Reply To: Native Instruments Insolvency and Updates

[LinkedMusicians]

On Xandre said

Thinking about the mess that is the Diamond Comics bankruptcy process. Is there any money smaller sample library developers prepaid to NI that might be given to debtors as part of the current insolvency? For instance: do they pre-buy a number of serials to be used within Native Access so their libraries can be used with Kontakt Player? Or is their current risk that the Kontakt platform will die / the new owner will significantly increase the license cost to build Kontakt libraries.

From what we know — based on 2023 financial data that was published — the debt that NI owed at that time far exceeded the company’s revenue or its total value. I wrote about the numbers we know earlier. The annual revenue was a small fraction of the debt. So, it’s definitely not possible for getting some additional revenue from channel partners to be enough to cover that massive level of debt, even if they all paid 10 years in advance, it wouldn’t even approach how much debt is owed. Creditors don’t expect to recover all of that debt, that’s why the government had to take over. NI management put the company into massive debt. Creditors are trying to get back as much of that debt as possible and the administrator is trying to find a path to getting the creditors back as much of what they’re owed as possible. The administrator is really working on their behalf, not NI’s ownership, not NI customers, but the companies that NI owes far more money than they have.’

I wrote a more formal analysis and went through some likely potential outcomes from the insolvency in the LinkedMusicians blog, if you wanted to check it out. I tried to address the fundamental questions most people not from a financial or strategy backgound would have about NI’s situation.

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