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Screenlight: Will Accounting Woes at Avid Spark Big Changes or an Acquisition?
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[Oliver Peters] “I think they had to. Apple devalued the market for color correction software when they rolled Color into Studio.”
Yeah, I agree that this made sense for Blackmagic, particularly since they were going into it making 100% of their revenue from hardware in the first place. Although I do recall comments at one point that as additional features are added to the full version of Resolve they might not all make it into Lite, so the products might more further apart in the future.
My point, though, was that I wouldn’t quite recommend that precise approach to Avid.
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Digital Workflow/Colorist, Nice Dissolve.You should follow me on Twitter here. Or read our blog.
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Mind if I interrupt this dance? 😉
Oliver, while everything Chris suggests may involve some risk, may or may not be the best solution… there’s the alternative….
I know how COW folks’ disdain for analogy these days but it’s a language I sometimes prefer to speak in.
Avid is much like cancer patient that may be approaching a terminal stage. The doctor may even say the patient has a couple of years or maybe… a bit longer with a very poor quality of life. Any possible treatment certainly means risk. Treatments may range from standard to experimental and prognosis may range from low chance of success with limited life extension to very much unknown for the experimental treatments.
A key problem is the longer the patient takes to make a decision the greater the likelihood of bad outcomes. Granted my bleak picture is my own painting and some might disagree. After it’s just one doctor’s opinion.
Ultimately Avid has to decide if software is going to stand on its own as a profitable part of the business or it will be a hook into its more profitable hardware and services. Or maybe even some tiered combination.
I think many if not most of the companies in the post field have made significant changes in their business models as the markets have changed. Avid certainly has made some attempts but to date they’ve been serious failures. Their response is to keep cutting away diseased parts but apparently never even remotely attempting a cure. Yes, with treatment there’s risk but without treatment the end seems inevitable.
So if everything Chris suggest is wrong… what’s the right risk for Avid to take?
Or do you believe waiting it out is a solution? -
[Oliver Peters] “I think they had to. Apple devalued the market for color correction software when they rolled Color into Studio.”
Actually they didn’t have to. If the market wasn’t profitable, if the market meant heavy loses, they could have exited. Instead they used software to sell hardware. They decided where the potential revenue source was and decided the software would be the hook.
I can speculate one way of thinking that brought them there. They had a reasonable estimate of immediate hardware sales for the niche market that chooses resolve over other tools including but not limited to Color. They probably also estimated that making free resolve pervasive, they may even entice some Color users to move. Some portion of that market will grow into hardware purchases. Also facilities buying the hardware would be assured of a very large talent pool. Was this the only answer? No, if they didn’t think that was viable they could have exited the market.
With Avid, Media Composer is still too expensive to be pervasive. Just about every other NLE is less expensive. Sure Avid made a move with low crossgrade price when the FCP7 plug was pulled. But the result was that most hung on to 7 and another portion moved to Adobe Production Suite (many already had so it was, at most an upgrade to the current version).
Even with that, Media Composer is not a significant revenue stream and, at the crossgrade price, worse than that. Avid had no strategy that opened the door to hardware purchases, at least nothing in the way that works like Blackmagic. I suspect, unlike Blackmagic, you may find Media Composer users looking at Isis competitors for example.
Sorry for the verbose response but basically Avid doesn’t seem to make the software hardware connection that competitors might make.
ProTools and its ecosystem might be a closer parallel to Resolve and its ecosystem. Blackmagic has a broadening range of low cost hardware wither it’s video cards, ATEM switchers, Teranex, VideoHub and now their move into cameras. Avid has what appears to be narrowing niche of high priced hardware.
Briefly, Adobe went through a major business model change which, as we’ve seen here, upset a few. Apple certainly went through a change which upset many. Avid seems to be afraid to take such risk. What they did do is, in the laster few years, enter and then exit the “consumer” market at a major loss… again with no business model on how to connect it to their ecosystem.
Avid will have to do something that will upset some portion of their user base in order to survive. I think that’s inevitable. That problem is exacerbated because, while being debt free… they are also basically capital bereft.
Blackmagic and other businesses made changes because they had business models in place. They probably had mechanisms for covering the risk as well. Avid my be in a position where they have no choice but jumping without a safety net.
If the NLE market isn’t profitable to Avid they either have to make it so or use it as a tool to sell hardware. That’s a choice.
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[Aindreas Gallagher] “translation I’m not an editor really, but thats not going to stop me giving forth at very great length on all topics. “
Alternate translation, he’s managed a facility and must understand all aspects of the business and has experience making these decisions and keeping in mind staff when making such decisions.
