Long-term Cakewalk and BandLab solvency - a.k.a. How will Cakewalk make money now?

Hey Guys -- I'm a former Cakewalk user (and fan) from another era, and my interest in Cakewalk goes way back to the early days with Hendershott. What memories. I currently don't use Cakewalk as my primary DAW, but with the latest news, I'm fascinated and want to be optimistic, but have some real questions about Cakewalk's ultimate direction.
 
I was saddened to find out that Cakewalk was being discontinued by Gibson, very happy to see it rescued by Meng Ru Kuok, and blown away to see him release it for free. Wow. That sent shockwaves through the larger DAW community. The winds of change are blowing. I was also really happy to see Noel brought back on the team, as many years ago, I had the privilege of some great personal exchanges with him and I think he's a stand-up guy. 
 
As I've been following the latest developments, I've gotten into several discussions with former- and never- and current-Cakewalk users about this big announcement, and most of us agree this is potentially a MAJOR shift for the entire DAW community, representing what is probably a brand new business model for DAWs.
 
So now to my questions -- What is the long-term plan for Cakewalk and BandLab? How will they really make money down the road? What will Cakewalk have to morph into in order to actually make money? What long-term commitments can Meng actually give the Cakewalk community of his support for advanced development? Obviously, BandLab won't likely share all it's deep strategic thinking with us, but I wanted to try to understand the general game plan. I hope Noel and/or Meng might be reading this too, would love their input.
 
Why is this important for some of us to know? Well, IMO, if someone installs a DAW, they may or may not realize this, but they are installing a product that is a long-term commitment. The musician/producer is forming a long-term relationship with his toolset. When you start writing or recording something so personal as music in a DAW, those projects can go on for years and years, and the tools we use are the creative extension of our minds and hearts. I've got old cherished Cakewalk files 20+ years ago (and older) in my backups -- and so I'll always be interested and optimistic about what happens with Cakewalk, and it's great to know it has a life ahead of it. And also great to know where Cakewalk is going. There will be a lot of heart and soul poured into using Cakewalk in the coming chapter of its history, and since this is such a "new" business model, I'd personally love to know where it's really going. I'm sure I'm not alone in my curiosity.
 
There's a basic fact in business (and some might say, life in general), which is that NOTHING is ever really, truly free. So BandLab has to get SOMETHING out of this extraordinary move they just made, at some point in the future. For now, I get it. It's a market-share move, and I believe the genuine passion of Meng. So it's a great first step worthy of huge kudos!
 
Yes, I've read Meng's posts and press releases about the general philosophy of giving the tools to produce music to the maximum number of people, etc.. And as a philosophy, I think that's great. But as a BUSINESS MODEL, he needs Cakewalk to eventually make money. Right now, Meng seems to be in Internet start-up mode, building market share for his BandLab and now Cakewalk divisions. But EVERY business (even ones with deep investment from billionaire fathers) will have to eventually make money, right?
 
So will Cakewalk continue to be developed as a high-end (but still FREE) DAW, but then start making money via the in-app purchase model? Will it go the advertising model? Will it go the profile monitoring and collection model? All three models?
 
Will they ever start removing features, or limiting the higher-end features with a pay wall? Is their focus going to be moving to mainstream, consumer kind of DAW, or will they ever be developing unique features for sub-market segments and specialties, like film/media/game composers, or EDM, or classical notation-oriented tools, or sound designers, or post production, or mastering, or studio hardware integration, etc... How generic will they go, or will they still pay attention to the fringe areas? Will they invest in R&D on the science of DSP algorithms or just package tons of loops to sell?
 
Would love to know the direction BandLab will really be going. I work with a bunch of people and I recommend DAW software all the time, and I want to be able to give them good advice, but I'm not sure what to say about the "new" Cakewalk yet. Where will it go in 2-3-4 years? What and how and why is it being released this way? Not a criticism, but if in 2 years Cakewalk is constantly hitting you with ads and in-app purchases or monitoring your computer to collect profile data, I wouldn't want to recommend that to anyone (or keep it installed myself). I'd like to know if BandLab will actually keep Cakewalk around and really commit long-term to it as a world-class high-performance DAW... and if so, how is BandLab as a parent company itself going to make money long-term?
 
It's all great and wonderful that Cakewalk is free and under development again with a good team led by Noel again, but I wouldn't want to experience the UNCERTAINTY again. Yes, obviously, life is filled with uncertainty, but in the DAW market, there's never been an approach like this before, so the more we know about the general direction and game plan, the more helpful that will be for generating confidence in the user base that this is a long-term commitment. And I know it's very early in the new chapter and they're still figuring things out, but I'm not even sure that BandLab itself is solvent or profitable on its own right now (I have no way of knowing, but I don't see any real visible revenue streams yet). I mean, BandLab is in a huge growth phase with start-up investment, so we understand how that model works more or less, but look at SoundCloud, which is really struggling, and that was a darling of the industry in recent years. What happens if BandLab can't transition to a profitable venture on its own? What happens with Cakewalk once again? I'm not just looking at 2018, but I'm looking at what level of stability and commitment I can anticipate in 2019, 2020, 2021, etc... 
 
