Is It A Support Plan Or A Software Subscription?

12-18-2014 12:00 PM

The Importance of Perceived Value

I’ve posted some thoughts about “perceived value” before, in my recent piece about streaming vs owning music I suggested that if something costs less, it has less perceived value. The elephant in the corner of the digital economy is that there are two kinds of goods, those which are difficult to manufacture and those which are not. The huge difference between hardware and software is the ease with which digital goods can be copied. If you can make as many of a thing as you want, how much is one worth? This is where the illegal downloader tries to justify their action. “If the product is infinitely reproducible at zero cost then I haven’t cost you anything” would be the justification to the software pirate - Of course they have cost the industry a huge amount but this cost is less tangible than stealing a physical product.
Creative Content & Software

The two digital products we are most concerned with at Pro Tools Expert are creative content and software. As people who make their living or aspire to make their living producing creative content like music, videos radio programmes etc, we are more aware than most of the knock on effects of limitless online piracy. As we all know, the story can appear bleak for professionals trying to survive in a world which contains the perfect mechanism for the unrestricted, unauthorised distribution of the fruits of our labours.
Living in Cloud Cuckoo Land

As software consumers it is easy to assume that software is written by massive corporations in gleaming white futuristic buildings with overpaid developers whizzing down wide corridors on Segways (at least that’s how I imagine it is). However when you sit down and think about it, that is as silly as a consumer of music assuming anyone who has ever put a record out lies all day in a platinum infinity pool in a house in the Hollywood hills. I know plenty of successful musicians, and they all have to keep a day job. The truth is that most software companies are small and margins are thin. Their position in many ways is similar to musicians or film makers in that there are a few very large players and many, many small companies trying to become big.
What About Software Vendors?

When someone releases creative content they are looking to recoup the costs in terms of time, effort and creativity, and their costs in terms of overheads and expenses. But spare a thought for software vendors. The process of planning and writing software combined with having to make sure it actually works represents an awful lot of work. Even after the (often painful) birth of software there is the not insignificant matter of updates to address bugs and stay compatible with new hosts and OS releases, and providing support to users. Record companies don’t have to re-release every few years or support people for whom their product doesn’t work as advertised. Basically software companies have it even harder than musicians.
So What About Avid?

So where does this leave Avid? Increasingly software vendors are moving from selling a product to selling a service. In a way they always have, given that they provide updates and technical support. The announcement of the new annual support plans as been met with howls of protest from many and while I’m never going to be pleased by requests for money or as another PTE team member called it “Avid tax” - I like that! I think we’re being a bit silly to ignore the fact that this is where the software business has to go to survive.
Don’t blame the software vendors, blame the pirates, blame the people who legitimise piracy and frankly blame Apple for their anticompetitive pricing and stranglehold on distribution in a large sector of the market. I was talking to a friend who is a very experienced IT person (non audio) and his withering response to the support plan controversy was very telling. For a software business to survive it needs cash-flow.
Avid Need Cash Like Any Business

For Avid to be able to sustain themselves they need to do more than balance the books, they need to develop, innovate and stay relevant. To do this needs money and its not unreasonable to conclude that ultimately the people who need to support Avid are the customers. My issue with Avid’s plan isn’t the principle but the implementation. This is a move to a subscription model and it strikes me that there is a degree of insincerity about trying to pass off a subscription as a “support plan” and if people try to make sense of this offer in terms of a support plan when its actually a subscription it will confuse and irritate users. This combined with poor communication coming from a marketing department who it appears have no coherent message coming from management makes all of this pretty messy. That said I would like to defend Avid’s reasonable aim of trying to secure their future while groaning with frustration at the execution.