Native Instruments GmbH is in "preliminary insolvency"

[Forum Admin]

Such a bleedin' shame!! Just heard.

https://cdm.link/ni-insolvency/

[forumuser936783]

Such a bleedin' shame!! Just heard.

https://cdm.link/ni-insolvency/

Can anyone else confirm this? There is only one article. And any others just source that one article.

[jaminem]

Oh no.....
really bad news for the staff and...

...I've invested 1,000's......

[RichardT]

Very bad news . Let's hope someone can buy them out.

[1Cal]

There's something online about a purchase by a private equity firm Bain Capital. Hopefully the administration is a prepack and part of that process.

[ajay_m]

Deeply unsettling news. I would guess one big problem for them has been cashflow recently. Many people have acquired quite comprehensive collections of NI products by waiting every year for the summer sale and starting with a single product like Kontakt and ultimately (as I have done personally) upgrading all the way to Komplete Ultimate.
BUT
Once you've done that, you have such a vast range of products to play with that there isn't much temptation to bother upgrading to a newer version of Komplete and so revenue dies out. I'm still on K11U I think.

I have carefully copied down every single installer and backed that all up to an external drive, because if you need to migrate to a new machine, the download times are enormous, but these products are still activated through NI's infrastructure. I assume they remain activated permanently unless reinstalled but this isn't a given (optional plugins on my Akai Force, also now discontinued, do call back in and check their license status regularly, something owners thoroughly dislike, but we are where we are).

But cripes, NI are a huge part of the music infrastructure and a huge number of much smaller companies depend on Kontakt. That, probably, is vulnerable to being hived off to a venture capitalist of some sort, since it's monetisable not just for end user licenses but the license fees that third party companies pay for the privilege of being able to integrate their sample libraries tightly with the NI infrastructure.

The remaining software products are in many cases entangled in a complex web of ownership and licensing I'd think (Absynth for instance, just recently resurrected from the dead) so what will happen there is anyone's guess. NI were probably paying some kind of royalties for libraries like 'Alicia's Keys' for the celeb endorsement, as well.

The history of Cakewalk and Sonar, though, shows possibly some hope. It's certainly had a chequered history but survives, so I'm presuming deals will be made though unfortunately I can't see an optimistic future for most of NI's staff. You could sell the existing product range for a long time without touching the code, I'd think, there's just so much stuff in their catalogue. Though they'll probably immediately stop making hardware and I can't see that carrying on, there's just no point, too much competition and their hardware products have had mixed success. Some good, some not so good.

[James Perrett]

You could sell the existing product range for a long time without touching the code, I'd think, there's just so much stuff in their catalogue.

That's what they've already been doing with RX. Quite a few of the modules are apparently unchanged since they were introduced.

[Forum Admin]

Latest news bodes well:

[ajay_m]

While the deal was approved in principal in early December last year, it's not clear whether or not Bain are proceeding with the acquisition or not, at least according to some music sites, so it's all very up in the air right now.

[Tomás Mulcahy]

Apparently it is the Bain deal that has fallen through.

https://www.production-expert.com/produ ... roceedings

[1Cal]

It looks like under German insolvency rules the company now has a few weeks to either find a buyer or stabilise its trading position. I've been in a similar position myself where my employer was in trouble and found a potential buyer to rescue them. However the buyer decided it would rather buy the trade and assets of the company without all the associated debt, out of administration (a type of insolvency in the uk). It is still possible that Bain etc may still be interested if they can acquire NI without all its debt provided the creditors will agree to write some of it off.

[ajay_m]

I would predict that Kontakt will get acquired as its user base can be exploited for revenue e.g move to subscription licensing etc. The hardware business is toast most likely.
Probably a lot of other products that were developed then sold to NI will get reacquired by their former owners at fire sale prices. I doubt that NI as a coherent entity will survive though. Maschine+ on reverb now and hope you can get half its value would be my thinking.

[ajay_m]

The most intelligent and detailed discussion I've found (ie as opposed to 'gosh that's awful') can be found here. Actual people who worked for NI are on the thread, I believe plus people who actually know what they're talking about.

https://vi-control.net/community/thread ... 844/page-8

[Dave Rowles]

Of course, this is why so many creative companies are trying to push us onto subscription models. They've built up a user database based on single-purchase software, but if users then don't pay to upgrade, their revenue falls off pretty fast.

[BigRedX]

The problem is that you can't make the subscription model work financially for something that is a niche product (pretty much all 3rd party music plug-ins) that has a predominantly hobbyist user base.

I use a lot of subscription-based software in my day job (graphic design) but because I get paid for what I do using it, I can afford it. All my subscriptions for each month are covered by less than half day's billable work and of course they are tax-deductible. For me the subscription actually works out cheaper than having to upgrade half a dozen applications each year - and I do have to keep on top of upgrades if I want to be able to carry on working.

Also a lot of subscription-based software will want to "phone home" at the most inconvenient moment. I use my music software at gigs and I couldn't take the risk that something on my computer will suddenly stop working because there is no internet connection available at a particular venue. So apart form the cost, there's also the issue of robustness.

