Reply To: NOT A DEAL: Spitfire Has Been Acquired by Splice

[peter]

On Teebacca said

She was Adobe’s VP of creative cloud engagement, which led to certain thoughts

I did not realize that. That definitely comes with a boatload of concerns. And, FTR, I’m not saying blindly trust corporations. As a former Fortune 500 strategy guy I absolutely have a level of pragmatism for anything that execs say. There is certainly a certain level of bravado to this CEO’s statements in the video that I find pretty alienating. But it’s par for the course with execs. Is it possible that she could be looking to make everything at Spitfire subscription only? Sure. But that’s always been a possibility with all of the major sample library developers.

Again, I think that EastWest and Cinesamples/Musio have shown Splice — and other potential players looking to make acquisitions in this industry —  show that there is an appetite for subscription and perpetual licensing, and both can be very lucrative. Of course, most software CEOs LOVE subscription because it’s a highly steady, predictable stream of revenue. That’s why Spitfire was increasingly interested in developing Labs for that purpose.

I hope this also serves to educate non-business managers who naively think that lines like Labs or Pianobook are altruistic efforts done for the love of music. They’re not. These are money-making ventures that seek to put customers into the pipeline that have a long-term focus. Efforts like Pianobook and Labs give away free stuff, because they realize that many of the folks who use free libraries are folks who will, at some point, be willing to pay for libraries too. It creates a marketing channel with these future customers.The price of that marketing channel are the costs of developing these free libraries and distributing them. If you’ve ever noticed, a good deal of mid and larger players that make free libraries are spending money to promote those free libraries. So why would they spend money to persuade you to get their free libraries? Just as a hypothetical, let’s say the cost of acquiring the average customer in this business is $60 US. If they place an ad at Google or a composer site for a new free library that costs $2 a click, they put a person into the pipeline for far less cost than other channels. However, it may take a lot longer time to develop that person into a paying customer than it does to promote their paid libraries. So the philosophy and strategy of pursuing this marketing strategy is different than marketing paid libraries.

Now, on the flipside of the coin, I never liked the fact that my most prized Spitfire library, Abbey Road Iconic String 2, is in Spitfire’s proprietary format and not Kontakt. First, I think Kontakt is vastly superior to Spitfire’s player. Second, if Splice does go subscription only or gets rid of the Abbey Road line, the plugin may be history and useless to non-subscribers, which I get is the kind of concerns a lot of people now have. But once again, that risk was already there prior to the acquisition and we can’t change any of that.

LinkedMusicians Founder. Your friend who keeps the beat.

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