Epic Disappointment

[Daniel Soderberg]

"With a Dragon upgrade for $6K you have a new camera with specs not found in the market. It seems the others guys have a history of selling you a new camera for full value and obsolete your original purchase at the same time. I thought our customers would see this clearly. Maybe we should re-visit our approach and do it their way? Any way you cut it... and however your package it, things will get better, faster and cheaper over time. Whatever you buy in electronics will be worth less after you buy it. It is all a matter of which way they will lose value. The only defense is to use them.

Jim"

The business model to allow their customers to pay a fraction (now not so much of a fraction) of the price of a new camera to upgrade the sensor is amazing... And it's one of the things that really sets Red aside as a great company that really cares about their customers. That's why I have invested so much into your company and it's products.

The move to cut the price of your top of the line camera by almost 20k (almost 50%) although may be great news for new potential customers, is huge shot to the gut to all of your best, most loyal customers. Like many have said, we've lost tens of thousands on our cameras potential resale value (and rental/hire values) OVERNIGHT. Not slowly over years, but overnight. It makes sense, and is very expected/anticipated, that the price be dropped (by maybe 5% here and there) as time goes on, but we don't even get the chance to see the decrease in value over time and make a decision based on the rate of depreciation.

You guys say "Hope you made your money back on your investment, (cause you're about to lose half of it...)", and yeah we did make some great money, but either way, we lost 20k (or a lot more depending on how many Epics we own) of THAT money we made on the investment. So that comment isn't really relevant to the price drop...

And as Andrae has said, it hurts the Red brand in general (which in turn hurts our ability to work with our Red products) to drop prices so drastically...

"The sale value of the camera affects the brand perception of the camera. The brand perception of the camera affects how much people are willing to pay for it. A RED One MX selling for the same price as Canon 5D Mark III affects clients perception of the value. A good example of this is the ARRI Alexa... it's high priced and more valued. If RED hurts their brand... they also hurt my investment in their brand."

Up to this point, I had been so excited about every new opportunity you've given us with all of your products and options in gear and upgrades, but this change was a huge disappointment in so many ways for us current Red owners...

 

[Lee Saxon]

The cost to produce electronics and computers is constantly going down. Televisions with specs similar to the one you paid $1000 for a year ago probably sell for $250 today. That's just the way it is.

That's true of digital cameras, too. Every digital camera ought to have dropped 50% in price by the end of its production cycle. Sony/Arri/Canon/etc have been keeping prices artificially high to price gouge you (not to mention setting them too high to begin with).

Red has (hopefully) started a push to make digital cameras subject to the same affects of Moore's law as digital [everything else].

I know this first time is a painful shock, but (hopefully) you're going to need to get used to it.

 

[Daniel Soderberg]

Lee, did you read my post?

"Like many have said, we've lost tens of thousands on our cameras potential resale value (and rental/hire values) OVERNIGHT. Not slowly over years, but overnight. It makes sense, and is very expected/anticipated, that the price be dropped (by maybe 5% here and there) as time goes on, but we don't even get the chance to see the decrease in value over time and make a decision based on the rate of depreciation."

By the end of it's production cycle? Is the Epic at it's end..?

The cost to produce electronics and computers is constantly going down. Televisions with specs similar to the one you paid $1000 for a year ago probably sell for $250 today. That's just the way it is.

That's true of digital cameras, too. Every digital camera ought to have dropped 50% in price by the end of its production cycle. Sony/Arri/Canon/etc have been keeping prices artificially high to price gouge you (not to mention setting them too high to begin with).

Red has (hopefully) started a push to make digital cameras subject to the same affects of Moore's law as digital [everything else].

I know this first time is a painful shock, but (hopefully) you're going to need to get used to it.

 

[Terry VerHaar]

Brand is based on a lot of things, only one of which (sometimes) is price. Of course, we all have different brand "perceptions" so there is no one arbiter of what this price change will do to RED's brand, unless you consider "the market" as the final say. I happen to disagree with you and your perceptions about RED's brand. I think this action makes them look scrappy, nimble, smart, fearless, honest, innovative, proactive and confident.

I am not going to exhaustively comment on all other camera brands (*a collective sigh of relief from the crowd*) but, to me, the major brands have been slow to the party; reactive, dragging their feet. They strike me as companies that have so much to protect that they can't afford to let themselves be innovative. And, in Arri's case, we seem to have forgotten the controversy awhile back which had them in the middle of some alleged IP theft. If true, that itself undercuts their brand. I, for one, certainly don't see them as leaders; more like the boutique guys who figure that their arrogance will keep the "sheep" in the fold - based on the old computer axiom that "no one ever got fired for buying IBM" - a little outdated, I know, but you get the idea.

