, but your payments count towards paying off the software license so it'd be like a temporary subscription model, but I doubt we'll ever see something like that
I simply love Benn's take-no-prisoners approach. Keep burning bridges with style, baby!
In the nicest possible way, your insomnia is an asset given the depths you go into topics. I think I'd have the opposite of insomnia if I attempted to do research like this.
Keep up the great work Benn, fascinating stuff.
Good to see you here, shows you care about various facets
Waves puts on a lot of live seminars. Theyre not crazy industry secrets, but it's great reference materials and thr guests are top notch
I work with a lot of music software and hardware companies. I once had to deal with a firm like what you're talking about (none of the ones you mentioned). I hated it. They were absolutely mercenary and had no love or understanding of the music business. They were just trying to turn a buck, and were looking for a handout at every turn. They were investing the bare minimum to bring a product across the line so they could sell it off and make it someone else's problem.
I then dealt with another one years later. Same industry. Same greasy feeling.
Three's a pattern, but I don't want to deal with a third one. It's much more satisfying to work with companies who believe in what they're doing. Unfortunately, those companies also tend to fail because passion doesn't put food on the table.
Right after Slate cashed out, I was bombarded by messages asking if I'd sold Kush (I have not) or been side-eyed by any fin-bro's looking for another property to exploit (no comment). I don't love the way corporate consolidation is creeping into the outer layers of this misfit-driven, sound junkie space called pro audio, I actually find it deeply unsettling. I have zero plans or desires to walk away from everything I'm passionate about, but I can't deny that my principles would flounder quickly if a number with 8 digits was slipped across the table. Fucking money.
loved the latest video
im so glad you didnt just sugarcoat and idolize moog like literally everyone in my local synth group does. people were acting like the sky has fallen because moog got bought out.
Well it’s because it was controlled by Moog and the people HE trusted with HIS vision. Now it’s in a finance bro’s hands who has never worked a day in their life and will not care about anything except their own bottom line. Same thing happened with these past bank failures, young financiers placed in positions by daddy where they can fail miserably and still walk away with millions. They. Don’t. Care.
You are probably buying into something that sailed decades ago. Moog has struggled a lot
@@KC-bi9jw i mean i dont trust finance bros but I also wont miss old moog that much. I couldnt give a single fuck less about bob moog, and i think the moog tone is something that only old synth nerds care about. I say good riddance. bob got his bag, time for a new era of innovators who dont charge 3k for a single analog voice.
@@NicholasSeamans i mean it makes sense. Moog hasnt dropped an innovative product in decades and priced their products to be utterly non competitive. This isnt 1985, analog mono synths dont cost thousands anymore. In fact you can buy multiple analog poly synths that have way more modern feature sets for the price of a dumb legacy product like a model d, and that’s exactly what most bedroom producers would rather do.
@@Rooftopaccessorizer Amen brother, I feel exactly the same way, The hype was intolerable, and when you called anyone on the reality, they went all lil kid believing in santa on you, no logic or reason can penetrate that. So I just disrespect any pro moog person I encounter with zeal. 🙂
Wow. Would be insane to do a similar breakdown for guitar/amp/effects companies and retailers.
Excellent video.
Looking forward to your analysis of the AVID buy-out, once the dust settles.
Videos like this make me think about Zildjian. Family owned since 1623. The instruments of mine that VC types / investors came up to talk to me about at trade shows have always been the ones that musicians weren't as interested in and generally were not good ideas.
glad to hear Image Line is doing well. I'd hate for them to get bought up by some greedy bastards that'd try to take my lifetime free updates away for some subscription bullshit or something like that
as someone who works in music retail marketing, thank you so much for making this incredibly well-informed and detailed guide to the state of the industry. It's all moving so fast >,
Hi. I need my music marketed 😂
peace.
this is one of your best videos yet, thank you so much for the time and detail you go into!
After watching a few vids I’m impressed. And not just on the content you make. Your self-awareness and honesty about your bias and objectivity is refreshing, and something most people are simply incapable of doing. Even with your other obvious talents, I think this is your superpower.
MUSICIANS MUST OWN THE MEANS OF MUSIC PRODUCTION AND DISTRIBUTION!!! WORKERS OF THE WORLD UNITE!!!
Reaper. Get it while you still can.
Thankfully now there is a ton of open source stuff both in software and hardware, so you can have a lot more control over what you use
And yeah, Reaper is great, despite being proprietary, and so is Renoise
Ben.....This is a style guide point I am sharing with you. So that you can have that polished corporate image you were going for in the cover image of this video.
