Where is NI headed? Some official and unofficial answers

Native Instruments has responded to our request for more clarity on recent layoffs and how this impacts their future plans. Other sources tell us there have been deep cuts into teams managing products, marketing, and design.

As I wrote late last night, NI has publicly stated they’ve cut 20% of their workforce. I should clarify that that number represents the layoffs executed just on Thursday of last week. Multiple sources have confirmed additional layoffs over the summer push the number closer to at least 150 rather than 100. This includes a leaked departure of the existing desktop TRAKTOR team in July, and additional product owners and designers, including the previous Director of Design.

This isn’t entirely a shock, though the scale and concentrated timing may be. It does seem cuts at NI were a long time coming. Native Instruments has a massive and complicated array of products, many of them now legacy products, and an over-complicated structure around them – both from a marketing and organizational standpoint. I think it’d be tough to find anyone to disagree with that, even in a week when people’s emotions are riled up by watching major layoffs.

And this isn’t just about the business – there’s a direct line to your experience using the products. If NI has too many products and a complicated organization that makes it hard for people to work together, that impacts users. It means it’s tough to execute new ideas and make the tools you use better.

It also stands to reason that even in any significant reorganization means staffing changes and cuts. The questions customers and partners might ask then is – why these cuts, why so deep, why now, and what’s the plan going forward?

The picture I’ve gotten from Native Instruments officially is convoluted. NI says they’re working on an integrated platform, but the cuts have hit UI, UX, design, and engineering, and late in the apparent timeline for whatever project that would be. We’re also now in year three of NI’s push to get us to think about services, but we’re not much closer to understanding what that’s supposed to mean than when we started. Here are some landmarks in that timeline:

March 2017: NI acquires Metapop, founded by former Beatport CEO Matthew Adell. Adell becomes Chief Digital Officer.

October 2017: EUR50 million in investment from a private equity firm focusing on digital services growth.

January 2018: NI reveals Sounds.com.

August 2018: Adell is out as Chief Digital Officer. (I believe this role also is eliminated at the same time.)

July-August 2019: Roughly 150 people, or 30% of the workforce, laid off. 20% are cut on August 29 in a single day.

The Thursday round of layoffs are part of a string of changes through 2019, many as high as Director level – including, to be fair, some hiring as well as firing. The main question I had is, beyond CEO / co-founder Daniel Haver and Chief Innovation Officer / President Mate Galic, who is running the new product effort, now that existing leadership of Traktor and Komplete are gone and the Chief Digital Officer is almost a distant memory.

That person appears to be Nicholas Goubert, who has this year gone from VP Digital Services to VP of Products to – as of this month – Chief Product Officer. Streamlining the organization under a single product leader instead of separating digital/services from the organization at least makes sense. It means NI is realigning themselves as a services-driven company.

The obvious parallel would be to a company like Adobe, although while Adobe offers extensive services, it has kept a bunch of complex product teams and silos. In fact, that parallel itself may be apt – Adobe’s complexity reflects the fragmented and specific needs of designers. Musicians are even more particular, which speaks to the difficulty of this process. (And… I’m not sure all of you are entirely in love with Adobe, either.)

The business of being NI is selling stuff to us music makers, though, so – what service? Do we want it?

NI’s responses don’t give me a much more solid grasp of what they have in mind or how they intend to execute it. (And as you see in the timeline above, they’re effectively announcing the business structure in September 2019 that delivers the services they first talked about at the start of 2017.)

But they at least confirm that they’re not exiting hardware or the DJ market, contrary to rumors, and that the future services are intended to connect to products you use now. Note that saying “we’re committed to Komplete” doesn’t also mean something like Reaktor. Those silos actually appear to remain. I’d be optimistic about something like Reaktor, which powers tons of sounds and products.

So I don’t think you should panic about any major products, based on what we’re seeing here. I can also confirm that some core teams are unaffected – like NKS. And for at least one vision of where NI intend to go, even if it’s one that’s been out for a while, NKS’ idea of integrating sounds, control, software, and hardware across an ecosystem of partners is definitely one glimpse:

https://www.native-instruments.com/en/specials/komplete/this-is-nks/

Here are official answers from NI to CDM:

CDM: If Native is building a new platform, why were resources cut?

