The present and future of post production business and technology

Why the Pro Apps – particularly Final Cut Pro X – are important to Apple

As part of the Sneak Peek of Final Cut Pro X at the NAB 2011 Supermeet, Apple updated their user stats to 2 million customs (with 94% satisfaction).

Now, my understanding is (with help from Oliver Peters) that this number includes Final Cut Express and the early individual sales of DVD Studio Pro and Motion. Some customers will be included having paid only $199, while others will have paid the $995 purchase price and one or more upgrades. For a customer who purchased FCP 1 for $995 and paid for every upgrade, then that customer has invested, over the 12 years since NAB 1999, around $3750.

But balance that with those who bought educational pricing, and other discounted opportunities plus those low priced buy-ins and I’ll assign an average income per user of $1000.  I think that’s conservative but the data to make a more accurate assessment isn’t available to me. (If you have it philip @ without the spaces.) Besides, it makes the numbers easy to work with.

So, 2 million customers with an average revenue per customer of $1000 (over 12 years) and that gives a gross revenue of $2 billion dollars or roughly $168 million in revenue per year.

I don’t have any clue about the cost side of that equation, but if there were 100 people employed on an average salary of $100,000 a year (many will be below that, few above) then we have payroll of $10 million a year. I could be totally wrong about how many people are involved so let’s say costs, with office space and support are $50 million. Or $75 million with advertising and promotional events. Even if the cost side is $80 million a year (and I’d be happy to learn where I might be wrong on the cost side) then it’s still an $80 million a year profit.

That’s chump change to Apple but it’s a brilliant business as a stand alone. Much more profitable over the last decade than Avid, for example. But in the light of the Mac Division generating (as we were told at the Back to the Mac event) $22 billion a year, you can understand why some people worry that Apple isn’t serious about the Pro Apps.

But that’s about to change. Dramatically.

iLife and Final Cut Pro trainer B.T. Corwin (who’s also the wife of noted FCP Trainer and author Tom Wolsky) pointed out to me on Wednesday at NAB, that Apple have some 50 million iMovie customers that they don’t make any money from. From there I did the math. But before we do that, let’s note that Final Cut Pro X will be a much more comfortable upgrade for an iMovie user than Final Cut Pro 7 was. Although the iMovie ’11 and Final Cut Pro X interfaces are somewhat similar there’s still a lot to learn, but it’ll be a smoother transition than going to the current version.

Almost all those 2 million Final Cut Pro customers will immediately buy Final Cut Pro X, even if they also plan to crossgrade to Media Composer. That’s a neat $600 million or nearly four times my estimate of current revenue.  But add in another 3 million iMovie upgraders and that jumps to $1.5 billion in the first year, heading for 10x the existing revenue for Pro Apps!

I certainly think they could get that 5 million figure in the first year. In Episode 25 of The Terence and Philip Show Terry Curren thinks the number will go to 10 million this next year and B.T. joins me with the 5 million prediction.

Whichever way it comes down, the relevance of Apple’s Pro Apps’ revenue to Apple will jump from “nice but really insignificant” to “now this is a business unit we care about”. A business they care about enough that Phil Schiller - senior vice president of worldwide product marketing at Apple – was there in the audience.

And they always did, because back in 1999, at the release of iMovie version 1 and the DV iMac Steve Jobs himself said:

We think Desktop video is going to be the next big thing. Imagine this in classrooms. Imagine classroom video reports, imagine this with parents, imagine the Steven Spielburgs of the world being able to use this technology when they were kids. It’s going to be unbelievable.

If, and it’s a huge if, Final Cut Pro X turns out to not suit some movie and episodic television workflows as well as the current one, and those folk migrate to Media Composer or Premiere Pro, that would be unfortunate but the number of customers they’ll lose is likely to be zero (because everyone will buy Final Cut Pro X anyway). Even if they lost 50,000 or even 100,000 customers, that’s just (at a maximum) 5% of the current user base, and 0.02% of the new customer base.

This version is about a foundation for the next decade of innovation. And the next decade of highly democratized video production.







51 responses to “Why the Pro Apps – particularly Final Cut Pro X – are important to Apple”

  1. Thomas

    You’re wrong with the numbers and you should know it.
    Personally i have no hard feelings about the fact that you guys are trying to make a buck out of any FCP hype (thats why you sell semi- and webinars before FCP X even was relesed, but please stop covering poor facts, especially about a company that has BILLIONS of Dollars in CASH at their accounts.

