Reply To: UJAM Instruments Music Creation Suite

[peter]

pseudopop wrote:

And the UJAM clearance sale continues. I wonder if they’re dropping their prices like this because sales are low or because they’re closing up shop.

I don’t have any inside knowledge, but I suspect that UJAM is dropping their prices because the entire sample library, plugin, DAW industry is realigning prices right now. Competitive forces (hmm, any fellow strategists or Porter readers here?) are making it so it’s more difficult for a developer to sell at the same prices their products commanded say 5 years ago.

More inside baseball (an American expression that means insider knowledge and conversation) here, but having known and given a little professional advice to Mike Green (owner of VI Control) many years ago (he also has a marketing background and is a former VP Marketing at a mid-size company), it’s the reason behind why Mike keeps using his site to attack his competitors. Which you can read on his forum in his rants about 8Dio destroying the industry “by leading the race the bottom”  and his fixation with trying to damage their reputation through damaging stories he’s known to be untrue or his recent attacks on Cinesamples and claims that the business is unstable and ready to go under. Mike has been freaking out that he can’t make the same profits per unit that he got used to. Where he could introduce a new library and earn back his investment for recording, editing, etc in say 6 months (I’m just using that as an example, it’s not based on anything) it may now take a lot more investment in promotion, he has to price the library lower with smaller margins than he used to, and move a lot more units to break even and make the same gross profits.

So, okay, that’s kind of technical. But that’s really what’s going on in the industry. The short version is that pricing is coming way, way down for sample libraries and plugins. That also means that a lot of small developers are going to have to change their way of operating and learn to move more product in order to maintain similar net profit, because their profit margins are getting much smaller. But the industry is growing very well. There have been small developers who’ve posted the opposite, because they really don’t understand business or markets. A talented indie developer may end up having a relatively successful small business but understand very little about strategy, branding, marketing or competitive forces and analysis and attribute a lack of sales or a slow down in sales to the overall market slowing down when, in fact, it’s merely attributable to their own strategies and changes in the marketplace.

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