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Dirk Ulrich leaves NI.

Akoustecx

Akoustecx

Electro Acoustic Excursions.
Francisco Partners involvement was never going to end well, particularly as they seemed to think the lockdown related explosion in sales was a trend, rather than a temporary consequence of it.
Given the cracks were beginning to show before FP got involved, this probably counts as something a little more seismic, and possibly an indicator of tectonic subduction to come.

Dirk Ulrich has left Native Instruments

Dirk Ulrich, founder and face of Brainworx and Plugin Alliance, has left the Native Instruments group and no longer has an active role.
synthanatomy.com synthanatomy.com
Click to read more...
 
Anyone who thought Dirk would fit into a role that wasn’t top dog has a screw loose. It’s interesting how he characterises the situation as being sidelined into an advisory board role because I don’t think that was how it was portrayed at the start - I had thought he was running something within the group or maybe that was how it started and they then elbowed him aside when it turned out he wouldn’t be a good fit with the other managers. I don’t doubt the conditions are challenging and FP* will wind up taking a loss on the whole deal but there’s a lot being read into this move when it probably comes down to Dirk’s people skills, which are, shall we say, best suited to an operation with fewer people.

* EDIT: Actually, probably not FP taking a loss but the banks and anyone else who bankrolled the purchase. Private equity often engineers a good outcome for itself at the expense of the funders through "management fees" and such.
 
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doctoremmet said:
Bit of a sensationalist take on the developments, the author definitely loves to declare “sinking ships”. But Ulrich’s departure is not a positive sign either way, albeit maybe not entirely unexpected. Thanks for sharing.
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Given that he's still the majority private shareholder, I'm hoping that Dirk finding it hard to be an advisor, rather than driving force, within the company is the main reason for this. If he suddenly sells all his shares as well, that would definitely suggest to me that he considers it a lost cause.
 
FWIW, I did my part to help Dirk and PA have their covid run and bought a lot of stuff from them during that time. But, it had nothing to do with covid and everything to do with quality/pricing. I strongly suspected his pricing model was designed to ramp up sales numbers and place a big target on his back for a buy out. So I picked up everything I wanted for relatively cheap, and then sure enough he got bought out. He's a very smart guy imo, and the bozos now in charge at NI are making yet another epic blunder in parting with him, imo. I doubt NI sinks, but the easy money has been made and the plugin market is now largely commoditized imo.
 
nortiks said:
So I picked up everything I wanted for relatively cheap
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If you are like me, you probably also picked what you didn't know you wanted. With higher prices, you would have bought a few items. At those price, you ended up purchasing a lot of things, probably spending more than you expected.

For me, it was a win-win situation. They got my money, but I got a lot of things that I might not have purchased, but ended up being very useful.

Paolo
 
For real if this ship goes down. I wonder if we can make sure the development of stuff like Kontakt ends up in good, non-cash-hungry hands.

Had enough of these fucking money people now. They may understand business but are fucking useless at understanding product or target audiences. They are also carving up the games industry as we speak, firing thousands of people thinking that the creative staff in a creative field are simply interchangeable like data entry and hiring someone else will yield identical results. Its as if many dont realize that the products themselves are not what you are buying, you are also buying the creative talent behind making it. Thats why you can have video game devs from yesteryear make award winning games followed up by utter shit once the business people have replaced all the talent for cheaper alternatives.

And CEO's and Owners, lads, if you care about the industry in any way you need to stop selling your companies to money people. They don't seem to get it. They will gut whats good until its not the same thing anymore, and for cornerstone companies like NI this will destabilize the industry for most.

