Reply To: Question: Will You Hold Off Buying NI Products and Kontakt Libraries?

[LinkedMusicians]

I think the reality is that many music producers don’t look at things even-handedly. I get it, most are not very business savvy. But looking at this objectively, think about the companies that we buy sample libraries from. The vast majority are small businesses. Granted, NI is a small business by US standards, not European standards, but its total annual revenue in 2023 was estimated between $78.5 million and $95 million with an EBITDA of aorund $25 million. That’s like a rounding error for Microsoft or Apple. UVI has around 20 employees and is estimated to do several million USD in revenue annually. Now look at the other sample developers that we use and they’re only a fraction of the size of UVI. We don’t know their financial condition or value. Orchestral Tools is an excellent developer a lot of us are customers of and they’re estimated to be valued at several million. But the vast majority of the indie developers we buy from are likely worth $1 million USD or a lot less. Most of the indie Kontakt developers likely have annual revenue of less than $1 million. I know of some well known ones and they do between $250,000 to $500,000 in annual revenue.

Even while NI is in preliminary insolvency, I think Kontakt is a safer choice than a small developer’s proprietary plugin. Why? Because Kontakt is the most valuable part of NI. If the administrator dissolves NI, he’s still going to sell off NI — there is virtually no chance that the creditors would want to walk away and leave that potential money on the table. I would be very surprised if Kontakt doesn’t survive this. I’m not a betting man, but I think the easy money is betting on Kontakt surviving. The only question is, where will Kontakt end up? But if a high-quality sample developer has a killer sale on their Kontakt libraries right now, I would buy it.

And take this into consideration too — if you’re a sample developer that exclusively produces Kontakt libraries and Kontakt ceased to exist, you know that the developer would surely be converting those sample libraries to another format, perhaps something like UVIor even their own plugin. I am not speaking on behalf of Orange Tree Samples, but I can assure you that, knowing Greg as I do, if Kontakt were to cease in three months, Orange Tree Samples would be converting their libraries to another format. I’ve seen a lot of posts on forums and subreddits with people stating that the money they’ve spent on Kontakt libraries would be completely wasted if Kontakt ceased to exist. Now, I don’t think that scenario is very likely, but if Kontakt did shut down, I know that the better Kontakt developers would be working on formatting their sample libraries for another platform. No doubt, it would cost money to do and they would need to fund that, but as someone who has spent thousands on Kontakt sample libraries, if Kontakt ceased to exist, I would absolutely welcome the opportunity to pay developers of the libraries I own for the same libraries in another, viable format.

But if you’re buying sample libraries embedded in a player from some small sample library developer, don’t kid yourself into a false sense of security; they could close tomorrow, the developer could go broke, close the business, die, and your plugin would only be worthwhile until you started having issues with it. This is why I greatly prefer buying from indie sample developers in the Kontakt ecosystem. NI was big enough to fund a great sampler while the developers focused purely on making great sample libraries and not the software that plays them.

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