Music software has evolved quite a bit in its roughly 35-year history, but nothing has influenced the business of music software as much as cloud computing, starting with software transitioning from a physical product to a virtual one. The tipping point was Apple pulling its Logic software from stores and selling direct via download at the unprecedented price of $199. Although a punch in the gut to Mac-only DAWs like MOTU Digital Performer, paradoxically, it helped increase industry acceptance of the Windows platform.
Digital downloads turned the software sales model completely on its head. Once Apple started the trend, momentum increased for companies selling direct to users. Gone were the fancy boxes, CD-ROM/DVD-ROM duplication, shipping costs, thousand-page printed manuals—and retail shelf space. All any company needed to be in the software business was a virtual storefront, the ability to process payments, and some marketing chops (the hardest part).
It looked like retailers might lose the software market, but then the Xchange Market platform and other advances made it practical for dealers to sell software virtually. Benefits included the fact that software would never be out of stock, dealers didn’t have to ship any physical media, and nobody had to restock the shelves when new software versions were released. However, concurrently, more manufacturers started selling direct as well, and the question became why anyone would buy downloadable software from a retailer when they could buy downloadable software from the manufacturer.
As it turned out, manufacturers aren’t necessarily great retailers. When someone buys software from a retailer, they get local support and answers to questions they might have. A retailer can also leverage multiple brands, like selling a DAW, a controller for that DAW and maybe even a computer that’s been tested to work with that DAW—and then bundle the package with an audio interface. There’s still a place for manufacturers to sell software direct, but that doesn’t mean retailers can’t.
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What’s more, software companies often manufacture hardware (a good thing, because you can’t steal hardware from a torrent). For example, MOTU has a respected line of pro-level interfaces, but it needs retailers to sell physical products. It can make more sense to buy the software and interface from a dealer than buy software online, then find a dealer from whom you can later buy the interface. Furthermore, although it would seem that manufacturers could market to a wide universe of people via the internet, they can sell only to people who know about them. A retailer can make people aware of products potential buyers might not have even thought about.
But the cloud isn’t only about sales and distribution. Today’s copy protection tends to be cloud-based. You establish your ownership of the software, register in the manufacturer’s cloud, and from there on, you can download updates, re-download the software if your hard drive fails, and get updates instantly. iLok dongles are still a factor, but there are also protection systems that can key software to a hard drive. If the hard drive dies, you de-register it online, then register a different drive. All the big software companies, and most of the small ones, have dedicated online sites and applications that give you control over your account—Waves Central, Native Access, iZotope Product Portal and the like have made life much easier for users. You no longer need to keep printouts of serial numbers and CD-ROM backups of software you downloaded; it’s all in the cloud.
Cloud distribution has also made the subscription model viable. Can you imagine what it would have taken to send out new physical media periodically to all your users? Just as Netflix re-invented itself as a streaming service instead of a DVD-by-mail outlet, streaming is the way to get new software and new features to customers efficiently.
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Looking to the future, piracy will remain, to some degree; anything can be hacked. (Just ask the Pentagon.) However, piracy may not be as relevant because eliminating physical media has been a factor in bringing down software prices. A lot of pro software that used to cost between $500 and $1,000 is now in the $400 range, or available via a nominal monthly subscription fee.
So we’re settling into the new paradigm. What’s next is fine-tuning the machine. I suspect that the golden age of music software is yet to come, as long as we can convince computer manufacturers to keep providing the tools to run it.