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Re: we're gathered around a very small pond.

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Craig Seeman
Re: we're gathered around a very small pond.
on Nov 1, 2011 at 4:18:25 pm

[Oliver Peters] "I don't disagree and I don't have a solution. Clearly if you scale down the income, you have to scale down the expenses. The trouble is that they've been pushed into a race to the bottom pricewise."

They need to examine their business model. Either the commodify and broaden their reach (like Apple) or the aim for professionals with deep pockets and provide what Apple won't. I think both Apple and Adobe are diversified companies (in different ways) and Avid is not to any great extent. They can't compete on price especially if they want to server the upper end Pro market. You can't sell high end products and commodity prices and expect to survive. They've boxed themselves into the untenable middle (for them).

[Oliver Peters] "Others, like Autodesk and Quantel, have managed to stay at the upper end of cost but have restructured so that income covers operational and R&D costs."

Probably a better model for Avid but the problem is how can they get back there with Media Composer and other products dropping close to commodity pricing. I think Avid has been attempting low software price with much higher hardware price and that's why they're getting hammered on Pro Tools 10 HD pricing. It's not really a good marketing or business model. I'm not sure how they get out of it except to develop a new high priced software/hardware product line that's also worthy of the price.

[Oliver Peters] "The much broader question is whether a mid-sized company can even survive in this current software world. Seems like the options are only large, commodity-driven companies (Adobe or Apple) or small, focused, niche operations (Quantel, Autodesk, Red, etc.)."

That's right. I think the problem is Avid stuck themselves in an in between place and is failing at both. I wonder if CMX's history is an analogy although maybe not exactly.

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