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Re: So if Avid goes under, then what?

COW Forums : Apple FCPX or Not: The Debate

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Craig SeemanRe: So if Avid goes under, then what?
by on Jul 3, 2012 at 1:26:56 pm

[Eric Santiago] "He flat honestly said they are not making squat."

Yes, that's been well documented in various financial analyst reports. They actually lost money since $999 for the crossgrade, is a "loss leader." That would mean the Symphony crossgrade would be more so. Avid is in one respect like Apple, in that their software is really used to sell hardware (and services). NLE sales is down to about 12% of their revenue and declining.

The problem is that MC/Symphony may not be doing enough to sell Unity/Isis systems, where they do make more money. The problem is, I think, overtime the demand of Unity/Isis may be declining compared to less expensive options. Of course some facilities really want/need that front end management/hardware/service but I think those facilities are a declining share of the video post market.

While Avid may be shedding loses as their consumer product where major losers but even their handling of the sale may be questionable reasoning. The division brought in over $90 million yes sold for under $20 million. Some feel it should have been sold for more. Of course Avid's motive was probably to shed the 20% of their employees tied to such products, which would result in some savings.

Philip Hodgetts wrote a bit about this.
http://www.philiphodgetts.com/2012/07/avid-opposite-motley-fool-analysts-ad...

[Eric Santiago] "It didnt stop us from adding an extra MC seat and then recently Symphony (crossgrade) but does make us a little leery about they future."

Given that Avid is virtually debt free they can hang on for a couple of more years but they still don't show any business model that will turn them around. They keep shedding losses. Their "leaner" company may starve to death. I'd give them 2-3 years. They are a prime candidate for being sold given they are debt free.



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