When wearing a suite with two buttons the rule is:
Top button = Use to button up.
Bottom button = Never use to button up.
The rules are different for a three button suite as well. It goes... Top to bottom like this:
A/S/N =Always/Sometimes/Never
Dress well, look well, be well
Your content is so deep and well put together. Thanks for sharing it with us.
The Venture Capatlists have absolutely clapped out the Indie rock genre. My indie rock playlist is essentially fossilized and set in stone now, very hard to find good, new music when it felt like back in 2013-2014 there wee new bangers every week
There were some cheese balls too, but yeah 2013 was such a great year of music variety. I miss that. There's good bands around nowadays but we gotta go out of our ways to find them because they're all fantastic but struggling locals acts that will never get picked up by any record labels. Record labels only care if you already had an insanely successful TikTok campaign, and youre already a millionaire.
@@ytgytgy Exactly. And things are churned out and recycled so quickly due to what’s “trendy”
The best solution I typically find is user created playlists where people are passionate about the genre and find great songs.
So many more underrated artists nowadays that just a decade ago probably would’ve had more traction like you are saying
This just saved me a whole lotta breath and a whole lotta typing. It's going to get linked and hopefully this one will go viral. Support your independent developers.
At 6:00 this really made me lol, that was so good.
Very fascinating info here. Thanks for keeping us abreast of the state of the industry!
your channel is literally the most diverse one from all music related channels I'm following.. and I like it :)
Can't remember the last time I found a good CZcams channel. Thanks for all this insight into stuff I never even considered was a factor, Benn! Subscribed and about to binge
i love these types of videos so much, like the inner-working of all the companies I crack plugins from
Waves 🤣
This was a great take on what's going on in the industry! Thank you Benn!
Great vid. I was waiting a long time for the bandcamp take, but awesome rundown. It will be interesting to see what happens with it, I think it could be really positive. There's just so much good stuff.
I am curious about Arturia. From a user’s perspective they are doing everything right. Good hardware, good software, no subscription, very fair pricing. I really would be sad if something happened to them.
They are the only ones who could survive the Behringer takeover of everything.
thats why they wont get bought.
just an actually good company
That and Arturia has a big fish of a partner in Korg
@@ratus7538 yeah because good, moral companies never fail when in competition with companies who operate in a more cutthroat manner /s
Same thing will happen to them also . Just watch 😂
Damn, we're going to have to find or create a new Bandcamp.. A distro that's actually for musicians and composers
soulseek
Since they were bought i genuinely haven't seen any negative changes in their site and i hope it stays that way.
Benn! Perfect timing. I wrote a very closely related article a few days ago & predicted a lot of what happened to NI and the DJ industry before the pandemic. Thank you for this video because your voice is so much louder than mine! 🤘🏼🔥
I enjoy and appreciate your videos, particularly the ones where you have crunched the data.
As someone who works in music tech Id love to see more of these videos from you. Your takes are sober and well thought out.
Never underestimate the appeal of those retail stores where people can test out gear. Many serious musicians will not spend their hard-earned on anything they haven't put hands on first. Too many horror stories abound of expensive sight-unseen purchases being very substandard upon delivery. Stick with brands that have store placement; they're always making real sales and amassing profitable loyalty from working pros.
It's true, there's nothing like buying instruments from in-person stores. I've returned every online guitar I've bought, all for reasons that would have taken a couple minutes at a store to figure out -- neck profile, body carve, etc etc
Amazing!! Great stuff Ben -- subscribed immediately
Great video Ben. Thanks for the effort you put in
Yo, the employment stats you have for AKAI is the consumer electronics AKAI, which is not the same company as AKAI Professional.
This is correct. The image Benn uses refers to Akai Creative at Heart. Which I think is the fine company that brought us the Akai toaster.
You are correct. I used the wrong graphic.
The point still stands though, as a quick look at the back of any InMusic device will tell you that they're not manufactured in USA/Europe where the majority of customers are. 🙂
@@BennJordanThanks for the reply!
That’s true but I also see the same when I pick up any Arturia, UA or almost every other electronic device I own. The way you presented it made it seem as though the R&D and QA work was outsourced to developing countries when I know a lot of the software development is done here in the UK, which is not a developing country as it stands right now. 😊
Akai Professional as a company doesn't actually exist anymore. Numark purchased the trademark brand and its assets which is all that's left. Soon as Jack O'Donnell created InMusic in 2012, he moved all the brands and companies he bought over the years to his new company InMusic. Before that Numark was the one mass producing MPCs. Let me tell ya, all the moern MPC'S made by Numark and InMusic are absolute junk! I threw my MPC 5000 in the trash back in January after it sat broke for 3 years as the 5000 is notorious fr faulty power supplies given it shares all the same parts as the Alesis Fusion HD keyboard that also has the same faulty power that would overheat and prematurely fail.