Composing tools isn't really an exponentially growing industry, we have been stuck without major tech innovation for a while now, and the companies with money are seemingly spending their cash and time moreso on repackaging/sales/marketing. Knowing this, it baffles me that money people are still trying to get into this niche market and make these essentially limited companies grow as though there is a bigger untapped market to grow into, but that just isnt the case (as we are seeing post covid sale bubble bursting)

Its like with the Spitfire Audio financial documents being released the other day, showing that their sales have dropped off a cliff by almost half while also reducing their overheads in the space of one business year. It also shows they operate with a 6 million dollar overhead on staff wages alone....we have devs like performance samples which are outdoing Spitfire in various ways and is operated by just one guy, so we can see employee amount cannot be directly related to product quality, so outside of making samples....AT a sample library creation company, that seems like an extreme amount you HAVE to make each year just to pay staff, thats a tough ask in 2024 for even more orchestral samples, after years of incessant and aggressive marketing schemes It feels like the barrel is empty and the scraping has begun. Thats not to say that all growth is bad, but as Spitfire are seemingly going through right now, this is a niche market with finite resources. Once everyone has a string library, your next one wont do as well etc etc...Spitfire has over 30 libs with String libraries at this point, they are eating themselves alive.

It this kind of greed for market share that I think will ultimately lead to the either demise or downsizing of all these companies that thought they would grow like an s&p500 and overstretched themselves because they were listening to business people. I was bringing this up like 5 years ago and was hounded out to the point of being banned when I would argue these points too much. Like the people with all the money giving out so much free content because they could, then wipe out a lot of the newer upcoming devs because they couldnt compete with free.

So now we have all of these companies who grew too big, but in the process of growing big, gave out so much stuff for free that they disrupted the low end 'just getting started out' market for new developers to cut their teeth, successfully removed competition....then fucking folds under its own weight... fucking both themselves and the industry through greed. With NI starting to do the same shit, I genuinly think its time to start building the future as if they are already dead. If they can change their way then great, but I think we can all see the writing on the wall here. Somethings got to give.

-DJ
 
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ptram said:
For me, it was a win-win situation. They got my money, but I got a lot of things that I might not have purchased, but ended up being very useful.
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*dis

Couldn't care about Dirk he got money since the UAD era, making them native afterwards (thanks to Victor Nembrioni on the amps) then selling out to NI like a wasted puppy mill mom. He looks chubby and happy, good for him. Doing the Elon Cuck sour puss sinking ship remark was extra.

But remember we all started calling PA "the new Waves" so maybe let's try to recall how annoying they became the last years before selling and keep that hate into your heart along with saving lots of money.

I still have two Komplete coupons for Any PA plugin for $29. And nope, not needed, most got free with Komplete otherwise on sales.

Now let's open that BX AMPEG VTX and get a magnifying glass because they didn't even care to have an upscaled GUI to those first plugins milked to the bone in their beginnings.
 
Weird, since contrary to article's sentiment, NI software becoming more and more central piece of my 15-year composing career by the time.

I really liked what they did with NKS, Kontakt, Komplete Kontrol and Reaktor lately, and thought other people were pleased as well.
 
Akoustecx said:
Francisco Partners involvement was never going to end well, particularly as they seemed to think the lockdown related explosion in sales was a trend, rather than a temporary consequence of it.
Given the cracks were beginning to show before FP got involved, this probably counts as something a little more seismic, and possibly an indicator of tectonic subduction to come.

Dirk Ulrich has left Native Instruments

Dirk Ulrich, founder and face of Brainworx and Plugin Alliance, has left the Native Instruments group and no longer has an active role.
synthanatomy.com synthanatomy.com
Click to expand...
Meh. A bit of a sensationalist article, if you ask me. By his reasoning re: NI, you'd think that ALL plugin and sample developers are on a sinking ship. But I don't think that's true in NI's case or anyone else's. If I had a dollar for every time someone was sure someone else would fail—and that ultimately didn't happen—I'd be a billionaire.
 
Akoustecx said:
Given that he's still the majority private shareholder
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You mean in NI?

Daniel James said:
I wonder if we can make sure the development of stuff like Kontakt ends up in good, non-cash-hungry hands.
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NI seems too big to die. Worst case scenario, they reduce the staff to a minimum just to keep their products on life support.

They probably have a huge war chest after all the recent acquisitions etc.
 