I enjoy working with a company like RED. I think that, in the end, they will always give me huge value for the money and that they actually care about more than taking my money. Not every one feels the same or makes their decisions based on the same set of perceptions and facts. That's what keeps the market vibrant. And, as far as markets go, it is my belief that "the market" will overwhelmingly support the actions of RED now and going forward. We'll see.

 

[Nikhil Kamkolkar]

Oh no. Here we go again.

I have a suggestion.

All those who claim that those who lost their asset value overnight should be fine with it, should send RED a check for 15K right now for NOTHING in return before posting anything to this thread.

All those who claim this price cut destroyed their business should immediately give away their RED to charity and take a full deduction and walk away from it all.

(hope that stops this train wreck before it starts up again)

 

[Max M.]

Its hypocrite to say they help the current customers. They scew they current ones to get alot of new people onboard. Which from a bussines standpoint is logical and clever, but admit you screw over the current owners. If you want to help everyone. Lower the price of AKS and for example sell the meizler for 4.000. That would help alot of current owners. If they would have split the difference: Like give 10k discount on the new body, and give the other discount in prices in AKS. That would be caring for current customers, not decreasing the value of the epic too much and everybody happy...

 

[Daniel Soderberg]

Thanks for exaggerating my post and therefore ignoring it completely... Very helpful...

Oh no. Here we go again.

I have a suggestion.

All those who claim that those who lost their asset value overnight should be fine with it, should send RED a check for 15K right now for NOTHING in return before posting anything to this thread.

All those who claim this price cut destroyed their business should immediately give away their RED to charity and take a full deduction and walk away from it all.

(hope that stops this train wreck before it starts up again)

 

[Nikhil Kamkolkar]

Thanks for exaggerating my post and therefore ignoring it completely... Very helpful...

Sorry, didn't mean to. I'm an EPIC-X owner as well and am affected by this. I think we all are affected to different levels, and I have no desire to scoff at other's feelings about this.

I meant to throw in a smiley but thought the humorous tone of my post was self-evident.

Again, apologies. Carry on. Hopefully, RED does consider what I've been saying from the very beginning. This move was not fair to stage 4 owners most certainly. The move is GREAT for new owners. The rest is all debatable.

 

[Jeff Kilgroe]

EPIC is not at it's end, it's coming full circle.

EPIC brain was released at $27K.

Due to natural disasters, manufacturing issues, supply chain difficulties, etc... RED had to raise the price of the EPIC to $34.5K. They did not want to do this. People bitched and moaned and complained and, hey, wait, I'm experiencing deja vu... Anyway, RED did not set their prices artificially high to account for market volatility, their transparency was apparent, even though this didn't set well with a lot of people.

Now they're doing the same thing, but correcting the other way. Prices are cut for the EPIC brain to $19K.

Dragon is about to release, it's a bit behind schedule, but also it seems like it's going to be even better. It's a $6K upgrade. Presumably, new EPIC brains with the Dragon upgrade already installed will be $25K here in the next couple months. That's the price for anyone who buys an EPIC right now to get to Dragon. Many of the people who bought into EPIC at the $34.5K brain price get the Dragon upgrade *FOR FREE* if they played their cards right and made their purchases at $50K total or more. Something that's pretty darn easy to do if you're buying accessories and media so you can use that camera brain.


Another point. Who buys pieces of advanced technology with resale value in mind? Based on most of the comments here on these forums, I wonder how many of the unhappy people can look in the mirror at themselves after buying a computer. You know, because that's exactly what these cameras are. And not just RED cameras, any digital camera system -- they're computers with imaging sensors pasted to the front of them. Like all other technology, they're going to get smaller, faster, cheaper, etc.. In the not too distant future, we'll have cameras that are no bigger than a rear PL cap and will have 100X the capabilities of an EPIC. They'll probably cost less than $200 too...


How many times did Sony slash the price on the F35? 3? 4? What is it worth now? They released the F65 for 20% less than the last official price of the F35, at which the F35 was selling for at the time and continued to sell for after the F65 introduction... F35's were selling for $220K less than 3 years ago. If you want to sell one today, you'll be lucky to get more than $10k for it and you'll probably have to take your buyer out to dinner and find other ways to fluff them a bit.


