That really is the question. They are a small company. I could be wrong but I read somewhere around 30 million euro cap. They have could not have paid too much unless they are betting the farm on this. If this was a dumping by SCS for a song that would tell a lot about how much future they think it has or perhaps how much investment is required to modernize the code base. I suspect they will have one release or maybe two to prove this is not just a license gone into caretaker mode.
Seems like SCS really blew it - Catalyst is nowhere.
Think about the considerations. If Magix was a smart company buyer, then they should have been aware some of the pitfalls of VegasPro purchase - namely that it doesn't do things that the pro NLE category has been programmed to do. So, with due diligence they would not and could not offer a lot of money to SCS.
But more importantly if Magix thought they were going to inherit the intellectual property associated with the purchase, including the content of this forum, then that cost (if any) had to be factored into the deal.
And finally did Magix realize what it would take to offer registration servers, on-going support and the like to continue maintenance of the software even in its present iteration, let alone consider movements to further versioning??? If they were smart about the deal, they paid very little, INDEED!
Agreed I doubt MAGIX would have paid much, heck free would have probably saved Sony money in redundancy.
The bigger question isn't what's going to stay the same but what's going to change to make Vegas capture enough market share to keep the lights on. There's still quite a few Vegas users around and keeping them is important but how to attract new users?
I think Sony's decision to abandon Vegas was made over two years ago when they undertook Catalyst. It took them this long to unload it. My guess is MAGIX picked it up for a song. It'll be interesting to see where they run with it and if they have the resources to make it happen. I'm guessing the first upgrade will be relatively minor. After all, what can they realistically expect to change between now and then?
So the prices are kind of all over the map and spanning a decade. Media100 went for a penny and a song, but they evidently had a lot of liabilities and had the poor fortune to be dependent on Apple when FCP was in its ascendancy. Still, I was kind of surprised by how little Media100 sold for and how much Sonic Foundry brought in.
I figured Catalyst was worth around $1,000. I think Vegas has more like 100 users. Upgrades are around $300. $300x100=$30,000. Then we need to double it, and it's $60,000. Then double it again, and it's safe to say they paid around $100K.
A song? No way. It was $100K. What song is worth that much? I don't know. Maybe one of Bieber's songs I guess. Hmm. That's a good point. I guess you could be right. I did a search on Wikipedia and saw this, 'his most successful single to date, "Baby".' I think probably what happened was MAGIX settled with them because they used Samplitude for the recording without permission. Then they probably just figured that Vegas was a better investment than holding onto the song since it was getting old. I think it was a smart move. MAGIX is definitely going to make more money in the long run having Vegas.
Existing Customer base, yes, but how many will feel the need/will to upgrade?
But the code looks like to be rewritten from scratch, thus value is somehow pretty low if the plan is to stay in the market( and we are talking about PRO editing, which is rather mature and already split btw few big payers).
And I dont' think there were many buyers willing to pay much, considering the investment needed to mantain/rewrite the code.
Making money not easy...you can get DaVinci for free...and if you are on Mac you can buy once FCPX..and receive free update.
I really don't know what SCS was worth in the last year, but these deals are probably pretty well researched as the buyer and seller both want as much as they can get. Sonic Foundry was evidently worth 18 million to Sony 13 years ago. I'd imagine that it's still down in that range, give or take 10 million.
On the other hand, Grass Valley was worth 220 million just a couple of years ago. They have a hardware business and a high-end clientele that SCS lacked.
I suppose the question is, what is blue sky worth in the video editing business these days? I would be surprised if Sony hadn't been shopping Vegas around for quite awhile. If true, blue sky may not be worth much right now. MAGIX is probably looking for market share and a stronger presence stateside. Therein is the value for them -- and there is little assurance they can convert our goodwill to their benefit. I doubt they paid a lot.
You said "If I were to guess it would be in the $200 million to $500 million range. Vegas has market share, it is not just Vegas and there are IP/patents that will transfer."
Which made me fall off my chair laughing. That's 7-8 times more then the entire value of Magix. So no that didn't happen. Maybe one million, maybe two, and maybe a percentage of sales - who knows but definitely not $200 million or more. There is a market but is almost all composed of upgrades to present users, and Consumer sales to those who are probably not even sure what they are buying. I would not expect much growth on the professional user side no matter what they do. Having said that it is possible to milk a decent revenue stream serving existing users from product like this if you got cheap enough.
They paid $18M+ 13 years ago just for sound forge. Plus they 'assumed liabilities" which could be anything. Some company's total worth goes to 'liabilities'. They could have assumed millions in liabilities (depending on the financial health of SF at the time).
If all they did was maintain what they bought, with modest market growth and inflation it would still probably be in the $30-40M range. But they have expanded it.
Along with the current SF, they expanded the product lines with Vegas and Acid (FWIW) and also included their content library.
As to the worth of Magix... it doesn't really matter. They could have leveraged or got VC funds or arranged some type of 'installment plan'.
We'll probably find out soon enough. Sony will likely specify the sale details in their quarterly report.
"They paid $18M+ 13 years ago just for sound forge."
That's not correct. Vegas and Acid and a slew of smaller pieces were all developed by Sonic Foundry and part of the deal with Sony. But, yes, this is all speculation based on very little information. Some of the disgruntled posters here are making pretty ridiculous claims, and I'm not even sure that this forum represents the entire user base.
One thing I noticed yesterday, apropos of very little, is that Magix has several applications included in software bundles on new computers.