# Native Instruments recieves $59 million investment



## gsilbers (Oct 24, 2017)

https://ask.audio/articles/native-i...tment-to-take-services-products-to-next-level


Interesting


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## synthpunk (Oct 24, 2017)

Now they can make Native Access work right, ba-dum-ching 

But seriously, I hope they also take a piece of that to make there company more customer friendly.


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## mc_deli (Oct 24, 2017)

Investors want returns, they want maximum ARPU (revenue per user) and they want users paying more, and paying more regularly.
NI hardware must be low margins. NI software, especially Komplete, must have astonishing margins. At the moment K/KU owners are paying ad hoc into upgrades but skipping cycles and maybe not paying anything for 1-5 year periods. It all says: SaaS. Any investor throwing money at NI would want Kontakt to become true cloud SaaS with in-app purchases, more regular payments etc.

Kontakt is already the industry standard software and it won't take a great leap to become the industry standard platform. Of course, the devil is in the detail: all the revenue splits to keep all the devs happy and not frightening off the core user base with subscriptions.


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## gsilbers (Oct 24, 2017)

i do wonder what the changes will be. ive been seeing NI push the reaktor engine to make it like kontakt is w 3rd parties developers. 

besides that i dont know. maybe what the article said. take machine as a standalone daw, develop more hardware and better cloud connection between musciains.


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## ok_tan (Oct 24, 2017)

they'll develop an electrical automobile and gonna call it KAR! 
Komplete Kontrol will replace the driver.


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## jononotbono (Oct 24, 2017)

Here's to hoping Kontrol can be built into Kontakt then!


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## Alex Fraser (Oct 24, 2017)

mc_deli said:


> Investors want returns, they want maximum ARPU (revenue per user) and they want users paying more, and paying more regularly.
> NI hardware must be low margins. NI software, especially Komplete, must have astonishing margins. At the moment K/KU owners are paying ad hoc into upgrades but skipping cycles and maybe not paying anything for 1-5 year periods. It all says: SaaS. Any investor throwing money at NI would want Kontakt to become true cloud SaaS with in-app purchases, more regular payments etc.
> 
> Kontakt is already the industry standard software and it won't take a great leap to become the industry standard platform. Of course, the devil is in the detail: all the revenue splits to keep all the devs happy and not frightening off the core user base with subscriptions.



Urgh. Komplete Kloud. I hate the idea but unfortunately your logic seems sound. The only other way would be to make Komplete upgrades more enticing, but it’s difficult to see where NI could go seeing as KU already covers most bases.


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## mc_deli (Oct 24, 2017)

Alex Fraser said:


> Urgh. Komplete Kloud. I hate the idea but unfortunately your logic seems sound. The only other way would be to make Komplete upgrades more enticing, but it’s difficult to see where NI could go seeing as KU already covers most bases.


I hate it but then I've not just thrown 50 million squid at it


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## bosone (Oct 24, 2017)

what to do with 59M$?
I would invest the money to create an artificial intelligence that will choose the right sound, right plugin (and its settings), right chords, right arrangements and right mix level for my next song, based on my personal music ideas, taste and considering what i have already composed.
so that i can finally compose songs without even hitting a key, and i can dedicate myself to play guitar and keyboard without wasting my precious time on a DAW, on a mixer or on a sampler.

anyone can finally be a serious musician! :D 

\sarcasm mode off


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## tav.one (Oct 24, 2017)

^^


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## gsilbers (Oct 24, 2017)

jononotbono said:


> Here's to hoping Kontrol can be built into Kontakt then!



not a bad idea. have like one of those korg motif pianos that has kontakt screen on it. but not like oasis which was huge. 

but i remeber buying the kore2 hardware with the same intention as the new pianos and it didnt work. at the end it was just easier to open a plugin in ableton, choose the patch and play. right click for midi controller.


