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Topic: Sample Development - Profitable? YES!

  1. #1

    Sample Development - Profitable? YES!

    Well, let the flames begin, because I\'m just not agreeing with the \"there\'s no money in sample development\" or \"pirates this and pirates that\" argument.

    I can only relate the process of producing sample libraries to programming computer software, which I currently do for a living. It takes me on average of 6 months to write a decent software title. I think based on conversations with sample developers this is a fair amount of time for a decent sample library as well. Even though I know FOR A FACT some libraries have been done in far less time.

    I have talked to several sample retail outlets, if a giga library sells on average of 1000 copies over the course of a 2 year duration that is a good selling library. If the developer makes libraries for akai and roland formats, then the potential market goes up dramatically! And I assume Halion compatibility will help the giga platform as well. For now, we\'ll stick with 1000 copies being the goal.

    Since the retail market usually dictates around 50% discount to stores and distribution channels, we\'ll focus on potential gross profit for a library. (I\'m sure 50% discount is probably not the case all of the time, since if a store only orders a few copies they may only get 20-40% off the retail price!)

    So, if it takes me 6 months to make a library, that comes out to 40 hours a week, 4 weeks a month, 6 months, = 1200 hours. Sure, it may seem longer than 6 months, because I may not really \"work\" every day, some days I may play with the samples, write some music, etc. But the actual editing time will work out to around 1200 hours.

    In a business profession everything works out to how much you make PER HOUR for the work you have done. So let\'s look at it from that perspective.

    In a typical software market, the distributor (who sells it to stores) buys it direct from the manufacturer for around 50% of the retail price. When stores by direct bypassing a distributor, they usually get around 20-40% off, depending on the quantity ordered. I\'m assuming most sample developers will market their products directly to stores. (websites, retail outlets, etc.) We\'ll stick to the 50% figure which makes it easier to do the math, even though it decreases the resulting figures.(When developers sell it for less than 50% they make more money!) Keep in mind when you buy DIRECT from a sample developer you usually do not get a discount, resulting in 100% of the money going to the developer.

    Here\'s some figures:

    The first number () is the asking price of the library, which is usually what WE pay when ordering direct. The second number is the money the developer would get if sold to a dealer or distributor (50% off), which is what I have based these figures on. The goal being 1000 copies sold.

    (200.00)100.00 * 1000 = 100,000.00
    100,000.00 / 1200hr = 83.00 per hour

    (300.00)150.00 * 1000 = 150,000.00
    150,000.00 / 1200hr = 125.00 per hour

    (400.00)200.00 * 1000 = 200,000.00
    200,000.00 / 1200hr = 166.00 per hour

    (1000.00)500.00 * 1000 = 500,000.00
    500,000.00 / 1200hr = 416.00 per hour!!(String libraries anyone?)

    If you calculate this data based on solely selling to the end user, bypassing any discounts the values GREATLY increase. But that is not realistic every time. Plus there is expenses. (packaging, marketing, etc.) Plus, if a developer can crank out a library in less than 6 months time, his potential earnings will increase as well.

    So, I respectfully disagree with anyone who says there is no money to be made by making sample libraries. Your marketing techniques may be the reason you are not selling that many copies, your asking price may be WAY to high, your market niche is small, or too competitive with similar product.

    I think one BIG mistake Giga sample developers make is thinking they are going to get rich doing a giga exclusive library. The giga platform is TINY compared to akai and roland, and probably Halion will even have a greater installed base of users. If you spend 1200 hours on making a library, it just makes sense to produce it for other formats as well.

    The \"pirates\" are not even an issue, they are not going to buy it at any price.

    While I expect flames, let\'s try to keep it from getting personal.

  2. #2

    Re: Sample Development - Profitable? YES!

    Hey Munsie!

    Man, you could start a fight in an empty room :_)

  3. #3

    Re: Sample Development - Profitable? YES!

    No I won\'t comment this... this is the third time I erase a post to this topic... gotta control myself, god it is hard

  4. #4

    Re: Sample Development - Profitable? YES!

