This is a follow up blog that will discuss the pros and cons of subscription based business models. More specifically I will explore how that impacts the music industry.
There are a number of companies that are now offering subscription based products to their consumer. Some of the main ones are Steven Slate, Waves, and Pro Tools. All three have been big leaders in the digital audio world for sometime now and in order to keep up with their customers and how businesses are shifting they all now offer a subscription plan.
These subscription plans allow customers to have access to their programs or software for a cheaper rate per month compared to buying each thing individually. This in theory sounds terrific, except that it requires a business to devalue its product as a whole. For the consumer, it feels like a deal until you realize you're renting all your software and you never own it.
When you don't own something, you really have no power over it.
Much like a landlord who owns a rental house, these companies are regaining all the power over the consumer.
Let's get something clear here, the companies that are moving to the subscription based model are doing it because they will make more money immediately. They are not doing this for the consumer. Even though it feels like a deal right now, long term subscription based businesses that deal with certain products such as plugins and software have a lot of hurdles to jump over to make it last.
Subscription based business is great for companies because it allows them to go after quantity. We have seen over the years that people in the music industry steal their software and plugins. This doesn't seem to be slowing down. The companies that make the software are raising the white flag and surrendering. They have decided that they would rather make some money then no money. Instead of having one person buy a plugin for $300.00 they would rather have 300 people buy it for $1.00.
From a marketing stand point this is great. Not everyone can afford a $300.00 plugin but most people can afford a $1.00 plugin.
Ten years ago people were buying plugins. They had value.
They were respected and viewed as incredible ground breaking tools. If you wanted a plugin you had to be serious about music. You most likely would not shell out hundreds or thousands of dollars for plugins unless it was your profession.
Companies that are offering subscriptions are killing their own buisness long term as well as the industry they are in.
If you think about Steven Slate, his plugins used to be kind of expensive. They are quality plugins that take years of research and development. For multiple years there was a respect for Steven Slate and what he was doing. He began to emulate hardware in a way that really outperforms some of the other big companies. Then, what felt like overnight, all his plugins became accessible for $15.00 a month. He decided to allow you the option of having every plugin that is currently out and every plugin that will come out for $15.00 bucks.
The consumer rejoices and Steven Slate makes a bunch of money right now from a quantity approach. The consumer is excited because they get what would have cost them thousands of dollars for a fraction of the price at the current moment.
The issue with this approach is that Steven Slate is killing the very industry he is in. Plugins are becoming worth pennies just like music has become worth less then pennies. Now everyone can have Steven Slate plugins. Those that spent the money on them years ago are upset and those that could not afford it are now stoked.
A product that some could afford is now affordable for everyone. While this may help stop people from downloading illegal plugins, it creates a situation where everyone can now potentially make records for next to nothing. Music is becoming a novelty. It's becoming devalued and the companies that allow us to make music have fully shifted from caring about professional quality records being made to now caring about making more money off the hobbyist.
Steven Slate used to be a quality brand, like a designer. Now it‘s the dollar store.
In order to keep customers happy, these companies are now forced to put out plugins and make things more exciting by the year otherwise the customer will get bored and move on. These companies are also training their customer to expect things for cheap. As of now $15.00 seems like a deal. Give it a few years and $15.00 will soon become expensive for people. This isn't new information or even me speculating, it's well documented as subscription based businesses have been around for years and years. The audio world is just now getting into it.
For the consumer you may feel like your getting a deal but at the end of the day you have given all your power away. You no longer own anything and you're at the mercy of the companies. If the companies want to raise prices, you are stuck. If they want to take away features or shift features you are stuck. If a company goes out of business you are stuck with nothing. If a company wants to start making less quality products, which we see a lot of subscription based companies do in order to keep up with the demand you are stuck. If a company decides that there should be different levels of subscriptions or move some plugins into a certain bundle and certain ones out of the bundle (we see this with Slate stuff, only certain plugins are in the bundle) then you're stuck.
At the current time you can buy the plugins still from most of these companies, but I predict that eventually you will not be able to. Once this happens then you're truly at the mercy of the companies. Much like Apple is rumored to get rid of iTunes and move fully to streaming only, plugin companies will follow along because it makes them more money, not you the consumer.
Now the push back is that producers and engineers and artists are saying, "I don't care". I can now make a product for next to nothing, legally, and sell it and make money finally. This is true. I can't deny that the subscription based model helps a lot of people out. I can't deny that having access to every plugin for $15.00 a month isn't a terrific deal compared to having to buy them all for $2,000 bucks upfront, but I think long term this will become a problem.
For all those that could not afford plugins or didn't do music as a career, now there are thousands upon thousands of people who now get to call themselves a mix engineer or mastering engineer while not really knowing anything about it.
Plugin companies are attracting a certain client now and it's not really professional anymore. Sure there are loads of professionals who use these plugins, but I think as we move forward we are going to see a shift back to analog and new boutique type plugins coming out for the professionals.
The whole world is demanding better, faster, cheaper, and while that has worked for us for a while, we as humans and in the music industry overall are unhappy. Even with access to so much, the majority of the people I know still can’t make a dollar no matter how cheap the plugins get.
The majority of people that read this will not care. The majority of people who read this will love that plugins are now a dime a dozen, but what the majority of people won't think about is that it means engineers, producers, and artists are a dime a dozen. It's never been more difficult to be in the music industry then right now and we are doing it to ourselves. The companies that allow us to make music are destroying their own industry by undercutting each other to the point where the product that used to cost $300.00 dollars to buy is now pennies overnight.
This follows the trend of how music used to be worth something, but now with subscription based streaming models we can clearly see how that is not working. I think subscription based business can be good, but companies need to start having more realistic expectations and a long term vision on how to help an industry instead of just trying to make as much money as possible in a short amount of time.
I am grateful for plugin companies and gear companies. I am grateful that people are pushing the envelope in audio. A lot of what I am talking about is probably how people felt when computers came out and audio moved from being recorded to tape to a hard drive. There are pro's and con's to all of this but there is wisdom that we can pull from the past to see that some of the things that are happening right now are not terrific.
I want to be apart of an industry that values it's product and what it creates and currently I don't see that happening a lot.
Let me know your thoughts below.
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