Look what happened to industries like 3D modeling and animation software. A few new players come in and shake things up and some changes start slowly at first, but we see rapid progression and development within the industry. And we also see drastic price reductions and increased diversity and adoption of the products across a much larger user base. In 1990, applications like Alias PowerAnimator and SoftImage|3D would cost upwards of $120K per seat after the software license and a competent workstation (mostly SGI at the time) to run it on. That didn't even include all the render node licenses either. By the end of that decade, 3D Studio MAX was the most popular 3D software and sold for under $3500 per seat. PowerAnimator evolved into Maya, eventually acquired by AutoDesk, just as 3DS Max and others were.

Same thing is happening in the camera world. Materials costs on the cameras is fairly low in relation to their actual price. It's a matter of manufacturing efficiency, supply chain, etc.. They're going to become more plentiful, cheaper, faster, better, etc.. So, do you want to keep buying from one of the companies that uphold artificial pricing that looks more exorbitant with every new product entering the market? Or would you prefer to do business with a company that is going to price their stuff fairly and in accordance with what they can actually be manufactured and delivered for?


In the end, who's going to buy a $75K camera from one company that eventually gets obsoleted in favor of a new model that will be priced similarly, when they can buy from a company that evolves their products 2~3X as fast at a lower price point while offering a means to upgrade to their current tech?


Anyway, everyone's entitled to feel how they want about this. It seem some people have built a business model around perceived value of their cameras. That might work for some, but seems like flawed reasoning to me. I enjoy being first in my market with the new camera toys and I have capitalized on that here and there. But in the end, people hire me for me. Not because I'm a member of the hot-shit camera of the month club. My EPICs have paid for themselves several times over. I could care less if they cost $50 or $50,000. I still make the same product with them and that generates more revenue than trying to market my camera as a valuable tool ever will.

 

[James T Mather]

This is not directed at any specific post or person - more the general direction of the board over the past few days.

A few people are disappointed and posting accordingly - maybe other users should let them get it out of their systems without being shouted down or called idiots for assuming they had an investment that would depreciate at a predictable rate. It is a public forum after all with all the oppositional opinion that will bring. We all see the world from where we are standing - what is good for one person is not necessarily good for another. Add a dash of pity before leaping in.

Others are delighted and posting accordingly - good for them. I wish them luck with their new cameras.

 

[Andrae Palmer]

Another point. Who buys pieces of advanced technology with resale value in mind?

I would guess that millions of people do. Many people plan purchases on major release dates and then sell that equipment before the next major release. Lots of Apple users do it for example. If I didn't resell my equipment keeping resale value in mind... I would have never been able to afford a RED camera and many other things.

In 2003 I bought a Canon XL1-S
In 2005 I sold it towards purchasing a Sony FX1
In 2007 I sold the FX1 towards purchasing a HVX200
In 2008 I sold both of my HVX200's and all of my Zacuto/REDrock Micro gear towards purchasing a RED One.
In 2011 I sold a RED One MX towards purchasing my EPICs.

Without this form of leap frogging, I wouldn't have accrued the finances to be where I'm at now. I work and manage the equipment that I own... towards the goal of progressing my life. Making careful informed purchasing decisions along the way. These tools are my working investments. I don't make so much money from these tools that I can let them depreciate down to nothing and have money in my bank account to buy the next latest and greatest. I thought RED was mindful of that concept.

You guys must be rich to not think about resale value. I guess I should be "talented" and still be out there shooting on Canon XL-1. RED broke that cycle by announcing a 45% price reduction without the next latest and greatest... Woohah!!! I never saw that one coming. Talk about Crazy!!!! Is there a fire sale going on?

 

[William Albertini]

RED is a company, not a charity. Early adopters always pay a premium because R&D has to be paid down. It might be useful to look at this example from another company when it was also in it's youth: Apple introduced the Lisa in early 1983 for a little bit under $10,000 a year later they released the Lisa2 for less than $,5000 and offered a free upgrade to the original Lisa owners.... no they did not give them back $5000, they gave them a free upgrade to a cheaper computer. I for one am pretty sure that even if I know with certainty that there is going to be a 40% drop in the price of something a year down the road that I need/want now I will eat the premium rather than sit on my hands for a year.

 

[Terry VerHaar]

Its hypocrite to say they help the current customers. They scew they current ones to get alot of new people onboard. Which from a bussines standpoint is logical and clever, but admit you screw over the current owners. If you want to help everyone. Lower the price of AKS and for example sell the meizler for 4.000. That would help alot of current owners. If they would have split the difference: Like give 10k discount on the new body, and give the other discount in prices in AKS. That would be caring for current customers, not decreasing the value of the epic too much and everybody happy...

