Avid Technology Inc, a provider of video and audio editing software and equipment to filmmakers and recording studios, is exploring a potential sale, Reuters reports citing “people familiar with the matter.”
The Burlington, Massachusetts-based company is working with Goldman Sachs Group on the sale process and has asked for binding offers from interested parties, the sources said.
Founded in 1987, Avid provides editing software and hardware primarily to entertainment industries. Its products, which have been used in the production of blockbuster movies such as ‘Top Gun: Maverick’ and ‘Avatar: The Way of Water’, include Media Composer, MediaCentral and AirSpeed.
In its first-quarter earnings, Avid’s annual recurring revenue grew 8.1% to $228 million, while its active paid software subscriptions grew 22% year-on-year.
The company missed analysts’ expectations, however, and its shares have dropped, down almost 20% year-to-date.
Avid Chief Executive Jeffrey Rosica told analysts on the company’s earnings call that supply chain issues created “substantial and unexpected gross margin headwinds for audio hardware,” which eroded profitability.
MacDailyNews Take: Avid’s market cap is currently $1.06 billion. If they thought it of value, Apple wouldn’t even blink at that price plus whatever premium would be required to close the sale.
According to Enlyft, which tracks various audio and video editing products and technologies, Avid has less than 5% market share of the 159,361 companies tracked, 6th on the list after Adobe Premiere (23%), Apple Final Cut Pro (22%), TechSmith Camtasia (11%), Apple iLife (10%), and Adobe Audition (6%). Of course, in purely professional film/video editing, Avid has a significantly higher share.
Adobe Premiere is consumer-grade trash compared to both Avid’s Media Composer and Apple’s Final Cut Pro.
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Avid’s acquisition of Sibelius music notation software in 2006 rankled many long-term Sibelius users. The much-admired Sibelius development team left and started Dorico. Avid clumsily (IMHO) introduced a subscription model, and I distinctly recall becoming exasperated with how intensely the Avid installer/helper app used my Mac’s resources and was always on by default. Eventually I became one of many Sibelius users to switch to Dorico.
Avid announced they were going to leave the Mac platform to become windows only. Steve Jobs in retaliation purchased Final Cut from Macromedia and started to steal Avid industry marketshare.
Unfortunately Apple threw out the baby with the bath water by changing Final Cut Pro into iMovie pro, thereby giving everything away to Adobe Premiere.
Avid used to be a $100k workstation and now they offer everything for a small monthly subscription. Good riddance.
“substantial and unexpected gross margin headwinds for audio hardware“
Especially when your audio hardware is ridiculously overpriced.
This is an amazingly mature market. Amazingly mature. It’s similar to trying to making some revolutionary changes to InDesign, Illustrator, Photoshop or Microsoft Word…
So what to do?
Subscriptions. I know a video editor using AVID tools – the same tools – for the last 11 years, hasn’t upgraded and is still cranking out professional sports and broadcast work. So once he wants to upgrade, if there is a reason why, they’ve got him on a subscription basis, even if the software is never updated… A really expensive forever costly dongle… For you younger chaps – expensive key to keep the car running… Silly me, key. Ha! Paying for a Fob or iPhone car app to keep access to the car you have. There, is that up-to-date enough? ; )
Competition. The editing space moved rapidly to requiring a $10k software purchase from AVID to making movies on an iMac. Final Cut Pro took amateur hour tools from the PC world and crushed them. Then Sony and Adobe retooled their editing suites to get into the real game and AVID was left overpriced and left in a high-end pro niche space, while others at up the expanding world of Podcasting and social media editing.
AVID really has the truck and real-time and editing and broadcasting niche always there but where else to go? What else to do? How to, or why, recreate the wheel, in this case the wheel in linear video editing and it’s time to move on.
Oh yes, the Avid dongle…
AVID-owned Pro Tools was first released in ’89 and for decades was considered by many to be THE audio program to use. Now Pro Tools is subscription only, so it deserves to die. I hope other companies learn from this.
Remember Quark ? — When magazine publishing was a thing, it was THE software — With the decline of magazines (and other software like InDesign), it was no longer in a growth marketplace . . . The problem with Avid is 1) It’s used mainly by Hollywood professionals, and 2) it is “possible” to edit a Hollywood film using other software (Premiere, FCP, Davinci Resolve (free)) . . . While it would be “inconvenient” if Avid went away, it would not stop Hollywood from editing movies (they would just map their specialized workflows onto one of these other applications) — so anyone who buys Avid needs to know it is a “niche” market, and one that will likely not grow in size.
I held on to QX until the bitter end, when it disguised subscription as an expensive update.
Worse still, you couldn’t open your own old files without that update.
Well stuff ’em, too many alternatives now to play the game any more.
Apple should remember Freehand, which was a program they should have bought instead Adobe, bought it and closed it down, if Avid can be had for two billion dollars Apple should buy it as a rearguard action.
Without a doubt, protools is the go to software for any film. They own that market. That gives them an invaluable advantage. Unfortunately, we have a lot of bodies in their closet that nobody wants.
Left Avid when FCP came out. Paid for every upgrade up to FCP7. Paid for FCPX on release day. Went back to FCP7 PISSED!! Stayed on 7 forever. FCPX finally matured enough to grudgingly get a year or two of work done. Always felt like iMove Pro. Then DaVinci Resolve added editing. Like having the joys of FCP7 back, but in something very stable and constantly improving. Using Resolve Studio now. Feel there’s nothing better. Will NEVER soil myself paying a subscription for anything Adobe.