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## storyteller (Oct 24, 2017)

I'd be inclined to think they either are looking at the backlog of products that haven't been updated in a while and having a nervous breakdown, or (more likely) I would bet it is hardware related and a slush fund for their new ideas. It takes a lot of capital to design, manufacture, and stock hardware. Programmers and recording sessions aren't cheap either. Just my humble thoughts on it... When they listed their Una Corda on ebay it made me think they may not have a tremendous amount of slush-fund capital.


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## jononotbono (Oct 24, 2017)

gsilbers said:


> not a bad idea. have like one of those korg motif pianos that has kontakt screen on it. but not like oasis which was huge.
> 
> but i remeber buying the kore2 hardware with the same intention as the new pianos and it didnt work. at the end it was just easier to open a plugin in ableton, choose the patch and play. right click for midi controller.



Well, I'm no expert in Software development but I just want the Lightguide to work with any library I load up in Kontakt. Just that simple. Maybe it's wishful thinking but it would be great especially for anything being hosted in VEPro. Just load a Kontakt library and instantly have the Lightguide represent what's going on in the library. I'd buy one of their keyboards without a doubt if this became a reality.


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## gsilbers (Oct 24, 2017)

jononotbono said:


> Well, I'm no expert in Software development but I just want the Lightguide to work with any library I load up in Kontakt. Just that simple. Maybe it's wishful thinking but it would be great especially for anything being hosted in VEPro. Just load a Kontakt library and instantly have the Lightguide represent what's going on in the library. I'd buy one of their keyboards without a doubt if this became a reality.



I also liked the way massive has the 8 macro controllers. so it would be cool if not only its the lightguide but also automatically assign 8 macro controllers of the most used for a specific instrument. so spitfire strings would have the normal dynamics, volume , vibrato etc while hybrid libraries would have like filter cutoff or sequencer settings or distortion. whatever makes that specific patch shine.


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## gsilbers (Oct 24, 2017)

storyteller said:


> I'd be inclined to think they either are looking at the backlog of products that haven't been updated in a while and having a nervous breakdown, or (more likely) I would bet it is hardware related and a slush fund for their new ideas. It takes a lot of capital to design, manufacture, and stock hardware. Programmers and recording sessions aren't cheap either. Just my humble thoughts on it... When they listed their Una Corda on ebay it made me think they may not have a tremendous amount of slush-fund capital.



there is also this

http://www.fohonline.com/international-news/7567-music-group-plans-big-expansion-for-operations-in-china.html

wows!

so im guessing NI will try to do something similar. either way, all the money goes to china... but thats another thread. :O


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## Alex Fraser (Oct 24, 2017)

Maybe NI should build a dedicated sample library recording facility and get some full time "sampoligists" to build on the the Komplete range.


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## PaulieDC (Oct 24, 2017)

mc_deli said:


> Investors want returns, they want maximum ARPU (revenue per user) and they want users paying more, and paying more regularly.
> NI hardware must be low margins. NI software, especially Komplete, must have astonishing margins. At the moment K/KU owners are paying ad hoc into upgrades but skipping cycles and maybe not paying anything for 1-5 year periods. It all says: SaaS. Any investor throwing money at NI would want Kontakt to become true cloud SaaS with in-app purchases, more regular payments etc.
> 
> Kontakt is already the industry standard software and it won't take a great leap to become the industry standard platform. Of course, the devil is in the detail: all the revenue splits to keep all the devs happy and not frightening off the core user base with subscriptions.


Nailed it, couldn't agree more.


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## Alex Fraser (Oct 24, 2017)

Interesting thread. I put this to the VI control Hive Mind: (™)

How would you create a Native Instruments Cloud service without upsetting the existing customer base?
As far as I'm aware, there wasn't a "Komplete" equivalent in the EastWest product range prior to the introduction of Composer Cloud. (Please correct me if I'm mistaken.) It would take serious balls for NI to offer Komplete as a subscription service when thousands of customers have already paid serious money for the same product.

Any thoughts, all? How would you approach it?