[ajay_m]

I didn't say I thought subscription licensing was a good idea, just that it is the sort of thing that people who know the cost of everything but the value of nothing will favour. And it does depend on the amount of money involved. After all, how many of you here are paying money to Netflix or Spotify or Apple Music every month? Or for business hosted email? Or even for your TV license?

Or perhaps do you have a shiny new car on a four year lease that you'll give back to the leasing company at the end of the term?

People are getting used to the idea that you don't 'own' things, in a world of increasingly intangible assets, and software licensing subscriptions increasingly look like an inevitable change in the industry, I'm afraid.

[The Elf]

If you can't make money with Kontakt as your flagship then something is seriously wrong with your business.

Let's hope that something positive comes out of this.

[S.Crow]

I didn't say I thought subscription licensing was a good idea, just that it is the sort of thing that people who know the cost of everything but the value of nothing will favour. And it does depend on the amount of money involved. After all, how many of you here are paying money to Netflix or Spotify or Apple Music every month? Or for business hosted email? Or even for your TV license?

Or perhaps do you have a shiny new car on a four year lease that you'll give back to the leasing company at the end of the term?

People are getting used to the idea that you don't 'own' things, in a world of increasingly intangible assets, and software licensing subscriptions increasingly look like an inevitable change in the industry, I'm afraid.

I suspect that most people prefer to have a choice.
The majority of private car owners don't lease.
One can still buy CDs, Blu-rays etc if you prefer.
The success of Spotify is partly due to the convenience and there's a free version anyway.
YouTube is also free with ads.
People have been paying for TV via Sky etc for decades before Netflix.
The TV license is a legally mandated tax.
If you cancel it, you can still play the physical media that you own.

There's not much recent history of people leasing instruments in the UK for consumers.
Waves tried going subscription only recently and there was such a backlash that they rolled it back.
A lot of companies offer both models but hardly any are subscription only.
This has changed with the recent AI song creation tools.
This seems more reasonable if the processing required is better done on servers.
But there is already a push towards more local AI processing, so I suspect there will be pressure against subscriptions as they don't appear to be popular in general.

If all the plugins and sample libraries that I own were subscription only, the cost would be staggering, not feasible.
I can take out a one month sub on Netflix etc to watch a series quickly and cheaply.
It's much more convenient and cheaper than the old days of buying a DVD boxset.

If I wanted to work on a DAW project for a month, the hassle and cost of renewing all the subscriptions would be a pain.
If things were subscription only, people would use less software and probably choose large bundles from the major vendors.

I like that there's the option to lease even if I haven't done so yet.
It's particularly useful for companies that don't allow license transfers or demos, which is common with sample libraries.
I hope both options remain commonly available.

[S.Crow]

If you can't make money with Kontakt as your flagship then something is seriously wrong with your business.

Let's hope that something positive comes out of this.

Look at all the major sample library vendors that have moved away from Kontakt in recent years.
There's been a stampede and these were selling protected/encoded libraries, so were paying a licensing fee on every sale.

It stagnated as a platform seems to be the opinion.
It appears to be a case of complacency, under investment and poor leadership.

[MOF]

I hope both options remain commonly available.

Me too, I have just cancelled my Roland Cloud annual subscription after two years as I have now got the lifetime licences of the four instruments that I wanted.
The rest of my software I own, including the latest Komplete Ultimate package.

[Sam Spoons]

I pay monthly for my mobile phone, internet, iCloud storage, landline and household bills. Annually for my TV license, my car tax, various insurances and my sailing club subs. I own my cars, boats house, and instruments, nothing leased. I could very quickly rack up a large monthly commitment if I subscribed to Spotify/Netflix*/Apple Music/etc or any other 'premium' services but I don't use any of them sufficiently often to justify even a small monthly sub so I put up with the ads where I have to or don't listen/watch.

[S.Crow]

It's important to distinguish between outgoings that are compulsory and those that are discretionary.
Also, to distinguish between services and products.
Comparing things that aren't in the same class doesn't tell us much.

If you subscribe to one music streaming platform and one TV streaming platform at a time, the cost isn't high.
Sky TV is more expensive alone, even for the basic package.
If you subscribe to a handful of premium streaming TV services simultaneously, then that gets expensive, but that's a luxury really.

[R_A]

Look at all the major sample library vendors that have moved away from Kontakt in recent years.
There's been a stampede and these were selling protected/encoded libraries, so were paying a licensing fee on every sale.

It stagnated as a platform seems to be the opinion.
It appears to be a case of complacency, under investment and poor leadership.

What platform have these developers moved to?

[S.Crow]

Look at all the major sample library vendors that have moved away from Kontakt in recent years.
There's been a stampede and these were selling protected/encoded libraries, so were paying a licensing fee on every sale.

It stagnated as a platform seems to be the opinion.
It appears to be a case of complacency, under investment and poor leadership.

What platform have these developers moved to?

All the large ones moved to their own in-house proprietary platform.
The smaller ones that moved away I'm not so up on and there are multiple options including HISE.

[Drew Stephenson]

I have to say, as someone who's not very tech-savvy compared to most on here, and only really dabbles in the world of VSTi's, then I generally work on an anything-but-Kontakt approach as it's such a complete PITA to work with compared to any other player I've encountered.
I know it's hugely powerful, but it's also hugely intimidating and confusing - and that's not great for building a user-base amongst hobbyists.