Pier said:
NI seems too big to die. Worst case scenario, they reduce the staff to a minimum just to keep their products on life support
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If I had a dollar for everytime I have seen someone say that before a company went under, i'd probably have enough to save NI from this shit.

And I imagine after buying all these companies they would have less of a war chest but more assets right? And its not NI buying stuff it's the hedgefund that now owns NI. They changed the name at one point but no one knew it, so they changed the company name back to Native Instruments for name recognition. These are no longer the same things as they were. Ours tools are just products to profit from in their eyes. Thats why you need to start looking at devs (again like Performance Samples) who are overtly composer focused. This is the future for us. Its not as big, its not as flashy. But its what will be best for us as composers to do our best work. We don't need a 2 second car on diamond rims, we need a workhorse van. You can deliver in both, but one is built to do the job, the other will look cool but do a shitter job. Shit analogy but I think you get me.

Nothing is too big to fail. Nothing.

-DJ
 
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Pier said:
They probably have a huge war chest after all the recent acquisitions etc.
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actually if you look at what happened the 3 companies were all purchased within the same time period by the same VC firm a few months later izoptop and PA were put under NI they were not purchased by NI
 
Nothing is too big to fail - correct. However, the “article” is mainly just a whole lot of speculative at best and frankly plain negative ‘reporting’, merely based on Ulrich’s announcement of his departure.

I do agree with Daniel’s assessment that the Soundwide spreadsheet managers likely over-enthusiastically prepped their little Excel files full of perpetually growing subscription based recurring revenue streams - as they do - so the investor is bound to be disappointed - as this industry is not one to grow indefinitely.

That said, one guy departing a company that maybe is underperforming according to some spreadsheet made in 2021, is not a huge sign that NI is about to fold. The news “article” that seems to trigger all these doomsday thoughts isn’t that informative, except for rather baseless announcements of ships sinking.

They may sink as we speak. But this linked online news item does not contain any actual facts that indicate they are.
 
ennbr said:
izoptop and PA were put under NI they were not purchased by NI
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Precisely. The VCs invested the money, not NI.

NI has more than 100M Euros in assets. Source.

Daniel James said:
Nothing is too big to fail. Nothing.
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Yeah nothing is too big to fail. On a long enough timeline all companies die yada yada.

Look I 100% agree that NI product decisions have been terrible... you can just search my posts to see my complaints over the years.

But NI is not a sinking ship. And it's much more likely they will reverse course than let the company die. I'd be surprised if this wasn't already happening but big ships move slowly.

Edit:

For reference, there's a 130 page long thread (and growing) at KVR with users complaining about NI. These kinds of things don't go unnnoticed:

www.kvraudio.com

KVR Forum: Sad state of Native Instruments - Instruments Forum

KVR Audio Forum - Sad state of Native Instruments - Instruments Forum
www.kvraudio.com www.kvraudio.com
 
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Even if the doomsday scenario is real, there's no way that NI goes under. It might get sold, maybe even at a loss with the investors losing their shirts, and maybe the company even gets divided into pieces, but NI has too much in evergreen assets for it to simply die.

It's not like a car company, where there's physical product with manufacturing costs and tight margins. If profit per car is too low, a business might not make financial sense anymore, and it literally closes its doors, and the "value" of the company is only in the land it owns.

Software, though, especially in the case of NI with the immense catalog it owns, is totally different. Even if the valuation of the company goes down by half or whatever, they can continue selling Kontakt (along with the NI-owned libraries) at a cost of pennies per copy. Even if it cost a million a year to maintain Kontakt, they'd still make a tidy profit, so ain't nobody pullin' the plug on that.

Even if the company gets devalued to the point where the investors want to abandon ship, they'd want to recoup something, so they'd sell off iZotope and the Kontakt portions to the highest bidders for however many million each would be worth.

So there's zero chance NI goes under. and Kontakt being abandoned. Zero!

Oh wait ... I come from the days of watching Gibson buy Studio Vision and do the opposite of what I just described. So ... yeah, maybe I shouldn't be quite so confident. :grin:
 
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