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