Q+A: Robert Sharp on Digieffects' Next Steps
RS: We’ve had a really great year. After the plug-in market stalled in 2008/2009, it’s really come roaring back, like most everything else. Most of the plug-in guys I know are doing extraordinarily well. One huge macro reason for that is Adobe sold about 20 percent more copies of CS5 than it did of CS4. So just from those organic reasons, we’re going to benefit right there. Apple’s been a little quiet on the Final Cut front-and I would hope that the next version will be 64-bit-but the Adobe ecosystem, especially with After Effects, has become so strong for us. We’re also seeing a lot more business from Premiere Pro customers.
Then there are the micro reasons. When I bought the company in 2007, it was near bankrupt and had been neglected. I like to tell people that if you want to predict a major economic downtown, just wait and see when I’m about to buy a company and completely leverage myself personally-that’s usually when things hit the fan in the stock market. But strangely, during that time, from 2007 to 2008 we turned things around, grew the revenue, did all the updates, became profitable and things were looking really good. Then the global downturn happened, and we sunk in revenues by about 25%. The fact of the matter is, looking back, I can’t blame it all on the dismal economy. We just didn’t launch the right products and had some internal issues that were holding us back. But last year, 2010, we completely figured it out, and launched Delirium 2.0 and Buena Depth Cue 2.0. Both, by the way, marked the first time in Digieffects’ long history (since 1996) that we launched paid upgrades.
You added a number of key new features in Delirium certainly worth paying for, like 64-bit support.
RS: Absolutely. The 64-bit support was a huge part of that, but we also made lots of speed optimizations and improved existing features. When I bought the company, I felt the way products were packaged and sold was confusing to our users. You had to pay separately for a Mac version or a Windows version of the same effect. Now, it’s very simple, you get one app for both Mac and Windows that supports all hosts. We’ve also pared down the product line to three main products: Delirium, Damage and Buena Depth Cue. We still have FreeForm, but that’s now bundled for free with After Effects CS5. There’s no reason for people to buy that from us because they can get it for free.
But you also offer a number of single plug-ins as part of those main product lines?
RS: Yes, the “a la carte” products are the latest thing for us. If you go to our site and you hover over any of the main products, you’ll get a list of the single plug-ins you can buy if you’re not purchasing the full suite. If $299 is out of your budget and you only need a snow or fire effect, then we’ll sell that to you for $49 each.
Did you price them that way to widen your market?
RS: Definitely. Ten years ago, it was just ad agencies, TV stations and big studios buying our products. Now everyone is creating video, so we wanted to price individual effects affordably.
What’s your roadmap, in the near term, for Delirium and your other core pro products?
Rather than trying to develop new products and grow the catalog, our strategy is to continue spinning out the a la carte products based on the three parent products, then just keep returning to those three and make them faster, improving UI and adding more features. What I’ve learned the most in the last three years is that the best marketing campaign is just to have excellent products. If you focus in on your best of breed and keep refining them, it pays off.
Where have you seen the most growth, in terms of host apps?
Probably the Final Cut market. We see it being used everywhere, in features and documentaries, at universities or by anybody with a Web site. Another area that has been very exciting for us has been the recent licensing of several of our plug-ins to Roxio for Creator 2011. Creator, which is very consumer-oriented, is still like a television station in a box, with media libraries, asset management, video editing and DVD authoring. It’s amazing that it’s only $79, but it also goes out to millions of people. We’re the first plug-in company to license a product to Roxio, which was huge win for us, both financially and in terms of our brand. Hopefully some of these users will graduate to a higher level and will want some of our more sophisticated tools. But it goes to show you the power of a consumer market that’s finally interested in serious media creation, especially editing and distributing video.
That’s why I’m so bullish on the future of our products and the host applications: there’s a real drive among users to want to make their content stand out from all the crap that’s out there. But our bread and butter is still the professional products. Delirium v2 was huge for us. It’s been around for ten years, has the most effects and has the biggest installed customer base. Both upgrades and new sales have been doing really well.
How many users would you estimate you have now?
We used to have under 100,000 users, and now, every owner of After Effects, Production Premium and the Master Collection now owns FreeForm. Whether or not they are using it, that’s a different story. And with the Roxio deal, we’ve got potentially millions of new customers. That really expands our footprint.
Has that surprised you?
Watching how rapidly the consumer video market is changing continues to astound me.
Any immediate plans to develop plug-ins for stereo 3D workflows?
Right now, it’s just wait and see. We’re way too small to try to take a leading position in any of that. As a plug-in company, we fill in the gaps, so we need to see where the trend develops first before we can do that. Personally, I hate wearing the glasses. I like to keep track of new patents, and I saw one filed by Apple recently for a glasses-free, stereoscopic 3D screen that can be viewed from anywhere in the room. I thought that was pretty interesting, but we shall see.