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[Craig Seeman] “Ultimately Avid has to decide if software is going to stand on its own as a profitable part of the business or it will be a hook into its more profitable hardware and services. Or maybe even some tiered combination.”
Agreed. I suspect the latter approach (hardware ands services) is the answer.
The bottom line is that high end post is no longer a profitable business for large, public companies. The survivors either have deeper-pocketed parents or are smaller, privately-held (or venture capital-held) nimble companies. It may well be that the best course for Avid is to double-down and target only broadcasters and restructure accordingly. That’s what GV has done. Not sure how well it is for GV, but you can see it in other sectors. Panasonic is a prime example of previously large companies who are floundering. Or Sony.
I don’t think that “dumbing down” the software for broader appeal is the solution. Of course I don’t have the answer either. But then no one else on this forum does either or they’d have the contract with the $1M golden parachute 😉
– Oliver
Oliver Peters Post Production Services, LLC
Orlando, FL
http://www.oliverpeters.com -
[Aindreas Gallagher] “translation I’m not an editor really, but thats not going to stop me giving forth at very great length on all topics. Future of editing, what you should be using, what apple is going to do…. and on and on and on.”
Creative editors are not the only stakeholders who care about and influence outcomes in this industry. They’re certainly not the only people able to provide informed commentary about the industry or speculation about its future. In fact, while folks in this forum are, in general, reasonably engaged and well informed on the subjects surrounding this discussion, in my experience a lot of editors out there don’t follow industry ‘politics’, aren’t familiar with the history of computing or phenomena like commoditization (critical to understanding how the industry is evolving), don’t know anything at all about software development cycles, aren’t familiar with product development concepts like ‘minimum viable product’ (critical to understanding some of Apple’s decisions around the FCP X launch), and sometimes don’t understand end-to-end post workflows or just aren’t very tech savvy at all.
There is nothing about being a creative editor that inherently means one is qualified to comment about big picture industry trends, let alone that one is so uniquely qualified to do so that others should be silent.
But, hey, don’t let the fact that I predicted both that FCP X would be a radical departure, and the backlash to that a year in advance deter you from believing that I couldn’t possibly have the slightest insight here.
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Digital Workflow/Colorist, Nice Dissolve.You should follow me on Twitter here. Or read our blog.
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[Herb Sevush] “, or if PPro keyframed the audio by clip as opposed to by track.”
Huh? Last time I looked you can keyframe audio clips since about version 1.5. Surely you mean something else and your brain is just bamboozled by all the feces being flung around this thread like a bunch of enraged monkeys… 🙂
David
AllinOneFilms.com -
[Chris Harlan] ” Wasn’t 4.2 when it became theoretically “useable?””
No. For large projects Premiere 4.2 was misery. It became theoretically and practically usable with the 5.0 64 bit re-write and Mercury playback engine.
David
AllinOneFilms.com -
[Oliver Peters] “Sure it is. You cannot accomplish everything you need to do within the Apple software. You have to find outside solutions, which Apple does not directly support. At least within FCP7/FCS or Adobe or Avid, I’m working with solutions developed and supported by the company. Not so in X.”
I just think this is essentially arbitrary. You’re letting other NLEs define the feature set, and then pointing to FCP X and saying it’s missing features. But the same thing would work in reverse. For instance, FCP 7 can export an EDL, and FCP X can’t. OK, well, FCP X can work with most camera media natively, and FCP 7 can’t. How come in one direction this is “you cannot accomplish everything you need to do within the software” and in the other direction it’s not? I bet more editors want to work with native camera media than want to export EDLs.
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Digital Workflow/Colorist, Nice Dissolve.You should follow me on Twitter here. Or read our blog.
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[Oliver Peters] “Of course I don’t have the answer either. But then no one else on this forum does either or they’d have the contract with the $1M golden parachute ;-)”
Actually I do think we have answers, what we might lack is the experience and skill set to implement them successfully. People with those skills might want to look at ideas from people like us.
[Oliver Peters] “I don’t think that “dumbing down” the software for broader appeal is the solution.”
They had their chance with Pinnacle and they mishandled that, I think. Lack of business imagination. If there were no viable strategy there then I don’t think Adobe would be continuing their Elements line.
[Oliver Peters] “The survivors either have deeper-pocketed parents or are smaller, privately-held (or venture capital-held) nimble companies”
This gets back to some of the things Chris Potter brought up. The problem is Avid really needs an Angel so they can go private.
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