Sorry, but you're comments suggest that the price reductions are purely nonsensical and arbitrary on RED's part. RED has given a reasonable explanation, which you can believe or not, but what explanation could be given for just arbitrarily changing prices on things no matter what the cost of the item? Meizler model at $4000, no matter that it cost millions to develop and several thousand to manufacture. Give away batteries for $100 apiece, costs be damned, because I can get a 7D battery for $50. I'd like carbon fiber rods for $10, RED can afford the per unit loss, they'll make it up in volume (LOL).

And as for "screwing" their customers, I know there are a small, vocal minority here that agree with you, but, based on the mix of comments, I think most are still supportive of RED.

 

[Elsie N]

This is not directed at any specific post or person - more the general direction of the board over the past few days.

A few people are disappointed and posting accordingly - maybe other users should let them get it out of their systems without being shouted down or called idiots for assuming they had an investment that would depreciate at a predictable rate. It is a public forum after all with all the oppositional opinion that will bring. We all see the world from where we are standing - what is good for one person is not necessarily good for another. Add a dash of pity before leaping in.

Others are delighted and posting accordingly - good for them. I wish them luck with their new cameras.

I agree that posters should be able to air their grievances... once or twice. But day after day after day...? Even Rob Ruffo who was one of the original dissenters to the price change has realized it is over and has moved on. It takes two to have a "discussion" and if the dissenters would just register their opinion and drop it, irregardless of who answers their post with a different opinion, well, then everyone would have had their say. Both sides should have the same right to debate.

 

[Nikhil Kamkolkar]

This is not directed at any specific post or person - more the general direction of the board over the past few days.

A few people are disappointed and posting accordingly - maybe other users should let them get it out of their systems without being shouted down or called idiots for assuming they had an investment that would depreciate at a predictable rate. It is a public forum after all with all the oppositional opinion that will bring. We all see the world from where we are standing - what is good for one person is not necessarily good for another. Add a dash of pity before leaping in.

Others are delighted and posting accordingly - good for them. I wish them luck with their new cameras.

Thoughtful. Thanks. I wish RED had considered the option and Bjork, myself and others have repeatedly posted. It'd have avoided creating this, well, 'infighting', for lack of a better term.

There aren't two camps here. There are three that I can think of.

1. Those who support the price cut fully (they are generally the ones who are positioned to take advantage of it, because they can buy the camera now, or can add another thus essentially doing the equivalent of dollar-cost-averaging).
2. Those who don't support the price cut much (concerns around brand, rental advantages etc)
3. Those (like me), who support the price cut, but wish RED had allocated their windfall fairly and helped pass along some benefit to those in Stage 4 who got the least of the financial benefits but assumed the greatest risk and provided the greatest revenue to RED for EPIC/Scarlet.

And to all those who keep talking about recouping, etc. Its not like I got my camera fully functional. I waited months as the pieces trickled in, then I started training myself on the gear, and only with the recent release build with audio will I (personally) consider taking it out on serious projects.

In the end analysis, RED has the right to make the moves they want to make. Its just that this move which created winners and losers felt like such an out-of-character moment for RED, given they had taken such good care of their early customers for RED ONE.

I think I'll retire from posting further on this topic. Its not like RED hasn't had an opportunity to be hear the feedback.

 

[Stefan Scherperel]

I would guess that millions of people do. Many people plan purchases on major release dates and then sell that equipment before the next major release. Lots of Apple users do it for example. If I didn't resell my equipment keeping resale value in mind... I would have never been able to afford a RED camera.

In 2003 I bought a Canon XL1-S
In 2005 I sold it towards purchasing a Sony FX1
In 2007 I sold the FX1 towards purchasing a HVX200
In 2008 I sold both of my HVX200's and all of my Zacuto/REDrock Micro gear towards purchasing a RED One.
In 2011 I sold a RED One MX towards purchasing my EPICs.

Without this form of leap frogging, I wouldn't have accrued the finances to be where I'm at now. I work and manage the equipment that I own... towards the goal of progressing my life. Making careful informed purchasing decisions along the way. These tools are my working investments. I don't make so much money from these tools that I can let them depreciate down to nothing and have money in my bank account to buy the next latest and greatest. I thought RED was mindful of that concept.

