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Waves Discontinues Perpetual Licenses (UPDATE: They have gone Subscription Only)


Martin H.

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1 hour ago, dumbquestions said:

Side question, it seems like updating OS & software versions is really important to most people. So another question I have is, do those people’s (maybe even you as the reader) reasons for upgrading software or OS truly warrant losing their entire waves plugin library? Asking because I’m still on an old operating system, & don’t foresee myself updating anytime soon especially after this.

At this time, Mac users are probably the main group to be concerned with OS upgrade compatibility. That sounds like a biggie!

But as far as I know, there are no issues with running the existing Waves plugins on Windows 10 or 11. So if you are still using Windows 7 or 8 it shouldn't be a problem upgrading to one of the current Windows versions.

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12 hours ago, smallstonefan said:

Like it or not, subscription is the future.

It's not mine, for reasons already stated. Audio software is tools I use in a hobby, just like my woodworking tools. I wouldn't own a miter saw or circular saw under subscription, nor would I own a guitar under subscription, because I want them around as need arises and inspiration strikes. And yes, with the advent of maker spaces, it is now possible to have access to such tools under a subscription model. It's just not going to happen that I'd pay for a subscription to anything that I might not use for weeks or even months at a time, and/or given my current financial situation, I could lose access to if I don't pay the fee.

As it is now, if I have a rough month, all I need to do my #1 hobby is the headphones and interface I already own, including the computer, and the perpetual licenses I already own. Those things, plus whatever food and shelter, and my life could still be at least livable and my creative outlet would still be 100% doable.

12 hours ago, smallstonefan said:

I'm guessing I'm the only guy on this board that took a perpetual software company to a subscription model - this is a topic I'm absolutely a subject matter expert on. I'm also rather proud that we navigated those waters successfully without institutional investment (thought we did almost run out of cash).

Wow, cool! Great to have this perspective. I myself am a veteran of the consumer and business software industry, as well as IT. So I have industry experience on the manufacturing side and consuming side of both.

There are big differences in the markets for consumer and business software. For software that is in the critical path of a business' moneymaking operations, subscription/leasing is the way, and has been for a long time. From an accounting standpoint, it's better for companies to lease what they can, as well as, for publicly-traded ones, I think analysts like you better the less infrastructure you own.

12 hours ago, smallstonefan said:

With predictable revenue from subscription we were able to staff up and increase the pace of releases - creating a LOT of value for our clients.

This. Subscriptions have the potential to be better for the product itself. Way back, 30 years ago when I was working in consumer software, I had the sudden insight that the way the traditional (non-subscription) consumer software business was set up, it actually worked against software quality as measured by program stability and the addition of annoyance-relieving smaller features that the veteran userbase often prefer. I think there has since been at least one book written about this, but at the time, it just popped into my head.

The bad thing is that stability and smaller features are not what made money for these companies. What made money (in the form of attracting new and upgrade licenses) was new features. All coding costs money, and since coding for bug fixes and convenience features doesn't make any, they get shunted in priority. Build me the new features, then we'll revisit the longstanding bugs if there's time.

Back then, release cycles were timed to important trade shows, and product managers were given bonuses for delivering the next version of the product with the latest features in time to make the deadline. I was a QA engineer, and my job was to find things wrong with the software. So the better I did my job, the greater the chance that I would cost my boss her bonus money by slowing down the process. This is one of the reasons that I had to stop doing QA. It was killing my soul.

A subscription removes this disincentive mechanism. Revenue is ensured, so bugs can be addressed and features that the subscribers request can be added. The goal becomes retaining existing subscribers and attracting new ones, and bug fixes help retain subscribers. The howls of agony from the veteran users on their 3rd release with a well-known bug still present are more likely to go away.

That's if the company is smart. It it's not, then "hey, the cash rolls in whether we improve it or not, so send the coders home."