    Thank you.

    1. Thomas, you would have credibility if you offered some alternative data points since you think mine are wrong. I stand by my data until someone provides better data. I should also point out that I only allow comments from people that contribute to the discussion. This post does not contribute. If that continues to be your style, you’ll find your posting privileges will be revoked.

  2. Nonsensical comment above notwithstanding, looks like you’ve been doing a variant of my math that I clearly delineated in the comments section of this post over a month ago: (but have long voiced…going back to the Apple Event at NAB announcing FCP Studio 2 in 2007). The point being Apple makes a bundle on Pro Apps and they are not and never have been a loss leader for anything. The bonus is they drive hardware sales.

    Heck, even the revenue they made from Quicktime Pro at $29 (remember that?) was really REALLY substantial.

    So, yea, good post.

    1. They do drive hardware sales, but the interesting thing about Final Cut Pro X is just how well it runs on the “not big” iron. Add Thunderbolt to an iMac and you’ll have a killer Final Cut Pro X workstation.

  3. Don Burton

    Makes a lot of sense. But also infers Apple may be willing to put those using FCP for feature and episodic workflows on hold for a little while until they bring the iMovie user up to speed. What concerns me is flexibilty. The current UI is so freeform that it allows so many unique ways of cutting. Hence, it’s a bit complicated but allows multiple uses all at once in the sequence. I do A LOT of dialogue editing as I edit as well as compositing and unorthodox effects work. I’ll also do a complete sound dedign w/ 80-100 audio tracks. The video tracks are often stacked 15-20 tracks high w/ composites. For me, it works much faster then going into Motion or AFX. I rarely have synch issues and I move stacks of clips in and out of the way easily and fast. The work we do is often for studios and broadcast: commercial, EPK and documentary based. Some feature and episodic tv.  But a large number of users who need that flexibility I describe and do work in the industry rely on FCP. Too early to tell, but if the UI is simplified to accommodate a transition for iMovie users and the result is a less flexible, more automated and restrictive UI which requires that you work in a certain way, it would be hard to not start looking for another tool. For us it isn’t about keeping “novices” out of the work pool… Our ideas are what matter. Not our tools. We welcome fresh blood w/ new perspectives all the time. FCP actually dressed down so many Avid ‘pros’ over the years by opening affordable accessibility to filmmakers who didn’t want to or weren’t in a position to climb the industry’s elitist ladder. It’s been GREAT! I broke in because of it myself. Just hoping Apple can continue the democratization you describe w/ out losing the tool’s flexility. Freeform tools are often just complicated to use by nature.

    1. While there’s some similarity between Final Cut Pro X and iMovie 11 it looks more like some of the things they were working on in FCP X made it to iMovie 11. There’s similarity but Final Cut Pro X is a professional editor’s tool, iMovie is for hobbyists.

  4. Great article, and very interesting when you work through the numbers that way. However! What I thought you were going to get to at any moment (but didn’t, hence my comment), is the underlying single-minded focus of The Steve, which is that all of Apple exists for the sole purpose of driving hardware sales (desktops/laptops).

    You probably heard about the Pro Apps team going to Steve in the early years ago pitching copy protection, to which Steve replied, “Final Cut Pro has the biggest dongle in the world.” (In other words, a G5 (at that time).) Steve didn’t care about piracy, because everyone who got a free install of FCP from a friend still needed a Mac to run it (and maybe with their savings, went out and bought a more expensive model!).

    I think the main (but not only) reason FCPX is $299 and not free is so it still is able to retain a little credibility, and of course if it were free the plan would be laid bare, and a little too obvious!

    To get the full effect of all the 64 bit multi-core goodness of FCPX, you will want the Big Daddy 12 core… then a 16, 32, etc… I bet Apple figures each copy of FCPX will bring Apple thousands, not hundreds, in profit.

    Re-examining your numbers including estimated hardware purchases brings the point of your article home even more.

    I think Steve’s focus comes from the early days, when Steve went the hardware route and Bill went the software route… Steve still sees software as “soft”… not real, in a way… only needed as a UI between the user and the hardware.

    In fact, I bet dollars to doughnuts that even to this day, Steve still sees iPhone/iPad/Apple TV as halo products, introducing and evangelizing the Apple religion, but the end game is that they replace their old Windows machines in the den with shiny new iMacs.

