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An open letter to MAXON CEO McGavran

Do you feel Maxon is taking an Adobe route?  

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  1. 1. Do you feel Maxon is taking an Adobe route?

    • Yes
      59
    • No
      11


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6 minutes ago, DMcGavran said:

I truly enjoyed that it worked out and we got to have a beer (2 actually and a longer night than planned).  Thank you for taking your time to have a fun discussion, I enjoyed the talk and hope we can do it again in the future.   Now I probably need a nap 😉

Cheers

Dave

 

Yes, I really hope It will work out again, too. So many untouched topics 🙂

Jops 

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Thx Jops for taking the time to post here. 

From what I read here or there, MAXON seems stretched: too much complexity, too many hurdles that hinder the development team’s productivity. I guess this is why they streamlined  the versions, scrapped the offline help etc. Maybe I’m wrong...Anyway, let’s wait and see. What I’m looking forward to now is Redshift ported to Metal so that I can finally invest in serious EGPU. 

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On 9/6/2019 at 10:56 AM, Jops said:

 

Many years ago the MSA was forced on us. Well of surely there always was a perpetual license, but it was quite a bit more expensive. MAXON told us that they needed a steady stream of income to be able to develop longer term features and under the hood developments. People where unhappy, because they had to pay before they knew the features of the release they where paying for. Many sad „MAXON will not need to work hard and develop new features, because it already has our money“ MAXON said „we are under more pressure then before, because we have to deliver on expectations“. That sounds familiar right?

 

And that is what happened:

MSA is not good enough any more, Team render gets limited and the only chance to plan our expenditure for the next years and to be save to be part of development is to subscribe, as we don't get any real official information about perpetual future („we intend to publish, but we don't know a price“) .

MAXON tries to persuade us to give away our R21 perpetual license (that was worth some 3000€, before subscription) for 20% subscription costs for two years (I don't have the numbers, but I think it is less then 400€ ?!)

 

So all this is quite Adobish.

 

MAXON invested heavily in the development of the new licensing and activation.

It's not as if the program has no weaknesses otherwise. Somehow it seems to me that preparations are being made all the time to start the developement of the features that users really want in a future that is getting further and further away.

Was it really the most important thing now to change the help system? Wasn't there anything else that needed development time more urgently?

 

people get the impression, that they paid their MSA for many years to finance the development of the new core and now, that you can see the first results of it (Timeline) that they have to switch to subscription if they want to profit.

 

Best regards

Jops

 

Well, I just have to chime in here as your post echoes a number of themes I have expressed since the day R21 was announced (though I would imagine that no offer for a beer will ever come out of it).  I think it is now apparent to most users now that MAXON's new business model gives more advantage to MAXON than it does to the users.  Most marketing people will tell you that is not a winning strategy over the long term and I would imagine that Nemetshek has signed off on some sales decline in the short term when they agreed to these changes.   For MAXON's long term health, I understand that they need to draw more revenue to keep their current development efforts going as they have a long way to go to catch up to the competition.  It is a tough road to create cutting edge features in the stable, easy to use manner that we have all come to expect from MAXON's developers.  So I respect their need to generate more cash from operations.  I was even okay with the MSA price increase from $650 to $725 - that is the benefit of putting out a quality product after all - but to incur a 53% prices increase from $650 to $999 while at the same time handing out R21 Studio to Prime holders for $250 is an indefensible, terrible move from the perspective of every long term Studio licenses holder.  IMHO: That is just going too far and MAXON has over-reached.

 

So with the understand that MAXON needs to increase revenue, I have proposed in previous posts win-win scenarios by which we all benefit.  While I will never know what is being discussed, I remain hopeful that they have at least been heard because I honestly want MAXON to make money, be successful and continue on their current trajectory. 

