Avid laying off 120 people

[Ron Lindeboom]

[Todd Terry] “Yes, some positive changes there, but I think they will prove to be too little too late.”

I couldn’t agree more.

I sure wouldn’t bet any of my money on Avid at this point.

Do I think that tools like FCP, Vegas or the Adobe Suite are comparable to Avid? Hardly. In some cases, not even close. But the differences are in feature sets and areas that are, for most people, not great enough to justify the difference in cost.

Example of the difficulty of their marketing message (from actual current examples)? Glad you asked.

Avid is going to be at Macworld pitching Media Composer. Uh, Macworld — home of more booths for iPod covers and 3rd party earbuds than you will ever find under one roof.

Yes, I agree with Shane that for real pros the media management functions alone set Composer far ahead of FCP. But what will that mean to an audience that is largely there to discuss their iPods and their earbuds?

The cost disparity for a tool that does far less overall than a box of Final Cut Studio — for twice the price — is going to fall on dead ears, me predicts.

And in response to Mark Suszko’s remark that their pulling out of NAB a couple years back is in large part a cause of much of this, I think that it is just a very small part of it all.

Avid has always viewed their market as insular and their marketing has always been insular. Now that this self-fulfilling prophecy of dwindling presence is playing out, a move to Macworld is almost a laughable market move to try to garner market share. If I were the boss over the person that made that decision, I’d have them on the carpet discussing the stupidity of the move.

But that’s me…

Best regards,

Ron Lindeboom

Creativity is a type of learning process where the teacher and pupil are located in the same individual.

Perfection is achieved, not when there is nothing more to add, but when there is nothing left to take away.
– Antoine de Saint Exupéry

[Alan Lloyd]

I have met George. He’s a good guy. Knows the used market like few others.

Tried Avid XPress DV long ago, PPro user now. (I’m just…not…a…mac…person.)

Their stuff is great when it works, and yes, quite costly. As others have noted, it’s when anyone else tries to move into hardware tied top the software that the costs begin to rocket upward.

And as a truly odd side question, are they the same people that used to make very good midlevel stereo speakers in MA?

[Scott Carnegie]

“I sure wouldn’t bet any of my money on Avid at this point. ”

I’ve honestly been hearing people say that for years; when they moved from Meridean systems, when they discontinued Xpress Pro, etc. The fact is that all of these businesses are likely to go out of business once day, it’s amatter of when.

Here is the latest financial report, I don’t know this kind of stuff so I’m not sure how to interpret it, although I don’t know how long a company can operate at a loss.

https://ir.avid.com/releasedetail.cfm?ReleaseID=424568

http://www.MediaCircus.TV
Media Production Services
Winnipeg, Manitoba, Canada

[Shane Ross]

OK…if people are writing off AVID now…as they did FCP all but ONE YEAR ago…who’s left? Who will really dominate high level film and television post? Vegas? Premiere? Smoke on a Mac?

Avid isn’t going to go away. Too many post facilities, TV production and new production facilities and television and film productions rely on it.

Shane

GETTING ORGANIZED WITH FINAL CUT PRO DVD…don’t miss it.
Read my blog, Little Frog in High Def

[Tim Wilson]

[Ron Lindeboom] “Todd Terry] “Yes, some positive changes there, but I think they will prove to be too little too late.”

I couldn’t agree more.”

Me too…although the IBM analogy is the absolute worst one possible, Todd. IBM is how they SHOULD do it.

IBM realized that any changes that they made to their computer business would indeed be too little, too late. At the same time, they found that the customers who were no longer buying IBM computers still relied on its enterprise-scale infrastructure-building expertise. They transformed themselves into a services company that is bigger than ever.

A key part of their infrastructure services is servers. As announced just last Friday (Ron’s birthday – woo hoo!), IBM’s server marketshare is #1 and growing. They also had the biggest profit in Q3 of any company in the server business.

So what happened to their computers? They found them to be a distraction to what had become IBM’s core domain. They sold the computer business to Lenovo…

…who just announced that their year-on-year profits had doubled, and that marketshare is up 18%, double HP’s 9% growth, and well ahead of Apple’s growth of 11% (on much lower marketshare of course.)

IBM is doing fine. The computer division they sold off is doing fine. Do you people not read the business news? 🙂

Here’s how that applies to Avid. One part of the company that has done great is broadcast. Why? Because the transition to digital newsrooms has only barely begun – over 80% of facilities worldwide are completely in play, and Avid has dominated so far. Why? Because of Avid’s expertise in enterprise-class infrastructure – integrating not only their own products, but aggressively supporting other companies as well.

You know that Final Cut Pro has been supported as an Avid Unity client for years now, right?

But far more important than networked storage, Avid has the server business nailed. As risky as disk-based playout is, going with non-Avid servers is even riskier – nobody else is as experienced supporting them in news environments.

The moral of the story is that Avid could spin off the video business (doing great, thanks to Media Composer software) and the audio business (Pro Tools, still going great guns), spin of networked storage (Unity), and become a services and servers business that would continue to dominate the market for pretty much as long as they wanted to.

In other words, IBM is EXACTLY the model to follow. If they do, Avid will be bigger and more profitable than ever.