Good video. As for the Moog buyout by InMusic, you are correct, I think they want the Moog branding more than the synths, or assembly line in Asheville. I think the Moog brand will be used similar to what Samsung has done with JBL. Samsung uses the JBL brand on everything from $50 Bluetooth speakers, to their expensive VTX pro audio line.
No question, that might be all they wanted, it famous, even normals know the name. Your comparison seems accurate, normals knoe jbl and bose,,,that's it. And of course anything labeled JBL or Bose must be good.
Glad this landed in my feed. Thanks for the breakdowns.
Sweet Fancy Moses! I have no idea how I stumbled onto one of your videos but the quality of your channel is fantastic. I have spent the past few hours binging your content and I just wanted to say two things; bravo and thank you.
Loved this. Thanks Benn
hi roomie
Hi roomie from Fortnite
@@4lare615y it
This is a great video. Thanks!
poggers + based Tantacrul
This is precisely the reason I respect the hell out of Abelton. Time and time again they’ve refused outside funding from VC and PE firms to grow sustainably.
This was great Benn, thanks. Keep these coming.
Would have liked to see UAD mentioned - their entire model has changed TONS over recent years. LUNA must have cost a bomb to develop, new more “focusrite” style interfaces, buying out bock and townsend mics, subscriptions+native
Yeah man, subscription (a.k.a. "extortion") is WAY easier than continuous innovation and you can fire all those developers! It worked for Adobe and Autodesk. Most people will be too young to remember by now, but back in the day they were both really amazing, super innovative and well-liked companies. Now it's just all about the share price. So sad.
Because of that it is actually very good that this did not end up well for Waves and Avid and therefore is a warning for others who would like to go subscription only.
Subscription services are like school teachers handing out vacation assignments - they forgot that everyone is doing it. Eventually people have to get picky.
Netflix and F1TV subscriptions give me value. Adobe and Roland Cloud would not give me value.
@@oldunclemick For a large company or a professional who uses the product regularly to make a living the cost of subscription software isn't necessarily a problem. For someone who only occasionally requires that product or for someone doing it for the sake of their art or just exploring their talents or for someone who no longer depends on it for a living but would still like to have access to it (and the work they did in the past), that same *constantly recurring* cost can be OUTRAGEOUS - as in _they should be outraged._ That's actually quite a lot of people who would be using the product to some extent, but simply *CAN NOT* justify the ongoing expense. Another issue that is almost never raised is how when companies switch to subscriptions, they don't just get greedy, they get lazy and the product tends to languish. Just ask anyone who has used 3ds Max long enough to remember all the new features and tools they got in each new release _before_ it went to subscription. Now it just sits there, waiting to die.
@@oldunclemick I always figured handing out homework is just an indication that a teacher is, for some reason, incapable of getting their job done in the classroom. That or they're just old and spiteful.
This was a great video and you hit every nail on the head. It feels so weird to be here from the beginning of companies like Slate Digital just to see them ultimately get bought out by companies that do not care about the industry. Its like the whole creative industry has been bought out by corporate mega conglomerates.
Been going on for Years and Years and Years. Back in the mid 2000's i noticed this. Akai was bought by Numark and then some compan called "In-Music" and i noticed the quality and direction of the type of gear they were making changed for the worst. Companies stopped making Real Gear and started making these little kiddy sub $400 grove boxes and cheap little 61 key keyboard plastic synths.
Numark/InMusic is the same company. Jack O'Donnell has owned Numark since 1993 and then he started InMusic in 2012 ad then moved all the brands and companies he bought over the years to InMusic.
Hi Ben, I'm an investor (used to do PE, now I'm partner at a VC fund). I'm also a massive synth and gear fan and have been following you since Ben & Gear. Great analysis of the market. A few thoughts:
1. Licenses (=recurring revenue) will always be valued higher by investors because they have a lifetime value. Customers may churn after 1 year, or may stay for 5. You can calculate that, and the return on investment in acquiring a license customers is almost always higher than selling a perpetual license. I hate music plugin licenses and I don't pay for a single one. BUT from a pure bean-counting perspective, they make sense - so long as you don't try to pull a silly move like Waves did.