 

But I find that recent changes in MAXON's business model are putting that trajectory at risk for the simple reason that the most important thing to MAXON's operations is to make payroll.  They have been doing a lot of hiring and those salaries need to be covered regardless of how many licenses they sell.  There is always a risk to a companies operations when you change your licensing model:  So the big question is will that new model generate enough sales to keep operations going let alone generate a profit. 

 

Now, MAXON was an extremely profitable company in the old model and I am confident that they developed sales projections over the next 3 years (probably based on the Adobe model) before they embarked on this new subscription plan.  But those are just "projections"  which is another term for "educated guess".  They really don't know. 

 

So there is risk

 

...and that risk will not become fully apparent until R22 is released.  Here is why:

 

It all has to do with how much of MAXON's business is made up of hobbyists or single seat professional users.  While every user cares about cost, these are the users who are most concerned about new license costs and the benefits they are receiving.

 

The genius of the MSA program is that it motivated everyone to renew every year.  If you did not, you incurred that 53% prices increase (from $650 to $999) because if it lapsed, you had to pay the full upgrade cost.  That program has now been removed.  From now on, if you want a perpetual license, you pay that cost.  But removing the MSA program also removes the deadlines for renewing.   There is no reason why I should rush out and give MAXON $999 when R22 is released.  In essence I have up until R23 is announced to purchase an R22 upgrade.  So there goes potential for any predictable revenue stream.

 

Also, subscriptions do offer freedom to the user as well, especially the hobbyist who is not dependent on C4D for income.  Maybe you realize that you are NOT using C4D 12 months out of the year.  Well...then don't sign up for the yearly subscription plan.  Look at what features you need that are only available in the current release and sign up for the monthly subscription rate to use those features.  FBX output is amazing these days and provides an important bridge back to previous versions.  I tested it from R20 back to R19 and it works quite well.  You could use the latest version for 7 months at the $95 monthly rate (did they raise that price?) and still save money over the annual $720 subscription rate.  I am sure that most projects can be completed in 7 months or less.  Even if you are committed to the $720 annual subscription plan, there is no penalty for waiting to renew.  You can look at the features  of R22 and make a decision to jump in again ONLY when you see the need for a feature in R22 that you think you will be using on a regular basis.  Again, there is nothing that forces you to sign up as soon as R22 is released.  

 

So what all this means is that MAXON's revenue stream went from a very predictable model (they new when everyone's MSA's were expiring) to something COMPLETELY UNPREDICTABLE.  That is why they are pushing for the monthly subscription plan billed ANNUALLY.  They want their money up front as that insures that they can make payroll for the coming year.  R21 was released for the majority of us under the old MSA rules and pricing, so that is why I say that this unpredictability will not become fully apparent until R22 is released.  That is first release fully under these new rules for everyone.

 

Well...as users we should all commit to NOT PLAYING BY THOSE RULES as long as MAXON continues to act in their own self interests more than ours.  Hey...you folks changed the rules so don't be mad at me for playing by them in a way you don't like.

 

There are also some threats that MAXON has in front of them as well over the next year:

  1. Will all Prime MSA holders that were comfortable with their $250 MSA costs be happy with a $720 annual subscription cost or a $999 perpetual license cost?  Again, for the hobbyist or single seat professional user, this could be a big hit to their budget.  Will they still opt in next year remains to be seen.
  2. Will lackluster releases in future years drive people, no longer bound by the MSA deadlines, to renew an annual plan for that new release?  Imagine if there was no MSA pricing for R21 nor an MSA deadline to renew to get R21.  Would you immediately run out and get it?  Probably not.  Instead, you might want to sit back and see what MAXON does to encourage sales as waiting is all to your advantage.   So the luxury of a predictable revenue stream provided by the MSA program while MAXON continues to roll out the new core at their pace is gone.  If an attractive feature set is not there that warrants the current price, people will wait to see if a better price becomes available.
  3. Blender 2.8 removed the interface barriers for a number of us.  It is now looking like a more acceptable mainstream program.  I will admit, it is a little clunky.  Using it sometimes feels like you are driving a dump truck compared to the smooth Ferrari feel you get from using C4D...but then again, it is free and it will still get you where you want to be quite well.  Plus, Blender usability  will only get better and when it does it will still be free.
  4. Blender is now capturing mind share.  Hobbyists happy with Prime in the past may move to Blender.  People new to 3D will probably try Blender first and realize that it is a good alternative to what you have to pay for with C4D.  So the subscription growth MAXON was hoping for ("wow!  Studio for only $60 a month"), may not materialize.
  5. If Blender ever get's a MoGraph module or any of C4D's major plugin developers (Insydium, 3D Quakers, Jawset, etc) ever start to port their programs over to Blender in response to a shift from C4D to Blender among users, then that just makes moving to Blender that much easier.

