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The numbers don't work out...

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Jonathan Dortch
The numbers don't work out...
on Jun 28, 2011 at 8:09:21 pm

A lot of us at the studio here have been wondering about the financial implications of the FCPX release, and the potential loss of the Final Cut Pro market. I hadn't seen anything posted like this, so I did some digging. I was actually really surprised by the numbers after putting them together. Going out on a limb in a few places where there are unknown factors.

This is what I've gathered from the sources available...

1.8 Million paid FCS3 installations worldwide (Mar '11)

1.8 Million x $1299 retail = $2,338,200,000

That's $2.338 Billion in potential revenue.

54 Million -- OSX User Base (June '11)

3.3% = Percentage of OSX Users with paid FCS3 licenses

Now it is very important to know the percentage of FCS3 users who are Upgrade or Academic customers at the lower price point... because obviously not every seat of the 1.8 Million base buys a full retail copy upon every release. Calculating it at the base retail to determine revenue potential is perhaps just as ridiculous as Apple selling Motion 5 (best version so far!) for $49 :)

Not accounted for is Apple saving millions with digital distribution vs traditional mastering and packaging, nor the potential piracy market with no license key or registration required for FCPX.

Nor the lengthy(?) FCPX development cycle. Clearly not much was being tossed towards FCP since about 2007.

So the the questions are --

1. Given the neutered interface and feature set, if FCPX is indeed directed towards the core Apple Base vs the Pro User, how large is the market for someone looking to step up from iMovie, but not looking for a robust professional platform like FCP Studio, Premiere, or AVID?

2. How large is the number of former FCP Users happy with FCPX and think it fills all of their needs and diving in to make the purchase?

The FCPX retail is $299 vs $1299, or 23% of the former retail price. If you include Motion and Compressor, it's $399 vs $1299 or 30%.

Even if we go out on a ridiculous limb and assume EVERY FCPX purchaser also buys Motion and Compressor, for FCPX to have as much revenue potential as FCS3, this would still require keeping the FCPS base AND tripling it with the paid FCPX user base.

$2.338 Billion / $399 = 5.85 Million paid users or 10.85% of ALL OSX users.

That means a little over one in ten people owning a Mac and OSX must purchase FCPX with Motion 5 and Compressor 4 to equal FCS3 revenue. If you want to look at only FCPX, then you need to pull around 13% of all OSX users.

To me, FCPX is stuck between two worlds.

With hardly a hint of high end professional FCP features still present, after four years of waiting on Apple to upgrade the platform, FCPX is obviously not ready for the 1.8 Million FCS3 user base. Hence the pro market freaking out and planning migration paths (BBC, Biscardi, like every reality TV show), my company included.

I just don't think the hobbyist/prosumer market at $399/$299 is as large as one in ten of every OSX user, especially given that a consumer friendly option to edit video is bundled with the computer for free. Maybe I'm wrong, but it seems to me and the people I've asked, $399 for a person not totally serious about the trade is still a heavy "App" investment.

I’m still waiting for the official statement from Apple about updates, plugins, etc, but to my eyes, FCPX is written and designed for somebody other than a professional editor. There’s just too many inherent limitations on a core UI level, that were clear choices made by Apple and have NOTHING to do with a 1.0, for me to possibly think differently.

1 in 10 seems like very lofty adoption estimates to me for such specialized software, but maybe I'm wrong and we're going to have a lot of budding editors in the woods! To me, it feels like Apple turning it's back on professional editors, trying to flood the market with a half-wit program at modest price point to the iUser. A marketing machine sourced upon the golden reputation of FCP to the more casual customer. Well there goes that reputation...

But with billions potentially being hurt with FCP’s shaky position in the market, FCPX being a lame consumer-centric duck has financial implications that aren't insignificant.

I knew FCP had a 52% market share in the market, but just wasn't aware it was worth billions.

Any thoughts? Please point me straight if I'm missing something, I have to get back to playing with Premiere Pro.