2. Speaking of licenses, ImageLine will always be valued a lot lower than other companies, which likely means it is highly unlikely to be sold. I love unlimited updates, but from a pure finance angle it doesn't make a lot of sense (you can argue that it lowers cost of acquisition, because customers are more likely to buy it vs. Ableton, knowing they have lifetime updates. Maybe. I use both.
3. NI is a really sad story IMHO. They have so many great products but just stopped innovating. Maschine is one of the greatest products for workflow and creativity and is practically dead innovation-wise and development-wise. DJ market >>> producer market, so I expect more focus on that.
4. Look at Focurite Share price performance. Again sad story. The market for synths is just so much smaller than guitars/DJs
5. On the positive side - I visited SuperBooth this year. It was incredible to see the amount of innovation coming out from so many small and medium producers.
6. There is an opportunity for a small PE player to do a roll-up play and buy quite a few of the modular players, creating efficiencies (=layoffs) and improving production quality and reducing costs. But market right now is still too small to be meaningful.
Thanks for a great video
Unfortunately for the musician/consumer, at some point when markets aren't great, you have to decide on whether to invest and innovate or just try to scrape out more profit for shareholders, and as we see time and again, the latter always wins out.
If I could ask a legitimate question: why does it seem these firms so often buy a flagging corporation and saddle it with seemingly insurmountable debt, then somehow get more money out and the corp goes out of business? GuitarCenter and Kmart/Sears come to mind. Thanks!
@@Scott__C
And then the innovation cycle starts again with cool kids in the garage building modular stuff, and the old stuff gets stale due to lack of innovation...
To your question: PE loves debt because 1. Interest payments help reduce tax payable. 2. It boosts returns. Just like a mortgage, if you buy something for 100 using 25 equity and 75 debt and the value goes to 125, you doubled your money. The inverse is also true - if it goes down to 75 you lost all the investors money. But you care less about that because you go do something else. So all the upside , with less downside. Asymmetric risk. 3. You can sometimes do a dividend recap, which is just like remortgaging you home and taking out more equity. So the PE fund may have taken all it's equity out, and now it is all upside.
Now, I'm sure most funds will have a model that says that the debt will be paid over time and performance will improve and everyone will be happy. But in reality stuff happens and the usage of debt by definition increases the risk. Because funds have asymmetrical returns (moral hazard) they will sometimes take too much risk.
Hope this makes sense?
@@someoneanonymous1 Thanks a lot. I've often read that, but your concise explanation helped a lot. I appreciate it. I guess I don't really agree with people getting wealthier by weakening a company or when it does poorly or goes under.
@@Scott__C agreed. That's the less positive side of capitalism. It is rarely one on purpose, but is sometimes the result of skewed incentives.
how can i get into this kind of business ?
I think you misspelled "Vulture Capital"
indeed!
Awesome video, very interesting - and the completely untethered, independent angle is priceless.
Great video and with well researched and consolidated information.
I'm moving more and more to hardware The thing that makes me uneasy is the subscription model which software is at the mercy of. I got locked out of photoshop and I don't intend for that to happen again. I'm working toward a dawless set up
I became a instant fan of yours during the whole MPC Keys controversy. I just want to send some love and tell you that people like you who are brutally honest and not scared of burning bridges are extremely rare and necessary in this music tech world. ❤
This is such an awesome video to appear in the Music Producer CZcams space. Big thanks for making this!!
Thank you for doing this, can't imagine the research time you invested into this
Something that's coming to a head with all of this is that the final product - recorded and live music - is under a lot of pressure to escape the "IP Matrix" in some form - and that's what this stuff - the multi-sampled instruments, the DSP algorithms, the subscriptions, the streaming platforms, the acquisitions of old 20th century recordings - is all tied into. A new generation of musicians is coming up every few years, and every time, they make a run at burning down what came before and ultimately succumb to the norms because they can't find another path that makes a career. And we have another round of that impending with AI music.
But there's a kind of crossover between music's dilemma and every other kind of IP in that so much of what's made now exists in a marginal space of "it's derivative of this and that, but it's not infringing them because it recontextualizes it in a different format" - e.g. that's most CZcams content where they "comment" over a well-known recording, it's people who stream themselves playing video games but then also play music, and all of that kind of stuff. That kind of brings it full circle to music being part of living, vs being a way to earn a living. It becomes so much easier to participate if you have no financial stake in it or drive to follow trends, and just freely use whatever tools you have lying around. I've been looking back through old Amiga demoscene stuff again and the sampling culture was very vibrant in that everyone ripped from each other and ended up with, in essence, a stone soup.