So all I see is risk and this new subscription model is not a slam dunk win for MAXON. It is all about preserving revenue over this transition and MAXON needs to think more about the user if they want to preserve that revenue and survive that transition.

 

Should you ever be in Boston (say during your tour) and want to hear more....let me know.  I will buy the beer...in fact, I might even throw in some food to boot.

 

Dave

 

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3 hours ago, 3D-Pangel said:

 

Should you ever be in Boston (say during your tour) and want to hear more....let me know.  I will buy the beer...in fact, I might even throw in some food to boot.

 

Dave

 

Boston is my favorite city in the states.  I grew up in CT and went to Uni in Maine.   Haven't been back to the east coast in a while, but next time I will take you up on it.

Cheers

Dave

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Dave - my guess is the number of Prime users is percentage wise quite low compared to the number of Studio users. I'm sure MAXON fully expect to lose a few customers. They will be counting on replacing those users over time with new users. Same applies to anyone not happy with the subscription plans, again they expect to lose a few. Taking a hit on income for a year or two has probably been factored into their plans.

 

Putting aside the move to subscriptions if I was paying for Cinema 4D upgrades or a subscription I would be saying to myself "you know what, I'm handing over $XYZ per year and the rate of improvement / value for money just isn't worth it". R21 is pretty much a .5 upgrade in my opinion.

 

I agree about Blender. While I've done a few Blender tutorials and know the basics it's still clunky to use. 

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Hey 3D-Pangel, 

 

I think you nailed it. Subsciption is the default license now and everything else costs extra. That perpetual costs 3500€ in font and then 200€ more than subscription every year is a save construct not to get it sold and to have a good reason to abandon it in the future. I have no Idea how many independent professionals and hobbyists really use c4d, but they are the ones that do not profit from this change. I believe that Dave McGavran talked to a lot of studios and TV channels and therefor knows what they want, but I doubt, that he is understanding the single Artist.

He has good intentions for development and thinks that he can therefor win over everyone even to his conditions, but artists are not engineers. They don't just look at the numbers. If they feel unrespected they might tend to decide on base of their emotions not on the pure Numbers. 

 

best regards

Jops

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4 hours ago, Jops said:

Subsciption is the default license now and everything else costs extra. That perpetual costs 3500€ in font and then 200€ more than subscription every year is a save construct not to get it sold and to have a good reason to abandon it in the future.

 

That is at least how it feels at the moment (which makes me sad). Although the upgrade prices to R22 are not known yet, the majority of users is assuming that it will be similar to previous non-MSA upgrades, which would (if you financially take the now-missing Cineversity into account) mean a doubling of the 2017 prices (2018 already saw a price hike, and now this...).

 

The best way for MAXON to say "We are still committed to Perpetuals" would be to announce that the upgrading of a Perpetual will be equal to the cost of the corresponding timeframe's subscription. As easy as that. It would certainly not solve the issues of oldtime Prime/Visualize/Broadcast users, and it would still phone home, and it is still more expensive than last year's MSA, but it would feel a lot more fair than the current pricing expectations.

