Rent-to-own?

Official support for: u-he.com
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pdxindy
KVRAF
15609 posts since 3 Feb, 2005 from in the wilds

Post Fri Jan 11, 2019 3:32 pm

chk071 wrote:
Fri Jan 11, 2019 2:52 pm
No. It's the same as if you pay for something with installments.

Do you tell people who can't afford a house that they should rather discipline themselves to save up for it as well?
Actually, yes... I frequently say so. Do you know how many people have lost their homes in storms like Katrina and Harvey? Do you know how many people lost everything during the economic downturn in 2008?

Millions of people would have been better off not buying because they fundamentally could not afford it.

chk071
KVRAF
20328 posts since 11 Apr, 2010 from Germany

Re: Rent-to-own?

Post Fri Jan 11, 2019 3:37 pm

Well, nobody except for the very rich can afford to pay full for a house here. Actually, credits are what makes the financial world go round these days.

And you US guys should consider brick and stone instead of wood, then maybe your houses still stand after storms.

tony10000
KVRist
398 posts since 4 Aug, 2017

Re: Rent-to-own?

Post Fri Jan 11, 2019 3:39 pm

I think that the rent to own model must be working because Serum (arguably one of the most popular soft synths out there) has been sold on Splice for a few years now. I am sure that it was not profitable for the developer, Steve Duda, would have pulled it and continued to sell it directly and pocketed the additional profit. Additionally, iZotope and PreSonus have also jumped onboard Splice platform. Lennar Digital (Sylenth) has also set up its own rent to own program as has Propellerhead. I think the model is consumer-driven. It is the reason cell phone companies can sell their phones for $800-1000. I doubt that many people would even think about buying such expensive phones unless they could pay in easy installments of $20-30 a month. I think that, while many musicians are able to easily afford the cost of u-he plug-ins, many are not. Rather than diluting present sales, I would expect that a rent to own program would add sales that would not be made otherwise. If I was in u-he's position, what I would so is to bundle a few plugins like Diva and Retro or Diva and Hive (or all three) and make those available together on a rent to own plan. That way, there would be more potential return for the developer on each sale without cutting into the sales of a single plugin that can be still be purchased separately at a lower price.
Last edited by tony10000 on Fri Jan 11, 2019 3:42 pm, edited 1 time in total.

tony10000
KVRist
398 posts since 4 Aug, 2017

Re: Rent-to-own?

Post Fri Jan 11, 2019 3:40 pm

tony10000 wrote:
Fri Jan 11, 2019 3:39 pm
I think that the rent to own model must be working because Serum (arguably one of the most popular soft synths out there) has been sold on Splice for a few years now. I am sure that it was not profitable for the developer, Steve Duda, would have pulled it and continued to sell it directly and pocketed the additional profit. Additionally, iZotope and PreSonus have also jumped onboard Splice platform. Lennar Digital (Sylenth) has also set up its own rent to own program as has Propellerhead. I think the model is consumer-driven. It is the reason cell phone companies can sell their phones for $800-1000. I doubt that many people would even think about buying such expensive phones unless they could pay in easy installments of $20-30 a month. I think that, while many musicians are able to easily afford the cost of u-he plug-ins, many are not. Rather than diluting present sales, I would expect that a rent to own program would add sales that would not be made otherwise. If I was in u-he's position, what I would so is to bundle a few plugins like Diva and Retro or Diva and Hive (or all three) and make those available together on a rent to own plan. That way, there would be more potential return for the developer on each sale without cutting into the sales of a single plugin that can be still be purchased separately at a lower price.
I think it is an idea that is worth considering.
Last edited by tony10000 on Fri Jan 11, 2019 3:43 pm, edited 1 time in total.

tony10000
KVRist
398 posts since 4 Aug, 2017

Re: Rent-to-own?

Post Fri Jan 11, 2019 3:41 pm

Deleted

sleepcircle
KVRian
605 posts since 28 Nov, 2016

Re: Rent-to-own?

