Quote:
Originally Posted by moff
You know, I was thinking about this the other day. Many of us have voiced some disappointment in Avid and their products, and eluded to changing to another product. But really, we all bought 11Rs, and Avid's already got our money, so why should they care if a percentage of us stop using it, and move to something else? It's really just more expense for us, no skin off their nose...
Let's look at this in perspective... Avid is a manufacturer of high-end audio and video production products. Things like MBox, Fast Track, and Eleven Rack are low-cost "consumer-grade" items, and represent only a very small portion of their business. Within that small portion, guitar and the Eleven Rack is a sliver. From a business perspective, while the 11R is a great product, it represents such a small portion of Avid's revenue that if it went away to morrow, it wouldn't even show up as a blip on the general leger.
OTOH, Line 6' entire business was built on modelling amps and FX, and Fractal is built around an amp\FX modeller, a MIDI controller, and a couple of powered wedges. They NEED to keep their products updated, and they NEED to be responsive to customer wishes/demands, otherwise they're out of business.
So we can go ahead and get frustrated, but in the end, would you rather play the 11R or a POD?
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Why? Because Avid should be interested in FUTURE profitability. Not past. My future dollar will be going elsewhere unless I percieve better value for their products vis-a-vis the competition. The competition has really upped the game, from both a value and absolute quality perspective. And while I would rather play the current eleven rack than the POD, if this trend persists it won't be long before I jump ship.
As for the importance of consumer/pro-sumer revenues to Avid's bottom line, think of it this way. When it comes to hardware perhaps margins may or may not be comparable, due the variable cost involved (physical components)
but when it comes to software, the bulk of the cost involved is R&D and perhaps after-sales service. Avid has already made the switch to keep after-sales service down by making users pay for it. That means most of the cost involved is fixed cost (i.e. the marginal cost for each additional copy sold is close to $0). There is a sweetspot where they can maximize profit there, and it certainly means segmented pricing for pro and consumer markets. The Eleven Rack introduced me to Pro Tools. I happily bought the upgrade from PT8 to PT9, felt it was a fair deal. And then the ridiculous pricing for the upgrade from PT9 to PT10 destroyed much of the goodwill that they had managed to build up with me. Likely outcome? Moving on next generation, looking for better alternatives. Impact? My dollar goes elsewhere. Individually I do no presume to make much of a difference... but I suspect I far from the only one who feels this way.