Tuesday, June 21, 2011

Final Cut Pro X: The war is on

Earlier today, Apple made Final Cut Pro X available in the OSX App Store for $299.99 (U.S.). Since NAB, there have been many questions about how Apple would make the other applications in the previous Final Cut Studio suite available, and the company answered the questions today: Motion is available as a separate application, for $49.99, as is Compressor, for the same $49.99. Final Cut Pro X includes much of the functionality from Soundtrack Pro, Color and DVD Studio Pro, so I assume that those applications have been discontinued.

Yesterday, I noticed a number of posts on Twitter, saying that Adobe is looking for bloggers to become Premiere Pro "ambassadors". The reason is clear: Adobe has got to be very scared by Apple's new pricing. A full copy of Creative Suite 5.5 Production Premium costs $1.699. If you just want Premiere Pro, that's $799; After Effects is $999, and Audition is $349. In other words, it's cheaper to buy the Production Premium suite. I would say that Adobe has to lower its prices dramatically to compete with Apple, but that goes against Adobe's corporate philosophy, which is to continually raise, not lower, prices.

Avid is also feeling pain; the company launched a preemptive strike against Apple by making Media Composer available to Final Cut Pro users for $995 right before NAB, only to learn that Apple planned to sell Final Cut Pro X for $300 a few days later. Again, I don't expect Avid to drop its prices to compete with Apple; the company remains in somewhat fragile condition, and a price war is the last thing it needs.

One question is, why did Apple drop its prices so precipitously? It didn't really need to in order to satisfy the needs of the professional audience, which has been conditioned to expect pro video editing packages to be priced at $1,000 or more. I think that there are a few possible reasons:
  • Final Cut Pro X is dramatically different from previous versions of the software, and Apple may have wanted to lessen resistance to buying the new version. At $300 (or $400 for the equivalent of the previous Final Cut Studio), it's almost an impulse buy.
  • By making Final Cut Pro X available at a low price and selling it only in the OSX App Store, Apple may be conditioning its customers to buy all their software, not just inexpensive software, online. (It may also be part of the process of getting customers ready for Macs without any optical drives.)
  • Apple and Adobe aren't friends, or even "frenemies". They're enemies. Apple is already driving a stake into Flash, and any sales that Apple takes away from Premiere Pro and After Effects will show up in Adobe's bottom line. In this battle, Avid may turn out to be an unintended casualty.
This is most likely not the end of Apple's pricing moves. There's still Logic Studio, sold as boxed software and priced at $499. I wouldn't be at all surprised to see a new version of Logic Studio, priced at perhaps $199 or $299, released in the OSX App Store later this year.

Apple's pricing for Final Cut Pro X opens up a new front in its war against Adobe (and to a lesser extent, Avid). Apple's competitors absolutely don't want to respond, but they may have no choice.
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Christian said...

It's not factual to state that Adobe's policy is to raise prices. All you have to do is look at the combined cost of Photoshop, After Effects, Premiere Pro, Encore, Illustrator and Flash as they were priced 6 or 7 years ago before the Creative Suites were created.

Even a look at the costs for the past few years reveals the price trending downward. You can upgrade from CS4 to CS5 for $600 (or $500 if you're a price shopper). It was previously $700 for CS3 to CS4, and $800 for CS2 to CS3. So prices trend downward by about $100 for each new upgrade.

And even though the price on the suites as FULL (non-upgrade) versions have remained fixed, they certainly have not increased - as you claimed.

On the matter of total cost, it should be noted that for $1,600 (non-upgrade) on CS5, you get DVD and Blu-ray authoring, a powerful motion graphics program called After Effects, the industry-standard Photoshop image editor and all the other goodies you may or may not need. You'd be hard pressed to convince me that Photoshop, at least, isn't required. And if purchased with FCPX, your total cost is now $1,000 or more.

If you produce DVD or Blu-ray videos with actual menus and navigation, then you'll need to buy another app for that as well.

Long story short, the $300 pricing is a red herring. Apple isn't lowering prices because they want to be nice. They have shareholders, after all. They're lowering them to get people to buy in larger numbers and sell more Macs. If you buy into Adobe, you can edit on a much more reasonably priced PC (if you want) but if nothing else, the Adobe suite gives you everything you need, all together, for a reasonable price for any professional.

FCPX will be successful, I assume, but it will be due more to an appeal to enthusiast or hobbyist users that aren't getting quite enough out of iMovie, but don't need Photoshop or disc authoring or motion graphics. For a professional editor, the math doesn't work out the same way.

Unknown said...

I didn't use the upgrade pricing because I wanted to make an apples-to-apples (no pun intended) comparison. Yes, if you already own a recent version of Creative Suite, you can get decent upgrade pricing. However, Apple's price is list price for any purchaser, not an upgrade price.

For that matter, I'm not sure that you read my post. Yes, I know what After Effects is. I specifically mentioned it in my post. The new version of Motion, which I discussed, is far more powerful than previous versions, and much more capable of taking on After Effects, for $50. In addition, FCPX includes DVD authoring, which I mentioned.

My perception is that Adobe has raised its suite prices from CS3 to CS4, CS5 and CS5.5. What I find particularly silly is that Adobe is charging existing customers for a point upgrade, CS5.5. They should have made it a free upgrade for users of CS5. That, to me, is a price increase.

I don't disagree that Photoshop is a worthwhile tool, but new users would be better-served by buying one of the less-expensive suites that includes it, and then buying FCPX, Motion and Compressor for $400.

You're spinning FCPX as a prosumer tool, but as I wrote in my follow-up post, the limitations of FCPX will be addressed fairly quickly.