My prediction: they won’t.

re: layoffs, my concern (to the extent that I care) is that they haven’t laid off nearly enough people. My guess why they haven’t laid off more – it’s too expensive!! They’re reporting termination costs of $7-9 million for those 120 employees, which is right in line with industry averages.

But I think that one of the painful lessons of the current economy is that you really don’t need as many people to, say, make newspapers, as you did before. The newspapers that have figured out the RIGHT way to do this are becoming profitable again, and many are even finding subscriptions going up as they now have the resources to grow their businesses.

My prediciton: Avid won’t.

But to me, in general, I think of layoffs are often a sign that a company is paying attention. So the question is really, even more than positive management and development changes, whether Avid’s layoffs are too little too late.

They should be so wise as to follow IBM’s model into the future.

[Ron Lindeboom]

I don’t believe that Avid will go out of business and never said such a thing. What I do believe is that Avid will become an increasingly more marginalized player in the days ahead, ending up with the niche that really understands the real differences that Avid brings to the party — differences like the monster media management capabilities that FCP and others can only dream of.

What I also question is the throwing of money at an audience like the Macworld crowd, to support a tool like Composer. I grin thinking of the kinds of questions and comments that the Avid demo people are going to get from the iMovie crowd — many of whom look at Final Cut Express as a huge step-up the foodchain. And Final Cut Studio? To many of this crowd, FCS is for performance maniacs.

My friend Tim Wilson likes to use the expression that “this ship has sailed,” a figure of speech that is especially true when thinking that Avid can go into Macworld and court and woo the low-end guys with a tool like Composer at this point in time.

Those are my thoughts,

Best regards,

Ron Lindeboom

Creativity is a type of learning process where the teacher and pupil are located in the same individual.

Perfection is achieved, not when there is nothing more to add, but when there is nothing left to take away.
– Antoine de Saint Exupéry

[Tim Wilson]

[Scott Carnegie] “criticizing Avid for “driving interest” away from the COW is not a valid argument for several reasons”

It’s valid because we specifically asked for help, and were told twice that Avid had no interest in spending energy on outside forums, and were spending the effort on bringing it all to themselves.

Ron and I were also each told this separately, me, within just a few months of leaving Avid to come work at the Cow. I had certainly seen this process well underway before I left – I just hadn’t heard it stated quite so clearly until I asked.

To another of your posts, I think that Avid has had a huge number of problems, but I agree with you that failure to consult or hire editors has not been among them.

[Ron Lindeboom]

[Scott Carnegie] “I am also a moderator on the Avid forums.”

Thank you for stating your bias honestly, Scott.

[Scott Carnegie] “As for the forums, the Cow put all of the Avid products into one forum, while the Avid page has several for different products, which I what I have always preferred. I started off posting in 2000 at avidpronet.com, which was eventually migrated into Avid’s site, which I continued onto. So I think this idea of criticizing Avid for “driving interest” away from the COW is not a valid argument for several reasons, one being that several folks weren’t on the COW in the first place and two being that there is nothing wrong with trying to bring your user base to your company website, it’s good marketing.”

We used to have our Avid forums broken out by products but we recently consolidated the forums to more accurately reflect the kind of “outside the Avid ecosystem marginalizing” that is more indicative of the way that outside users perceive Avid.

Like it or not, Avid is becoming increasingly more marginalized as time goes on. Where will it end? As I said to Shane, I believe that Avid’s abilities far exceed their competitor’s (because they DO listen to editors) when it comes to media management tools, project management, and other high level features that users of Apple, Adobe and Sony can only dream about.

Is this a knock on Apple, Adobe, or Sony? No, for cost-to-benefit curves, their products are pretty hard to beat. For many users their feature sets are enough. Is it enough for everyone? No. And for those whose demands are greater, there will always be Avid.

Another company that works in these rarefied airs farther up the mountain, is Autodesk. Autodesk has built a profitable company that works well with a focused and smaller segment of the market.

Avid appears to be making moves that are designed to try to bolster their presence in other areas of the market — in this case, the consumer segment served by Macworld.

Will it work? Me, I don’t think so — but you are welcome to think whatsoever you wish, Scott.

Best regards,

Ron Lindeboom

Creativity is a type of learning process where the teacher and pupil are located in the same individual.

Perfection is achieved, not when there is nothing more to add, but when there is nothing left to take away.
– Antoine de Saint Exupéry

[Scott Carnegie]

“we specifically asked for help, and were told twice that Avid had no interest in spending energy on outside forums”

Sorry, I should have clarified that I wasn’t saying it didn’t happen, only that I think it isn’t a reason to criticize them.

I don’t think it is a fair criticism to make of a company that they want to spend their resources on their own product rather than someone elses.

http://www.MediaCircus.TV
Media Production Services
Winnipeg, Manitoba, Canada

[Grinner Hester]

[Scott Carnegie] “The Avid bashing going on in this thread is unwarranted”
I guess it depends on perspective. To me, their lyeing in attempt to move product that isn’t ready is plenty warrant for negative feedback. If they didn’t expect this, they are veeeery bad at their gigs.