    1. Here’s the thing Josh. I’ve been hearing just how brilliantly FCP X performs on a MacBook Air! If anything it’s going to drive the sales of all the line, not the high end only. Once we get Thunderbolt on iMacs that’ll be the tool of choice for Final Cut Pro X. I truly believe the days of the tower at Apple are tied to the roll out of Thunderbolt. Once we have TB 100 Gb/sec (2nd generation) there’s no value in a full on tower any more. (And Apple will kill it). If you don’t need to put in internal cards, why the tower?

      Pro Apps have always had to stand on their own economically. While the hardware sales definitely sweeten the deal, the Pro Apps have had to make profit on their own, and they have. Always.

      1. Well OpenCL, will greatly benefit from big, beefy graphic cards that fit in towers but not laptops or iMacs. Try running Motion on a 12-core with an ATI 5870, then do the same project on the fastest MBP or iMac. Night and day difference.

        And with multicore processing, the more cores the better! Remember, background rendering doesn’t mean no rendering… if you’re working on an effects-heavy show on a slow computer you will still need to wait for background rendering to complete before playing or exporting.

        1. Performance on a Macbook Air is reported to be “amazing”

      2. Terry Solenberger

        Well Philip that day has come and we now have iMacs with Thunderbolt. Nice, but I do not see it as a demise for the Mac Pro tower. Since Apple continues to choose to use AMD (ATI) graphics cards, this workstation will continue to be an intermediate system, not a PRO system, hence the tower’s name. Correct me if I’m wrong Philip, but both Adobe and Autodesk officially support only the Nvidia graphics cards from PNY. The Mercury Playback Engine in Adobe Premiere CS5/5.5 and real time effects in Autodesk Smoke for Mac only perform to spec on systems running with Nvidia cards (especially the Quadro 4000 or 4800 Pro Graphics Cards). I spoke to a rep at Autodesk who had real-world work experience in Smoke and he mentioned that it runs on AMD processors, but the performance was really a night and day difference. Same went for Adobe reps as well. Photoshop, Illustrator, Flash, Dreamweaver for the most part perform well on AMD, but Premiere, After Effects, Encore (pretty much most of the production apps) just do not compare to the performance on the Nvidia cards. I do not work for PNY by the way. LOL!

        Apple says it cares about its professional user base, and if that’s true (which I believe), they will not drop the Mac Pro anytime soon, unless there is a logical replacement. That replacement would more likely have changeable expansion cards as well to meet the needs of the professional.

        Now Philip, if you are simply stating that if the user is only using Apple software products such as Final Cut Pro X, then the iMac may make a good system. But even the intermediate user will need the superior tools of Adobe. And any professional editor will need Final Cut Studio (if it will still exist as a suite – unknown), Adobe Production Suite CS5/5.5, and Autodesk Smoke for Mac for Finishing.

        I was frustrated when Apple switched to AMD over PNY in the new MacBook Pro line. Here they introduce Thunderbolt, a blazing new technology that was all the buzz at NAB with the storage solutions community of exhibitors, and they remove the one major PRO feature of the laptop, that made the Intel i7 Quad Core model a true portable workstation – the Nvidia graphics card! Oh that ticked me off. They give-if and take-if away.

        Oh well, despite all of that the new iMac does look overall great. Just not the machine to serve as my professional workstation. Just a great recreation machine in my house. Will probably be a great system for all those iMovie turned FCP editors that will probably be introduced into our ever growing community.

        Oh by the way, it was great to be checked in by you both at the Media Motion Ball and at the FCPUG Supermeet. Thank you for your time and effort in volunteering for these events that were absolutely wonderful and memorable! Many thanks.

        1. It largely comes down to what is a professional editor. If you limit it to that niche that are doing movies and broadcast/cable TV then those people are probably not the target for Apple. However the other million plus professional editors working in lesser TV/cable, education, corporate and event videography will be well served by the iMac with TB and FCP X.

          Apple made it very clear that writing directly to any graphics card’s language was not something they supported but Adobe, Blackmagic and Autodesk did just that. Apple’s solution is a card-neutral OpenCL, which is fully suppported by Final Cut Pro x.

