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Adobe had a stranglehold on video editing. Premiere Pro. After Effects. $69 a month. Subscription only. Giant cancellation fees. It's been the way for years. But that's changing. People are starting to ditch Premiere Pro, for something else. A software with no subscription, that you buy once and own forever. Which has a free version, with 95% of the features. Davinci Resolve. The software that dominates TV and Hollywood, is now coming for Adobe. This is how DaVinci Resolve beat Adobe at its own game.
What some people miss is that DaVinci isn't really just "another editor". It has something very powerful, but also very specific. To understand why DaVinci is so important, we actually have to look where it's actually used the most. Hollywood movies. Imagine the movie process as lots of overlapping pipes. There's the rough, basic edit, using proxy files: aka lower quality versions of footage. This is often done with Avid Media Composer, or Premiere Pro. Then it splits into different pipes: There's VFX, which is a gigantic part with all kinds of artists, tools, and steps. Then, there's the conform stage, where that low quality is upgraded to the real, high-resolution media.
There's sound design and mixing, often with composing. And then, there's color grading. So where does DaVinci fit? Right here (point to color grading). Color grading. Color correction, like fixing inconsistent lighting and exposure, and grading itself, the tone and palette of the movie. DaVinci could handle a lot of these steps, but it is hands down, undeniably the best at this. This isn't a small niche audience either. Most major movies, TV commercials, TV shows, and music videos are color graded in Resolve. Star Wars, Avatar, The Martian, Jason Bourne,
Oppenheimer, Superman, Alien Romulus, Pirates of the Caribbean… it'd probably be easier to list blockbusters not color-graded in DaVinci. This is actually where one of their problems was. You see, DaVinci isn't new. It's actually been around for over 40 years. And through the 80s and 90s, DaVinci had built a reputation as the gold standard for color grading. (show below products on screen): DaVinci Classic, DaVinci Renaissance, and DaVinci 2K. But, it was a bit different back then. These products were between $200,000 and $800,000. Not cheap, but this was pretty standard for filmmaking tools.
It wasn't you or me buying this software, it was giant studios. This continued for decades, then out of nowhere, seemed to come the end of DaVinci. The corporate owner, Acterna, went bankrupt in 2008. But… DaVinci, the company within Acterna, was still profitable. Though that didn't matter. Even if part of a business is profitable, when the whole thing goes into bankruptcy, it can be very messy. But ironically, this was probably the best thing to happen to DaVinci. Different assets went up for sale at a bankruptcy auction.
DaVinci was bought by the Australian camera company Blackmagic Design. And more specifically, its owner Grant Petty. His company was a bit different. It was very self sufficient. They hadn't borrowed money and had basically no investment. [Grant Petty, BMD]: "If you're using venture capital, you're always desperate to pay back the investment" "[We were] in the right place and fit enough to take the opportunity. "Sales were up [for BMD's products] and we were doing quite well". The price for DaVinci was $10 million, which was quite a bargain, since buying the software itself cost $250,000. But Grant had big plans, which would change the world of video forever.
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Even though Blackmagic was doing well, it was time to change things up. [Grant Petty, BMD]: "Other companies were stuck in the world of charging a lot of money for their products but we weren't playing by the same rules. Resolve was a good product, but it was the same old hardware, so we decided to focus on the software." Grant wanted to change things up, and the key to that was DaVinci Resolve. So, in 2010, at the National Association of Broadcasters show, Grant and Blackmagic made a big announcement. New versions, and more importantly, a new price: $995 for a macOS version. $29,995 for the advanced macOS, and $19,995 for the advanced Linux version. That might sound like a lot. But remember,
once you bought it, you owned it. Highly robust, top-of-the-line tools for Hollywood movies. And before this, they were between $200,000 and $800,000. This was a huge change. But right after, the entire industry began to go through a metamorphosis. In 2013, Adobe dropped the "pay once and own it" model. Now, everything would be bundled under one big monthly payment. Creative Cloud. I don't think I need to explain why Adobe is so annoying. Deceptive cancellation fees, a short trial, a giant monthly price tag, the FTC lawsuit. But, the money doesn't lie. Other companies began to jump on. And soon every piece of software you could imagine moved to subscription. So, what about Blackmagic?
Grant could have swapped to a subscription license here, and made a lot of money. But, he essentially did the opposite to Adobe. Grant has made it clear how much he despises these plans. [Grant Petty]: "Cloud licensors are like slumlords. You have to keep buying from them and the more you're loyal, the more you'll get penalized. It is like your dog does something nice and you beat it with a stick." DaVinci moved in the other direction. Not only did they stay a "pay once and own" model, but they doubled down. In 2017, with the release of DaVinci Resolve 14, the price dropped even more. To just $299. And, this wasn't a cheap, basic version either.
This was the full package, with even more features. Notably, a full scale video editor. Like Premiere Pro. Grant also said "The full DaVinci Resolve 14 Studio is now available for only $299, which is less than the cost of most annual cloud-based subscription plans" I think we all know who he's talking about. But, somehow, that wasn't even the biggest change. Today, if you go to DaVinci Resolve's homepage, you'll see two buttons: Free Download, and Buy now. So, what is that free download? A free trial?
A super basic DaVinci? No. The free version has about 95% of the paid product. I'm not kidding, you can go try it right now. It's unbelievable. They don't even ask for your credit card. Just a few details and then they ask you what features they should add. The only things it doesn't have are resolutions beyond 4k, collaboration tools, and a few other features used by industry professionals. It reminds me of software from the 2000s. "Here you go. We hope you like it. Anything we can do to improve?" And that's not all.
