Daniel_K - A CREATIVE Story E-mail
creativestory.jpgAuthor: Matthew Bradford

Editor: Chris Hunter

Creative Labs, famous for the trademark SoundBlaster name among many others, falls to a knee after more than a decade of domination. David and Goliath could not have been retold any better. However, this is Daniel, and then enters the Scottish armies from the movie Braveheart.

The story revolves around a computing enthusiast from Brazil named Daniel Kawakami. He was able to "fix" the issues that were previously thought to be errors within Creative's driver suite under the Windows Vista operating system.

After completing his own driver set, he released them for some time on the Creative Labs forums. Company VP Phil O'Shaughnessy publicly threatened Mr. Kawakami despite his helpful intentions. The VP posted an admonishing letter in the thread where Daniel was discussing and releasing his driver fixes, found at message 6 of the 2,411 posts. Daniel himself posted an interesting response that can be found at message 9 on the same page.

In this official response, O'Shaughnessy states:

 "By enabling our technology and IP to run on sound cards for which it was not originally offered or intended, you are in effect, stealing our goods."

O'Shaughnessy further seals the fate of this incident by continuing to say:

"If we choose to develop and provide host-based processing features with certain sound cards and not others, that is a business decision that only we have the right to make."

These statements combined with others made during the VP's warning instigated an online riot. Customers loyal for nearly 20 years have gone on record as saying that they will never again purchase a Creative Labs product. Some enraged proprietors went as far as to purge their shelves of Creative Labs products still in stock.

Following Daniel Kawakami's curt warning, enthusiast-centric hardware wholesaler Newegg.com reacted to the community, officially posting a response to an estimated 5000 return orders for Creative products in just a 24-hour time frame. Click here to view a copy of this response copied to the AMD Processor forums. Creative Labs forum moderators have removed the original post.

Creative responded with a corporate boilerplate response. They neither accepted blame nor addressed the purposeful crippling of the "Vista Ready" sound drivers. This bland response enraged the public and the enthusiast community, spawning several websites dedicated to boycotting Creative's products outright. While most sites have been shutdown, a petition still hails here, offering a chance to join the ranks of disgruntled Creative customers or outraged enthusiasts at large.

Creative Labs has taken a hit in recent years; selling their Singapore HQ building to an anonymous buyer for a sum near 180 million USD.  The financial graphs show the added results of this recent PR disaster with a 13% loss in stock value in the last month and the continuation of further decline for the once innovative audio hardware company.

creativestorystock.jpg

Despite their losses, Creative is still paving the way, releasing their XiFi-2 sound card, which has questionable profitability at this time, as suspense hangs over the fiscal losses of this potentially damning event. The success of this product is dependant on how Creative handles damage control. In addition, Creative will have to regain the trust of a disgusted and broken community by properly dealing with their past decisions in marketing and morality.

The story of Daniel Kawakami and the audio technology heavyweight is epic, and in this case, the community has spoken. Articles, blogs, and posts have spread across the web like wildfire. Wired blog network posted articles highlighting the lack of response post-event, and an informative and revealing article where Kawakami himself speaks out. He talks about the events that have taken place, his own decisions, and what he found deep inside Creative's labeled "Vista Ready" software. 

Take time to read the multitude of comments from angry and disgusted customers below these articles. Seeing the energy created by the disenfranchised brings the whole picture into crystal clarity. Creative has made an enormous mistake.

All too late, Creative Labs has succumbed to the pressure of the community following the outcry of customers and newcomers commenting in the many threads started on the Creative Labs forums. The company has given the green light to Daniel Kawakami to provide an approved list of repaired drivers frpm those he created. However, his original work is undoubtedly available via bit torrent from various tracker sites.

Few news sources following this story have had much to say in defense of Creative's actions. The idea that they have made their intellectual property and marketing a sham of deception has caused much discussion on the limits of IP or intellectual property. Have they gone too far? Planetx64 responds to this question in an article found here.