          1. Terry Solenberger

            You make a great point there! Ironically, I actually belong to that community of professionals – LOL – as more of my regular clientel are from the educational and commercial sector. I started out with Final Cut Pro (version 1.0) as a student, and rapidly found my skills with program and Adobe After Effects (version 4.0) allowed me to aquire work from local clients in that sector. I have since expanded my client base to encompass the entertainment and broadcast industries. I have to admit that both the commercial and educational community right away took Final Cut Pro as a serious product, and valuable tool for prospective employees to have knowledge of. That still remains a debate within the entertainment community, which I am always happy to argue about Final Cut Pro’s valuable place in the the industry.

            I do wish that Adobe, Black Magic, and Autodesk would the same as Apple has in this case. Having a more open or universal hardware support would certainly benefit all.

          2. Helge

            I’m not an engineer, so I can’t explain the details, but the reason some companies have gone down the CUDA (nVidia) path instead of using OpenCL is because CUDA is much more mature and hence allows the manufacturer to get a lot more out of the graphic cards. BlackMagic just announced that Resolve v8 supports OpenCL so that it can be used on an iMac or MacBook Pro, but the performance is not as good as on a similar CUDA based card. The new noise reduction feature is also not available when running OpenCL.

            If you think about it, for a company like Adobe (or BM) there is no benefit to only support certain nVidia cards if they had options to do otherwise. Once OpenCL matures I would expect to see support for it in Premiere Pro and After Effects, but CUDA will most likely offer superior performance in the next 2-3 years.

          3. It was more about timing as to why Adobe went CUDA, but even so the Mercury Engine benefits from most graphics cards to some degree.

    2. Just read this quote from someone who worked on the pro apps team from 2002 – 2008:

      “The goal for every Apple software product is to sell more hardware. Even the Mac operating system is just trying to get people to buy more Mac computers.”

      I think that’s Apple’s DNA, hardware company first.

      1. I guess.

  5. Karel

    Although I don’t know where you get these numbers from, there’s a uttermost chance they are wrong. And I don’t just mean a couple percent…

    However, I don’t think the direct revenue/profit/benefits is to be found at the direct sales of any pro app.

    Anything stand or falls with the Apple brand name. If pros are using a Mac above a PC rig to edit their footage, it builds on the Apple brand, eventually selling more of them iPad n phones. The bigger the brand becomes the more interesting it becomes for other manufacteres to comply with the Mac. Proprietary interfaces did work till some years ago and helped Apple to expand their brand importance.

    I can run Premiere on my PC, but not FCP. Therefore I bought a Mac. And loads of them because I changed the administrative computers at the same go. Why not, they are not that incredible more expensive anyway. Saved some money on the go with lowering the pc maintenance invoices

    I would never thought about buying (a) Mac(s) otherwise but that one Pro app changed that.

    My point is that the sale of a single pro app can mean that people buy other stuff from the same brand too. I for one am happy with what I did, wouldn’t want it any other way if I could have changed the requirements of myself and my company.

    1. Karel, I showed my working out, so if you think the numbers are wrong, provide some alternatives. I’m open to revise. But you’d need to ground such numbers in the real world for me, at least somehow. 🙂

      As Carey says, Pro Apps have always been “highly profitiable” (the quote comes from a former product manager in the Pro Apps team at Apple who has now moved on. That was about 3 years back).

      We do also have the data point that I’ve quoted elsewhere that Apple have about 50% of the “professional Non-Linear Market”. I think that’s about to dramatically increase.

      But I think the run-on point about extra sales is valid, even if Apple are transitioning away from big iron.

  6. Marcus Samuel-Gaskin

    Thomas, the webinars are free…

  7. Andy

    @Thomas – if you want to be taken seriously by ANY measure, then you need to, at MINIMUM, follow that completely ad hominem rant with some counter-“facts”. Otherwise you’re nothing more than an annoying troll.

    Aside from your post not making ANY sense to begin with.. but never mind.

  8. @Josh. Re everything driving hardware sales. I didn’t get to that because I don’t believe it. Everything drives experiences – from the way the hardware looks, to the way it interacts with the OS to the way the box looks when you pick it up. Everything is about the experience.

    Final Cut Pro X, for example, is about the experience of editing with Apple’s hardware and software in tandem.

    1. What I meant by driving hardware sales is that, if you buy Final Cut, you have to buy (or own) a Mac. If a post house buys 10 seats of FCP, they need 10 Mac Pros as well. And video editing is much more demanding than, say, word processing, meaning you want the fastest, most expensive Mac you can afford.