 

Yes, fairness is the word here. Perpetual users are already saddled with an upfront cost (which they have paid already and cannot fully retrieve), and they suffer from getting updates later than subscribers. There is no reason to punish them with much higher yearly cost on top of that - except to intentionally make that choice unattractive. Since the "R22" would be virtually identical with what subscribers receive at the same time, there would be no "separate version issue" either*.

 

If a customer feels treated unfairly, there will be resentment. Resentment leads to angry threads (lots of them, not just on this forum but on those of other software too), and to customers leaving the fold. That cannot be part of the strategy, no?**

 

* Only exception to that would be if MAXON wants to release a pure bugfix version for Perpetual users, which necessitates keeping the bugfix branch separate from the feature branches. But as we don't have seen any new inbetween versions yet, this might very well be the 21.1 anyway. Plus, retaining customers may be worth the additional cost.

 

** "The only bad publicity is no publicity"?

 

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@DMcGavran

 

I think you will have to drink many beers on the tour 😁

 

With that being said, I think we will make a challenge for MAXON beer can & bottle design - that could be fun


Free C4D trainings from MAXON professional on our youtube channel

 

https://www.youtube.com/c4dcafe

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49 minutes ago, Hrvoje said:

@DMcGavran

 

I think you will have to drink many beers on the tour 😁

 

With that being said, I think we will make a challenge for MAXON beer can & bottle design - that could be fun

can't we have a beer DRINKING challenge? gonna have better chances to win then 🍺🐒😉

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Funnily enough, one of the most popular cafe challenges was the Beer Can Challenge back in 2011. Here's the winners.

martinsrscg_entry2.jpg

mithrandir_1.jpg

rolphenstien.jpg

Atomic101_1.jpg

JimW.jpg

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That is awesome Nigel, we will definitely have that one 🙂


Free C4D trainings from MAXON professional on our youtube channel

 

https://www.youtube.com/c4dcafe

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As much as I'm happy you're being more aggressive against competitors.. here is the main reason why I'm probably dropping out.

 

Perpetual. Now it's great you have it.. it's the reason I jumped on. No, it really is.. I have far too much experience with old projects that needed a look down the years, only to find that the current version (adobe in this case) no longer had that version available. Which threw a wrench because the plugins from back then don't work on the current version. The story is similar for other tools as well, but let's not stick too long on that. But knowing that I can just return to my old setup as it was back then, is assuring.

 

With the current perpetual I would now have to pay the full price every single year.. but with MSA I got the same version cheaper, because I stuck with it. With this pricing, you're essentially giving me the middle finger. Not cool.. not cool at all. (If there is a way to get the new version perpetually like before, it isn't on your page. But something tells me it will still be nearly 2x if that's the case. Still not cool.)

 

Had you've gone the route of propellerheads, allegorithmic etc.. where you pay to own... it would have been an entirely different topic. Then subscription would make much more sense, if you as a reward after the full year get to keep the version you're on perpetually. And it's not like it would cost you anything either... it's already been sold & used.

 

To be short.. with the current price structure it no longer makes sense.. if things are going to cost me >2500€ then I might as well go back to Autodesk. Because I can get their entire media suite for less per year, and still have money left to spend on keeping other tools up to date. This isn't cheaper.. you've just raised my yearly cost by nearly 3x-4x, and robbing me of the historical projects in the process.

 

EDIT: the €2500 is in comparison with the Full Autodesk media package... sorry if I made things unclear.

 

Which makes me sad... I really like C4D.

 

Oh.. and the license manager needs to be able to sign out a license remotely... what happens if my laptop get stolen and I didn't sign out. No, don't tell me... contact support! No, wrong answer... let me do it myself. See how messy this gets? Internet is only great while it works after all.

 

And copy ideas from your competitors more frequently... they have no qualms copying things from C4D after all. And implement Cycles if you don't want to make a GPU renderer yourself (prorender really isn't as developed as Cycles)... it is under Apache License version 2.0 license after all.

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