Not trying to be negative but trying to understand the game plan. I see a lot of celebrating in the forum, with a few nay-sayers getting criticized, but some of them are bringing up valid concerns. I for one wish Meng and Noel the best with all this, and I hope they can truly transform the industry in a positive way. The potential is certainly there! But it's also a risky move -- BOLD, but risky. Meng is about 30 years old, clearly very ambitious, innovative, and with great support from his family, and he already has shown he has some great business skills. But when the numbers have to add up in a few years, what will Cakewalk look like then and how will it balance the accounting? 
 
Hope you all understand this is NOT a negative post, but a genuine query on the bigger picture. In any case, I wish Cakewalk all the best, and hope that it stays around for a long, long time! Congrats to Meng and his team, and warmest well-wishes to Noel as he starts this new journey!

meng
New features will absolutely be developed, not just fixes. As I said in my very first post, at BandLab we prefer to under-promise and over-deliver, so I hope we'll continue to bring positive surprises in the future.

The way we operate our group is not like many others, and Cakewalk, like all of our brands, are not isolated projects but integrated ones, which is why our approach is even financially feasible. Our commitment to the world of music as BandLab Technologies extends beyond software and those of you who start to research a little will understand we have many traditional revenue streams within our group and don't just give everything away for free :-)

For those of you who use Cakewalk in a professional context and are looking to whether you should put your time and effort into a platform - you should know that we are committed to all our products and the immense responsibility towards not just the Cakewalk community but the millions who are part of the BandLab community too - we would not dare to take on a project of this nature unless we were confident we would be a good home for it.

Now it sounds a little hard sell, so I'll shut up and get back to working on the product :-)

 
...

meng
As I said above, if you google a little or check our NAMM photos and announcements, you'll see we aren't just a software company.

We don't believe in chasing rainbow startup dreams but building solid sustainable businesses. They take longer, but they last longer too :-)

 
Thank you, Meng, for your response! I appreciate you taking the time to read this and share your thoughts! This really does sound like a very different business model indeed -- this integrated and almost holistic approach you have mentioned seems very rare in general and from what I can tell is totally unique within the music software market. I've done a little more homework, and I can see some of the other business avenues you appear to have, and I have to say, it's extremely bold of you to operate like this. You have an intriguing vision -- and it's definitely not a typical Western mentality to business IMO. If you are successful long-term (and I do hope that you are!) you have the potential to really change the landscape of music software. Bravo for your guts to do this.
 
It does seem almost miraculous that you'd back a project/brand in such a manner, with a cross-project revenue model, and I hope your approach works. PLEASE don't go down the path of invasive profile building and selling ad space inside the tools, though! :-) Let the tools you release be refuges of creativity and trust as a clean baseline app, and let us pay for unique plugins/modules/sounds or additional services without constantly being bombarded with marketing. Just crossing fingers that you'll remain classy in the years to come! 
 
I REALLY like that you are cultivating an attitude of "immense responsibility" towards your communities, and that you wouldn't "dare to take on a project of this nature" without due care. This is definitely confidence-building, and my hope is that when it comes time to write Noel and his team their paychecks you'll have that kind of commitment and passion for many years to come. Because as you know, great developers are not cheap. And great software takes time and resources before it bears fruit. I personally wish you the best. 
 
I do want to emphasize that there are many former (and current) Cakewalk users (and DAW users in general) that take that kind of commitment and attitude very seriously, and if you are going to make the world a better place with your ambitious and good-hearted plans, you'll need their added passion and trust to combine with your own. A lot of older-gen folks (some of us are long-time pros) rank trust, stability, reliability (and how that translates into bugfixes, professional features, consistent quality control), as very, very important. You're out on the cutting edge of business models for DAWs, so it's unknown territory where you'll be taking our beloved music-making tools. Just because Cakewalk is now "free" I hope you never sacrifice the core values of trust, stability and reliability.
 
Again, giant kudos to you for your guts to literally forge a new path in this overall DAW market/community. If you maintain this genuine passion, I believe you can make a lot of good things happen.
 
Regards,
ionecake

meng
Cakewalk, like all of our brands, are not isolated projects but integrated ones, which is why our approach is even financially feasible.

ionecake, I believe the answer to your question lies somewhere inside the rather cryptic line I quoted above.  How can Twitter, Snapchat, or Facebook be free?  Their business models depend on ancillary revenue, much of which is to raise the visibility of items within their ecosystem -- iow, advertising.
 