It is difficult to ascertain where the Singapore based sound hardware will go from here. We will continue to cover this story, as it is still evolving and continuing. The battle is far from over between Creative and the Customer.




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w99 (75.72.203.173) 2008-04-26 03:06:18

I, for one, am never again going to buy a Creative product. Not one of their MP3 players. Not one of their shitty soundcards.

We, the market, have spoken. This kind of community action is only beginning. Those in power need to take care, from industry to government.

We are many, and we are watching.
Nathan (204.65.61.119) 2008-04-26 07:36:09

Yes, Creative made a bad PR decision here. But, it is NOT the PR disaster that you make it out to be. Creative's been in financial trouble for awhile now. Their stock has been steadily dropping for, literally, years. The sale of the HQ has also been in the works for awhile as a means to offset the massive debt that developing/marketing their newest sound card created. Yes, they are on their way out, but this is just a small link in a much larger chain that has created their demise. I'd say the greatest reason for their demise has been in integrated audio. Integrated audio these days rivals anything put out by Creative. Creative never got into the MB game, and it's cost them. 5,000 returns? Sure, that's a high number for any given day, but not much in the grand scheme of things. It also doesn't directly hurt Creative, NewEgg already paid creative for the merchandise, so Creative has their money, it's NewEgg that has to foot the bill for holding extra stock of sound cards.
Do you homework, look at real figures. We like to like this story because of the same reason we like David vs Goliath, as you mentioned, but it's just not the whole story here.
Welcome to BHFO Nathan!
Matthew Bradford (Author) 2008-04-26 15:36:15

Thank you for taking time to come by the site and read one of our many articles. We at BHFO take our homework seriously, and upon review of over 20 credible news sources around the web, we have gathered fact from several locations to better depict the reaction of the community as well consumers at large to this incident. For a company to blatantly reveal an unfortunate truth, and for both retailer and consumer alike to have responded in such an overwhelmingly public nature, yes this is a bit of a PR disaster for the once great Creative Labs. As I said in the article, "Take time to read the multitude of comments from angry and disgusted customers below these articles. Seeing the energy created by the disenfranchised brings the whole picture into crystal clarity. Creative has made an enormous mistake." This alone, if it had been properly reviewed as was suggested, is potentially disastrous PR for a company so reliant with an enthusiast community. The companies fiscal losses and the sale of the Singapore based headquarters of the Creative Labs corporation, were only highlighted by this issue. Therefore, the news reported in this article concerning the transaction is relevant and accurate, as it did occur.

Myself and the staff of BHFO greatly appreciate criticism as much as we do compliments. However, your comment digressed into your own opinion of the incident following your comments on the the blow made to Creative as the quality of on-board audio chip sets has increased tremendously in recent years. ASUS contributed significantly, and is currently in the forefront of competition for Creative's best products. I would like to thank you again for taking the time to both read and leave comment on my article. Please come back anytime, and we look forward to your's and everyone else's feedback on our content. We hope you have a great rest of the day.
Nathan (204.65.61.119) 2008-04-26 15:05:49

It's true that I did begin to venture into my own theories about their demise. The point that I was trying to make was that this was just one of a long line of mistakes they've made that is costing them a lot. I felt that your article gave undue credit to this particular event, making it seem that the Driver disaster was the cause of the declining shares and the sale of the HQ. I was merely attempting to point out that the stock has been plummeting steadily since 2005 (and generally since 2000), and that the sale/release deal that they did with their headquarters is not a quick transaction to execute, and the chances that this was not in the works long before Daniel was threatened are virtually nill. Perhaps I was wrong in saying that you did not do your homework, and that it was the emphasis on the Daniel story as their reason for demise that I should have taken affront to.
Thanks for the input!
Chris Hunter (Super Administrator) 2008-04-26 16:13:46