And, note to Cakewalk users: the license for Cakewalk by BandLab is a subscription. It says so in Wikipedia, so it must be true (I know, I wrote the CbB entry😂). Seriously, it is a subscription license that must be renewed at least every 6 months. The difference with Cakewalk is that BandLab is paying for our subscriptions.

Veteran Cakewalk/SONAR users can see the obvious benefits of being freed from having to grub for perpetual licenses: the program is as stable and smooth and fun to use and versatile as it's been since the X series came out, and maybe before. That's what it's like having your favorite program backed by subscription.

So I fully admit that it is (potentially) better for the product while still sure that I really, really don't want to buy a subscription for any audio software, for reasons already mentioned.

12 hours ago, smallstonefan said:

Something else everyone here misses is that most businesses are valued on a multiple of their EBITA (ie profit). Software companies are usually valued on a multiple of their recurring revenue. So, a traditional business doing $10 Million in revenue with $1M in profit might be worth 3x or 4x their profit - a valuation of a $3M-$4M. The same company that does software with that $10M being subscription revenue (what we call recurring revenue) is worth closer to $30M (a 3x on recurring).

Which would you choose if you ran a company?

The reality is that a CEO's #1 job is to increase shareholder value. PERIOD. If the shareholders of Waves are thinking about a company sale, then moving to subscription is absolutely the right course of action.

All software companies over time that want to have a big exit....

This, again. I won't go into my beliefs about how stock market analysis is the scourge and poison of capitalism, but yes, this is all true. And after that insight that I had about the disincentives for quality in software manufacturing, I had another one, and swore to myself that I would never again work at a publicly-traded company.

What you describe is the reason. When a company goes public, its focus changes from providing goods and/or services that they can sell for a profit to increasing shareholder value, which is entirely based on what a bunch of people in New York who know nothing about your business think your company is worth. Analysts don't care how many employees at what salaries are needed to make a quality product, they only look at how many you have and how much you pay them, and less is more in both cases.

This is why a company whose stock is flat will get a new CEO, who immediately, without checking to see what impact it will have on operations, orders 10% in layoffs and elimination of all contract employees across the board, in every department from product development to facilities management. After which the stock price blips up (and upper management cash in a bunch of options). The employees at the company who don't know any better look at each other and think "we already didn't have enough people to do the work, we also lost some of our smartest people. This company is going to go into the toilet. How can the stock price be going UP??" And the new CEO is a hero to his bosses, despite the fact that he (and yes, it's still most often a "he") may have doomed the company's long term survival.

Because the people pulling his strings don't care about quality product or long term viability or employee well-being or marketplace prestige or anything else but having that stock price go up. It's about "the big exit," (which happens when the stock gets attractive enough for another company to buy the place out and the early investors can cash out as multimillionaires).

In modern times, especially in high tech startups who want to benefit from younger employees donating labor (in the form of working more than the agreed 8 hours a day, 5 days a week), companies give employees stock options so that they in effect become "shareholders." So their focus also shifts from "selling quality product" to "doing whatever drives up the stock price." The actual product or service is at that point no longer "the product." "The product" is the stock price.

Cakewalk Inc. wasn't dissolved because SONAR and its other products were necessarily failures, it was dissolved because Gibson's stock price was in the toilet and they wanted a quick boost. Burn the division whose removal will result in the best effect on the stock price. Merry Xmas, stockholders.

Note about the publicly-traded thing: A company doesn't have to be publicly traded for this scenario to play out. If they just want to sell the place, the same analysis criteria go into deciding what private companies make good acquisitions. They're also used when private companies seek loans.

Explains a lot of unfathomable corporate decisions, don't it? 😂

In light of the above, it could be that Waves are just looking to sell and don't care about what happens to the company or its users after the first big quarter when the analysts put them on the "buy" lists and the owners' shares become worth a fortune. They might not give a hoot about its possible impact on the future sale of Waves' plug-ins. The new owners (or even the current ones) could decide that the real assets are the licensing partnerships with other manufacturers and sell the plug-in business.