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## Eric G (Oct 24, 2017)

mc_deli said:


> Investors want returns, they want maximum ARPU (revenue per user) and they want users paying more, and paying more regularly.
> NI hardware must be low margins. NI software, especially Komplete, must have astonishing margins. At the moment K/KU owners are paying ad hoc into upgrades but skipping cycles and maybe not paying anything for 1-5 year periods. It all says: SaaS. Any investor throwing money at NI would want Kontakt to become true cloud SaaS with in-app purchases, more regular payments etc.
> 
> Kontakt is already the industry standard software and it won't take a great leap to become the industry standard platform. Of course, the devil is in the detail: all the revenue splits to keep all the devs happy and not frightening off the core user base with subscriptions.



(From my past life with an MBA in Finance and Investment Banking)

To double click on your comments, yes investors want to maximize customer revenue. But that would be considered just a starting point. Fundamentally, investors (which expect min. returns of 7-10x ), will want to see growth across the board.

So expect growth in customer types, products, libraries, regions and platforms. In addition you may see some of the developers and/or products get acquired (a quick way to grow). Look at the developers NI has been working with as likely candidates.

At the end of the day investors only get their money back if the company is acquired by another investor or goes public. So they expect results in 2-4 years tops.


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## greggybud (Oct 24, 2017)

Bring back Kore. Learn and correct the foundational mistakes. Update it and keep the same functions in it that can't be found today in any other device...especially morphing.

Oops....I doubt that would make money compared to development costs.

With that in mind....just keep cranking out endless Maschine expansions, more sample libraries, and call it a day.


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## muziksculp (Oct 24, 2017)

Now they can hire a lot more software programmers to deliver *Kontakt 6* as early as January 2018, and make sure it is a huge step up from the current version in terms of features, design, GUI, ..etc.


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## gregh (Oct 24, 2017)

Could they set themselves up as the Adobe of the audio world - end to end workflow for music production software. Is $59mill plus their existing expertise enough for that, or a part of that? How big is that market anyway?


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## Jdiggity1 (Oct 24, 2017)

Alex Fraser said:


> Interesting thread. I put this to the VI control Hive Mind: (™)
> 
> How would you create a Native Instruments Cloud service without upsetting the existing customer base?


Ha! You don't.

Have you seen the things we get upset about here??


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## jcrosby (Oct 25, 2017)

mc_deli said:


> Investors want returns, they want maximum ARPU (revenue per user) and they want users paying more, and paying more regularly.
> NI hardware must be low margins. NI software, especially Komplete, must have astonishing margins. At the moment K/KU owners are paying ad hoc into upgrades but skipping cycles and maybe not paying anything for 1-5 year periods. It all says: SaaS. Any investor throwing money at NI would want Kontakt to become true cloud SaaS with in-app purchases, more regular payments etc.
> 
> Kontakt is already the industry standard software and it won't take a great leap to become the industry standard platform. Of course, the devil is in the detail: all the revenue splits to keep all the devs happy and not frightening off the core user base with subscriptions.



^This... I expect to see a severe dumbing down of products. The likelihood of seeing needed features just got a lot lower IMO. This is what Izotope's done. (I realize that's a touchy subject here, some people love them more than ever, I think they've turned all my favorite products into a homogenous version of their former selves...) I digress...

I basically see this being a solid indicator NI won't be throwing many life rafts to users like ourselves in the future... (Sheeeeit. I was on the phone with their support last week and the chump said 'you pro users are only a tiny portion of our customers'...  )


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## Saxer (Oct 25, 2017)

I think their main market is the bridge between music production and DJ-ing. Maschine, blinking keyboards and the big library catalogue will spread the world. There are still kids who learn acoustic instruments. Proselyte them!

But I could imagine investors are looking for other markets. I think they'll bring a lot of technology useful for speech generating.


