Price and value discussion

The Lounge
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Just a few thoughts on synth prices (partially rehashing stuff I’ve posted before). If you know about supply and demand curves, you can safely skip it all, I’m not going further than super basic stuff here.

First of all, it looks like many people can’t distinguish the price (how much you’re paying for something) from value (how useful it is to you). But the thing is, value is subjective. For example, I wouldn’t buy the OP-1 even for $200, because I’ve had one and found it vastly inferior to the OP-Z. However, lots of people keep buying it, so to them the value is more or less in line with the price.

When you feel that the price is too high compared to the value, it seems to be natural to say it’s overpriced. However, as value is subjective, what that really means is that it’s overpriced for you. Other than that, the only case when a synth is overpriced is when (almost) no one is buying it. No, the Moog One wasn’t overpriced, people were buying it, neither is the Play, neither is the OP-1 Field, neither was the Virus TI, neither is the opsix SE, neither is the M8.

There’s also a popular misconception about the price only reflecting labor, or at least being a function of production costs (plus shipping and handling costs, if they’re feeling generous). We’ve all seen the cringey “why does it cost so much, it’s just a Raspberry Pi with a keyboard” comments. The truth is, the costs only define the lowest boundary for the price, while there is no upper boundary at all. If you’ve made a great device based on a $30 board, go on and sell it for $600, if it’s worth it for the people, they will buy it (guess what, they do). If it sucks, no one will buy it even if you spend $1000 on each building it from the most expensive components ever. Because, again, costs don’t define the price. Even if they did, development and testing aren’t exactly instant or free, neither are big up-front investments like mold manufacturing or promotion.

This is also one of the numerous reasons why equating price to size is wrong. Small size can increase or decrease value for different people, some find portability important, some prefer less fiddly controls, everyone has different needs and preferences. Thinking about it before typing would make the “it’s too expensive for something that small” comments go extinct.

Another thing (and another hot topic), if the price of your synth drops, does it mean anything for its value as an instrument? No, of course it remains the same instrument as it was. It hurts the resale value, but that’s important from the investment point of view, and honestly if you’re considering synths as investments first and foremost, you should check out other investment options.

Of course, this is a very basic explanation, and I’ve missed a lot of obvious things and examples that you are welcome to add.

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Generally value seems to be the perception of what a product or service is worth to a person. I would like to mention those two “values”, taken from a textbook:

  • Intangible Value: It will be measured qualitatively like “beautyful”, “nice”, “tasty”, “prestige” etc.
  • Tangible Value: It can be quantified numerically as money, time saved, percent of improvement etc.

Now it depends on the person, which value drives his or her decision - both balanced or unbalanced.

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Humans think way too much about things.

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one thing sorta related maybe that really gets my goat is with portable music devices.

a lot of folk (and most companies) seem to view em as cheap devices. or that portable & cheap are mutually exclusive.

whereas imo there’s room in the world for both cheap ones and more expensive high end ones.

the world needs more high end portable devices. flagships like.

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this is very true :joy:

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Wonderful, isn’t it? :slight_smile:

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The intersection of creative artistic expression and money is indeed a distracting hopeless wasteland.
Yet it seems to account for about a fifth of the posted content here.

If you look at a synth and the first thing you think is resale dollar bills before what amazing sounds you could make with it, somethings gone awry.

Which makes me hypothesise at least a fifth of the great electronic music machines ever created are just sleeping in peoples attics and cupboards, unused, unheard and awaiting an eBay listing, dreaming of finding a user who’ll turn them on.

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Yeah “overpriced” is always a red flag for me when I see it in online discussions. It reminds me of that mid '10s extreme consumerist trend driven by a certain “cloner” manufacturer and their guerrilla marketing campaign of feeling entitled to More Stuff, taking it as a personal affront when something costs more than you can justify spending, and going from there to attacking the manufacturer for being “elitists”.

I tend to somehow read “overpriced” differently from “too expensive for me” or “too expensive for what it is”, it’s like treating the cost of something as a personal insult. Usually I’m expecting the classic '10s follow up, “I’m going to wait for *** to clone it”.

The OP1 is a classic example for me, probably I’d love one if it was maybe half or a quarter as expensive, but it doesn’t particularly bother me that it’s priced beyond what I could justify for what it is, clearly for other people the value proposition works out, so maybe it’s just Not For Me.

I think the broader synth internet is particular prone to tipping over into raw consumerism and More Stuff for the sake of More Stuff - from what I’ve seen this is just as much a feature as artistic expression or techniques or making music. Some spaces are more prone to this than others, of course.

So I guess that consumerist mindset can turn very quickly into a feeling of absolute entitlement to More Stuff and it seems like that becomes the only thing that matters to some people. It often seems like other considerations don’t even register, like quality, artistic usefulness, uniqueness, or the realities of smaller manufacturers trying stay afloat while doing something different.

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It comes down to perception of self and how much more creative you think the product will make you. Apple’s marketing is all about “Take your inner artist out and about” (iPad landing page). And it has been the same for this new wave of synths products.