JONATHAN DORTCH
BLACK WOLF CREATIVE


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Chris Kenny
Re: The numbers don't work out...
on Jun 28, 2011 at 8:23:34 pm

[Jonathan Dortch] "I’m still waiting for the official statement from Apple about updates, plugins, etc, but to my eyes, FCPX is written and designed for somebody other than a professional editor. There’s just too many inherent limitations on a core UI level, that were clear choices made by Apple and have NOTHING to do with a 1.0, for me to possibly think differently. "

The UI "limitations" are mostly subjective. There is very little that can be done in FCP 7 that fundamentally cannot be done in FCP X as a consequence of UI changes.

I don't quite understand how you've managed to construct an elaborate argument that FCP X not being intended as a pro app makes no financial sense, but instead of causing you to switch to the position that FCP X is a pro app (that hasn't yet had its full feature set implemented yet), you conclude Apple saw a prosumer video editing market here where there is none. Apple. The company that I think it's safe to say after the iPhone and iPad, is better at matching products to markets than any other technology company in the world at the moment.

The explanation that fits all the available facts is that Apple shipped FCP X when they had something useful to prosumers, with the full intention of continuing to build on it until they had something useful to pros. This fits the feature set of the first release. It's consistent with Apple's past actions with respect to features in initial products. It explains Apple's actions without assuming Apple doesn't understand the needs of either the prosumer or pro markets. It makes sense of the fact that FCP X was introduced at a pro event, and is being offered as a successor to a pro app. And the only stupidity this explanation requires one to attribute attribute to the generally pretty well-run Apple is stupidity about communicating this approach to customers, which is fairly believable given Apple's extreme culture of secrecy.

--
Digital Workflow/Colorist, Nice Dissolve.

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Jonathan Dortch
Re: The numbers don't work out...
on Jun 28, 2011 at 9:30:05 pm

[Chris Kenny] "The UI "limitations" are mostly subjective. There is very little that can be done in FCP 7 that fundamentally cannot be done in FCP X as a consequence of UI changes."

Well I can expand. By limitation baked into the interface I would note

- lack of custom window layout
- lack of custom frame size
- lack of custom frame rate
- lack of preference panel
- lack of overall clip duration when trimming in timeline
- lack of Countdown Generator
- no custom scratch directory
- inability to patch together a blade slice within a clip
- inability to establish track based output for audio export
- inability to set in/out points for timeline export

I could go on... nothing is subjective about missing ability. You can do all of these things on the FCP platform since v2.0. You cannot on FCPX by choice of design. Some of these features should have been easy to include in a X1.0 if intention was to match FCP in depth and ability. I'm sure we can add OMF/XML/EDL/tapping support via pluging, but fixing most of the "missing" features requires core level re-writes to the software.

[Chris Kenny] "The company that I think it's safe to say after the iPhone and iPad, is better at matching products to markets than any other technology company in the world at the moment."

No argument that this the iPhone/Pad/iOs are brilliant hardware/OS and world changing things. I own both and waited in line. This is a discussion about high-end software however, and Apple hasn't designed a significant pro-software release in a long time. Most of the current/legacy products were either purchased and re-appropriated (Shake, Color), or neutered (Aperture). There's Motion, a very odd piece of software, but it is hardly a viable After Effects competitor and hasn't dented the motion graphics market. I am not a heavy Logic user so I cannot speak to that platform, though I believe FCS and Logic were the only two professional products left under Apple's wing.

[Chris Kenny] "I don't quite understand how you've managed to construct an elaborate argument that FCP X not being intended as a pro app makes no financial sense, but instead of causing you to switch to the position that FCP X is a pro app"

No intention of switching position, I merely tried to indicate both sides to the argument or hypotheses floating around. My position, uniformed like all of the rest of us, is that after using the software extensively, it feels like a consumer-centric program. Beautifully designed for a very different market on many levels, at a very different price point.


[Chris Kenny] .. And the only stupidity this explanation requires one to attribute attribute to the generally pretty well-run Apple is stupidity about communicating this approach to customers, which is fairly believable given Apple's extreme culture of secrecy."

Like the assumption that all "missing" pro features will be added, this is an assumption that Apple intends FCPX to match FCS3's place in the market. I was just saying to my eyes, and by looking at what was included from a design decision, that's not clear. And that the financial implications of that decision seem strange.

