Software Pricing

Over the past several weeks, there has been a shocking trend in software prices hitting rock-bottom, mostly within the Apple ranks.

Lately Apple has slashed its prices and is practically giving away their software, making it far more accessible to more people. Just a few examples… the new Mac OSX Lion will sell for a paltry $39 (Used to sell for around $129), and today they’ve announced Motion will sell for only $49 in the app store, as well as Final Cut X for $299.

Might this affect the pricing of Adobe’s software in the future? Will they slash prices like Apple has to make their software more affordable to the masses?

Where do these rock-bottom prices leave us in the Envato community? Can we justify or compare the price of a project file to full professional software such as operating systems or applications? It seems as though we really have entered into a race to the bottom in terms of price with digital goods.

Instead of raising prices for popular items, it now feels hard to justify charging more for an After Effects or WordPress template than it costs to buy an entire copy of Mac OSX or Motion.

Obviously the comparison isn’t as cut and dry as I’m making it sound, but I think it’s worth a thought. I used to be a proponent of raising prices slightly across all of Envato’s communities, but now I’m beginning to think differently.

Now, it looks like it’s a competition to see who can charge the least for their software and still remain profitable.

Apple is using their software as a lure to buy their hardware. Software takes a massive amount of time to develop and support. When you buy Lion, it’s not a piece of software that you can run on any machine. Nor is Final Cut. You need to buy a Mac.

I think the most aggressive part of this sounds like the move against Adobe… in particular After Effects and Avid. I don’t really want to see an Apple / Adobe war. I think an Adobe / Apple war is ill-advised. I think Adobe would win. I like Adobe products and I like using them on a Mac. That would be bad.

I have to say, I’ve long been a fan of software that you rent. I think it people were to stop seeing it as something that you own and rather as something that you licence, then they’d be able to see the idea of renting software on various timescales as an increasing flexibility in the licencing.

I’d love to be using Nuke for compositing, for instance, but because compositing has become a smaller part of my work lately I can’t justify the £4000 cost. I’d love to rent it on a week by week basis and pass the cost on to the client, but as yet you can only rent a licence for a quarter. I think it would also be much easier justifying your overheads to clients if software were not something you’re just supposed to magically own, but something that you have to pay for specifically to do their job.

Isn’t it strange though that on the one hand you’ve got software that costs thousands. (Look at the price of Boujou, for instance) and on the other you’ve got software that’s pretty much free. Look at Blender vs. Maya. Most of what’s made in Blender is rubbish, but that doesn’t mean it’s not a capable program. But people who are serious about their software are prepared to spend money on it.

You’ve got the excellent Open Office, which is a plain rip of Microsoft… don’t know what the legals are on that one.

But yes, the promised race to the bottom in all things digital seems to be materialising before our eyes.

The problem is that if there’s no profit in it for people anymore, then we all lose, because people will stop developing stuff.

As regards us authors, our templates are not a lure to buy cakes, cars, spanners, hats or any other product that we produce. They are our one and only end product and as such, they should in some way reflect the work that’s put into them. It’s hard for a freelancer to break even time-wise on a Videohive project as it is. If they got much cheaper, I’d probably cut my losses and bail out.

-f.

Gotta say though… Final Cut Pro X looks like a pretty big step forwards.

-f.

felt_tips said
It’s hard for a freelancer to break even time-wise on a Videohive project as it is. If they got much cheaper, I’d probably cut my losses and bail out. -f.

I absolutely share your view on that point. I definitely would not want to see prices get any lower here, thats for sure.

Envato’s network represents, in my opinion, the greatest “bang for the buck”, or best quality for the lowest possible prices.

Whether its a good or bad thing, I think in general, customers have become accustomed to paying no more than $20-$30 for an AE project.

But you bring up a good point, felt… we authors know that a template may only sell so many times, and we’ll most likely never break even on the project in terms of hours spent creating it, so limiting the amount of time we spend on a project becomes more likely, and therefor the quality suffers.

So, I suppose we’ll have to either start working harder to create better projects for paltry price tags, or jump ship on AE marketplaces altogether and go back to slogging it on a daily basis with regular clients.

It seems to me as though the next 18 months or so will be pivotal in which direction things go with the AE template marketplaces. The industry has absolutely exploded in the past 3 years, and with more authors entering the forum every day, things could become diluted pretty quickly.

felt_tips said
Gotta say though… Final Cut Pro X looks like a pretty big step forwards. -f.

Agreed. I’d love to get my hands on it ASAP . Now, if only I could find time away from creating AE projects to mess around with it

I soooo want to play with Motion 5 now

That said, I don’t think the new price points are starting a race to the bottom. If any, they are selling at a more rational price, and probably most of it has to do with selling them through the app store and not by physical media (that has to be pressed, distributed, etc.).

Adobe definitively needs to cut down their prices. US$700 for the download version of Photoshop CS5 ?? It’s crazy, it should be more in the US$300 range. An Adobe-apple war doesn’t seem viable, since not everyone is going to buy a Mac (and Apple isn’t going to port their pro stuff).

Now, the lower cost for the apps means more people will buy them, thus reinvigorating the market for templates for them Prices here on the marketplaces are pretty much spot on. It doesn’t need to get any cheaper.

@felt_tips You’d be amazed by the things people are making with Blender, check out http://www.blenderguru.com/

I can assure you guys prices are not going to be dropping. EVER . And as we get more authors, there is a risk that things get diluted. Less exposure could lead to lower sales. But at the same time we’re working hard to build our buyer base at a faster rate. Which in turn should lead to more sales, even with the increase in authors/files.

As we continue to grow, I think a bigger focus will need to be placed on the way items are presented. Right now the ‘see everything new’ item list works, but I don’t think it’s the most efficient way for the buyers. Any changes in presentation should alleviate this dilution even further.

MarkBrodhuber said
I can assure you guys prices are not going to be dropping. EVER .

Thanks for the input, Mark. I wasn’t too worried about prices ever dropping on our marketplaces, but it’s reassuring.