is Propellerhead dying?

[TheMiles]

Have you seen the poll on wich version of reason is used the most ? 8.3 seems to be adopted widely... Also RE's are selling very well and AFAIK the props get 20 or 30 percent from each sale. I am sure the pops are drowning in money right now. I have feeling the next update on Reason will be a big one!

I certainly hope time does NOT prove me wrong!

[EnochLight]

But as you can see for yourselves, propellerhead had a NET PROFIT of 10.5 million SEK in 2013 and 6.1 million SEK in 2014.

NEWSFLASH! They are doing just fine!

Not to play devil's advocate, but if the conversion pictured below is accurate, then I'm having a hard time understanding how a $720,750 USD net profit for a company of 40+ employees is doing just fine?

[EnochLight]

Have you seen the poll on wich version of reason is used the most ? 8.3 seems to be adopted widely...

Actually, that poll seems to indicate that over 40% of the users who answered on are an earlier version of Reason (7.1.2 or earlier). Granted, only 66 people have answered as of this morning, so the sample size is certainly not representative of their entire customer base.

[eXode]

But as you can see for yourselves, propellerhead had a NET PROFIT of 10.5 million SEK in 2013 and 6.1 million SEK in 2014.

NEWSFLASH! They are doing just fine!

Not to play devil's advocate, but if the conversion pictured below is accurate, then I'm having a hard time understanding how a $720,750 USD net profit for a company of 40+ employees is doing just fine?

Do you understand the meaning of net profit here? If you do, how much net profit do they need to be doing OK in your opinion?

[joeyluck]

Enochlight, net profit is after they have paid themselves and all expenses.

[EnochLight]

But as you can see for yourselves, propellerhead had a NET PROFIT of 10.5 million SEK in 2013 and 6.1 million SEK in 2014.

NEWSFLASH! They are doing just fine!

Not to play devil's advocate, but if the conversion pictured below is accurate, then I'm having a hard time understanding how a $720,750 USD net profit for a company of 40+ employees is doing just fine?

Do you understand the meaning of net profit here? If you do, how much net profit do they need to be doing OK in your opinion?

Enochlight, net profit is after they have paid themselves and all expenses.

Hi guys,

Yes - I very well know what net profit means. That said, please understand, what I am not familiar with is what metric that Swedish companies consider net profit to be healthy when measured against their revenue. For 2014 in this example, they have a gross revenue (net sales) of 80,209,000 SEK (which is a little over $9.4 million USD). To walk away with just $720,750 USD net profit?!!! That's a net profit of a little over 7.6% of their gross revenue.

When you have companies like Ableton doing (say for instance, in 2013) a gross revenue/net sales of $12,991,628 USD with a net profit of $2,259,486 USD... that's about 17.4% of their gross revenue. This is for a company that does not have their own proprietary plugin format/store as the only form of 3rd party plugins available to their flagship product and with an average employee count of quite a bit more. And yes, I realize Ableton is a much larger company with more products, but it's not the amount of revenue/net revenue; it's the percentage of profit.

So I ask again: is a 7.6% profit margin healthy for a company of this size?

[Namahs Amrak]

Hokey backyard business does good. Alaso, they're not competing against Coca Cola.

Props to Ernie for riding the wave.

[joeyluck]

Have you seen the poll on wich version of reason is used the most ? 8.3 seems to be adopted widely...

Actually, that poll seems to indicate that over 40% of the users who answered on are an earlier version of Reason (7.1.2 or earlier). Granted, only 66 people have answered as of this morning, so the sample size is certainly not representative of their entire customer base.

You're right that it is still a small sample size...

But it does show that 60% or so of users are on the latest version. That's a majority.
I would argue that this is close to the norm for most any DAW (also accounting for the following).

Keep in mind that the majority of ReasonTalk are users who migrated here via the PUF—so they are pre-existing customers (upgraders).
So, much of what you see are likely upgrades and not accounting as much for new customers. We do have new customers here though!
But for those most part, it's much of us same ol' users who are the most active here and in the polls.

For the next poll, instead of all the point version options, I would create a poll that would have options for things like
'Reason 8 full - new customer' 'Reason 8 upgrade' so that could help answer some of that

[EnochLight]

I will say this: at least in the U.S., a net profit margin of 7.6% is considered pretty horrible for a software company. Small business or large, that would be considered incredibly low. That said, I have no idea what Props net profit margin has been in the past. Perhaps 7.6% is normal for them, and they're quite content? Who knows...

[Namahs Amrak]

[EnochLight]

For the next poll, instead of all the point version options, I would create a poll that would have options for things like
'Reason 8 full - new customer' 'Reason 8 upgrade' so that could help answer some of that

That's a good idea. Will wait for the other poll to run its course though.