100% agreement on the secrecy. To me that's the biggest tragedy of the week so far. What has Apple gained by staying silent on FCPX and it's intention? Professional software needs service and support, not secrecy.

JONATHAN DORTCH
BLACK WOLF CREATIVE


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Chris Kenny
Re: The numbers don't work out...
on Jun 28, 2011 at 10:28:33 pm

[Jonathan Dortch] "I'm sure we can add OMF/XML/EDL/tapping support via pluging, but fixing most of the "missing" features requires core level re-writes to the software."

To be honest, some of the items on your list are things that aren't really all that critical for pro-level software. As far as I know, Avid Media Composer, the supposed gold standard for "serious professional editing", also doesn't support arbitrary frame sizes. Others, like a command to join through edits or set in/out points on the timeline, are nearly trivial fixes, not fundamental rewrites.

[Jonathan Dortch] "Like the assumption that all "missing" pro features will be added, this is an assumption that Apple intends FCPX to match FCS3's place in the market."

Apple has already told Pogue, Studio Daily and a couple of others reliable sources that at least the most important pro features, like multicam, video output and some means of exporting sequence data, are coming back. That and the existence of several high-end features already in FCP X would seem to make a strong case against is being (exclusively) a prosumer app.

--
Digital Workflow/Colorist, Nice Dissolve.

You should follow me on Twitter here. Or read our blog.


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Jonathan Dortch
Re: The numbers don't work out...
on Jun 28, 2011 at 11:12:15 pm

[Chris Kenny] "To be honest, some of the items on your list are things that aren't really all that critical for pro-level software. As far as I know, Avid Media Composer, the supposed gold standard for "serious professional editing", also doesn't support arbitrary frame sizes"

Chris, these features were absolutely critical to my workflow with FCP, and to many others. If you don't need them in yours, that's cool. I've seen your many posts with very pointed and vocal support of FCPX, and if it works for you, that's fantastic, but can you appreciate where any of the rest of us are coming from? I checked out your work to try and get a better idea of where you're coming from. We're relatively neighbors, our studio is off the Bedford L stop in Williamsburg.

As a colorist, how do you feel about FCPX color grading tools and auto-match color correction? What about the absence of Color? I would wager most of your work is done in Resolve these days? Are you an offline editor as well? If not, how can you vehemently defend the editing capabilities/lack thereof in FCPX for high-end or even similar legacy workflow?

Features definitely don't need custom frame sizes :) We do a lot of interactive work for web delivery, installations, video walls, etc where custom frame sizes are paramount. I find their absence especially odd given FCPX's strong commitment to web delivery and the general death of tape-based broadcast.

If you envision you can accommodate all of your clients with FCPX software, that is a real game changer! To me the missing tools and feature sets are somber deal breakers, and diametrically opposed to the expansive feature set of FCP, and with Apple totally mum it's a bit unnerving. I think that's why we're all posting in this forum in the first place.

To you, what is a "critical feature" beyond the ability to sequence and sync video and audio in a timeline and export?

I can't speak to custom frame sizes in Media Composer... I haven't used it in about 7 years. Maybe someone else can speak to this. I've never been a fan of the AVID ecosystem and have based my career the last 8 years upon FCP without ever looking back. Also to me, and to the dominant 52% of the market, Final Cut Pro had become the "gold standard" for serious professional editing.

Again, most of all, whether the bells and whistles work for you or they don't, it seems impossible to defend that FCPX looks and feels, from design and included feature set alone, to be aimed at a different market. Until we hear definitively from Apple, all of the back and forth is just pissing in the wind.

JONATHAN DORTCH
BLACK WOLF CREATIVE


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Chris Kenny
Re: The numbers don't work out...
on Jun 28, 2011 at 11:29:49 pm

[Jonathan Dortch] "As a colorist, how do you feel about FCPX color grading tools and auto-match color correction? What about the absence of Color? I would wager most of your work is done in Resolve these days?"

Yeah, pretty much exclusively Resolve, so the discontinuation of Color, I can't say I personally care much about.