Post Fri Jan 11, 2019 4:10 pm

when you get a house with a mortgage, the house is collateral. the mortgage is against the house. it's a fundamentally different idea because there is still something 'in your bank' as it were and none of this really matters because people don't go out getting 100 different little mortgages except in a few extremely unfortunate circumstances.

whereas people frequently use credit cards and "down payments + x for the next y units of time" schemes to get in way over their heads, and tend to unconsciously spend more money on microtransactions than they would volunteer for a whole game, because it's "only a little at a time."

you are right, "credit is what makes the financial world go round these days," but just because something is the status quo doesn't mean it's a good thing. aren't you arguing against the status quo right now by saying u-he should do the rent-to-own thing?

people living on credit, and other people taking advantage of that to make their own worlds go around was the cause of the subprime mortgage crisis a decade back.
Last edited by sleepcircle on Fri Jan 11, 2019 4:27 pm, edited 3 times in total.

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pdxindy
KVRAF
15609 posts since 3 Feb, 2005 from in the wilds

Re: Rent-to-own?

Post Fri Jan 11, 2019 4:12 pm

chk071 wrote:
Fri Jan 11, 2019 3:37 pm
Well, nobody except for the very rich can afford to pay full for a house here. Actually, credits are what makes the financial world go round these days.
and the financial world is swiftly destroying the physical world... but now we have gone far far off topic :hihi:

sleepcircle
KVRian
605 posts since 28 Nov, 2016

Re: Rent-to-own?

Post Fri Jan 11, 2019 4:15 pm

yes, this is starting to sound hyde park-y.

suffice it to say, you guys (chk071 and russell grand and a few other people) want u-he to implement a way for you to start spending your money as soon as it comes in—instead of paying a lump sum later on—for reasons of convenience and with the promise that there's "probably more money in it for the developer eventually" and that if the company just waits a heartstopping year or two, to see whether or not the bottom drops out of things, they'll likely be back on track.

on the other hand, i and a few other people disagree because we're not completely convinced it's a financially bright idea or a good business strategy, or because it might be a waste of time that could otherwise be spent programming other things.

i mean i appreciate your enthusiasm, i just feel like it's misdirected. idk.

there are a couple other arguments i could make, like the fact that if serum DOES make money on the strategy, it's probably because it is the "most well known" synthesizer, which leads to countless beginners saying "oh if i get serum i can make music like X artist," buying it, becoming frustrated, forgetting about it for a few months of automatic payments and then quitting.

and i'm sure i could come up with other arguments, but this is starting to wear me out.

i guess i'll just leave, here. good luck to everyone.

tony10000
KVRist
398 posts since 4 Aug, 2017

Re: Rent-to-own?

Post Fri Jan 11, 2019 4:38 pm

sleepcircle wrote:
Fri Jan 11, 2019 4:15 pm
there are a couple other arguments i could make, like the fact that if serum DOES make money on the strategy, it's probably because it is the "most well known" synthesizer, which leads to countless beginners saying "oh if i get serum i can make music like X artist," buying it, becoming frustrated, forgetting about it for a few months of automatic payments and then quitting.
I don't think that a lot of people are just going to quit after a few months due to Splice's model that allows you to stop and then pick up where you left off at a later time. Once someone has made an initial investment, they have "skin in the game". And the fear of loss is always greater than the desire for gain. Chances are, they will pay it off and get something rather than leave with nothing. After all, it is something that they can sell/transfer once they own it.

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Touch The Universe
KVRAF
3649 posts since 2 Oct, 2008

Re: Rent-to-own?

Post Fri Jan 11, 2019 4:44 pm

pdxindy wrote:
Fri Jan 11, 2019 3:17 pm
Touch The Universe wrote:
Fri Jan 11, 2019 2:40 pm
Essentially buying on terms means you are leveraging funds, which is always beneficial
tell that to all the people who lost their underwater homes...
Taking out liens on properties irresponsibly or rampant inflation skewing markets has little to do with leveraging finances. I think a little bird flew away with the rest of my statement there but, what is kvr without a little quoted out of context post now and then.
High Quality Soundsets for Lush-101 | Hive | Electra 2 | Diversion | Halion | Largo | Rapid | Dune II | Thorn | and Spire.
http://www.touch-the-universe.com/

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Urs
u-he
23673 posts since 8 Aug, 2002 from Berlin

Re: Rent-to-own?

Post Sat Jan 12, 2019 12:05 am

I guess I'd get into it if it was Rent-To-NFR. Like, you rent for a while, and at some point you can keep it without paying further installments. But you can't sell it. This would be a bargain I'd be happy to buy into since u-he's user base has grown to an age and size where license transfers are daily business.