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## heisenberg (Oct 25, 2017)

While I agree with mc_deli and jcrosby's assessment, I don't think we should necessarily think it will go in the direction of maximizing profit with little good coming out of it for the people who use and rely on their products.

First the nature of this venture capital outfit is not really known yet. They are newly formed and it appears that NI is so far their most high-profile investment to date. We cannot really gauge how they will effect the decision making of NI. Their policy is to have minority stakeholdings in companies.

Second, if you look at Propellerheads, they received a venture capital infusion which had all the hallmarks of a bailout (which NI's does not). If you have been following the course of Reason and either use it or want to use the DAW, all of the developments in their product in the past year or so have been for the good or both it's user base and the continuance of the product. I haven't seen this much fanfare the release of a Reason update in a LONG time. I think the release date for version 10 is today.

Third, the nervousness of long time Kontakt users and developers, may cause and uptick in Falcon's use which in turn may put a fire under NI's butt as far as Kontakt development goes.

There is almost always unintended consequences in these things and they don't have to be negative.


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## Jaybee (Oct 26, 2017)

jcrosby said:


> ^This... I expect to see a severe dumbing down of products. The likelihood of seeing needed features just got a lot lower IMO. This is what Izotope's done. (I realize that's a touchy subject here, some people love them more than ever, I think they've turned all my favorite products into a homogenous version of their former selves...) I digress...
> 
> I basically see this being a solid indicator NI won't be throwing many life rafts to users like ourselves in the future... (Sheeeeit. I was on the phone with their support last week and the chump said 'you pro users are only a tiny portion of our customers'...  )



Worrying. This is *exactly* what is happening over in the world of photography. Adobe have moved it's key products Photoshop (image editing and manipulation) and Lightroom (a multi-purpose converter for 'negative' type files plus a rudimentary asset manager and keywording tool) into the 'Cloud'. No more standalone versions will be produced. To access the latest Photoshop you 'rent' it monthly. This is the way it's going. 'Software as a Service' is the industry term. At the same time the feature set is being developed towards the amateur user, the casual user, the uploader of holiday snaps from their phone and not the working pro. The needs of pro-photographers are being ignored because, yes, 'you pro users are only a tiny portion of our customers'. You're right, it's all about ROI and we'll simply be collateral damage. 

What really worries me is the huge market share Kontakt has got. They have us all by the short and curlies, and that includes the majority of sample library developers out there. When I first entered this world of VIs a couple of years back it was quite shocking that one piece of software was the keystone to so many people's businesses. The whole Native Access thing has shown just how much we rely on that piece of software working as designed (or not). If Kontakt decided to go leftfield and remove features *we* all need to run our super large templates etc. we'd be completely stuck. 

At least in the photo world there are open-source and paid alternatives to Photoshop and Lightroom that may not be as slick but that will work with these files and get the job done. With VIs based on Kontakt there doesn't seem to be *any* alternative. This would really scare me as a sample developer too. What it I'd developed everything in Kontakt and suddenly Kontakt stopped supporting my older libraries or trebled the fees to get a 'library' in? Chaos. 

Shame there hasn't been any development of an _open-source_ Kontakt alternative file type. A 'Reaper' version if you will. A sample-based version of the ubiquitous .jpg file for images. Something that can be developed by _anyone _whilst retaining a core code ensuring older/other stuff will still run. Even a separate commercial sampler version that could read/play these files. 

The more NI commands the market and wraps up sample libraries into proprietary .nki files the more control it has. That can't be good.


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## jcrosby (Oct 26, 2017)

heisenberg said:


> While I agree with mc_deli and jcrosby's assessment, I don't think we should necessarily think it will go in the direction of maximizing profit with little good coming out of it for the people who use and rely on their products.
> 
> First the nature of this venture capital outfit is not really known yet. They are newly formed and it appears that NI is so far their most high-profile investment to date. We cannot really gauge how they will effect the decision making of NI. Their policy is to have minority stakeholdings in companies.
> 
> ...