[Namahs Amrak]

[jfrichards]

...That's a net profit of a little over 7.6% of their gross revenue.

When you have companies like Ableton doing (say for instance, in 2013) a gross revenue/net sales of $12,991,628 USD with a net profit of $2,259,486 USD... that's about 17.4% of their gross revenue. This is for a company that does not have their own proprietary plugin format/store as the only form of 3rd party plugins available to their flagship product and with an average employee count of quite a bit more. And yes, I realize Ableton is a much larger company with more products, but it's not the amount of revenue/net revenue; it's the percentage of profit.

So I ask again: is a 7.6% profit margin healthy for a company of this size?

Dylan, you have to be much more careful with financials. It looks like Ableton has a revenue of 13 million having 125 employees, while Props have a revenue of 10 million with 40 employees. It's therefore easy to say Props is way more healthy than Ableton, but there are so many factors that need to be added in. Revenue and profit numbers by themselves are misleading. Having high profit margins can be done for stockholders while investing in future projects is neglected. High profit margins with underpaid employees often leads to instability. Etc.

[Ostermilk]

But as you can see for yourselves, propellerhead had a NET PROFIT of 10.5 million SEK in 2013 and 6.1 million SEK in 2014.

NEWSFLASH! They are doing just fine!

Not to play devil's advocate, but if the conversion pictured below is accurate, then I'm having a hard time understanding how a $720,750 USD net profit for a company of 40+ employees is doing just fine?

Speculation is usually a waste of time when it's done by actuarian and experts, it's even funnier when it's carried out by lay people.

If Propellerhead was a public company I'd far rather be investing in it than someone like say Roland. Being able to show a net profit at all is an amazing thing, but then again you are not party to any strategy that company may for re-investment for future growth, without knowing any intentions of the business the figures don't provide any enlightenment toward anything other than how much tax they are due to their national government at the end of that financial year.

What was fantastic was the small amount of time they we're in the red after making the move to Rack Extensions and software as a service generally which must have represented a significant amount of financial planning any investment before any return having figures in the black such a short time after such a huge change in direction is nothing short of phenomenal and is certainly bucking the trend of most music content creation vendors around.

If this represents a company on its way down in any shape or form then I need to be investing in this kind of 'failure'.

[EnochLight]

What was fantastic was the small amount of time they we're in the red after making the move to Rack Extensions and software as a service generally which must have represented a significant amount of financial planning

Agreed. It seems like the only (recent) year where any sort of red was ever shown was during the RE SDK development/roll out as well as Balance. While I was disappointed that they abandoned their hardware experiment, I'm glad they did so if it means keeping them viable.

[EnochLight]

...
So I ask again: is a 7.6% profit margin healthy for a company of this size?

Dylan, you have to be much more careful with financials. It looks like Ableton has a revenue of 13 million having 125 employees, while Props have a revenue of 10 million with 40 employees. It's therefore easy to say Props is way more healthy than Ableton, but there are so many factors that need to be added in. Revenue and profit numbers by themselves are misleading. Having high profit margins can be done for stockholders while investing in future projects is neglected. High profit margins with underpaid employees often leads to instability. Etc.

Thanks John. Yes, it's a good point that companies such as Ableton have almost 3x the employees as Propellerhead. Hence, a 7.6% net profit margin with 40 employees versus a 17.4% net profit margin with 125 employees is something to take into consideration. If you were to break this down per-capita using net profit (cash) / number of employees, then the cash amount is almost the same between these two examples.

Speculation is fun!

[Namahs Amrak]

This thread's never going to be 'Accountant's Corner', that's fer shoh...

[satyr32]

I am really looking forward to the 2015 data. It might be that this will be their best year taking in consideration the number of REs I purchased

[EnochLight]

I am really looking forward to the 2015 data. It might be that this will be their best year taking in consideration the number of REs I purchased

Hah! Ain't that the truth. I know I contributed to their bottom line, that's for sure. Anyway, if 2014 is anything to go by, I'm willing to wager that 2015 will look even better.

[davidhyno]

https://hire.jobvite.com/Jobvite/Job.as ... j=oCcE1fwd

shhhh...they can hear us!!!!

[jfrichards]

Wow.

From the above link:


See Other Jobs | Company Info

You can help!
Propellerhead is a world leader in music making tools. To serve the world even better, we need more great people working for us. Please apply or forward a Jobvite to someone you think could help us change the music making world.