      There’s no doubt that billions of dollars of Apple hardware have been purchased over the last 12 years for the purpose of running Final Cut Pro.

      And you know it too, so when you say you don’t believe it I think you’re just joshin’ me!

      1. True enough. It doesn’t go the other way though – hardware sales have never subsidized Final Cut Pro – its always been “highly profitable”

  9. Just to clarify… Apple claims 2 million installs – not 2 million customers (I noted that distinction during the sneak peek presentation myself). Seeing as how probably most of the customers own more than one Mac, and have installed their FCP seat(s) on at least 2 machines, that number is probably realistically closer to 1 million actual paid customers.

    The wording is important, because it means a 200% difference!

    Still, 1 million+ customers makes for a very strong user base, and one that is sure to grow in the coming months as FCP X rolls out.

    1. What’s interesting is that is now 2 million customers in this weeks discourse.

  10. Thanks for that clarification Eric, although as of about six months ago Apple said 1.4 million unique registrations, so that may still be the number to go by. Doesn’t change the numbers that much – it’s the expectation of 5 million sales this year coming that interests me.

    As I noted the 1.4 million does include FCE and individual Motion/DVDSP sales when they were available separately.

  11. Art Bell

    This is all very interesting and seems like reasonable back of the napkin financial modeling, and glad to see Apple getting the big upsell from iMovie…but the points for us professionals remain:

    1. Motion?
    2. Node based compositor from Shakes bones?
    3. Does this finally kill Quicktime Pro?
    5. Compressor, Soundtrack etc.,
    4. Tape support?
    6. I can’t wait for 64 bit support and less bugs but if Apple wants to stay in and be taken seriously in the professional film and television world then it would be great if Apples’ ‘Pro Apps’ make professionals work lives more productive.

    Isn’t that what the ‘pro’ stands for?

  12. 1) Nothing was said about any of the other apps. I *believe* Motion and Compressor will be still around. Probably Soundtrack Pro.
    2) No idea. Will have to wait until Apple show us Motion X (or whatever)’
    3) No. QT 7 will still be needed in OS X 10.7 even though QT X player gets editing and export features (probably from AV Foundation)
    4) Nothing said but I’d be very, very surprised at built-in tape support. Viz changed name on BMD’s Capture and Output Tabs in their software
    5) see my answer to 1
    6) I think they’ll make the work lives of a majority of professional editors more productive and add a couple more million professional editors. But there are many, many kinds of professional editing, and we don’t know the suitability for all kinds of workflows.
    This is a “Skate where the puck will be” release, not skate to where the puck is (that’s for Adobe and Avid to do).

    Pro stands for “getting paid and satisfying customers”. It in no way defines tools or techniques.

    1. Flick

      1. I think we are going to see a big overhaul of Motion X, maybe with the name of long-rumored Phenomenon. They are probably going to merge powerful sides of Motion, Color and Shake into one, more friendly application with the simplicity of ex-Motion.

      As far as I could guess, Apple has added most features of Soundtrack Pro, Color and Compressor to Final Cut Pro X and some features of Compressor, Soundtrack Pro and Color to Motion X.

      2. I do not think that Apple have some engineers or team to build up a node base Compositing or Motion graphics application. The best thing they could do is to incorporate and pack up powerful sides of Shake with Motion’s simplicity. If they could create a less complex layer based application with the power of Shake. That would be a great job.

      3-4…I have no idea.

      5. I guess Color, Compressor, and Soundtrack Pro are dead anymore.
      The new pricing paradigm is also another indicator of this. Imagine, Color 200, Motion 200, Soundtrack 150, Compressor 100 bucks, DVD Studio 50 bucks, make 1000 with FCP X. Then what’s the meaning of new pricing action.
      My guess is FCP x 300, new Motion X 400 making 700 bucks. Then the new move is meaningful.

      6. Apple is following and foreseeing the liberation in media content creation environments. Most of Pro guys will be dead soon as well. Time is the time of 2 or 3 person, artists or students lead home design houses. Check out Universal Everything group.

      1. Point 1: Elements of Shake have already made it to Motion so I certainly see that as being plausible. (Phenomenon being a rumor should not be relied upon for anything real.) That’s plausible even though Shake was a node-based compositing application while Motion is a timeline based motion graphics application. Color’s interegration in that, is highly unlikely.
        As for “most of the features of Soundtrack Pro” being in fCP X I’d disagree strongly. We heard of one STP feature – cleanup audio – in FCP X. The needs of the interface for an audio mixing tool are quite different. For example with the Magnetic TL FCP X avoids clip collisions. In STP clip collisions create a cross fade!