It’s especially true because you don’t need them anymore, the same as you don’t need an analog watch. In the 70s if you didn’t have synths/boxes you could not make that type of sounds. Nowadays they are not required. Their value is not in the sound they make, it’s in the status you think they’ll bring you, and how you think you need them to perceive yourself as a musician. And to “NoT LoOk aT a ScReEn” because admittedly your day job consists of that, too.

I went down that road, more than once (Microbrute, Minilogue, Sub-37, Prophet REV2, Analog 4 MKII, Analog Rytm MKII, Digitakt (x2), 0-Coast, Boog, Mother-32 (x2), Edge, K2 (x2), Nord Drums 3p, Lemondrop, MS-20FS, MS-20M, …forgetting some) and I can now say with certainty that I’ve never been less creative than when I started accumulating gear to solve problems caused by the fact that gear has limitations in the first place.

Sure it wasn’t uninteresting: it made me learn synthesis in a way VSTs did not. It’s more tactile and immediate. I found my sound. But its value eroded quickly.

And today I cannot justify buying those things anymore. How is a box 1000€ when you know what you can do with a similar priced computer ? I know how : it’s a luxury item, same as a watch. Also, I’ve started to be more ecologically conscious and I can’t fathom how damaging producing those short-lived things are. Their net value is negative.

Easy to say after having indulged so much, won’t judge other people going down that path, but it’s not for me anymore.

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When I think something is overprice and I have interest in this device. It just mean that the pleasure over time I can get from this device might be less than this set of other device. If I have never used it, it’s just fairy tales. It’s fully subjective and I don’t judge it on manufacturing cost or R&D or whatever.

Today, with the consumerist culture, you can find great old gear which give you looooots of pleasure using them. My favorite one those last two week ( and I use it regularly for few month ) is an old novation keyboard that I bought last year for one hundred bucks. And it has more value to me this month than quite a few higher price synth that I own including some which are price over thousand bucks.

Gear price is real, measurable pleasure using it, is people dependent and subjective.

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I think you make some good points about cost, but it seems you’re using two different ways of measuring value here. On one hand, you say value can only be determined individuals – it’s subjective. On the other hand, you say that value can be measured by sales – an objective measure.

What does it mean when a large group of people come to a consensus on a subject, though? You might say that people have misconceptions or are wrong about the facts, but can you say that something is both subjective and that people are doing it wrong?

In terms of an objective measure, I’m not sure that sales can answer this directly either, unless we want to say that people never buy things they feel are overpriced.

I think that terms like this are harder to pin down than you might think.

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Absolutely - and for me it’s also because I switch it on after 10-20 years - and if treated well - the instrument is ready to go.

Can’t say this for a couple of VST, computers, OS, etc. I owned … H/W not replaceable, OS no longer supported, VST and app no longer updated, not running on new OS etc.

Got some pieces in my studio built in the 80ies. Reliable and available all the time … :smiley: … okay may sometimes need a repair - but possible - even after 40 years of life :wink:

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True … we can’t buy talent or creativity … but that doesn’t mean that buying wisely new gear to overcome significant limitations isn’t a good idea.

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If you made your tracks on Music Maker on a 1977 Atari computer, you can still find one today for around 150$, about 47 years later. Nobody urges you to update your OS, VSTs or computer, and if it’s air gaped it’s mostly safe to use without any updates. I’m running projects I made in FL Studio (then Fruityloops) 20 years ago without much hassle. If you made music on x86, the pool of replacement parts is almost limitless, and with virtualization even more. In the words of Jon Hopkins:

Just to start off, give us a basic rundown of the major units in your studio.
Jon Hopkins: Yeah, so Logic is the main system that I use, but I also have Parallels on my Macbook Pro to run my old PC. I’d been running the same PC for like 10 years.

What version?
Windows 98. [Parallels] is incredible because I can have the exact same PC that I’ve gotten so used to running in one window on my Mac. I wrote my last two records on the real thing, and now I’ve just compressed it into the Mac.

Which Windows programs are you using?
It’s just SoundForge. Maybe I’m just stubborn about learning new things—I can’t stand learning new programs—but any sound I can imagine, I can make with SoundForge. And I’m using the old version, like 4.5 from 1999. I use it for every sound.

On the other hand if your main tool is a Machinedrum, and it fails, your pool of available replacements dwindles with every year passing, and the price you’ll pay will be asked to replace it will grow exponentially. And you’re probably still dependent on a computer to backup it.

This may not be true for simpler synths or machines that are easily fixable, but most of the new stuff isn’t made to last (Elektron’s rubberized buttons or PCB-soldered Drive+, Sequentials’ pots that fail, everything now mounted on PCBs across the range: you buy a Prophet 10 it’s not more repairable than a REV2, which is barely more than any Behringer).

So I’d say it’s bullshit.

