Tess Stynes for MarketWatch:
Avid Technology Inc. agreed to sell its consumer audio and video product lines and plans further streamlining efforts as the company aims to concentrate on its media enterprise and professional customers.
I fear that this marks the beginning of the end for the company that pioneered digital nonlinear editing and dominated that market throughout the 90s. With the rise of Final Cut Pro (and, to some degree, Premiere) in the past decade, Avid was slow to react and clung to the still-profitable but dying business model of selling expensive turnkey systems with proprietary hardware. They finally relented and opened up their software to third party hardware in the last year, but it is too little, too late.
Most telling is this:
Avid in April reported that its first-quarter loss widened amid a revenue decline primarily attributed to weakness in the “creative enthusiast” portion of its business.
I’m not exactly sure what they mean by “creative enthusiast,” but in this context I’m pretty sure it equates to “people who aren’t willing to pay five or six figures for our products.” That’s basically everyone. That market was washed away around 2003.
If you look at Avid’s stock performance over the past few years you’ll see that they reached a 52 week high in June 2011, the month that FCP X hit the market. Avid pounced on the opportunity (rightfully so) and managed to boost sales among professionals who panicked over what Apple had done to their flagship editing product. Since then, however, sales and their stock price have been in steady decline. Say what you will about Final Cut Pro X, but it remains the second highest grossing product in the Mac App Store, and it is undoubtedly eating Avid’s lunch at the low and mid-range of the market.