12 Pricing Models for Music Software

Most people leave it to the end to come up with a price for their plugin. Ideally, it’s something you think about sooner, with the pricing model even built into the development of the product. But as humans, we tend to put things off, and this might be most true when it comes to money.

In order to help you come to terms with pricing your audio plugin, here are 12 example pricing models from existing developers, each with a slightly different take on the subject. Each has its pros and cons, which you may not have realised if you haven’t yet taken the plunge.

1. One Fixed Price

Choose a price and stick to it, without having sales, discounts, coupons or anything to lower the price.

Examples: ValhallaDSP, Xfer Records,

This is the pricing structure used by two of the most successful and respected plugin developers: ValhallaDSP and Xfer Records. The unwavering price of $50 for a ValhallaDSP plugin makes it fair, easy to remember, and easy to pass on – and that’s part of the appeal in the first place. Serum benefits from a long-held price point as well, being a synth that people have been willing to pay for for many years.

The negatives of this pricing strategy? As long as you join the game in 2011, there aren’t many. But for plugin developers starting out nowadays, there’s a lot more competition from Day One, and plugin buyers have been trained by most other developers to expect discounts. It takes time, patience, and financial security to sell with the One Fixed Price strategy, but it is still possible today.

2. Discount Pricing

This is practically the default pricing method, as experienced in other digital industries too.

Examples: Waves, Audio Hertz

Discounts are used by many, many plugin developers in order to offer a time-sensitive price point. A discount strategy allows for multiple price points to be reached, creating segments of customers, some of whom are willing to pay more (business class) and some of whom are willing to pay less (economy class).

Many developers who I’ve worked with have found that they ”only” (read: “overwhelmingly”) sell plugins when they’re on sale vs when they’re at their regular price. This is a natural consequence of the whole industry leaning more towards discounts, and certain providers in the industry relying completely on this model.

3. Subscription Models

Offer your software through subscription only, or at least make perpetual licenses very hard to find.

Examples: Slate Digital, LANDR

During the dawning of the Netflix era, subscriptions were every venture capitalist’s dream. Since then, recent examples such as Minimal Audio Current 2 and Waves Audio attempting to transition to subscription-only models, without offering a perpetual license option, shows that the model has become, generally speaking, unpopular with music producers.

It seems unlikely that a new subscription-based model for plugins will work. Established packages like Slate Digital and LANDR still seem viable to me. These services may have to be ‘The Netflix of Music Production’, providing an all-you-can-eat bundle of tools, and possibly an end-to-end solution for everything from browsing samples to automated mastering.

Alternatively, there’s the Adobe model: become the only game in town, and feed off anyone who needs to play.

4. Rent To Own

Pay monthly, but get closer to perpetual ownership every month.

Examples: Splice Rent-to-Own Plugins, XLN Audio.

The taller, more handsome brother of the subscription, Rent To Own (RTO) is a pricing model in which a user pays monthly, but each month accrues credit for the total price of the software. Once they do, they keep the license as a perpetual one. While the typical music producer tends to eye subscriptions with suspicion, RTO feels far groovier, as if it’s a payment plan that doesn’t charge you interest.

If a musician or producer needs to use a particular tool for a short-term project, they can go in for just one month, and their payment (usually) means something towards the final total.

The negative behind RTO models for plugins is the setup. Go it alone, and you’ll have to maintain a complicated system where licensing meets finance to make it work.

5. Yearly Upgrade (The De Facto Annual Subscription)

Release an upgrade at a regular interval in order to get a regular boost of sales. It’s like an optional yearly subscription.

Examples: Cubase, Bitwig Studio

Have you noticed that many DAWs upgrade annually? This is usually done on purpose, and can be thought of like a de facto subscription model. Grab the latest version of Cubase, and next year there’ll be another one. At that point, you might want to pay up for the new features, with your de facto annual subscription. Alternatively, you may wait another year or two until enough features have been added to make the cost worth your while. In the intervening time, you get to keep your DAW as it was for your last full license.

There are nuances between different plans, of course. Bitwig offers its 12-month Upgrade Plan that gets you the DAW as it is when you buy it, plus all upgrades that are released in the year after.

6. Freebie Upgrade Model

Give out a free, ‘Lite’ version of a product in order to upsell users to the paid version.

Examples: Tokyo Dawn, Spitfire Audio

You’ll get a lot of downloads when using this strategy…

The upside: you’ll get a load of people on your mailing list

The downside: you’ll get a load of people on your mailing list

We’ve all seen developers giving away whole plugins or cut-down versions of them for free, in order to tempt people into buying the full version one day. Many of the companies who launched around 2015 to 2020 led off with the free plugin strategy. The reason: because it works – although we should define works.

Yes, it’s very likely that by giving away a free plugin, usually in exchange for subscribing to a mailing list, you’ll get a lot of people downloading. I’ve seen people get 100,000 mailing list subscribers with a free plugin, but a more realistic expectation over time might be 10,000 – it does depend on the plugin, though.