FCP X's built-in grading tools are pretty good, in my opinion, by NLE standards, which admittedly isn't saying a ton. I can see automatic color matching being useful to offline editors (which I'm mostly not) for producing better looking rough cuts, which is not as silly as it might sound, as it's not unusual in the indie feature world to submit rough cuts to festivals or screen them to try to raise more money for completion.

[Jonathan Dortch]
Are you an offline editor as well? If not, how can you vehemently defend the editing capabilities/lack thereof in FCPX for high-end or even similar legacy workflow?"


I don't. I admit FCP X is lacking essential high-end workflow features at this time. If a client asked me if they should cut, say, a Red music video on FCP X to bring in for grading in a weeks, I'd have to tell them not to, because as of this moment there's no way to get sequence data out of it and into Resolve.

But, I believe Apple is following a deliberate strategy of shipping the app as soon as it's useful to mainstream users, knowing full well that more features need to be added before it's useful in high-end workflows... and is now in the process of adding those features. They've essentially told us as much, just not (yet) first-hand. And if this is Apple's strategy, it's hard to find much fault with it. High-end users will get what they need about when they were always going to. Meanwhile, mainstream users have a shiny new app already.

[Jonathan Dortch] "Features definitely don't need custom frame sizes :) We do a lot of interactive work for web delivery, installations, video walls, etc where custom frame sizes are paramount. I find their absence especially odd given FCPX's strong commitment to web delivery and the general death of tape-based broadcast. "

Personally, I've also found custom frame sizes useful on occasion. My point was not to try to claim this feature isn't useful. It was to note that its lack is not an indication that FCP X is consumer-oriented software. As you noted, features don't require custom frame sizes and neither does broadcast; there's no real correlation between "seriousness" of market and need for this ability.

--
Digital Workflow/Colorist, Nice Dissolve.

You should follow me on Twitter here. Or read our blog.


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Jonathan Dortch
Re: The numbers don't work out...
on Jun 29, 2011 at 12:26:51 am

[Chris Kenny] "They've essentially told us as much, just not (yet) first-hand. And if this is Apple's strategy, it's hard to find much fault with it."

I just have to majorly disagree here as, both as a business owner and daily FCP editor. Fault is pretty much what this whole discussion is about.

I find great fault in the software not being capable after numerous years of development. I find great fault in Apple *not* telling us anything first hand, releasing a substantially lacking piece of software while yanking our entire platform from the market. I find great fault in the prosumer-first strategy when so many of us have based our businesses around the previous software that clearly catered to the high end user. Apple drove FCP hard to compete with AVID for the last ten years, and we listened.

I place great fault on Apple for the frenzied storm they've sent our user base into. I REALLY don't like clients reading on CNN about our software and calling to ask what's wrong and if their projects are OK.

Adobe managed to rewrite Premiere into 64-bit without losing a single feature. By adding a lot of awesome features.

Look for Avid to do the same thing with MC6. As a user I expect to gain features, not lose hundreds, even in a 64-bit re-write.

This 1.0 argument holds little weight for those of us who base our livelihood on the powerfulness of platform. This isn't 1.0. We don't want 1.0. It's the 8th full generation of an editing platform and it feels like a slightly more robust iMovie. FCP7 is so outdated horsepower wise it's getting hard to stay on board, especially if we are expected to use FCP7 for another year or two while X plays catchup to the mock of our industry.

The strategy of re-inventing the wheel, releasing sub-par software and playing major pro catchup doesn't work when there's a 10 year vestige, expected features, and 2 million customers who rely on the platform. It's absolutely ridiculous. It's arrogant and dangerous. It's regressive. The improvements in FCPX aren't mind blowing, they're on par with the work Adobe has already done to Premiere in CS5. I just started using Premiere for the first time since about 1999 given this fiasco, and I'm even less impressed with FCPX now. I kind of feel silly for not checking it out sooner. Amazing Photoshop/After Effects integration and render free timelines without background transcoding. This is what we needed in the FCP platform.

If the strategy is to force us to wait in 32-bit FCP for an undetermined amount of time as Apple plays catchup to get back the platform back to functionality, I don't have the time to wait. It's not good business. Silence doesn't work for me when business is at stake.