NI: Our new organization aims to break down functional and brand silos that have developed over time through the continuous expansion of our portfolio. Given our broad spectrum of products and the overlap between roles, it means that certain areas of product development are affected more than others by the redundancies. In the past, we have simply been doing too much at the same time and this strategic change as well as internal remapping of talent will allow us to move forward in a more effective and collaborative way.

With the focus on a platform strategy, do users need to be concerned about support for and investment in existing products?

We are fully committed to our existing brands Komplete, Maschine and Traktor. The reason why we are focusing on a platform strategy is actually to improve the experience for all users of our products. We strongly believe that by improving accessibility and usability of our portfolio, we will be able to provide an enhanced and more cohesive experience, both for existing and new customers. Rather than releasing more and more products, we want to ensure that users are getting the most out of our current products through a connected and unified experience.

Will Native Instruments continue to release integrated hardware?

Creating deeply integrated experiences between hardware and software remains at the core of our vision. However, we want to deliver more value to users of our hardware by implementing new features in the software that will allow for a better overall experience of our ecosystem.

What about the future of Traktor?

We continue to be fully committed to our DJ platform Traktor and its passionate users. Also within the DJ domain, we are focusing on improving the software experience, building on the creative and modular legacy of Traktor for both desktop and mobile. Supporting this, we are also continuing to evaluate the right accompanying hardware products. In fact, Traktor users can expect a new hardware controller this year.

Okay, so the most we can come out of this is, Traktor hardware and products remain. The leaked firing of the Traktor desktop team suggests that future Traktor products will take a different form, and won’t be based on the legacy Traktor codebase (which is what powers Traktor 3).

Other than that, we mostly have to wait.

I wish the new teams at NI the best. Before the layoffs, I’d heard from the current Metapop team, wanting to show what they’re working on. And with SoundCloud failing to deliver innovation for creators, and Alihoopa dead (the Propellerhead-created online music making service, later spun off), there’s a vast space for someone to show a way of using social features for music making.

However, I can only echo the overwhelming buzz I’m hearing from the larger community. Large layoffs are unsettling, not only because of the people lost, but because of the presumed disruption to the organization. Some talent in music tech is very specific – and the departure of these 150+ NI employees over recent months has competitors eager to hire. (Behringer went as far as posting their headhunting call publicly; other companies – inside and outside this industry – are being a bit more discreet.)

For now, what Native Instruments are announcing is mainly layoffs, not products. Their main job now, to regain trust after a shaky end to this summer, would be to turn that begin to say how this relates to the people who rely on them.

I know a lot of you are deeply invested in this company – some even in your businesses as partners as well as in your music making careers or passions. I’ll do my best to keep you informed.

The post Where is NI headed? Some official and unofficial answers appeared first on CDM Create Digital Music.

Win NI Komplete Kontrol A61, Komplete 12 Ultimate + Expansions at Metapop

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What does it mean that NI bought a startup that monetizes remixes

Native Instruments announced an acquisition that suggests a new area of intended growth for the company. They’ve acquired MetaPop, a firm that clears and monetizes remixes – and with the company, they also get the former CEO of Beatport. To work out what that might mean, you need to first understand MetaPop.

It’s safe to say remix culture isn’t what some predicted it would be. Instead of ushering in a bold new age where music is re-imagined by fans and artists find new opportunities to share ideas and earn money to support their art, we get — uh, takedown notices. And a lot of non-starters.

Into that somewhat desolate landscape, enter MetaPop. The startup was born at the start of 2015 in Los Angeles, founded by former Beatport CEO Matthew Adell. (Adell sold Beatport to SFX, though … that turns out to be an unpleasant story. It appears meanwhile MetaPop has only undisclosed seed money behind it – though that could be actually a good sign, in that acquisition could help it grow.)

Basically, the idea of MetaPop is to actively support fans making remixes, and squeeze revenue out of unlicensed remixes that are floating around online. When you just play music – as in a DJ mix or an online streaming service – you are required to pay a compulsory license, or a fixed license fee that is supposed to pay money back to the artist. That’s another discussion, but suffice to say even the US Commerce Department thinks that that license structure doesn’t make sense for remixes. (I will refrain from using the word “mash-up,” as I think it’s dead, like “information superhighway.”)