The financial feasibility Meng refers to will come from ancillary revenues.  There could be add-on products and services that are fee-based.  There can be fees (advertising charges) to promote the music published through the system.  There can be hardware sales associated with their software.
 
This only works if the numbers are big enough, and taking a critical mass of the market.  There was no way SONAR was ever going to get numbers like that.  The idea, therefore, is to promote the "free DAW"as part of the overall value proposition to reach the critical mass of users.  If Cakewalk had tens of thousands of active users, Bandlab could aspire to millions of users.  They won't all use the full DAW, but it is part of the package for those who want to use it.
 
We can debate whether it is practical to reach millions of users (and that is my number, not Meng's).  But I think that is the concept.  And it helps that there is an existing business and funding to sustain this effort over several years as Bandlab tries to build that critical mass.
 
Personally, I think it is something of a long shot, but I am very impressed by the ambition and the effort so far.  I hope it pays off bigly for Bandlab and Meng.

cparmerlee

meng
Cakewalk, like all of our brands, are not isolated projects but integrated ones, which is why our approach is even financially feasible.

ionecake, I believe the answer to your question lies somewhere inside the rather cryptic line I quoted above. 
 

 
Agreed completely, that's the key, his "integrated" approach. Also agree it will likely depend on large numbers of people who use the platform. How that evolves and pans out in the years to come, we'll see, but I also agree it seems most likely that revenue will come with add-on products and services. I just hope that he doesn't get tempted to go the pathway of invasive profile model and ad revenue model like the the social media companies you mentioned. 
 

meng
New features will absolutely be developed, not just fixes. As I said in my very first post, at BandLab we prefer to under-promise and over-deliver, so I hope we'll continue to bring positive surprises in the future.

The way we operate our group is not like many others, and Cakewalk, like all of our brands, are not isolated projects but integrated ones, which is why our approach is even financially feasible. Our commitment to the world of music as BandLab Technologies extends beyond software and those of you who start to research a little will understand we have many traditional revenue streams within our group and don't just give everything away for free :-)

For those of you who use Cakewalk in a professional context and are looking to whether you should put your time and effort into a platform - you should know that we are committed to all our products and the immense responsibility towards not just the Cakewalk community but the millions who are part of the BandLab community too - we would not dare to take on a project of this nature unless we were confident we would be a good home for it.

Now it sounds a little hard sell, so I'll shut up and get back to working on the product :-)

Will you ever sell stocks? I don't have much money, but I would seriously love to invest in Bandlab! :)
Your vision, creativity and hard work I believe, God willing, will achieve great things.
I've never bought stocks before, but I'd sign up to buy Bandlab stocks! :)

Lanceindastudio
 
You da Meng!
 
Cheers!
 
 

Thanks for your thoughts, Craig! I agree that each DAW has certain strengths, and it will be very fascinating to watch this new chapter in Cakewalk's history and how the larger DAW community evolves! Wishing the best for Meng, Noel, and the rest of the team!
 
Also, BTW, I noticed you have been posting Studio One articles on the Presonus blog since what we thought was the death of Cakewalk -- but now that Cakewalk is back in action, are you turning back to Cakewalk as your main DAW? You seem to have been much more Cakewalk-centric in recent years (I know you have been working with many DAWs of course), but wondering if things have changed for you with all that has happened? Cakewalk could use your enthusiasm and energy like before!

They can make money off their purchase of cakewalk they just need to keep their customer base happy and content. Happy people spend money. There is also the numbers game that I liken to when I purchase an app or a game for a dollar, the first thought is there no money in making apps, but when 50 million people buy it all of the sudden a little money turn into a lot.
 
Off topic, but it seems like just the other day I sent off an email questioning the truth behind lifetime updates. The response took 4 months to receive and it essentially said read our post. I was like WOW that took 4 months. That was the post that was sent out stating how invigorated the staff was, and how motivated they were, and how they promised to stay Sonar.
 
Regardless I am hopeful that this works out. I have spent years fighting off the people telling me I needed the industry standard, and nothing compares to x and that I can't make crap with an amateur DAW. Now I can say try it it will cost you nothing but your time.

RexRed
 
 
People go to Facebook for news and the would more likely come to Bandlab for music creation and music tech info.
 
Hooking people socially though Cakewalk would be nice, Cakewalk could notify you when friends come online not through an audio beep but through a news feed which scrolls with ads. You can glance at it every once in a while, when editing.
 
An instant messenger built into Cakewalk would be nice too.
 
Advertisers could sell hardware though a Cakewalk feed.
 
It does not have to be invasive it can be tailored to your needs.
 
Like, please watch this ad before you delete this track would be invasive but your guitar player just signed in would be helpful... You have X number of fans online viewing your editing or waiting for your new song release would be helpful.

 
I can't think of anything worse. There are enough distractions already when I'm trying to get some music recorded.