        2: you can have power or simplicity, rarely both.

        5. I expect to see Compressor and Motion and Soundtrack Pro. Color I’m not so sure about since so much of what most editors want is in FCP X – match color, unlimited secondaries etc – that I worry about Color. If it wasn’t for the caliber of a person writing docs in the color world, I’d think Color was going to be gone. DVD SP will definitely be a no show.

        Priding could go that way, for sure, which means the new studio would be more expensive than the old one. FCP X $300, Motion $199, STP $199, Color???$199 and Compressor included with any or all of them.

        6 Quite likely.

  13. There’s another piece to this money making pie – one to one lessons. I graduated from iMovie to FCE to FCP years and years ago because the experienced video editors teaching the one-to-one lessons showed me the value of FCP. With that came the need to graduate from an iMac to MacPro. From one MacPro to two, and so on.

    So, here’s how I see the progression for the customer:
    1) Buys an iPhone, loves it, buys a macbook or iMac(many of my PC-loving friends went this route)
    2) They get the one-to-one lessons for $99 because they think it will help with the transition from PC
    3) They bring in the home movies they shot on their iPhone/Flip/whatever to edit during the one-to-one
    4) They get hooked (saw this happen to many)
    5) One to one instructor lets them play with FCPX on a MacPro in the store.
    6) They see how much quicker the video plays than on their one year old macbook. And look, I can change the default transitions, etc.
    7) Boom! They’re into it for another $3k+!


  14. That sounds like a very sound business plan if you ask me. As long as you deliver value along the chain, why not?

  15. Having said all that, the concern remains… what will make FCP inherently PRO? What will convince people that they should spend XX per hour for our services, if they think they can DIY it? Using a $1500 software program was an excellent barrier to entry. Perhaps they should beef up the certification program and really promote it? I spent hundreds of hours/dollars earning Apple certifications. You can bet I promote it.

  16. Noting makes a App inherently Pro, nor does the app have anything to do with the value of your services to the client. In fact if your clients care what you edit with, I think you’ve already failed because the focus isn’t on the value you bring to the client. (That’s the only thing that’s important in servicing a “professional” market).
    Using artificial barriers to entry (aka artificia scarceness) is a real bad idea economically because it leaves you vulnerable to someone else who doesn’t have that barrier to entry, or to sudden drops in the price of tools.
    In m “How to grow your business” seminars I point out the futility of identifying our business offering with any specific tool. It’s just a seriously bad idea. (And frankly that includes certification.)

  17. Good points. I’ll still tout my certs tho. Lord knows I spent long enough acquiring them. 🙂 Learning the most efficient way to use the software saves my clients in my time, and has saved me countless times because I know how to do random things that I would have to spend more time figuring out otherwise.

  18. Hi Philip, I just started listening to your podcasts and really enjoy them. I am a Sony Vegas Pro user (for 5 years) and professional editor. I really like Sony Vegas Pro but the new Final Cut Pro has made me plan to 1) buy my first iMac and 2) purchase Final Cut Pro and learn the software. Even though I have spent thousands of hours with Sony Vegas (which already has many of the *new* features in FCP X), I simply have to learn FCP X because it seems like it will be the industry standard in the next year or so.

    A couple quick questions: 1) I am totally used to editing with 2 monitors for workflow and productivity: is this advisable with FCP X? 2) I am also totally used to right-clicking…is that hard to not have with Macs?

    Any other PC to Mac advice? Thanks.

    1. Screen real estate is always a good thing. Macs have had right click since the inception of OS X, so you’ll have no problem. Every mouse that Apple ships has right-click support (it may not be on by default although it should be) even if you don’t see a specific right mouse button.

      Best advice is to allow it to be a Mac and not get frustrated because it’s not a PC.

  19. AndrewK

    I’m not familiar w/the business of making and selling computer software so forgive me if this is a basic question, but how can Apple buy other products, continue development, drop the price massively and still apparently turn such a healthy profit? Or even radically slash their own prices and still maintain such a healthy profit (I remember when FCP and Cinema Tools cost $999 each).