I could not agree more that the average layman is content with listening to the latest integrated audio solutions. Yes, Creative has been declining for years due to their refusal to diversify beyond a few companies like Cambridge Soundworks. I have bought many creative cards since the SB16...I used to love their products like the Zen. That adoration does not change the fact that they have shattered the trust of the community at large. Granted, they have recovered from other stock drops that were worse than this, but losing because of market forces and losing because of trust are two different worlds.
I will not be buying an X-Fi as planned. I have stopped recommending them as a sound card provider. I would look at this situation as a PR Disaster with a larger image impact rather than financial. If they are smart, they will pull out of this and dust off their reputation, but they will be short a few enthusiasts that used to support them.
Thank you for the opinion and appreciated feedback. We like to generate discussion with our Opinion Articles. I reworded the paragraphs emphasis on a direct relation between the sale of the HQ and the Daniel_K incident. Sign up for a BHFO account, and we hope to see you posting in the future.
Nathan (204.65.61.119) 2008-04-26 16:07:50

"We like to generate discussion with our Opinion Articles."
And I enjoy discussions, especially when they don't devolve into the normal dribble that is often found on the internet. A true discussion should involve points and counter-points. Both you and Matthew command my respect for both your candor and professionalism.

I was once a creative user myself, but after moving to their original Live! line of cards from the SB16's, I found that even with my Klipsch 2.1 speakers, I couldn't tell any difference between the onboard and the sound card. I, honestly, can't think of a single one of my friends who have purchased a sound card for their machines. In XP you could see a small increase in framerates by offloading the sound processing to the sound card, but as CPU's and bus's got faster, that edge began to shrink. With Vista's new software Audio Abstraction Layer (required to provide the application specific audio controls, one of the few Vista features that I miss when I go to an XP machine), the framerate advantage disappeared completely.

Ultimately, I think the root of Creatives problems lie in consistent poor management. They failed to predict where audio products were going (not just sound cards, anyone remember the Zen?), they failed to treat their customers with respect (seriously, you'd think companies would learn from the RIAA, pissing off your customers is a bad idea), they overpriced their merchandise, and they failed to properly support their existing hardware during a major OS upgrade, getting greedy(desperate?) and charging for the drivers needed to support their products.
Matt (64.246.145.187) 2008-04-30 05:34:37

I always used to use creative labs products - back before every motherboard had integrated sound. Now that they all do - the only thing i've seen a use for that creative labs makes is speakers (cause they are cheap) and get the job done.

I'm not someone who has a need for a high end sound card. But hey if i did - and it didn't work on vista (which has been out for over a year) - I'm not sure i'd have too much faith in that company.
who cares
Heywood Jablowme (71.209.18.162) 2008-05-28 17:55:40

This is just a piece of sh** company trying to make amends. I'm a previous purchaser of creative products and I won't so much as buy a motherboard that has anything related to creative involved. Onboard sound here I come! Or, better yet Logitech, cuz they don't fu** their customers, big or small.
thoughts.
Matthew Bradford (Author) 2008-05-28 18:08:58

Although this is pretty much over and done with as an issue on the edge of news, it is still however something to think about. In the grand scheme, Creative as a company will still go on to create and release products and still reap profits from its customers.

But one important piece of this puzzle was that for an isolated moment, the community and the power of the rapid spread of information caused great stress and considerable financial loss to a major corporation.

I feel that after all is said and done here, the moral of the story is that we, the "consumer" have the power to change what needs to be changed should we all feel empassioned to do so as a group.

Boycotting is out of style in today's society however it still has the power to bring about change. It hasn't died as a power, only we haven't used it for it's power in too long.

I applaud the efforts of all of the members of the computing community in their passionate expression against an obvious wrong.

In order for a company to manufacture a profitable product to be fed to the consumer...we have to consume it right? It has to be bought to pay for it's creation.

In that light, don't we own the corporations? Don't we hold the power that they perceive as their own absolute?

Food for thought readers. My thanks again goes out to all of the thousands that have read my article, telling the story of what truly became a David vs Goliath event. If even one of you retold this to others and passed it on then you have made this article a success.
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Copyright (C) 2007 Alain Georgette / Copyright (C) 2006 Frantisek Hliva. All rights reserved.

 
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