I sure hope so. Kontakt is in many ways VI-Control's bread and butter... Time will tell.

That said...



Jaybee said:


> Worrying. This is *exactly* what is happening over in the world of photography. Adobe have moved it's key products Photoshop (image editing and manipulation) and Lightroom (a multi-purpose converter for 'negative' type files plus a rudimentary asset manager and keywording tool) into the 'Cloud'. No more standalone versions will be produced. To access the latest Photoshop you 'rent' it monthly. This is the way it's going. 'Software as a Service' is the industry term. At the same time the feature set is being developed towards the amateur user, the casual user, the uploader of holiday snaps from their phone and not the working pro. The needs of pro-photographers are being ignored because, yes, 'you pro users are only a tiny portion of our customers'. You're right, it's all about ROI and we'll simply be collateral damage.



This is what freaks me out. It's also an easy leap to imagine them going subscription... Every one and their mother is moving to subscription in Audio... Not a fan in the slightest. I've kind of seen this on the horizon in terms of audio since the boom of the iOS market... As I've said in previous threads, good god I hope I'm wrong.

This is exactly why I cling to my Cheese grater... If we hit zero day with NI and that machine has to live offline, frozen in time for me to work, I can fix the machine myself and keep it rolling for quite a number of years...


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## Quasar (Oct 26, 2017)

Jaybee said:


> Worrying. This is *exactly* what is happening over in the world of photography. Adobe have moved it's key products Photoshop (image editing and manipulation) and Lightroom (a multi-purpose converter for 'negative' type files plus a rudimentary asset manager and keywording tool) into the 'Cloud'. No more standalone versions will be produced. To access the latest Photoshop you 'rent' it monthly. This is the way it's going. 'Software as a Service' is the industry term. At the same time the feature set is being developed towards the amateur user, the casual user, the uploader of holiday snaps from their phone and not the working pro. The needs of pro-photographers are being ignored because, yes, 'you pro users are only a tiny portion of our customers'. You're right, it's all about ROI and we'll simply be collateral damage.
> 
> What really worries me is the huge market share Kontakt has got. They have us all by the short and curlies, and that includes the majority of sample library developers out there. When I first entered this world of VIs a couple of years back it was quite shocking that one piece of software was the keystone to so many people's businesses. The whole Native Access thing has shown just how much we rely on that piece of software working as designed (or not). If Kontakt decided to go leftfield and remove features *we* all need to run our super large templates etc. we'd be completely stuck.
> 
> ...



Well said. The monopolistic aspect of the locked-down Kontakt platform, and the dependency so many 3rd party developers have on it is the most worrisome aspect to me. Recent changes involving Native Access etc. are undoubtedly only the tip of the iceberg. We are in dire need of a "Reaper-like" or Open Source alternative that can truly compete IMHO.


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## Vik (Oct 26, 2017)

"If Native can crack all the major DAWs and make Komplete Kontrol as useful for other music software as their own this could become the controller for everyone period."
Maybe, for that amount, they'll instead ( or additionally) make a new DAW which is taylor made for use with their sample libraries and hardware.


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## mc_deli (Oct 26, 2017)

Alex Fraser said:


> Interesting thread. I put this to the VI control Hive Mind: (™)
> 
> How would you create a Native Instruments Cloud service without upsetting the existing customer base?
> As far as I'm aware, there wasn't a "Komplete" equivalent in the EastWest product range prior to the introduction of Composer Cloud. (Please correct me if I'm mistaken.) It would take serious balls for NI to offer Komplete as a subscription service when thousands of customers have already paid serious money for the same product.
> ...


The first step surely has to put an "app store" in or around Kontakt. The other thing is to develop healthier relationships with key devs. Kontakt is strong all the time e.g. SA are exclusively on Kontakt. 

Convince all devs that a Kontakt store will rain down incremental revenue. 

At the same time broaden Kontakt's appeal to the DJ and prosumer market by offering sounds, loops, FX etc. as well as instruments. 