If you don't see it, you don't see it. But if you relied on FCP's robust feature set for your daily work instead if Resolve, you might see things from a different perspective. If Resolve didn't exist you'd be pretty much hosed with the death/MIA of Color -- alternatives even a few years ago would have set you back 25K+. The industry will always shift and adapt. What would you do if Blackmagic pulled Resolve and replaced it with a far inferior product and met your questions with silence? It's unnerving to have your platform be in an unknown state of flux.

I still think it's entirely possible, Apple's vague comments through Mr. Pogue notwithstanding, that even with some restored features like Multicam and third parties supplying plugins, we're dealing with an entirely different direction with FCPX. Do you not get that impression from the software? From running FCPX side by side with iMovie? There's just too much missing from legacy FCP. And no serial, price point too low, no volume license, no educational license. It bucks all trends of professional software.

No one hopes I'm wrong more than myself. Final Cut Pro is like family to me. Just seems like the writing is on the wall, despite a silent Apple.

Maybe I'll see you around the neighborhood. Thought your site and work were nice.

JONATHAN DORTCH
BLACK WOLF CREATIVE


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Chris Kenny
Re: The numbers don't work out...
on Jun 29, 2011 at 11:57:51 am

[Jonathan Dortch] "I find great fault in the software not being capable after numerous years of development. I find great fault in Apple *not* telling us anything first hand, releasing a substantially lacking piece of software while yanking our entire platform from the market."

Apple should have been able to support MMS in the first version of iOS, right? It's a pretty simple feature. You can play this game all day. Apple is not incompetent at software development; the software is what it is after years of development because software development is hard. A huge amount of work probably went into foundational features on this first release. Apple had to build AV Foundation into something that could replace QuickTime, for instance.

[Jonathan Dortch] "I find great fault in the prosumer-first strategy when so many of us have based our businesses around the previous software that clearly catered to the high end user."

Given that this strategy doesn't necessarily result in pros getting the features they need any later than they otherwise would have, this is fundamentally irrational. You're saying Apple should have held the app off the market until more pro features were implemented just to signal loyalty to pros, essentially.

[Jonathan Dortch] "Adobe managed to rewrite Premiere into 64-bit without losing a single feature. By adding a lot of awesome features."

People keep invoking this, but moving to 64-bit by itself does not require rewriting.

[Jonathan Dortch] "The strategy of re-inventing the wheel, releasing sub-par software and playing major pro catchup doesn't work when there's a 10 year vestige, expected features, and 2 million customers who rely on the platform."

The same thing could have been said about Mac OS X, except with bigger numbers. The same thing was said about Mac OS X. A decade later, Apple sells ~5x as many Macs. Apple plays a long game. If you, for whatever business reasons, need to go somewhere else at the moment, then obviously that's what you need to do. But Apple probably has a very strong future in this market.

[Jonathan Dortch] "Do you not get that impression from the software? From running FCPX side by side with iMovie?"

Again, this is extremely reminiscent of early OS X criticism. OS X also got bashed for having a UI that was supposedly oversimplified. Even, according to some people, designed for children. The truth is, the FCP X interface looks superficially similar to the iMovie interface, but the former has substantially more depth to it.

--
Digital Workflow/Colorist, Nice Dissolve.

You should follow me on Twitter here. Or read our blog.


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Jonathan Dortch
Re: The numbers don't work out...
on Jun 29, 2011 at 4:18:54 pm

[Chris Kenny] "Apple should have been able to support MMS in the first version of iOS, right? It's a pretty simple feature. You can play this game all day."

You're comparing a professional software platform to a phone? This is the software I use to run my business. A healthy functioning platform is a critical necessity. Cell phones are totally optional. I'm sorry, but it is painfully clear that you do not run a business from FCP. I have no idea why you're chipping in to these discussions with erroneous analogies blindly defending FCPX when you clearly have very little invested in the platform professionally. And doing so snidely without a modicum of professional empathy for those of us affected.