    Hi Scarbee,

    \"gotta control myself, god it is hard\"

    Why on earth would you erase your comments? If you disagree with my post that much I\'d like to know why?

  5. #5

    Re: Sample Development - Profitable? YES!

    The problem I believe is in your premises. Given the right figures you can make any amount of money on paper, but those figures may not reflect likely outcomes. I can\'t tell you what it ought to be, but I believe if you expect 1000 copies you may be horribly dissapointed. Distribution percentages I believe are higher, and up front costs can be vast and very important to consider if you\'re just looking at it financially.
    But I think it\'s a mistake to assume developers look at it this way to start. Probably more realistic is they have a good idea, and they love making and using samples. So then they try to make a go of the idea, so long as they think there\'s going to be enough money to support the costs.
    Anyway, so much as developers have discussed money at all, they\'ve said there\'s not a lot of money involved. For those that have, I don\'t doubt their integrity. It seems unlikely they\'re trying to mislead anyone.. though I do love a good conspiracy, sometimes things are what they seem.

    [This message has been edited by Jeff Hurchalla (edited 12-12-2001).]

  6. #6

    Re: Sample Development - Profitable? YES!

    Hi Z6!

    \"Man, you could start a fight in an empty room :_)\" That\'s funny...

    Not trying to pick a fight, but you can only \"blame\" the pirates for so much. And the thought of someone selling sample libraries in the 300-400.00 range and then comlaining about not making money, it just does not make sense!!

  7. #7

    Re: Sample Development - Profitable? YES!

    <BLOCKQUOTE><font size=\"1\" face=\"Verdana, Arial\">quote:</font><HR>Originally posted by Munsie:
    Hi Z6!

    Not trying to pick a fight, but you can only \"blame\" the pirates for so much. And the thought of someone selling sample libraries in the 300-400.00 range and then comlaining about not making money, it just does not make sense!!

    Well, they have a lot of overhead etc., as well. It\'s not the same as producing regular software (where you might be able to \'pre-sell\' it). They\'re running businesses in a very fickle sector.

    And the initial capital investment is pretty huge - just the quality mics alone cost as much as automobiles (well, MY automobile).

    Personally, I hope these guys get rich doing this, then they can make more libraries. I don\'t like some of the protection methods at all, but it\'s easy to see where they\'re coming from. The market is not yet huge (although the proliferation of \'pirates\' will help - regardless of how painful it \'feels\' in the meantime).

    I suspect that assuming 1,000 copies of say, GOS is maybe overdoing it. I hope he sells a million copies, but I think the high end is where the pirates will initially do most damage.

    Regardless of some the garbage that I talk, I do believe that some of these guys are producing something approximating art within a commercial environment and more power to them for that. It is a difficult way to make a living.

  8. #8

    Re: Sample Development - Profitable? YES!

    Well said Z6, I couldn\'t add anything.

  9. #9

    Re: Sample Development - Profitable? YES!

    Investment capital is HUGE on alot of these things.

    Not to mention some people are Locked into distribution deals that actually bite into the profit as well as the markup.

    The minute I see Gary Garitan in a limo with bottles of expensive alcohol and cigars, and versace sunglasses...I\'ll change my mind on this, but I know for a fact that alot of these developers have a LOOOOONG way to recoup the costs that go into these things.

    Another thing about the \"string library\" thing. Gary took over 2 years to do that library. Its been a long haul for him. AND HE\'S STILL GOING. So I dont like the thought of him being generalized into this thing.

    Most of these developers do the sampling thing as a side project to what they really do for a living, not all, but alot of guys. Or its the other way around and these guys are trying to make a living doing sampling, but have to get side gigs to pay the bills.

    Can one of you guys actually post a more realistic number of units sold? 1000 seems more than outrageously high, especially for niche products.

    If thats the norm, I\'m jumping in to the market

    Maybe I\'ll release an 8 CD set of fart sounds. Labeled by food eaten, with different velocity splits for dynamic level and intesity. I can add a scratch and sniff CD layout. how much do you guys think it\'ll be worth?

    Really...I am an Idiot

  10. #10

    Re: Sample Development - Profitable? YES!

    LOL! That\'s to funny King.

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