From a fellow non-Brit, for future reference, Scots really don't like it when you call their city "Eh-din-burg". I say "Eh-din-burr-uh" in my American accent, which they seem to find acceptable
There are two main pronunciations of it in Britain: Ed-in-burra and Ed-in-bruh. The G is always silent.
Great report. Gives us insight what is happening with our beloved companies.
well done, sir! thank you very much for your effort! keep doing this pls....
After this video I seriously think that Benn's insomnia is caused by the spirit of Antonio Gramsci, that awakens him every night whispering in his ears all kind of troubles of the music industry! 😂😂😂
this is why various music production software and dj software makers are pushing subs hard .Do not let them get away with it.
Love to see someone with some business literacy reporting on the music industry like this. I've been fascinated by the way M&A has such real world effects on everything we do ever since I read Matt Stoller's Goliath. Whenever I hear news about Epic buying BC or NI laying off staggering amounts of employees or whatever, I've always wanted to have someone who has the industry knowledge to put it in context. Thank you!
Awesome video - your production is so top level, I'm captivated every time I watch this channel. Fun fac: In 2012 I started making music production software not having a clue what I was about to step into. 25 software titles and 6yrs later I finally gracefully bowed out. Even as I was exiting I was amazed at how many weekly new plugins/tools/tech would launch, and didn't want to compete anymore.. today I couldn't imagine trying to compete, I remember I was almost side by side with Melda at one point. The whole WYSIWYG plugin maker niche was bigger back then too as there was a bigger first batch of noobs learning to create, now almost everyone jumps right one one of the big daw's and proper plugin sets so the smaller dev shops and brands are incredibly difficult to try to run now.
Don’t forget Elektron is quite heavy into VC money too (or was, don’t quote me). So far it doesn’t appear to be much different, apart from maybe the stillbirth of the Model: series. But you never know.
Damn man, I had no idea! I'm going to have to check that out
I really apreciate the constant mix of economics and music you put out on your channel. You are really a genius
i never put much thought into this tbh. thank you for this, thank you for your effort. very informative!
I’ve recently algorithmically stumbled across this channel, why the hell did CZcams take so long? Absolutely love this channel, the level of research is very impressive and I’m glad to have found it. The quips and cross-industry jabs are absolutely hilarious 😂 keep it up, man.
My fear is that investment companies will buy music production businesses, transfer toxic debt into them and file for bankruptcy of the newly acquired mp biz, ala Toys R Us.
well, yeah, that is a very rational fear.
This is the likely fate of Native Instruments. Moog music, think Benn is on the money, they'll actually make an effort to run it as a real business that makes stuff ala Akai.
"investment" is such a misnomer. These capital groups are nothing more than cancer. They use their vast wealth to infect, consume everything and leave behind a rotting corpse.
I mean, that's what always seems to happen.
That's the business model. Buy stable businesses, strip them for parts, burden them with debt, and sell them off at a paper loss.
I visited the Moog factory in April and the vibes reminded me of when I was getting paid similiar shitty wages to work in a multi-million dollar cannabis operation. A lot of dudes in their 20s and 30s seeming very on edge. Thought maybe it was having a large tour group come thru but deep down I guess I recognized the smell of overworked and underpaid lol
That being said I own 0 Moog products and greater than 0 Behringer products 🙄 so I am the problem
@@willkellogg1352 not really. Moog did it to themselves by stagnating. Nobody wants a mono synth that costs 3k
@@willkellogg1352 No comparison between those two companies. One is completely disgusting and lacking in any ethics. Moog on the other hand isn't what i would call a cool company any more (not for a long time). They are working the name brand and hippy co look pretty hard but it's obvious (to me) that they sold out. Still, no comparison Moog are not ip theft, parisitic, sue happy a$$holes. if you reading this U a$$hole, come sue me hahaha.
@@Rooftopaccessorizertrue. In this day and age you're literally mad for spending that sort of cash on a new make of such a simple (but of course classic) synth. Not even sure if they will ever get vintage status and go up in value.
Bordering on a scam really isn't it
@@willkellogg1352Behringer is actually constantly innovating, unlike Moog.
Great analysis. Reflective of the larger fixation by investors and consumers alike upon "branding" rather than understanding who is actually innovating and creating quality products.