All of us who run a business based on this software are trying to communicate with one another and get our bearings, both on new software function (or lack thereof) and guessing at Apple's market strategy. Because a guess is all any of us have at this point, yourself included. Few imagined Quark would ever be obsolete until major OSX missteps resulted in Adobe cannibalizing their entire market. History is riddled with such examples.

And wasn't MMS disabled as an appeasement to the AT&T for their already nervous bandwidth concerns? That's the rumor I heard anyway.


[Chris Kenny] "You're saying Apple should have held the app off the market until more pro features were implemented just to signal loyalty to pros, essentially."

I do expect loyalty from a professional platform because we use this software to run our businesses, and have invested in the platform for 10 years. And yes, releasing the software in its current state with no communication or road map has caused great disturbance in our market. The FAQ this morning is a start, though it smells of damage control.

[Chris Kenny] "Again, this is extremely reminiscent of early OS X criticism. OS X also got bashed for having a UI that was supposedly oversimplified."

Yes OSX was bare in it's first incarnation, but an OS will always become robust over time, it mandatory by function as the hub for interacting with the system and delegating processes.

There is no mandate for FCPX to return to the functionality of legacy FCP. It is at the discretion of the maker. Apple could be content with an entirely different type, and broader base, of user. Additionally, a point already well hammered, Apple also allowed OS9 support for years afterwards, and held our hand with Rosetta. FCS3 was pulled last Tuesday and our 600 former projects are obsolete in the new platform.

JONATHAN DORTCH
BLACK WOLF CREATIVE


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Chris Kenny
Re: The numbers don't work out...
on Jun 29, 2011 at 4:34:47 pm

[Jonathan Dortch] "You're comparing a professional software platform to a phone?"

I'm looking at the realities of software development by comparing one software project an other software project.

[Jonathan Dortch] "And wasn't MMS disabled as an appeasement to the AT&T for their already nervous bandwidth concerns? That's the rumor I heard anyway.
"


MMS isn't all that bandwidth-intensive. Less so than e-mail, really, because it sends much lower quality media than you can attach to e-mail.

Anyway, there were probably a dozen missing features in the first version of iOS that conventional wisdom said were absolutely necessary, and that almost any other company would have waited to implement before shipping. Apple is very aggressive about shipping initial releases as soon as they have a minimum viable feature set, and as a consequence I don't think it's safe to predict their long-term market goals from their initial releases.

I mean, we've seen this already with FCP X, with people reading the fact that FCP X was an 'island' (in terms of providing access to sequence data to third-parties) as an indication that it was an exclusively consumer app, when it's now clear from Apple's timeline for releasing such support ("the next few weeks") that they have been working on this and always intended to offer it.

[Jonathan Dortch] "I do expect loyalty from a professional platform because we use this software to run our businesses, and have invested in the platform for 10 years."

We're not talking about material loyalty here, though, only loyalty signals.

[Jonathan Dortch] "And yes, releasing the software in its current state with no communication or road map has caused great disturbance in our market."

I entirely agree that Apple has not communicated effectively here.

[Jonathan Dortch] "Yes OSX was bare in it's first incarnation, but an OS will always become robust over time, it mandatory by function as the hub for interacting with the system and delegating processes."

There's actually a bunch of hysteria in some circles that OS X will lose many of its advanced functions and merge with iOS....

[Jonathan Dortch] "There is no mandate for FCPX to return to the functionality of legacy FCP. It is at the discretion of the maker. Apple could be content with an entirely different type, and broader base, of user."

The truth is, in terms of code size, the critical unique features that only pros require are not that complicated. XML export is simple compared with, say, the new rendering engine. It makes little market sense for Apple not to add the features this market requires, given the scope of the work.

--
Digital Workflow/Colorist, Nice Dissolve.

You should follow me on Twitter here. Or read our blog.


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David Lawrence
Re: The numbers don't work out...
on Jun 29, 2011 at 8:14:50 am

[Chris Kenny] "The UI "limitations" are mostly subjective. There is very little that can be done in FCP 7 that fundamentally cannot be done in FCP X as a consequence of UI changes."

Let's start with something simple - entering time code values to set the head and tail of a source clip. How do you do this in FCPX?



