Today brought more news from Avid that things are not too rosy in Burlington Massachusetts for the one time pioneer of NLEs. They are selling off the consumer M-Audio brand and more incredibly their consumer editing apps including Avid Studio for the iPad.
We were quite staggered in a few conversations during NAB when editing colleagues didn't realise that Avid wasn't in a great financial state. The heavilly promoted FCP switcher campaign that was offered in the run up to the FCPX launch and beyond might have given the impression that Avid were growing and were going to grow more in the future.
The actual picture is somewhat different.
Avid have been in poor financial health for a while, the company has been shedding jobs on a regular basis to try and keep costs down. In October 2011 Avid laid off 10% of their workforce and today Avid announced that they intend to reduce the headcount further by another 20%.
The announcement is of course wrapped in corporate speak:
“The changes we are announcing today make Avid a more focused and agile company,” said Gary Greenfield, CEO of Avid. “By streamlining and simplifying operations, we expect to deliver improved financial performance and partner more closely with our enterprise and professional customers. Our objective remains to provide these customers with the innovative solutions that allow them to create the most listened to, most watched and most loved media in the world. I’m excited about our future prospects.”
They have also decided to sell off two product lines from their bloated range that they gathered from their agressive acquisition operations. It seems only like yesterday that they bought Euphonix from Yello's Dieter Meier.
Avid has agreed to sell its consumer audio and video product lines. The company’s consumer audio products are being sold to inMusic, the parent company of Akai Professional, Alesis and Numark, among others. Headquartered in Cumberland, Rhode Island, inMusic's brands are best known for producing innovative products for music production, performance and DJing. The products involved in this transaction include M-Audio brand keyboards, controllers, interfaces, speakers and digital DJ equipment and other product lines. Avid will continue to develop and sell its industry-leading Pro Tools® line of software and hardware, as well as associated I/O devices including Mbox and Fast Track.
Here comes the amazing bit...
Separately, the company’s consumer video editing line is being sold to Corel Corporation, a consumer software company headquartered in Ottawa, Canada. The products involved in this transaction include Avid Studio, Pinnacle Studio, and the Avid Studio App for the Apple iPad®, as well as other legacy video capture products.
Yeup that Avid Studio iPad app that we reported on back in February has been sold. We can understand that they want to concentrate on professional customers, but the market has moved on from the time when Avid was the undisputed king of NLEs. Contrast this to Apple's position that offers a vertically integrated range of video editing and music creation applications.
Rather than slicing off the lower end of the market, Avid should have reduced the cost of Media Composer down to the same price point as Final Cut Pro X and met its nemesis face to face. Or taken a leaf out of Adobe's book and offered MC for monthly rent and therefore dodged the Sarbanes Oxley feature update problem.
So what will happen to Avid from now on? We know things are tough financially worldwide, but take a look at the share price which has dropped 60% in the last year. They have also lost a lot cash, a whopping $150 million in 2008, getting better year on year to just over a $20 million loss for the year ending December 31st.
So will Avid go bust? It seems that without their successful ProTools audio software propping them up it might have happened a while ago. Will the Avid product disappear? Of course not, take a look at the re-emerging Lightworks (At one point in time the only competitor to Avid) or the Boris maintained Media 100 as examples of NLE software longevity. That familiar interface will be around for a long time. Who owns it and how much money will be pumped into R&D of the products is a different matter.
Don't get us wrong, we don't want Avid to die, competition is good and this will further push the development of FCPX. We would just be considering a plan B if we ran an Avid post house.