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3 hours ago, Starship Krupa said:

From an accounting standpoint, it's better for companies to lease what they can

Not sure about this: there are pros and cons.  Pro is you can potentially scale up and down as business needs change (monthly/annual fees); downside is you can't capitalise which affects (Uk at least) how much tax you pay.  Where I've worked for >20 years now (3 CFOs in that time so not just one person's approach), the goal has *always* been to buy so it can be capitalised - every last little thing that can be capitalised is (even down to staff time on capital projects).  We're gritting our teeth with a new system being implemented over the next few years as it has to be cloud-based, and that investment can't be capitalised (as per HMRC rules).  The difference in tax liability is very significant.

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16 hours ago, smallstonefan said:

I'm guessing I'm the only guy on this board that took a perpetual software company to a subscription model - this is a topic I'm absolutely a subject matter expert on.

To reiterate a point others have made - Not all subscriptions are the same, "taking a perpetual software company to a subscription model" isn't a pattern that you can apply to some random software and expect similar outcomes. E.g., (1) The perception of leases/rental/subscriptions is different depending on your target market, e.g., consumers or businesses  (2) Subscriptions where when you stop paying you lose access to a significant amount of previous work you have created are fundamentally different from the opposite case of subscriptions.

Netflix, Hulu, Disney+, etc. - There is no creation, once you've watched whatever you want you can stop it and lose nothing you've done

Microsoft Office 365 - You create documents but, if you stop the subscription the documents can still be opened with quite a few compatible packages (and you would typically go through a transitional period to ensure there aren't critical compatibility bugs), and you can go back to a perpetual license Office if you prefer.

Yes, for the above cases there is inconvenience costs of stopping the subscription but it is not comparable to the potential disruption from stopping a waves subscription where, if you have a previous project/session and you want to make some changes even if it is in a plugin that is not waves, that won't be an option if you don't have an active Waves subscription

Adobe CC is probably a more similar example of what Waves is attempting BUT, they were discussing it for at least 6 years before it actually happened,

Waves made the change in one of the worst possible ways: "As of right now and without any warning we are turning back on our previous commitments" (which are still shown on the website, as posted earlier in this thread  but they couldn't care less), "you won't be able to renew your support contracts", "you will no longer be able to renew your rights to a 2nd license as you used to", "you will no longer be able to renew your rights to transfer licenses as you used to",  "if you install the newer version you will lose your right to use the older one", "your only options are to accept our conditions or informing us in writing that you're canceling your license" (but we're not saying that you're getting anything back).

I hope that there is a (class action?) lawsuit where a judge ends up telling Waves that they have to issue a refund, calculated at the latest advertised retail price, to anybody who informs them in writing of the desire to terminate their license agreements because of not agreeing to the new terms.

There are certain implicit expectations of what is "normal behavior" (e.g., providing sufficient notice before doing drastic changes like this) and, even if the contract is craftily worded and it's not a breach of contract, when a company breaks those expectations, customers will react quite negatively, e.g., warning every potential new customer that this is a company from which abnormal behavior can be expected. The ill will can also encourage the hacking/cracking of their licensing system (as a software developer I generally try to discourage people from pirating software but now, if I hear that someone is using pirated Waves software, I won't bother to say anything)

I've said in a previous post that people will forget if Waves turns around more or less quickly but, the longer they take the worse it can end. There is a certain deja-vu with how Windows 8 managed to alienate a really large percentage of users. Not long afterwards, Steven Sinofsky was no longer an employee of Microsoft, and Windows 8.1 came out, with the return of the Start button. (Sinofski was the president of the Windows Division at the time, and the highest ranking person who was actively responsible for the decision, against plenty of pushback and warnings that removing the Start button was a bad idea)

 

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34 minutes ago, Eusebio Rufian-Zilbermann said:

To reiterate a point others have made - Not all subscriptions are the same

100%

And the subscription isn't the real problem here.