Of course, nobody expects a 100% success rate in converting those people to paid users, but the success rate can be surprisingly low. It seems to me that the people who download free plugins are far less likely to ever actually pay for them. This won’t be true for everybody, and so releasing a free model will often pay you back, especially at the start, but it will come with a trade-off if you’ve already built a genuinely interested customer base.

Companies I’ve worked with who have free products tend to have an email open rate of about 20%, whereas companies who don’t tend to have more like 40%. When you offer a free product, the danger is that you dilute your contact list (which you’ll also pay for).

Or How About the Cheapie Upgrade Model

By adding a small, token price like $5 for your free plugin, you’ll dissuade people just looking to soak up free software, and add a filter to your system to include only those people who are willing (and able) to open their wallets in exchange for something you’ve made.

Wait a second, that sounds just like…

7. Tiered Editions (Lite, Advanced…)

Have multiple versions of your software, charge different prices, offer upgrades.

Examples: Soundtoys, Excite Audio

This creates more routes to reduce the price of the plugin for savvy customers. Someone may pick up iZotope Ozone Elements when it’s 90% off, and then move up to a higher tier when the upgrade price becomes cheap. Those who are willing to pay less can still end up paying their own price, while anyone who’s willing to pay in full can go right ahead.

Having tiered sales can be more complicated to administer, especially with multiple products when marketing systems get big and swollen. It’s also harder for customers to understand, and can create hesitance and analysis after deciding to buy.

There’s one huge reason I’m usually sceptical about this pricing model. Yes, you segment your market by the pricing and feature set that everyone is willing to pay for, but do you cannibalise sales of your Advanced-tier product when a user realises that they can live with only the features in the Elements tier?

8. Free For a Limited Time

Give it away for a short time, then everyone after that must pay.

Examples: Soundtoys, Eventide

This was a gutsy strategy back when it was first used by developers like Eventide and Soundtoys, as discussed in my article Introductory Sales on Plugins – Why Do We Do That?, but it’s become more common to see developers putting their plugin out for free for a limited time. Sometimes, you’ll see a previously released plugin being offered for free for a short period, too.

The positive behind this pricing model is that you get quick adoption of a new piece of software. Even if that adoption is unpaid, the idea is that enough people have tried the plugin to be able to recommend it to others, who will pay at the later price.

9. Early Access

Charge a lower price before development ends and the plugin is released.

Example: Entonal Studio

In this pricing model, those who are following the development of a plugin can pick it up for a cheaper price before it’s fully ready. The buyer gets to try out the thing, knowing that it’s not fully ready, but saves money. The seller gets some confidence that people find the software worth paying for, and maybe some de facto beta testing as well.

I don’t like early access for plugins, though. The model comes from the world of games, especially Steam, where the platform can update your installation itself. Users buying an early access version of your software will likely not update it, and may be stuck using a pre-release version without realising it.

The other main reason I don’t recommend early access models is that it takes away from the amount of firepower available for the final launch. If you’ve announced things before the final release, the strength of your announcements will be lower, and you’ll have used up credibility with gatekeepers and the media.

10. Heavy Discounts

Everything must go! Set a higher MSRP, then from time to time, have a firesale for 95% off!

Example: Brainworx, iZotope

Usually, these work by comparison: the developer sets a higher main price such as $299, which we can all agree is very rarely paid. Then, the plugin goes on sale for $14, making it impossible to resist such an incredible offer. If the software was sold at a regular price of $59 and came down to $14, it would probably have a smaller impact, but being able to say it’s “95% off until tomorrow” compels buyers to take action.

This strategy clearly works for getting short term sales, but the danger is in devaluing your brand and associating yourself with cheapness, rather than quality. It’s slightly less dangerous to do when you have a large portfolio of plugins to discount from, though. Being seen as the place to go for deals could be a viable market strategy, so long as you own the reputation that will inevitably come.

11. Prestige Pricing

Keep prices high, use them as a mark of value.

Example: FabFilter, u-he

At the other end of the spectrum from heavy discounting sits prestige pricing. You can probably think of some car brands that are popular simply because they’re expensive status symbols.

By charging high (or simply reasonable) prices, and sticking to your guns about it, you build a reputation for being worth that price. Those who have paid the high price for one of your plugins have invested a good amount of money in it, and this gives them a stake in your reputation.

The negative around prestige pricing is that it takes time to build up that reputation. Do you have the time, money and patience to build that value?

12. Bundling

Put all your software together and charge a reasonable price with ridiculous savings.

Examples: Native Instruments, FabFilter

From what I’ve seen and heard, companies tend to make their most money from bundles, as people buy the whole collection of software, sometimes at a radical discount. While there’s some pressure on the bundle as it turns into more of a subscription deal, it’s still a decent place to aim for.

There are some companies I’ve advised to avoid bundles, but this only applies to cases where the plugin portfolio is very diverse – instruments, effects and other disparate types that wouldn’t necessarily be wanted by one buyer at the same time.