    Color was basically a free addition to the Suite that used to retail for $25,000. Shake got 2 or 3 big price cuts before Apple put it out to pasture. DVD SP, LiveType, Logic, etc., were all more expense programs before Apple got a hold of them. How does Apple manage this?

  20. The reason Apple can do all that and still maintain a healthy profit is because they are the biggest selling pro NLE in the world. 2 million installs vs about 300,000 for Media Composer.

    As the article says – do the math. 2 million at $300 is $600 million revenue, minimum. The probably paid 20 million to buy Color. They paid about $12 million for Shake and Silicon Grail.

    It’s just a big business with a lot of customers so the numbers stack up.

  21. Christopher Carnel

    Waiting for KY Derby to start and looked at Apple’s FCPX promo pics and realized the viewer might not be done with after all. It looks like there is a zoom tool that will allow you to see a series of clips or zoom all the way in and it focuses solely on one…

    Not sure if this is right or has been pointed out yet. If this proves out seems like a pretty cool way to innovate beyond the static viewer while at the same time allowing people to continue with that paradigm if they so chose.

    1. Christian

      One thing I use FCP’s Viewer a lot : “Ganging”

      To load a movie or a sequence in it while another sequence plays along.

      Great to compare different versions of the same project at the same time.

      Heck, I even use it to check exports by ganging them to their original sequence.

      If this is not hidden in some preferences pane I will definitely miss it.

      Cheers, Christian

  22. Not sure what you’re looking at Christopher, but the only zoom tool I see in the browser area of those hi res graphics is the one that determines how frequent we get a thumbnail in the browser for each clip. At All it’s one keyframe per clip.

    Perhaps I’m missing what you you’re seeing?

  23. One thing I noted in preparing for this week’s “Preparing for Final Cut Pro X” seminar is that beside the slider I referred to above is a button very similar to that which shows the Timeline View Options, so maybe some icon size options lie under there.

    But frankly, the lack of a dedicated Viewer won’t really be missed. All the functionality is there, just in different (and I think more convenient) places.

    1. Christopher Carnel

      I’m with you about the irrelevance of the viewer. What I noticed in both pic #2 & #3 on Larry Jordan’s blog is the following:

      Pic #2 looks like it’s in color correction mode and it has “all clips” in the upper left hand side of the “new viewer” box and on the bottom right it has the slider with (All) to the right of it. All must be all clips I presume.

      Pic #3 Is different than pic one…On the lower right hand of what I will call the new viewer is an icon and 10s with a slider type of function (this must be what you’re referring to). Furthermore on the top left of that same box where the clips will be viewable it says “all clips”…meaning there is (presumably) another viewing option for that “box”.

      Guess we’ll find out…look forward to your webinar this week. Very interested in how migrating from FCP 6 to Mac OSX “might” work…

      1. Greg

        Hi Christopher,

        FCPX has borrowed several nice interface features from iMovie. What you’re seeing is one of them – slider control over the number of thumbnails in each clip’s filmstrip view. 10s means one thumbnail every 10 seconds of footage, which was the setting that Randy Ubillos used at the Supermeet; All means a clip has only 1 thumbnail.

        In iMovie set to All you can still skim and set ranges in that single thumbnail.

  24. Ray Doetjes

    The business strategy is three fold with a long term strategy (to match the vision Macs anywhere).

    1) Bump your install base with a program that once you are hooked you can’t easily switch of from. NLEs have a relatively steep learning curve and are often too expensive to switch.

    2) Because you can’t easily switch and this program is good and cheap people will move to your platform and/or stay there.

    The initial cash bump is nice for Apple but not really their main concern. Their vision to have Mac in any household and in any creative venture is what matters.
    Everything that Apple does is aiming to achieve that Vision.

    1. I’m not sure about the NLE lock in. Might be true for many but for professional freelance editors they need to know at least FCP and Media Composer (and these days should be familiar with Premiere Pro). Plus all three NLEs run on the same hardware so switching only has the mental cost.

  25. Jay

    Now that FCP X has been released and the reviews are woeful (2.5 stars in 825 ratings in the App Store, well below a 94% satisfaction rate), I think this article needs a “Part II” or at least an update. It seems rather clear to me that Apple has actually abandoned the “Pro Apps”. Final Cut Studio, Final Cut Express and Final Cut Server have all been axed. Final Cut Pro X is nothing more than a glorified version of iMovie, with a slew of features from the previous FCS 7 removed! The “Pro” editors are up in arms and already talking about jumping ship to Adobe Premiere because FCP X is a shadow of its former self. Hell, it can’t even open FCS 7 projects. No backwards compatibility? Really? This product is squarely aimed at consumers and pro editors have been left blowing in the wind. Sure the consumer market and infinitely larger than the pro, and Apple may sell more copies than ever to that audience, but the bottom line is, you can no longer call this a “Pro App.”