You guys must be rich to not think about resale value. I guess I should be "talented" and still be out there shooting on Canon XL-1.

I have gone much the same rout as you, however when I bought into Red, I did so knowing that I was buying into a completely different business model. They have said that from the beginning and the whole idea of being able to upgrade your camera as new technology comes along was set in motion. I bought a red one for two reasons.
1. Because it blew everything else out of the water at the same price point, and much higher.
2. Red's program was based on cameras not becoming obsolete. New model coming along outdating the old model.
Instead of red Releasing a Red TWO MX and screwing all of it's existing customers they allowed us to upgrade to an MX sensor. I guarnatee you that SONY, PANSONIC and CANON would not and will not do this, nor have they ever.
Then the Epic was released, and instead of my now outdated red one becoming obsolete, I am allowed to trade it in for full price towards and EPIC. I guarantee you that nobody ever gets full price back for their used equipment, no matter how good you are in timing the new investment.
Now the same EPIC that everyone has purchased can be upgraded to Dragon, for a fraction of the price of a new camera.

The business model of selling an old camera for a new one was never part of RED's game, and was stated in the beginning. It was the foundation of what makes RED, RED. If you have bought into RED then hopefully you have done so with this in mind, because it has been stated that way from the beginning.

 

[Andrae Palmer]

That model was OK when RED was a superior camera by far... what happens to that model when the competition releases similar or greater cameras? Heck I'm not a RED customer because I'm loyal to a cult. I'm a RED customer because they have kick ass tech at prices I could afford. The moment that their tech is not kick ass anymore... I will move on. So yes... resale value is very important to me.

 

[drew sandoval]

I have gone much the same rout as you, however when I bought into Red, I did so knowing that I was buying into a completely different business model. They have said that from the beginning and the whole idea of being able to upgrade your camera as new technology comes along was set in motion. I bought a red one for two reasons.
1. Because it blew everything else out of the water at the same price point, and much higher.
2. Red's program was based on cameras not becoming obsolete. New model coming along outdating the old model.
Instead of red Releasing a Red TWO MX and screwing all of it's existing customers they allowed us to upgrade to an MX sensor. I guarnatee you that SONY, PANSONIC and CANON would not and will not do this, nor have they ever.
Then the Epic was released, and instead of my now outdated red one becoming obsolete, I am allowed to trade it in for full price towards and EPIC. I guarantee you that nobody ever gets full price back for their used equipment, no matter how good you are in timing the new investment.
Now the same EPIC that everyone has purchased can be upgraded to Dragon, for a fraction of the price of a new camera.

The business model of selling an old camera for a new one was never part of RED's game, and was stated in the beginning. It was the foundation of what makes RED, RED. If you have bought into RED then hopefully you have done so with this in mind, because it has been stated that way from the beginning.

I was wondering, if you did buy a Red One and followed it through all the upgrade paths (from R1to R1MX to Epic), what would you have actually spent on the camera brains? If I remember correctly the R1 was $17k, then the MX was free (am I right on that?) and then the epic was between $6k and free if you waited for the later stages? Am I correct or way off base on that?

 

[Terry VerHaar]

Way off base.

 

[Max M.]

Sorry, but you're comments suggest that the price reductions are purely nonsensical and arbitrary on RED's part. RED has given a reasonable explanation, which you can believe or not, but what explanation could be given for just arbitrarily changing prices on things no matter what the cost of the item? Meizler model at $4000, no matter that it cost millions to develop and several thousand to manufacture. Give away batteries for $100 apiece, costs be damned, because I can get a 7D battery for $50. I'd like carbon fiber rods for $10, RED can afford the per unit loss, they'll make it up in volume (LOL).

And as for "screwing" their customers, I know there are a small, vocal minority here that agree with you, but, based on the mix of comments, I think most are still supportive of RED.

I just think red could have used to cost savings on a epic towards bringing down to overal costs of there ecosystem or improving it further. But its a free market and they can do what they want. Now they took off a huge chunk of the epic price, which is mostly in advance of new buyers, would be nice if current owners would also benefit a bit as they made it possible by buying in early and not only loose value. I'm not asking for free stuff, as i understand that doesn't make sense.
But for example i would love to have the toia module sitting on my camera right now. And would love that red would use a part of the epic profit to get modules in peoples hand asap, instead of passing all the savings to new customers without having a complete solution for everything yet. Split the difference, drop the epic price to like $27.000 and use the rest to make cheaper and more modules. Have to feeling more people would benefit from that?