Avid Restatement

[Andrew Kimery]

[Scott Witthaus] “The 2014 numbers will be more interesting as there will be a surge in revenue based on the new subscription model that Avid is forcing it’s loyal users.”

Avid offers a perpetual license option and a subscription option.

[Andrew Kimery]

[Mark Suszko] “When the arbitragers and speculators and financier types start controlling the company, so that accounting trickery is put ahead of new product development, or customer service, I think you have the beginnings of a long downward slide. “

I don’t think that’s happening with Avid (at least not yet). There is been a lot of improvements made to MC over the last 4-5 years. If Avid is floundering anywhere on the customer facing side I think it’s their marketing department. For example, there is lots of confusion over what Avid Everywhere is, I keep seeing people wrongly assuming that Avid went subscription only, and some longtime products have gotten new, and IMO confusing, names (ex. Interplay Sphere is now called Media Composer Cloud).

[Franz Bieberkopf]

[Craig Seeman] “Anything is possible but the numbers do point down, not up.”

Craig,

I think the numbers are up and down.

https://ycharts.com/companies/AVID/profit_margin

You can pretty clearly see bleak years there from 2005-2010 or so. The shroud of mystery has been lifted though on the past few years and 2011-2013 are profitable after much restructuring and layoffs and new board members.

There’s been real uncertainty about what’s been going on at Avid, what the financial irregularities really mean, and what the future might be – those who depend on Avid are probably relieved that the restatements paint a healthier picture than the one that many speculations pointed to.

I’m not particularly inspired by what I see in terms of software (and services) but there are those who rely on Avid and like the stuff. This has to be good news for them.

Franz.

[David Mathis]

[Andrew Kimery] ”
[Scott Witthaus] “The 2014 numbers will be more interesting as there will be a surge in revenue based on the new subscription model that Avid is forcing it’s loyal users.”

Avid offers a perpetual license option and a subscription option.”

I think the approach Avid is taking is a much more fair approach. Of course if you decided to opt out then start again, you have start from scratch again which could prove to be more expensive. With any subscription model, having a good strategy is of key importance just like it is with the stock market.

Slightly OT:

Assuming that BMD really steps up to the plate with Resolve as an NLE and there is tight integration between Resolve and Fusion, wondering what effect that will have on Adobe and Avid, looking at both short and long term.

camera operator | editor | production assistant

Remember kids, tracks are you friends when you charge by the hour. Track Tetris, game on!

[Scott Witthaus]

[Andrew Kimery] “Avid offers a perpetual license option and a subscription option.”

But still, you either buy the annual support by 12/31 or when you do want to upgrade, you pay full license price. So, that is what I mean by “force”. Or am I missing something here.

For example, in my market Avid has largely gone away. Maybe one shop that clings to it, but usually uses Premiere or FCP. I still have an MC7.0.3 license on my computer for “just in case”. But quite honestly, I have not had a paid Avid gig in years, so paying $299 makes no sense. However, if I don’t do it (buy their support) before the 31st of December, I am penalized and have to basically re-purchase the license. Good for Avid revenue, bad for me.

Now I know some people will say “it’s only $300 bucks! Just fork it over!”. Sorry, I don’t think that way. So while Avid may get a surge of revenue at the end of the year with this “tactic”, they have lost me as a paying customer and I am sure many others like me. Hello, FCPX and Resolve (when it’s worth a sh**).

Scott Witthaus
Senior Editor/Post Production Supervisor
1708 Inc./Editorial
Professor, VCU Brandcenter

[Michael Hancock]

[Scott Witthaus] “However, if I don’t do it (buy their support) before the 31st of December, I am penalized and have to basically re-purchase the license. Good for Avid revenue, bad for me.”

Or you pay $75 to rent it monthly when you get an Avid job, without locking yourself into a contract. When the job is over, you cancel. Seems like a win-win.

—————-
Michael Hancock
Editor

[Franz Bieberkopf]

[Scott Witthaus] ” However, if I don’t do it (buy their support) before the 31st of December, I am penalized and have to basically re-purchase the license.”

Scott,

You have options.

One of those is to continue using the version you purchased as long as you wish with no additional costs.

Franz.

[Andrew Kimery]

[Scott Witthaus] “But still, you either buy the annual support by 12/31 or when you do want to upgrade, you pay full license price. So, that is what I mean by “force”. Or am I missing something here.”

To me it’s no different than an upgrade discount. If you upgrade w/in a certain time period you get a discount. If you do not upgrade w/in a certain time period you do not get a discount. If you buy the perpetual license and choose not to upgrade your software still works. You are not forced to pay Avid any more money beyond the initial purchase price in order to keep using the software.

The $299 “service agreement” (or whatever Avid legally has to call it) allows Avid to roll out feature upgrades whenever they want and not violate federal accounting regulations in the US. It’s a presumed violation of these regulations that led to Avid not divulging its finances and eventually getting delisted from NASDAQ. For example, all the new features shown at IBC for the MC 8.1 upgrade could not be made available under Avid’s previous distribution model. Under the old model all those feature upgrades would have to be put on hold until MC 9 was released. I don’t see it as an evil tactic but just as a way for them to stay competitive while still giving customers options w/o violating the law.

The common refrain from the “I hate Adobe” crowd isn’t the price but the fact that there’s no perpetual license option and Avid gives you a choice between buying a perpetual license or signing up for the subscription plan. Putting Adobe and Avid in the same bucket is inaccurate, IMO, as they have different offerings.

[David Mathis]

[Andrew Kimery] ”
The common refrain from the “I hate Adobe” crowd isn’t the price but the fact that there’s no perpetual license option and Avid gives you a choice between buying a perpetual license or signing up for the subscription plan. Putting Adobe and Avid in the same bucket is inaccurate, IMO, as they have different offerings.”

Something that else might play a role in is could be that Adobe wants to serve a segment of the market. I am no saying this is bad or good, just a direction that chose to go in. I respectfully dislike the current offering but that is the way the ball bounces. There are plenty of options out there.

I agree with Andrew, it is more an apples and oranges type of comparison.

[Dennis Radeke]

[David Mathis] “Adobe wants to serve a segment of the market”

Hi David,

I’m curious as to what you mean by this. From our point of view, we strive to make the best products that will address all segments of a given market (eg non-linear editing). That said, I could clearly be misunderstanding your intended meaning.

Thanks,
Dennis – Adobe guy