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Simon Ubsdell
Re: The numbers don't work out...
on Jun 29, 2011 at 8:21:15 am

[David Lawrence] "Let's start with something simple - entering time code values to set the head and tail of a source clip. How do you do this in FCPX?"

Ctrl/P then type your inpoint timecode; Ctrl/P again and type in your outpoint.

Done.

Simon Ubsdell
Director/Editor/Writer
http://www.tokyo-uk.com


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David Lawrence
Re: The numbers don't work out...
on Jun 29, 2011 at 3:51:08 pm

[Simon Ubsdell] "Ctrl/P then type your inpoint timecode; Ctrl/P again and type in your outpoint.

Done."


Thank you!!!



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Chris Kenny
Re: The numbers don't work out...
on Jun 29, 2011 at 12:13:30 pm

[David Lawrence] "Let's start with something simple - entering time code values to set the head and tail of a source clip. How do you do this in FCPX?"

If I understand what you're asking: click to select the clip in the browser. Click the timecode display. Enter timecode to jump the playhead to that location, and hit 'I' or 'O' to set the in or out point.

--
Digital Workflow/Colorist, Nice Dissolve.

You should follow me on Twitter here. Or read our blog.


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Paul Dickin
Re: The numbers don't work out...
on Jun 28, 2011 at 8:26:34 pm

Hi
Is it 1.8 million FCS 3 users? So the droves of users still on earlier versions are additional to that?
I have 1 FCS 3 licence, but 9 previous 'user' licences/SNs from versions 2-6.
That whole kit and kaboodle comes to a lot more revenue to Apple than the retail price of FCS 3...



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Andrew Richards
Re: The numbers don't work out...
on Jun 28, 2011 at 9:03:58 pm

Apple claimed 2 million FCP installations at the SuperMeet where they previewed FCPX. They did not specify current version.

Apple is in the business of selling hardware. Nothing new there. Revenue from Pro Apps is a rounding error for them. Pro Apps exist so users will have a strong incentive to drop $4,000 on a 17" MacBook Pro or $9,000 on a 12-core Mac Pro. Those are high-margin items, probably the highest in any of Apple's product lines. One single unit sold is good for thousands in profit. That is a market worth stoking with platform-unique software that is very resource-hungry. What you pay for Pro Apps nowadays is to cover development and marketing.

Best,
Andy Richards

VP of Product Development
Keeper Technology


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Jonathan Dortch
Re: The numbers don't work out...
on Jun 28, 2011 at 10:00:46 pm

[Andrew Richards] "Apple is in the business of selling hardware. Nothing new there. Revenue from Pro Apps is a rounding error for them."

Ab-so-lutely. Also raises the question of a potentially neutered consumer-centric FCP in relation to the high end computer purchase. The marketing even shows FCP on a Macbook Pro. FCPX in no way seems directed towards the ~10K system by feature set alone.

JONATHAN DORTCH
BLACK WOLF CREATIVE


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Bernard Newnham
Re: The numbers don't work out...
on Jun 28, 2011 at 9:04:49 pm

The only reason I have a Mac is to run FCP, and that's true in parts of the BBC, the university where I work, and probably many more large facilities. You can save a lot of money not running Macs - they're a significantly more expensive investment than a PC. So if the software isn't there you don't need the hardware. You could add that to your statistics

B


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Andrew Richards
Re: The numbers don't work out...
on Jun 28, 2011 at 9:16:10 pm

Bingo.

Though in my experience the support requirements for Windows typically push the cost of ownership higher relative to Macs. But then that may be moot with Win7. I'm thinking back to Win2000 and XP...

Best,
Andy Richards

VP of Product Development
Keeper Technology


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Jonathan Dortch
Re: The numbers don't work out...
on Jun 28, 2011 at 10:13:47 pm

[Andrew Richards] " I'm thinking back to Win2000 and XP..."

OK this might require Win98 or before, but I've dug through some old boxes and I think I've found your new platform! Don't worry about the 4GB file size limit, it will be addressed via plugin :) Check out the sweet "firewire" cord.