I don't care if they want to offer a subscription that's fine - couldn't care less - I just won't subscribe.

The crux of the issue is what they have done to BIG spending and loyal users AND how they have done it - with zero warning - as sneakily and unpleasantly as possible.  They have potentially made that investment worthless.

If you need updates, for whatever reason, then you are basically FORCED to subscribe.  Then once you have subscribed there is no going back - it's a TRAP -  if you unsubscribe you lose access to the updated plugins so current/old projects won't load correctly.

They are saying 'you keep your existing licenses', great, but that's not what we (the customers) signed up for.  Bait and switch !

In my view there is zero excuse for this kind of immoral behaviour.  If they needed to do it or go out of business then they should have ceased trading.

EDIT

and if they are going bust, which is entirely possible, then you'd have to be very silly to subscribe, then start projects with plugins that will simply disappear without warning.

also they specifically say that those prices are for the FIRST year  - so even if they are around in 12 months who knows what you will need to pay !

Edited by simon
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I don't give a flying f**k about corporate bean-counter gymnastics. I want to own everything I have. Outright.

Apologies to any in present company, but I despise bean counters. They ruin everything they touch. Once they start running a company instead of people who know anything about the real world beyond numbers, that is the end. They play their games to artificially inflate the value of the company and damn the product, damn the customer service and most of all damn the customers.

I think corporate bean counters make lawyers and politicians look honorable.

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That criticism must have damaged them far more than they thought - and it was well deserved in my view.

They tried to stiff their users.  It leaves a very bitter taste in my mouth - I'll never trust them again.

 

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As I've stated on the other thread, I personally only use about  dozen of their products (all V13) and had thought about going down the WUP route. After the weekend, I've sourced almost all similar VSTs (some free) and will probably go with them. Once bitten, twice shy!

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Just got the email that Waves is bringing back perpetual licenses! Wow. 😲

Quote

Dear Waves community, 

 

 My name is Meir Shashoua, and I’m the CTO and Co-Founder of Waves Audio. 

 

 Over the past few days, many of you have expressed concerns about our decision to discontinue perpetual plugin licenses and our move to an exclusive plugin subscription model. I would like to start by apologizing for the frustration we have caused many of you, our loyal customers. We understand that our move was sudden and disruptive, and did not sufficiently take into consideration your needs, wishes, and preferences. We are genuinely sorry for the distress it has caused. 

 

 After respectfully listening to your concerns, I want to share with you that we are bringing back the perpetual plugin license model, side-by-side with the new subscriptions. You will again be able to get plugins as perpetual licenses, just as before. 

 

 In addition, those of you who already own perpetual licenses will once again be able to update your plugins and receive a second license via the Waves Update Plan—again, just as before. This option, too, will be available alongside and independently of the subscription program. 

 

 We are currently putting all our efforts into making perpetual licenses available to you again, as quickly as possible. In the meantime, you can keep up-to-date on this news page, where we will post the latest updates on perpetual license availability. 

 

 I would like you to know that we are committed to you, our users. We listened to your feedback, and we will continue to listen to you. Waves is a company filled with users and creators, just like you, and we are all as passionate about the products as you are. With this in mind, we will strive to find the way to make things right by you, and hopefully regain your trust. 

 

 Thank you for your feedback and continued support—I wish you all the best, 

 

 Meir Shashoua
CTO and Co-Founder, Waves Audio

 

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3 minutes ago, Spice3d said:

Just got the email that Waves is bringing back perpetual licenses! Wow. 😲

 

As I said in the udder thread: "Prolly CLA et.al. said "remove my name unless you bring back perpetual/WUP"."

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On 3/26/2023 at 3:08 PM, husker said:

Non concur. In my almost 30 years as an IT professional, I have yet to see one company move to exclusive subscriptions, then move back to offer perpetual licenses.

Never say never 😉

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