So MetaPop does two things. First, it actively courts remixes. There’s a marketplace of pre-cleared stems, where you can go and download stems for free and make your own remixes. There are promoted contests, too, like a recent one with Carl Craig. They’ll even host a remix contest for you for free.

Second, MetaPop supports labels and artists by searching for unlicensed remixes and monetizing them.

You can read Adell’s thoughts on this as CEO, as he speaks to Bas Grasmayer:
Monetizing remix culture: Beatport’s former CEO about his new mission

Carl Craig stems, anyone?

Carl Craig stems, anyone?

Now, it’s pretty easy to follow why Native Instruments might be interested in such a company. We’ve already seen that part of the company’s vision for the future of DJing is live remixing content with STEMS. MetaPop is literally a source of stems, if you want to look narrowly at what that might mean. But apart from remixable content on MetaPop being potential STEMS fodder for Traktor users, more broadly it seems to align with Native Instruments management’s idea about where DJing and electronic music are going.

I wouldn’t look at this as “what NI plans to do with STEMS, though.” It seems to me that NI are primarily acquiring Matthew Adell – and they’re not being secretive about that.

Keep in mind that NI had a financial stake in Beatport, and worked on strategic partnerships. Now, they’re bringing Adell into Native Instruments, naming him Chief Digital Officer. In today’s press release, NI CEO Daniel Haver says point blank, “we’re very excited to take our online offering to the next level.”

He’ll stay on in NI’s LA office. That office is now up to 50 people.

Let me break from script here, though, and say, quite frankly, I have some real questions and reservations about this direction.

The principle potential here for electronic music as service and remixing as medium is all on the DJ side. And Native Instruments has got to get their DJ offerings in better shape to remain competitive.

TRAKTOR is complicated, and subject to instability depending on the computer hardware it runs on. Then, some of its differentiation points are starting to look more like vulnerabilities. Sure, you can use elaborate NI controller hardware – but you’ve got to compete with a competitor who can tell you to just “carry a USB stick.” Then there’s the concept of doing live remixing with STEMS. I still like STEMS as an idea – I’ve released my own content on the format, other artists’ content, and I’ve used it and found it to be musically useful. But Native Instruments rolled out STEMS as a “standard” and has since utterly failed to bring on any major developers or vendor partners, or even to integrate it in their own production products (like Maschine). To me, it’s a great idea – but one that’s had next to no follow through, internally or externally. I say all of this as a TRAKTOR user.

That’s assuming this will have some connection to the existing TRAKTOR DJ product silo, but it’s hard to think remixing and online services won’t have some connection. (Again, DJs are the ones really driving consumption – worth saying.)

And let’s get real. This market has gone back to selling, buying, and playing vinyl records. That’s how devoted it is to reliability, tradition, and physical hardware.

I don’t doubt for a second that there are real opportunities in online offerings, too. Indeed, Adell identified some of those problems with MetaPop. Just getting music out and getting it in the hands of DJs (and remixers, if you like) is already a huge challenge to producers. That impacts NI products outside of just DJing, too – if you can’t get music heard, then you’re less likely to want to buy production tools. Solving these problems could well be valuable.

But this is the challenge Native Instruments faces. Whatever they do with digital offerings, I think they’re going to live and die based on hardware, because hardware is what we’re investing in. (Ask that competitive Japanese company that makes giant MP3 players that cost about as much as a used car.)

Sure, that may be an odd thing to say to the company that made its fortune by going to software. But look at it the other way round: NI has grown at each stage of life based on correctly recognizing trends. That includes the value of software development, then the potential of digital DJing and digital vinyl, then the combination of controller hardware with software.

They may well have it right by identifying online offerings as part of the next trend. But I think the thing to watch is whether that can work in tandem with a more robust offering for DJs, up against increasingly dominant competition.

Of course, that’s what keeps working in this business fun – it’s neither easy nor simple, and it connects directly to people’s most passionate feelings about music at a time when how music is made and heard is changing. So, as always, we’ll be watching.

MetaPop

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