JONATHAN DORTCH
BLACK WOLF CREATIVE


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Aindreas Gallagher
Re: The numbers don't work out...
on Jun 28, 2011 at 9:00:06 pm

but well - isn't there another way to see it - we would have upgraded - for about what we'd pay for FCPX right? so they weren't going to get 1299 a head out of us this time round - so when they built FCPX, which is as you say, in the walks like a duck talks like duck - it is consumer software, that even if they lost us, as I'm pretty sure they more or less knew they would, all they needed to replace the lost revenue from professionals is a roughly equivalent number of prosumers to enter the market - and then apple would have this new market created for itself - they'd be on new turf, like the nintendo wii or something. They must have sat down with calculations showing them how many prosumer customers they would need to generate to offset the software dying off as professional software - in that scenario they sort of only need 5% of their market to opt in to replace the upgrade cycle cash they would have got from us. thats why I think now that supermeet thing was so bogus - that wasn't a presentation for us - they were kissing us on both cheeks - that was a presentation designed to get FCPX into the minds of the casual mac market - it was free publicity for what was going to become their new prosumer app. You're right - Apple need to make money off this application and they don't expect to make it from professionals, but if that upgrade stuff I just blurted up there is true - then the financial bar for success isn't that high? Or I'm completely wrong, which wouldn't be surprising, because my maths is usually godawful.


http://www.ogallchoir.net
promo producer/editor.grading/motion graphics


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Daniel McClintock
Re: The numbers don't work out...
on Jun 29, 2011 at 12:55:23 am

My two cents...

I think Apple has run up against a brick wall with Final Cut Pro. I think Apple has hit a saturation point with the software. I don't think they can grow the professional market anymore... especially a market where the department of labor only sees a moderate growth pattern for the next 10 years.

http://www.bls.gov/oco/ocos091.htm

In other words, I think Apple could not sell to enough professionals to justify development and implementation costs.

Also, to a certain extent, I think the limitations of just being on an Apple platform are starting to show... especially with the competition. Avid and Adobe are on both Windows and Mac. For Adobe, this has meant incredible numbers now since the Premiere Pro rewrite just over a year ago to 64 bit.

Mr. Dortch has indicated that 1.8 million people own FCS3 by his estimates -- Adobe announced this month that they have sold two million copies of Premiere Pro CS5 in the last two years. And these are full versions, not upgrades.

http://tv.adobe.com/watch/industry-trends/adobes-vision-for-professional-vi...

Also, Premiere Pro is not an easy piece of software to learn, so that means that a good majority of people who are purchasing it have to be former Final Cut and Avid users. There's a reason why PP 5.5 looks very similar to Final Cut.

In order for Final Cut to be competitive, Apple has to find new customers. For Apple those customers still have to come from the 10% pool of people who own Macs. And in that group, The only ones available are the people who want to take their video editing to a step beyond iMovie and those people who don't expect to create large market commercials, TV shows or motion pictures.

FCPX in its current version does not surprise me. You have to remember that it has always been Apple's philosophy to make what looks hard easy. Apple's philosophy is also very democratic -- software and hardware for The People. I think Final Cut Pro occurred during a time when getting into video was still an expensive venture. Nowadays you can get decent-looking video off a cell phone. Everyone has video today and now they need an easy way to edit it that looks good without being too complicated. And despite what some people may think FCP7 was difficult for 90% of Apple's customers.

It also would not surprise me that within the next five years, you will find some version of Final Cut on the Windows platform. It depends on how many people purchase the next couple versions of the software between now and then.

I think Apple is at a crossroads right now with FCPX. I think you will see them make updates to the software but I believe it will never be as extensive as FCP7. The question is: Does Apple believe the loss of sales from the professional user can be offset by an increase in sales from the primary Mac user?

Something to chew over.

------

Sometimes life needs a Cmd-Z!


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Bernard Newnham
Re: The numbers don't work out...
on Jun 29, 2011 at 7:23:42 am

If I was a "prosumer" - presumably an amateur who has aspirations to be like a professional, someone who buys a Sony Z5 or EX3 for home movies - I certainly wouldn't want to be seen buying something that the professionals had rejected.

B

bernie


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