This video ain't even out yet, but I gotta say @Bennjordan, thanks for making it. I've been increasingly concerned with this developing story, and can't wait to see what you've learned.
Interesting! Had not heard about the purchase of Melda, by Image-Line, I'm an FLS user and was a Beta tester on Melda's MXXX, and love their work, and Vojtech, is such a cool person! I like both companies. As long as these companies don't move to subscription only, their financial decisions, are their business. I did hear about the sale of Plugin Alliance, I have some of their brands including Unfiltered Audio, UA's work is among my top 5 music tools. Sad to see anyone fired, though.
Melda has had their subscription model for a while. Honestly, the big thing Im worried about is whether any new stuff will be coming out. He seems more focused on repackaging the Melda algorithms into United Plugins which makes sense for him financially (make "easy" plugins based on the Melda algos which a lot of normie producers dont like because of the way Melda plugins look or function with all the sub-sub-sub menu diving and whatnot). It kinda diminishes the hopes that new crazy stuff would be coming out for Melda itself. MXXX is amazing and is probably the basis behind most of the plugins developed for United Plugins. I just wonder if we will see something as revolutionary as MSpectralDynamics in the future. I hope so!
None of this is meant to bash Melda or Vojtech in any way. I genuinely repsect the guy and support his decisions.
Great analysis and commentary. One interesting aspect of the music and in fact any software business, is that the complexity and cost of development/maintenance of software. A lot of tech no longer has the margins that it once did, and even some of the monopoly providers are beginning to struggle more with overhead as complexity continues to increase.
All usual, GREAT Research and Insightful Content. 👍🏾✌🏾
I hope Sweetwater is not ruined. They provide an extra level of customer service that is becoming more and more rare. I would much rather support stores like Perfect Circuit and Sweetwater than save a few dollars.
Except they donate money to republican politicians that are shamelessly attacking the US and its working class
I have the most awesome and embarrassing story about Sweetwater. Basically I purchased a wildly expensive dj mixer and found what I thought was a fault. Sweetwater happily replaced the mixer 3 times. Except on the fourth replacement I called the manufacturer to investigate. Basically they explained how the product worked and none of the previous items were faulty. Sweetwater were incredible about it. I’m a customer for life.
good customer service is always the first thing to be cut. they no longer care about customers, they are only trying to please the shareholders.
To preserve that level of service, Sweetwater must become a cooperative, otherwise they will be consumed by the dominant corporate model.
It's been happening sine the PE buy. I've read many more stories about customer service going downhill than ever before. GearFest is a prime example. This year they basically just brought in CZcamsrs to advertise for them rather than the customer appreciation focused event they had in 2019 and prior. Loads of well known musicians and industry pros giving advice, manufacturers there you could talk to directly, concerts, food trucks, and real deals on gear. This year, no deals any better than anyone else.
Watching this makes me feel better about some of my software purchasing decisions over the past five years. I've definitely bought a lot of crap that I didn't really need at the time but hey at least I got a perpetual license when I still could.
Yeah but native instruments is still selling the $200 upgrade for the next release of Komplete. It’s not forcing you to pay monthly. I think that’s for ppl who just want to use the products in some rental capacity. I’ve always avoided them because I’m a hobbyist and I wouldn’t get my time or money’s worth out of it.
Also, NI still has the Summer of Sounds sale this summer (just like before and the reason you can upgrade for $200).
Reaper cost me $60 for life. It’s 100% compatible with ProTools.
I bought my license back in 2012, and never looked back.
Peace.
Dude, that disclaimer is way better than anything you’ll ever see on Finance or Crypto CZcams. Thanks for that. 🙏🏼
Focusrite has become such a pillar alike image line, the 3rd gen interfaces are pretty nice I'm never getting rid of my 18i20 so novation getting bought is gonna be legit
Great research and valuable insights here. In terms of musical tools I feel there is nothing to worry about: when all our favourite gear/software has been snapped up by corporations we don´t agree with, we can still use the absurd SHIT TON of gear/software that has been made over the last decade alone. When it becomes impossible to maintain/update the stuff we need, we´ll MAKE OUR OWN. I mean, harpsichord production is red hot these days (relatively speaking), nobody can stop you from reusing, reimagining, wiring up or writing a great new instrument so, frankly, FUCK THEM. When it comes to music distribution, however...................
Yep, A lot of old school Reaktor users are using PD, one even migrated some of his Reaktor Ensembles over to PD, there are a ton of plugins free or modestly priced that are just as good as say Native Instruments (sleep on Sonic Charge’s synplant 2 at your own risk)