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That’s absolutely too much in a direction and wrong for me.
I mean, yeah you can virtualize thing.
Or you can find old part and make it work.
You can have tons of CDRom burn with the old OS to keep your machine up and running. And it cost you way much more in time energy and expertise than repairing an old synth… I mean soldering can be learn by a 15 years old, knowledge in computer over time it’s a 20 year expertise and experience…
I have fix an old Korg Delta by browsing two forum and a quick eBay run. Less than 4 hours of work.

Do you have try to use ASIO on a VM ?
Indeed you can play music recorded with an old VST in a VM but the latency is noticeable so it’s not realtime because no one has this use case. 0.5ms of latency and hours spent setting up the environment and forwarding usb.

And your 20 years old sound card… That you plan to use on your old box. Sometimes it will die, and go fetch and replace that with the driver not available… And when you know a 1K€ computer will do that and much more…
That’s falling in love with old computer for sure…

Yeah Jon Hopkins do that, for soundforge and probably Espen Kraft do that for his dusty Atari. But I’m not convinced there daw does run on windows 98 because it’s time waste and without the « it sound like a Juno 6 ». I mean it sound like an old computer.

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Got it. Nobody can say something is too expensive because some people are buying it, even if it is super cheap to produce, as long as people buy it, that’s what makes it cost the right price.

Thanks for the lecture, I guess, free market guy.

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From a technical point I agree absolutely … but this approach takes more than beeing a creative musician.

Once I watched a video about a successful producer (unfortunatly forgot the name) using computers for making music etc. They “freeze” the complete computer setup for having the option to go back in time if wanted. Works, definitely …

First thing I disliked in my computer-music career was the change of Logic beeing only available for Apple products after the company was bought by Apple. I started with Logic ages ago, loved it, but since I work with PC for different reasons that great product was gone for me.

Second … I loved this Alchemy synth … Apple bought the company and it was not updated for my platform, at least …

This is not to complain about the situation or a company - just a part of my experience … but when I switch on my Korg MS-20 bought in the 80ies, or my Roland D-50, both are quite vintage, they are instantly availabe :slight_smile:

That I like to touch a knob and don’t like to fiddle around with a mouse on a screen adds to my preference to have hardware. At the end - there is no right nor wrong - it’s about preference.

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I think that retail price is totally defined by cost but the problem is that there are other significant yet invisible components in the retail price that blur the underlying tangible value:

  • the retail margin, which makes up to 40% of the retail price excluding sales tax or VAT. While the manufacturer does not have to pay for this, this margin drives up the price for the consumer and makes the manufacturer’s product less competitive. The bigger the manufacturer, the more clout they have in negotiating distribution terms in their favour. Some manufacturers such as Yamaha even severely restrict the list of distributors.

  • sales taxes / VAT. Again, this is borne by the end customer, unless they are prosumers subject to VAT, who can deduct the said tax.

These two components alone can easily represent roughly up 60% of the retail price.

You can then expect a third to a half of the remaining share (40% in this example) to be the manufacturer’s margin. This suggests that the costs would represent roughly 20%-27% of the retail price. The costs include 100% of the direct costs (eg materials, consumables, payroll of manufacturing staff, subcontractors, transport, etc) as well as a fraction (!) of the indirect costs (eg admin, marketing, R&D, interest expenses, depreciation of tangible assets, etc.).

To wrap it up, the manufacturer’s margin can be expected to represent 13%-20% of the retail price. This is before income tax (deduct another fifth up to a third of that margin, eg 2%-6% of retail price) and knowing that a certain quantity of product needs to be sold to break even with the indirect costs. If everything goes well, a manufacturer can hope for a 0%-10% net profit margin on the product.

If one (completely or partly) removes the distributor from the equation, then maybe the manufacturer could afford the luxury to use cost as a lower boundary to define the retail price in order to break even faster.

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We are a strange moment historically for prices across many asset classes from music gear to real estate. I feel like many people are still anchored in the scarcity mindset of the early pandemic years and significant distortions remain, but will eventually correct.

In music gear, I am regularly befuddled when I see something like a SP 404 SX priced at the same level or even higher than an MK2…or people trying to sell their MPC 2000s for more than $1000.

I think with the launch of Ableton Move and the Elektron Digi II models we are on the cusp of a major consolidation in the market and a lot of “vintage” resellers and tier-2 gear manufacturers are going to struggle to remain viable. I think people today measure value in part by connectivity and the ecosystem, and Ableton now has a full ecosystem that can appeal to every aspect of the market, and Elektron has something similar going with their machines + Overbridge. Roland is obviously also trying to head in this direction with Roland cloud…

Of course there will always be the Dawless and modular crews and those that value vintage gear, but I think it will become an increasingly smaller niche, with less companies being able to support it with viability.

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People often engage in conspiratorial thinking when they take a complex scenario outside of their interest in developing better models of why digital goods are priced the way they are when they’re “just an arduino” or whatever rationale.

Price discussions from the aggrieved aren’t about art, they aren’t about using tools, it’s an odd performative dance and not really about having a community of people using elektron devices over reinforcing some crab bucket mentality of sin and redemption.

And worst of all, it’s rarely interesting :wink:

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