  26. Larry

    This has very little to do with the actual profit Apple’s pro apps achieve and has everything to do with what they do for Apple’s brand: a brand that was once defined by creative freedom and revolutionary progress for artists. FCP (along with Firewire) not only got Apple an Emmy, but the halo effect of being the subversive creative brand that could make filmmaking and (multimedia creation in general) far more democratic. It wasn’t about having the entry dough for an Avid system anymore, it became more about storytelling and we have a slew of incredible journalistic documentaries and indie films (which tell stories that would have never been told otherwise) because of the FCP revolution. That is why people like myself love (or maybe loved) Apple. They represented a gross roots liberation from the corporate system that grew to define creative – and by launching a revolution based on reduced cost of post-production (not to mention what Firewire did for live filming) they became the darling of every producer, director, and editor in the industry. People associated them with the very soul of filmmaking, and the entity people refer to as “Hollywood”.

    This was excellent for Apple on the consumer end as well. FCP was built upon Quicktime. And Apple created Quicktime. They helped build the H2624 codec as well. So it made sense, not just for Apple’s pro customers, but for their CONSUMER customers as well, to rely on Apple once again for the distribution of content. Both music and film studios felt comfortable with Apple because they created all their content under Apple’s software and ecosystem – their very codecs were established by Apple. Since Apple had seeded the very roots of digital multimedia they were in a prime position to dictate its distribution, namely the creation of the iTunes network.

    But Apple can’t play both games – they can’t be the open, democratic company that encourages creative expression while simultaneously playing the part of Big Brother on the consumer end. This strategy is filled with too many conflicts. As they continue to strip FCP of features, abandon the pro apps, the codecs, even the power user capabilities of OS-X, they won’t have the reputation, the patents, or the loyalty of following to survive an attack on iTunes by the competition. Professionals have an amazing ability to stick with a company because they believe in its vision, and its ability to stick by that vision. A relevant example is how pros stuck with Apple even as it approached the edge of financial collapse in the 90s. Consumers do not have such loyalties. If Apple abandons the pros, and another company can compete with iTunes with better-developed codecs, better relationship with music and film studios, a more open ecosystem, etc. Apple won’t have the pros to looks to anymore – nor a internal pro division creating new industry technologies and standards with which to rule the roost.

    Apple’s abandonment of the “pro apps” (which is truly the abandonment of a power-user ecosystem altogether) is akin to a sports car manufacturer such as Ferrari or Porsche dropping out of competitive motor sport racing. It would boost short term profit potential, but it would completely destroy their R&D, their brand perception, and eventually their product. Motor sports racing, like “pro apps”, is not an easy thing to compete in. Everything happens at the cutting edge. There are other teams waiting to literally destroy you. They are hiding technology you might not have. They might have even stolen your own technology right from under you. R&D costs are nightmarish and each and every venture is a risk. If you don’t take that risk though, and play it safe with the consumers eating hotdogs in the stands, you end up watching the race and not leading it.

  27. Aima Fe Doup

    I’m fed-up. After years of making a living as a Shake artist, I had to adapt as Apple dropped the pro product and move to something else. I adapted, but many of my employers had an obscene amount of money invested in a platform that died. That hurt all freelancers and the industry. Apple didn’t care back then.

    But I also edit, and have edited for over 20 years, and the last number of years with FCP. My gear, setup, pipeline, environment were based on a platform that was updated but not completely re-configured until now.

    Like Shake (which Apple had the balls to say Motion was a replacement), Apple has killed FCP.

    It’s dead. Why? Ladies and Gentlemen, when you remove backward compatibility and support for that previous version, it is dead. If they did, the wouldn’t have mis-managed this launch so poorly and recklessly.
    They lied to us by not saying, or warning that X would NOT be backward compatible. Why upgrade? Frack them.

    FCP folk. It’s time you started to Think Differently.
    Apple intent is clear and was clear years ago. They don’t care about Pro.

    It’s time to move to another software platform and hardware system.
    Adobe, they are making your job easy, aren’t they?