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Avid to relist on NASDAQ
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[Mark Suszko] “Plenty of people thought FCPx was dead on arrival, after that initial introduction. It was just shagged out after a prolonged sqauck, after pining for the fjords.”
Mark,
You practicing your Aindreas impression for the holiday party?
Know someone who teaches video editing in elementary school, high school or college? Tell them to check out http://www.StartEditingNow.com – video editing curriculum complete with licensed practice content.
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[Bill Davis] “You practicing your Aindreas impression for the holiday party?”
LOL, that’s a good one, Bill. 🙂
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[Craig Seeman] “really isn’t an NLE company anymore.”
Avid would disagree.
When people say things like “Avid makes more money off of storage,” they miss the simplest of equations: the value of Unity minus Media Composer = ZERO. Avid would sell ZERO Unity networks without Media Composer.
This may seem a trivial distinction, or merely semantic, but it’s not. It’s the one fundamental, inviolable truth in Avid’s world, and the only starting place for any discussion of what “Avid is” or “Avid means” at all.
Non-MC users could use Unity (it supports any clients you can think of), but never will. Without the workflow advantages Unity enables for Avid clients, hard to make a case why they should, either.
MC users have some reasons to use Unity, but hey, if you don’t need those advantages, they can choose other kinds of storage, and they do. There are companies with banners on this very page who’ve built their entire business on being non-Unity storage specifically designed for Avid editors in specific scenarios that Unity might previously have been the only option.
A small market, you say? Yes it is, but it’s obviously big enough to make a living in.
Unity users, though? 100% of them use Media Composer. ZERO percent of them DON’T use Media Composer.
Avid can’t sell their awesome Unity storage outside this market (for technology reasons that are worth talking about another day), so once Media Composer is no longer a compelling client, Unity is done.
The same is true for Avid consultation and services. Say you’re an enterprise scale customer who needs a wall-to-wall, end-to-end, multi-vendor, multi-platform solution with a customized workflow.
Avid broadcast sales consultants are actually really good at this, because Avid has never owned all the tools that, say, a newsroom needs to operate, so they HAVE to be good at the big picture if they want to make a sale at all…but honestly, if you’re not using Media Composer-derived software AT ALL, there are no advantages to Unity, and no ABILITY to use Interplay, and therefore, no reason to even LOOK at a bid from an Avid services consultant.
Bringing us back to our one, inviolable truth: without Media Composer, Avid has neither the storage nor the services to make any kind of future as “storage and services company” even vaguely feasible.
So Media Composer isn’t Avid’s biggest SOURCE of revenue, not by a long shot, and as noted before, hasn’t been for a while. But it’s the only REASON for ANY revenue, and will be forever.
That’s the definition of “an NLE company.” No NLE = no company.
In that sense, Avid may be the only “NLE company” around at all right now.
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[Tim Wilson] “Avid would sell ZERO Unity networks without Media Composer. “
But that would make MC as utility integral for Unity not so much something that has great value to them with stand alone MC sales. It’s not that MC should or could “go away” but its value to them is really as part of Unity.
I have to wonder it EditShare is hoping LightWorks because their Media Composer in that it becomes integral in making their storage systems more valuable. It seems why they might have found value in LightWorks. They want/need an NLE with ties to their storage system that they can add value to.
[Tim Wilson] “That’s the definition of “an NLE company.” No NLE = no company.
“I would consider them a Broadcast Enterprise company that makes an NLE to best take advantage of that. Semantics maybe but I don’t consider them an “NLE Company.” In fact, these days, I don’t think there are any NLE companies per se.
Apple would survive without FCPX. Adobe could survive without PPro although for them, it may be seen as, at least, an integral tool in After Effects work (not that it’s value is in any way limited to that).
My own guess as the array of NLEs improve, Avid’s NLE ONLY market share will erode (which has no baring on MC’s use with Unity system). In fact Avid, with proper management decisions, will weather that.
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Would it be fair to say that MC could be considered a loss-leader for Avid aimed to sell and maintain support for the larger, more profitable Avid Everywhere, Unity and consultation products?
Hernandez is a smart guy. He trimmed the company down, focused on his core user group (the folks who really use the above products) and set up the subscription model that will, at the very least, stabilize the revenue flow. Those are really good accomplishments (I leave the ACA out of it, as that seems more like a cash-grab than anything else). Now the challenge is growth and profitability. I still can’t tell from the Avid press release if the company is making a profit or not. Certainly revenue will jump in this last quarter due to a rush in subscriptions before the end of the year (not mine, I will use the $300 to buy a bit more Avid stock), but what about next year? How do you increase revenue? Raise the subscription price or get new customers. And getting new customers would rely on Avid marketing which has been historically bad. The NLE field is shaking out with not a lot of people on the fence to sway. Louis did a good job keeping the company upright (burned through a ton of their cash reserve, however), now the challenge is to grow. It will also be interesting to see if they start selling off pieces, as Mr. Hernandez did this very same thing at his last company. Interesting story to watch unfold.
Scott Witthaus
Senior Editor/Post Production Supervisor
1708 Inc./Editorial
Professor, VCU Brandcenter -
Just wanted to say that you’ve summarized the Avid situation better than I’ve ever seen anyone else do it.
Now… I just wish that the Avid brass would see it that way too 😉 The way they treat Media Composer, it feels like the bastard child of the family.
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I think it’s unfair to look at any of these items as loss leaders. Avid makes money off of all of its products. Some more, some less, but they all are slices of the complete income pie. Avid can’t really afford to neglect any of them.
– Oliver
Oliver Peters Post Production Services, LLC
Orlando, FL
http://www.oliverpeters.com -
I respectfully disagree. I would bet that Avid would love to break even or just take a little loss on making and updating the NLE software as long as it drives the sales of cash-rich support contracts and (supposedly) more profitable “big-iron”. Avid used to be a company that was centered around the NLE. Now the NLE is a support for the contracts, consultancy and hardware revenue streams. It would be interesting to hear how Avid defines itself these days.
Scott Witthaus
Senior Editor/Post Production Supervisor
1708 Inc./Editorial
Professor, VCU Brandcenter -
[Scott Witthaus] “I would bet that Avid would love to break even or just take a little loss on making and updating the NLE software as long as it drives the sales of cash-rich support contracts and (supposedly) more profitable “big-iron”. Avid used to be a company that was centered around the NLE. Now the NLE is a support for the contracts, consultancy and hardware revenue streams. It would be interesting to hear how Avid defines itself these days.”
Let’s conduct a thought experiment to test this idea that MC is nothing more than “support” for Avid’s service contracts, consultancy,* and hardware, and that none of these sources of revenue are actually centered around the NLE.
Let’s say Avid shutters Media Composer tomorrow, and positions their sure-to-be-renamed ISIS system as a hardware solution for Adobe Anywhere clusters, available with support and customized solutions.
What happens next?
* Oxford comma! I haven’t heard “Harvard comma,” but rather usually hear this referred to as a “serial comma.”
Walter Soyka
Designer & Mad Scientist at Keen Live [link]
Motion Graphics, Widescreen Events, Presentation Design, and Consulting
@keenlive | RenderBreak [blog] | Profile [LinkedIn] -
[Scott Witthaus] ” I would bet that Avid would love to break even or just take a little loss on making and updating the NLE software”
What makes you believe that they aren’t making money on MC or PT as individual products or business units right now?
– Oliver
Oliver Peters Post Production Services, LLC
Orlando, FL
http://www.oliverpeters.com
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