Let's revisit where software rental plans come from. A lot of expensive software such as Adobe stuff, scientific software, CAD software reached saturated markets. It would be beyond this post to explain how it got there, and how the internet and stuff dragged this out until 200X. First, products got bundled to palm off software to people even if they don't need it. Then, those bundles themselves imposed horrenduous update costs. Then, those update costs were spread out into monthly installments, when the transition from software ownership to software rental was complete.

I'm sure someone has written books about this, but it seems obvious to me. As long as companies can grow their user base, they're good to sell individual products. The result is fast growth in number of users, with few product licenses each. That's where u-he still is (our users own own about 2 products on average, a majority owns 1). But once the user base reaches a critical point, it makes sense for companies to "sell more" to existing customers. So, Adobe back then, turn products into "suites", and make existing customers an attractive offer to go there. Once the user base has been converted into "everyone has everything", a company has reached the end of selling as its core business model. It needs to start monetizing already sold licenses. From this point on, they need to enforce paid upgrades onto the customer base. That's rental.

Obviously, this is only for companies which have more than one product. Companies with only one product can bypass the bundle phase, unless they start vertical growth (tap into other businesses, such as content creation or a more diverse product range).


#------

This, in my observation, is where software rental comes from. It's a consequence of unsustainable growth. It's a way to make money from existing users when the user base can not be expanded any further. But we are very far away from that point, our headaches lie elsewhere.

Another question is, are there disadvantages of outsourcing the rental? Will Splice etc. try to bind customers to themselves instead of the brands they rent out? Do companies like Splice and Gobbler try to establish ecosystems in which they gather control over the user base and brands become a commodity?

tony10000
KVRist
398 posts since 4 Aug, 2017

Re: Rent-to-own?

Post Sat Jan 12, 2019 12:21 am

Urs wrote:
Sat Jan 12, 2019 12:05 am
I guess I'd get into it if it was Rent-To-NFR. Like, you rent for a while, and at some point you can keep it without paying further installments. But you can't sell it. This would be a bargain I'd be happy to buy into since u-he's user base has grown to an age and size where license transfers are daily business.

Another question is, are there disadvantages of outsourcing the rental? Will Splice etc. try to bind customers to themselves instead of the brands they rent out? Do companies like Splice and Gobbler try to establish ecosystems in which they gather control over the user base and brands become a commodity?
I think that it would be perfectly acceptable to make rent to own software NFR. If someone wants a license that can be transferred, they can purchase the pay-in-full upfront version. I believe that would be more than fair since you would make less money on the Spice version.

As for your second question, I don't see any evidence of this. Splice just functions as a store to sell samples, synth patches and plugins. That seems to be their primary business model. They have added a community and project management system to make their site more "sticky" and to build their user base. I think that it would be worth contacting them and listen to their pitch and check out case histories and success stories.

By the way, it appears Splice is already sending business your way:

https://splice.com/plugins/manufacturers/21
https://splice.com/plugins/827-diva-vst-au-by-u-he

AnX
KVRAF
4608 posts since 17 Nov, 2015

Re: Rent-to-own?

Post Sat Jan 12, 2019 12:37 am

installments on a $200 or less synth?

Seriously, just save up the cash for a few weeks :roll:

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phreaque
KVRian
834 posts since 17 Jul, 2007 from Baghdad-Iq

Re: Rent-to-own?

Post Sat Jan 12, 2019 12:53 am

How about rent-to-own (NFR) for Synth bundle and/or FX bundle, with an option for letting a user to complete the bundle if already having a plugin purchased before, marketing strategy wise it would be a good idea to increase the U-He users.
Phreaque Modi

tony10000
KVRist
398 posts since 4 Aug, 2017

Re: Rent-to-own?

Post Sat Jan 12, 2019 12:57 am

AnX wrote:
Sat Jan 12, 2019 12:37 am
installments on a $200 or less synth?

Seriously, just save up the cash for a few weeks :roll:
I have gone from a good paying job to a fixed income in the last year (not my choice). Thus, my discretionary income is limited. Fortunately, I bought everything I needed while I was working.

However, most people live paycheck to paycheck these days with large mortgage, rent, car, Internet/TV payments, etc. That is why the rent to own model (@ $10 a month) is becoming so popular, especially since there is no interest payment or other downsides. It is really not much different than a layaway plan, only you get to use it (with the restriction of an Internet connection check and 2 computer limit) while you are paying for it.

See: https://support.splice.com/hc/en-us/art ... eneral-FAQ
Last edited by tony10000 on Sat Jan 12, 2019 1:05 am, edited 2 times in total.

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