An open letter to FAST

[Robert Young]

This is a reply to a letter from Steve Wise of FAST multimedia (July Issue)


Steve Wise of FAST multimedia may be one of the industry's true gentlemen but I'm not letting him get away with his stated reasons for his or other video cards' UK prices. He sites the cost of "support" as the main reason, coupled with the UK's much lower economies of scale compared with the US.

Well, let's see: I logged on to FAST's UK Web site and clicked on "support". There are two options, both of which require you to have pre-registered your product. The first option is to be diverted to the user forum, run NOT by FAST but by Delphi. The second option is to call FAST direct for 50p per minute at all times. So registered users don't get free support direct from the company then. So where is this "huge support overhead" Steve is claiming?

His second point, about volume sales in the US, cannot alone be the reason why his products sell there for as many dollars as UK pounds, representing an enormous discount on UK prices. The fact is that the UK market is "fixed" by all the major manufacturers who will not supply to distributers or retailers who attempt to re-sell below a fixed threshold. Steve Wise himself explains "The worst case scenario for us would be everyone buying their AV Masters in USA......". Quite!

So the answer then, Steve, is to encourage more sales in the UK by offering your excellent product at a price more in line with the US, then Munich won't close you down, you will undercut your competitors and you will stimulate a European market which you assume to be "niche" but in fact is only that way because of your pricing policy!

For too long UK video equipment consumers have buried their heads in the sand and allowed manufacturers to rip them off through their (consumers)ignorance about global prices. And since FAST products are made in Europe, there is even more reason why distribution costs should if anything reflect lower not higher prices in the UK. I'm getting a bit fed up with this patronising stuff about support, and marketing jargon which is an insult to my intelligence.

Lastly, Steve, I have a DC30 card which I'm not altogether happy with. Indications are that FAST AV Master may well be a superior product. But I really don't want to risk another £500 for yet another package which may or may not work on my perfectly normal, hi-spec, well tuned computer which far exceeds the recommended specs for all products in this range. So I'm willing to risk buying your card at a price commensurate with those in the US if your company also guarantees FREE support to get the thing working for at least fourteen days after purchase, and also agrees to take the card back with a full refund if it doesn't work.

This is the kind of "marketing" which consumers respond to, and the sooner you and your colleagues in the video software industry wise-up to it, the more profit you will make, and the more we will revise our currently completely justified dim view of your industry.

Robert Young



[This message has been edited by Robert Young (edited 05 July 1999).]

[tim]

Robert, I agree with all you say.
I find that prices relating to other equipment in which I am interested show the same sort of differences as between the mighty dollar and sterling. There really do seem to be very strong reasons now to consider buying direct from the U.S. The only thing that makes me hesitate is that I am one of those unlucky people who always seems to get the "Friday" model which invariably has to be exchanged for a replacement, and that would be a considerable hassle if the item had to be returned to the States.
I have another gripe which I do not see aired very often and that is the way software suppliers announce upgrades and new versions, with great hype. It is then many months before such items become available. Very often the so-called improvements simply correct obvious omissions and bugs from the original releases. In my case, I have been waiting for a new release of Speed Razor with the relevant drivers from Fast, from late last year when I was assured that "we hope it will be available before the end of the year". I happen to think that Speed Razor by in-sync is a very good editing package for the DV Master card, but there are several glaring omissions, such as a lack of the ability to batch capture, which should have been addressed months ago. It is one of the improvements promised with the new version, but I stopped holding my breath a very long time ago!
I am doubtful if this is the right place to post this message, but, hopefully, along with the original message from Robert, someone who has some influence and who cares for customer satisfaction might make a note.
Tim

[Steve Wise]

Robert

In reponse to your posting, it was not my intention to be either patronising or feed you marketing jargon. Fundamentally I agree with Bob, the business model IS outdated and we need to look at ways of promoting international presence BUT protecting local delivery. My point was that it is not going to happen overnight.

I would like to clarify a few points, however. Support overhead does not just mean a technical support line - support overhead is the cost of bringing a product to a local market - not only through manning a local office, but through distribution and dealerships. I don't think this is the forum for opinions on dealers, but rightly or wrongly we use them, and we use distribution for logistics reasons, as do all manufacturers. Supporting a channel in this way is costly, and this is where the economy of scale argument IS relevant.

I think it's a little paranoid to suggest that we 'fix' UK market prices - it's just that for the UK market size, there is a finite point at which it is actually worthwhile for the distributor/dealer to actually sell you the product. I know it sounds ridiculous, but it's true. One thing I can say with some certainty is that dropping prices does NOT necessarily stimulate a market, but that's probably another argument altogether.

Perhaps I talk from too much from a UK perspective when I say about the 'worst case scenario'. The bottom line is that most international companies, FAST included, probably don't give a hoot where you buy your AV Master - we support users who have bought abroad - but if you take this to its extreme I believe it DOES threaten local presence, and I think that is worth having - so we can have debates like this, for instance.

Also, it IS more expensive to manufacture in Europe - we have things like minimum wage and stuff, which aren't too prevalent in the Far East - hence the attraction for a lot of manufacturers.

The free support for a limited period is a good idea, and we can look at that. The refund thing is more difficult because of the channel reasons above, but I think people like Multimedia Direct offer this facility.

Regards

Steve Wise

PS: in answer to Tim's question - we are reasonably confident of Speed Razor 4.7 shipping at the end of July. We have a beta version in-house and last week we batch captured some 47 or so clips via Firewire and were just as pleasantly surprised as you will hopefully be :)

[Ouch]

Ouch. I bought Fast in USA $400 have had no reason to call Fast - but that is only because after time in NLE most fixes can be worked out- Fast also has a pay service here and it is the reason I probably will not buy another Fast product.

[Robert Young]

Steve,

Thanks for taking the time to reply.

I don't think anyone really expects absolute parity with US prices, but none of your points, though impressively argued, justify such a LARGE disparity between the cost to the consumer of video products here and in the US.

The "fixed" price paranoia is not mine - all you have to do is engage any UK video retailer in slightly below surface level chat and he will confirm, almost apologetically, that he dare not sell at a price lower than that advertised since he is "tied" to an RRP agreement. Many retailers are aware of the US/UK disparity and I even know of one local retailer who actually recommended I didn't buy a product from him as he couldn't possibly match a much lower price elsewhere (yes the South West of England actually does have honest retailers!). Let's not forget that the retailer or mail-order supplier is also paying an inflated price for these products and merely passing that on.

The support issue is surely one which affects everyone in the world, though I concede that larger volumes of sales in the US make it cheaper. The question is, do European manufacturers want a healthy market or not? If they do, then I don't know a better way than to be realistic about the price of the product. Sooner or later it will happen and UK consumers will vote with their wallets.

I predict that an approximate parity with the US will occur within six months, whether you like it or not!

Best Wishes,

Robert


[This message has been edited by Robert Young (edited 05 July 1999).]

[tim]

Steve,
Thanks for your P.S. to your reply to Robert.
What you say is encouraging and I will start to hold my breath again!!
I still haven't received my copy of CV magazine for July.
Tim