Business Analyst Propellerhead

Propellerhead AB
Stockholm, Sweden
Full-Time




We at Propellerhead recently introduced the world’s first social network for music makers—a service that makes it easy for everyone regardless of ambition, skill or platform to create music and connect with other makers eager to share, explore, and collaborate. As we venture into this unexplored realm, we are looking for someone to methodically gather and harness insights to guide us building out a truly great service for this worldwide creative community. If you have strong business chops, an immense curiosity for finding answers through data & research and a passion for music and social networks, this might be the perfect job for you.

Responsibilities
• Evangelize the use of data throughout the organization
• Convert business questions into actionable insights
• Collaborate with Product Managers and Engineering to build, measure and learn
• Design and analyze experiments, surveys, and other research
• Create, structure, hone and maintain the key performance metrics that guide our decision-­‐making and development
• Own the data chain

Must have
• A wide range of skills that can go inquisitive to technical—from asking the right questions to figuring out how to get the answers through analytics, experiments, testing and other methods
• A willingness to get your finger nails dirty and implement, be a self starter
• A comfort working with multiple stakeholders, unclear questions and disparate/incomplete data to provide lucidity and recommend clear actions
• Good communications skills—writing, reporting and speaking
• Experience in data analytics, ideally in consumer oriented apps and/or internet service
• Knowledge of SQL
• Familiarity with key analytic tools and services like Excel, Tableau, Flurry, Google Analytics, KISSmetrics, etc. Bonus if you can code!

The position is located in Propellerhead Software’s headquarters in Stockholm, Sweden.

Are you up for the challenge? To apply, send your application to ansokan@harveynash.se. For further information regarding this role, please contact recruitment consultant Christian Bergius at christian.bergius@harveynash.se or 0730-48 13 48.

Based in Stockholm, Sweden, Propellerhead creates world-class software products and services that inspire music makers and provide the foundation for a worldwide creative musical community.
www.propellerheads.se

Apply now

[jappe]

https://hire.jobvite.com/Jobvite/Job.as ... j=oCcE1fwd

shhhh...they can hear us!!!!

Another member to the Discover team too I guess
http://www.titanit.se/lediga-jobb/8955- ... developer/

[Yonatan]

Well, dead or not. They have a killer competition. Look at Logic X 10.2.
You get a mega powerful synth called Alchemy, an integration with Gobbler (cloud-service where you can save, upload and share to collaborate with other producers etc), and on top of the cake; the ability to distribute ones songs directly from Logic to Apple Music!
And all that is for free to all Logic X 10.-users. And it has video-support, and score-window, and stock devices that ppl pay €99 each for in the PH Shop,
often because the lack of it in Reason devices. I love Reason to evolve, but man how I am getting tired since R8 was released and Discover came along. Maybe I´ll end up using R8 only as a sketch-pad and beat-maker for certain things, and Logic as a main DAW. I sweared not to go that route, but now I seriously consider that option. I will wait until 8.4 or 8.5 before I finally decide.

Well. Using Reason has become quite expensive yet you get less for the money.
Something has to change at PH or they will not last long.
Apple are giving artists what they need and want, real value.
I would like to see tha same spirit from Propellerheads.

[pLansford]

Threads like these ease my embarrassment of my own occasional drunken drivel. Thank you guys. I love you Propellerheads and I will start my trial of Zero now.

[lowpryo]

Well, dead or not. They have a killer competition. Look at Logic X 10.2.
You get a mega powerful synth called Alchemy, an integration with Gobbler (cloud-service where you can save, upload and share to collaborate with other producers etc), and on top of the cake; the ability to distribute ones songs directly from Logic to Apple Music!
And all that is for free to all Logic X 10.-users. And it has video-support, and score-window, and stock devices that ppl pay €99 each for in the PH Shop,
often because the lack of it in Reason devices. I love Reason to evolve, but man how I am getting tired since R8 was released and Discover came along. Maybe I´ll end up using R8 only as a sketch-pad and beat-maker for certain things, and Logic as a main DAW. I sweared not to go that route, but now I seriously consider that option. I will wait until 8.4 or 8.5 before I finally decide.

Well. Using Reason has become quite expensive yet you get less for the money.
Something has to change at PH or they will not last long.
Apple are giving artists what they need and want, real value.
I would like to see tha same spirit from Propellerheads.

you may be the first person in history to use the words "Apple" and "real value" in the same sentence! Macs cost about 3 times the price as a PC with similar specs, so they better be including that value somewhere haha

in seriousness, it's awesome to hear that they are loading Logic with great features (Alchemy looks amazing), but the fact that it's exclusive to Mac is going to be a deal breaker for a big portion of the market today IMO. but it sounds like you're very satisfied with it so more power to you!