NATIVE INSTRUMENTS MARKET SHARE

There are many “numbers” involved in business. I deal in web stats, impressions and clicks. These are important to manufacturers, as are piffling things like sales, margin and market share. But Native Instruments’ business model allows them to get a bigger slice of the market share whenever the discounting mood takes them. And their just announced 5 day long 50% off sale is a perfect illustration of this, and got my mind racing on the various business models used by the manufacturers to peddle their wares to the masses.

I’m going to look at the big 3 – NI, Serato and Atomix aka Virtual DJ to show the differences and similarities in their approaches. It would be fair to say that Traktor and Virtual DJ are not so different in their offer – an off-the-shelf product that is often bundled with hardware. Their approaches to the market are slightly different though – NI make Traktor, sell it as a standalone boxed product through the retail chain, and make their own hardware that works 100% hand in hand with the software. They also used to bundle Traktor LE with other controllers, but I sense a definite slowdown in this area in recent times. Indeed, I have come to liken NI to Apple – I feel that a truly integrated and possibly exclusive workflow approaches where Traktor compatibility will be entirely in the hands of end users and manufacturers with no bundled versions being sold. And knocking 50% off an already cheap price enables just about everyone to grab a copy and thus massively extend Traktor’s market share. End users will always be looking for Traktor mappings, even for units not designed for it.

Virtual DJ is a little different. You may not realise this, but there is no boxed retail product. You cannot walk into your local DJ shop and grab a copy. And because of the agnostic nature of Virtual DJ, hardware is rarely made specifically for it. Stanton’s DJC.4 comes to mind, if only for the video button. Virtual DJ has always been around, shifted stratospheric numbers and sits pretty safely in the middle of the compatibility pack – almost every controller’s friend, even those that Traktor really doesn’t get on well with. But again, Virtual DJ can also be discounted, but it’s not something that they really do as their market share is almost beyond the realms of comprehension anyway. And whereas Traktor has paid major upgrades, Virtual DJ is free for life after the initial purchase, which for the version lacking DVS and full screen video is the same $99.

And then we come to Serato. As far as comparing approaches, Serato don’t sell you anything at all. They sell licences to hardware partners and work with that revenue. Yes they do have their own products like Serato Video, but “Serato” as you know it is in fact Rane licensing Serato’s “Scratch Live” package and Serato offering after sales support. And for DJ Intro, ITCH and Serato DJ hardware partners, it comes down to Serato selling licences based on required features and projected sales. And it’s only with the advent of Serato DJ’s upgrade path for existing customers that they’ll actually begin to see some revenue directly from the end user. So there is little that Serato can do to stimulate market share and revenue, other than hope that people buy more hardware from their partners forcing more production runs.

So you can immediately see the huge difference in approaches. From the all important market share perspective, Traktor and Virtual DJ can be discounted to almost nothing and sold (the important factor when it comes to figures) in a bid to get market share. Serato’s model however depends entirely on their partners selling more hardware, which thankfully for them, people like to do quite a bit of.

NI’s tactic has paid huge dividends in the past. The last 50% off sale cleared the shelves of Audio4 and Audio8 Traktor Scratch packages, and massively redressed the market share with Scratch Live. And as Virtual DJ 8 approaches, the already cheap Traktor Pro just became stupidly cheap, and may well bring people to the Traktor yard instead. Call it a preemptive strike if you will.

For the money, it feels like one of those things that is worth a go, just to say that you have a full version of Traktor. Be warned though – tactics like this usually have a sting in their tail, and that is normally an all new version coming along that requires a small but paid upgrade. Granted, NI pretty much gave everyone a free copy of Traktor Pro 2.5, but the move from 1 to 2 incurred a cost. And if my gut is correct, the next upgrade (not update – there’s a difference) is going to be quite epic, and will most definitely be a necessary purchase.

So I cast this open to you – for the price of a few beers with your mates, are you tempted to grab the full fat Traktor while it’s on sale?


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