What I wouldn't do is make a DAW. Maybe acquire a DAW but even then much better to have the cross platform sampler IMHO. And introduce parallel subscriptions, which to be fair to EWQL seems to have worked well.

But first get through the NA backlog first eh fellas!


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## C-Wave (Oct 26, 2017)

gsilbers said:


> I also liked the way massive has the 8 macro controllers. so it would be cool if not only its the lightguide but also automatically assign 8 macro controllers of the most used for a specific instrument. so spitfire strings would have the normal dynamics, volume , vibrato etc while hybrid libraries would have like filter cutoff or sequencer settings or distortion. whatever makes that specific patch shine.


It’s already there, it’s called NKS. Any library that is support NKS can do that including Spitfire.


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## Alex Fraser (Oct 26, 2017)

Some thoughts.

If Komplete goes subscription, so be it. As long as there’s an incentive and cherry on top for existing users to migrate. I’d rather have a subscription than no Komplete at all.
The “prosumer” vs “pro” boat sailed a while back. At the end of the day, everyone uses the same tools. You can open Kontakt and use an “instant drum loop” library, or go under the hood and get coding. Same tool.
I really don’t think that NI will start removing features that will hurt the “pros.” They’ll just make everything more accessible. They’ve already started this. Look at how many “loop” style libraries are already in Komplete. There’s simply no market in creating software for high end users only.


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## bosone (Oct 26, 2017)

going to cloud with monthly base fee will probably cut down a large part of hobbysts.
i really dont like "renting" a software and then if i stop to pay i have left with "nothing" in my hand. in this regards, cakewalk was quite smart so that, if you stop to pay their plan, you simply remain without updates.
but if you stop to pay EW cloud, for example, you cannot use the libraries anymore. that is the reason i will never subscribe to EW... 

i am quite sure that NI will not lose its large "bottom" part made by hobbyst and "casual" users so they will be able to find a good compromise if hey will ever switch to cloud...


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## jcrosby (Oct 26, 2017)

Vik said:


> "If Native can crack all the major DAWs and make Komplete Kontrol as useful for other music software as their own this could become the controller for everyone period."
> Maybe, for that amount, they'll instead ( or additionally) make a new DAW which is taylor made for use with their sample libraries and hardware.


Isn't that basically what Maschine is already? If they folded in audio tracks it's most of the way there already...
(Obviously not in the true sense... but then again neither was Reason for a long time...)


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## PaulieDC (Oct 27, 2017)

I was introduced to the EW subscription last year when I first got into VI composition. 50 bucks a month for a year got me an amazing ride digging through all that stuff. Ultimately I realized in August (my final month of the 12 month commitment) that I only really used/wanted HO, SO, the pianos and StormDrum3 (and a few 25th Anniv modules). During their recent sale I bought the first three, I'm hanging on for SD3, maybe at Black Friday. Point is, EW does the dual thing (unlike Adobe) and that worked great for them and me. If Kontakt follows this model, win-win. And yes, SaaS is a big win in the right scenario. My main craft is photography, video production and some graphic design. I LOVE just paying 49 bucks a month for _everything_ Adobe makes which includes Font library access. That used to cost $2500 with a $999 upgrade every 18 months , and trying to depreciate software on taxes is a total headache. For the first 6 years at that rate with 3 upgrades, that's $76 per month to "own" the software and it had to be Mac OR PC. Now it's a 50 dollar-a-month write off, I'm always on the latest version, and I can run both licenses on either Mac or PC. Plus I can install it all on several machines, but only be signed in on two at anytime, and I don't need iLok. Same with Office, no more $400 price tag for ONE license. $9.99 per month gets me full Office on 5 PCs, an iPad and an iPhone plus 1TB of OneDrive Space. Another monthly business expense, so easy to write off. Absolutely love that. It's not a horrible way to go... how much is your communications bill per month for phone, internet and TV? Mine's about $300, ugh.


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