Blackmagic just kept adding stuff to DaVinci. In 2017 they acquired Fairlight, an audio editing software. Then added it to DaVinci Resolve. Then in 2018, they added VFX and composition tools from Fusion, which they had acquired back in 2014. DaVinci just kept getting better and better. Soon this software had everything. Not only the best color-grading you could get, far better than anything Adobe had, but a great video editor, VFX tools, and audio editing. And all for that $299 price tag, and a robust free version. More and more people were beginning to look over from Premiere Pro. But, why do this? Why give away most of your product for free? Surely this makes no business sense, right?
Well, it actually made much more sense than you might think. And even if it was still in the background, word of DaVinci Resolve was beginning to get around… All kinds of fascinating business stories happen all the time, some without anyone noticing. And they have heaps of things to teach us. We cover lots of these stories, so subscribe! We're almost at 1 million, and you can help us get there. For DaVinci, there are two important factors at play. First, Blackmagic isn't a software company, like Adobe. They're still a camera and industry tool company. Highly advanced, professional tools like cameras around $30,000.
Editing dashboards, color panels, all for hundreds or thousands of dollars. Their gigantic consoles for movie studios go for tens of thousands. Blackmagic isn't a software company like Adobe. They're a hardware company, and DaVinci Resolve is the software that goes alongside it. So why does this matter? Because of the second factor. Making most of it free, and the full version a "buy and own forever" license, aligns with Grant's philosophy. [Grant Petty]: " I think the computer industry has forgotten about the spirit behind when they were setup. Personal
computers were about distributing computing power to individual people. Now it's become a centralization of your data and you're the product, not the product you're actually buying. I think the computer industry has lost its way." That point about "distributing computing power to individual people" is key. Grant calls this "democratizing creativity". It makes it easier for people to jump in, create something, and maybe end up on a path to being a filmmaker, freelance editor, color-grader, audio engineer, or even a YouTuber!
Those who start in DaVinci may, down the road, as they go from amateur to professional, pay for the other products by Blackmagic. Plus, it does something very smart. One of the biggest challenges for a customer here isn't actually pricing. It's the switching cost. If you've used Premiere Pro for, say, 10 years, jumping into new editing software is very hard. It can take months to relearn shortcuts, the way plugins work, the way the timeline works, general muscle memory, and I say this as someone who's done it! But Blackmagic has made it as easy as possible to switch.
There's no financial risk in learning it, and you're not restricted in how much you can learn. This also brings me to a conspiracy theory I have, that Adobe secretly allowed the rampant piracy of their products in the early 2010s. To get everyone into the ecosystem, and build that switching cost. So when those who pirated software eventually pay for it, they're already used to Adobe. Though, I could be wrong. But going back to DaVinci, this tactic actually combats piracy. Why pirate a product that has 95% of its features for free?
The switching cost was as low as possible, and people were beginning to notice. In just a few years, it felt like everyone was giving up Premiere. In 2009, DaVinci had just 100 users. Of course, these customers paid hundreds of thousands, but by January 2019, DaVinci Resolve had over 2 million. Blackmagic now had over 1000 staff, and was making $300 million a year. For comparison, Apple's Final Cut Pro had about 2 million as well. And this is even more true today. By 2023, Resolve had over 5.4 million users.
Compound Annual Growth Rate (CAGR) is 116%. And most of that growth happened after the free version was introduced. Blackmagic Revenue also grew to $124 million in 2024. Though some estimate that by 2025, it was over $550 million. Adobe's ongoing price increases, AI controversies, lawsuits, cancellation fees, and software stability issues keep pushing people toward alternatives. Hashtags like #DitchAdobe pop up all the time. Ironically, the best marketing campaign for DaVinci… is Adobe. So, the question is: how does DaVinci really compare? In the professional video editing software market, Premiere Pro is still at the top,
with 35% market share. Then Final Cut Pro at 25%, then DaVinci at 15%. But, they're growing quickly. And keep in mind, this is video editing, not professional color-grading, which they are still dominating. They are slowly eating into Adobe's market. However, there are two things that concern me. First is that DaVinci has introduced a subscription. But it's a bit different. What they call the rental model, they're offering a $30 per month option, alongside the full-price purchase. This has got people a bit concerned. But, I can see the reason.
Imagine you're a freelancer, and you need DaVinci just for one job. You can just pay for a single month, instead of the full price. Importantly: The one-time, perpetual license purchase is still around. So for now, I think this is okay, because it gives the consumer more choice. Though there's something else. With their new growth, Blackmagic would be in the perfect position for an IPO. That, or activist investors, or private equity, or anything along those lines. I can't imagine what would happen if investors pushed the company to slowly and gradually move to an entirely cloud and subscription model.
Blackmagic is one of those companies that fills a gap in the market, delivers value, and puts their customers first. Not only that, they're thinking big picture, instead of just the latest trend. Though with how Grant likes to run his company lean and without borrowing, I don't think we have to worry. Adobe, however, is in a bit of trouble. Remember that insane revenue graph from earlier? Well, take a look at this: Despite record revenue and profit, Adobe's share price keeps falling. And that's not all. The FTC lawsuit for their deceptive fees has finally concluded.
Justice seems to finally be coming for Adobe. Click here to learn the rest of the story.
