Re: [Avid-L2] Avid Perpetual License Price Increase?

It's called recurring revenue model. Companies get values on a high multiple for this kind of revenue / income. The switch to subscription based software propelled Adobe to the next level. One of the reasons LiveU, Frame.io and other players in our space are getting such high valuations is the revenue stream of their subscription user base. 

 

Think about it. In a perpetual world folks would buy the software and expect free support, upgrades and bug fixes for life. Now Avid has you purchase an annual support package to stay current, but they know that for every 1,000 perpetual owners, only a percentage will pay the renewal and each year that drops.

 

With a subscription model they lower the cost of entry and as long as they keep delivering a solid product that meets the needs of their users, they should have a very high renewal rate. This is also paving the way for a SaaS model in which you will not just rent the software, but also additional features, performance and capabilities in the cloud. These will include storage, encoding, transcoding, collaboration, AI based metadata, and more. SaaS allows end users and especially enterprise level accounts to scale up and back down as needed for peak events or project deadlines. It's the model of the future and while Avid was first to talk about it, I see Adobe moving much faster towards making it a reality. Especially with their Frame.io purchase.

 

Gary

 

-----Original Message-----
From: "Karl Knowles" <tech@knowlesvideo.com>
Sent: Tuesday, August 24, 2021 8:15pm
To: Avid-L2@groups.io
Subject: Re: [Avid-L2] Avid Perpetual License Price Increase?

Gary, you confirmed my point that Avid has established a pricing structure that at face value is losing money.  The $275/year price you detailed is over $100 less than the current perpetual renewal and close to half what that perpetual renewal will be in one week.  Avid is coercing people to subscription with significantly lower prices.  In my original post I asked "why?".  Considered alone that's contrary to basic capitalism.  Something is motivating this aggressive loss-leader migration that isn't being discussed.  That "something" obviously has greater value than what they are losing with each subscription renewal versus what they would gain from each perpetual renewal.  I'm curious what that is.

Cheers,
Karl Knowles

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