Red's open and honest business model.

[dwbell]

Advertisement (gone after registration)

Respect.

 

Everything changes... IMPORTANT post.

 

Will be zapped by the mods.

[pop]

Respect has never been zapped by the moderators here. Lack of respect, OTOH, ...

 

I'm moving this thread to the Customer Forum. The Leica Digital Forum is for discussions about Leica's Digital cameras.

 

[dwbell]

Ha! Touché!

[pop]

The thread you mention above is a bit lengthy. Does it tell anywhere by how much the price of the product is lowered?

 

Leica, BTW, did roughly the same for the M9. Once the tools (and presumably the development) for the M9 was written off, they re-launched it as the M-E at a markedly lower price.

[CalArts 99]

Leica, BTW, did roughly the same for the M9. Once the tools (and presumably the development) for the M9 was written off, they re-launched it as the M-E at a markedly lower price.

 

That's right, and also the new M is not as much as the M9 when it was launched (or at least just about the same price.) I remember when there was speculation here that it would be closer to 9kUSD.

 

What Jim Jannard said about owning his products is also good food for thought for Leica digital owners:

 

"So if you bought an EPIC did you lose? Only if you did not put your EPIC to work. These are professional tools. They need to work. That is your responsibility.

 

Is your EPIC still relevant? Absolutely. Is it frustrating that you paid $X and it will soon be sold for some percentage less than X? Yes. But this is the nature of electronics. It has been. It is. And it always will be."

[dwbell]

Yes, the crux of the "problem" is kind of a circular array. The users who's old model is suddenly lowered in resale value are annoyed, because they are the ones who wanted to use the higher previous value to part fund the new model. So, to keep the value they kind of don't want a new model to be released. But they really do want that.

 

I like the mans approach and transparency. I'd like more of that from Leica, with regards current delivers etc. it's always stoned silence with them I feel, even to the dealers.

 

I didn't mention the price topic, it's interesting though that two posts picked up in defence. I thought it would be zapped as it's totally Leica unrelated. I hoped it wouldn't as it demonstrates that one can communicate well with the end users and charge huge sums for unique tech at the same time.

[pop]

Advertisement (gone after registration)

(...)

I didn't mention the price topic, it's interesting though that two posts picked up in defence. (...)

 

That's what I - in turn - call an interesting statement.

 

The central statement of the opening post of the thread you linked to was "We are ready to lower prices on EPIC." That kind of touches on the price topic, I would think.

 

Since I did not wish to read all of the thread you linked to, I was not able to find out whether they did in fact lower the price of their product or whether they simply stated that they were ready to do so and - if so - by how much.

 

(...) it's interesting though that two posts picked up in defence. (...)

 

That's an interesting one, too. I don't feel it's defensive to point out that the vendor you claim respect for does the same as Leica did but with much more fanfare. After all, it's you who supposed that we would delete your contribution for the sole reason that you said something nice about a vendor of video gear in a Leica forum.

 

So, we agree on the point that respect is due to Red for "being ready to lower the price", even if their reluctance to increase their margin is probably not the sole reason for doing so.

[dwbell]

This isn't going anywhere a useful Pop. The open, transparent communication and the price drop is what I have respect for. It being totally unrelated to Leica is why I thought it would be zapped. Thanks for not doing so.

 

Disagree about "fanfare", that's Red's MO, not a one off trumpet blow.

 

I too will be interested what the price reduction is, in percentage terms.

 

I think you think I'm on the snipe? I'm not, life's too short to get het up about this sort of thing. I find Red's approach attractive. I would like to see more like this from Leica. I'm not a hater, how can I be with tens of thousands of euros worth of Leica gear?

 

Enjoy Sunday.

[CalArts 99]

Just for the record, I wasn't trying to defend Leica in any fashion, but only stating facts about product pricing.

 

I like Jannard and I like his products. I met him briefly at an open house for a post production studio in Los Angeles. But he is the antithesis to Sefan Daniel and Andreas Kaufmann. And Red (as is Oakley) is way on the other side of the spectrum of Leica Camera AG. Leica is a much more conservative company.

 

He has always marketed (including with Oakley) in this sort of style (and it's highly profitable; Jannard has a net worth of several billion USD.) I do respect his method of marketing, but it's also just marketing in a different way. And perhaps having that kind of personal wealth means the stakes may not be as high and more risks can be taken. i.e., the 'laid back style' and marketing transparency that more conservatives companies might not feel comfortable with. But even for Red, the bottom line is still the bottom line. I'm not implying at all that it's some kind of a facade, but it is definitely part of an overall marketing strategy.

 

As far as deliveries with Leica, don't forget what happened with the release of the Red One and all that deposit craziness (the "Red reservation program") that led the industry to think it was all just vaporware. And it took over a year and a half to finally ship after taking deposits from customers.

 

The Red is a good product but Arri, Panavision, and BlackMagic are also very strong in the industry, too.

[IWC Doppel]

I don't see any relevance ?

 

A manufacturer moving the price, I suspect for commercial reasons (need volume, increase market share, competition etc, etc), with a story to support, that will have some marketing involved, I have no doubt.

 

Without a full understanding of the capital investment capitalised R&D time, etc etc, 'profitability' and 'price' is irrelevant. Ever played with a spreadsheet for a software product and you'll know what I mean.

 

BTW I have never heard of the product

[Ruhayat]

I just read the opening post on that thread. Seems to me to merely confirm that what Leica is doing is correct: now that they have recovered R&D costs on the full frame digital M, they can introduce the product at a lower pricing. Minus the conscious trumpeting that RED is doing.

 

Like someone said: marketing. But 2 different approaches to it. Personally, I prefer Leica's way of just quietly lowering prices by trotting out a new M-E, not by cutting the price on an M9, which would have users steaming as what this RED post seems to be trying to assuage. Leica's approach is more elegant, it seems to me.

[sblitz]

so he is just lowering the price for an existing product because his costs have declined? so what did he do with the profits? not a naive question. schumpeter wrote eons ago that there is no such thing as excess profits, this is money that needs to be reinvested in a firm to improve production lines, etc, so the firm can stay alive over the long haul. firms that gather up cash and spend it on themselves or give it all back in dividends end up going broke at some point. want some examples? us steel companies after the 60s, kodak more recently, banks earning excess returns and boosting dividends rather than holding the cash in reserve (bank models are always a bit different), even the excess profits leica once earned before the slr ate its lunch probably should've spent the money more wisely. so these guys will eventually go the way of "remember them" because they failed to reinvest and build. it might not matter the owners, so be it. but a business model? no at all.