Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Does The "A" In Avid Stand For Avoid?

Don't let it get away!

Keep track of the stocks that matter to you.

Help yourself with the Fool's FREE and easy new watchlist service today.

Avid Technology (Nasdaq: AVID  ) with its Media Composer was the name of the game when nonlinear editing began to take over in the early 1990s. Avids were the must-have professional editing equipment for high-end video and film production. It was a good product without any real competition. With a virtual monopoly on nonlinear editing the company did what any self-respecting entrepreneurial venture would do ... it went for the jugular.

Not only did you have to pay an arm for the software, you had to spend the leg for the proprietary Avid hardware. And if you wanted to keep it all running, you had to buy a service contract too. That stuff added up fast. But producers, under heavy deadlines that never seemed to let up, paid the price.

There were other nonlinear editing systems out there, but none of them caught on with the pros. Not until Apple (Nasdaq: AAPL  ) got into the game with its Final Cut Pro in the early 2000s and,  as usual, changed the rules. First, the software would run on any reasonably fast Mac and didn't need special graphics cards to work. Second, it was a small fraction of the cost of an Avid, which made it cheap enough for colleges to train the next generation of video professionals. Avid didn't react fast enough to this threat, and by 2007 Final Cut Pro had taken over nearly half of the professional editing market in the U.S., with Avid holding only 22%.

Avid still makes a good product, but the company is now such small potatoes in the video and audio editing biz that I can't see any way it can continue to compete against not only Apple, but also Adobe (Nasdaq: ADBE  ) and Sony (NYSE: SNE  ) . With Apple having just completed a bottom-up redesign of Final Cut, about the only hope that Avid has of regaining market share would be if Apple totally screwed it up. Possible, but not likely.

Avid has lost money the last five years, and about the best thing you can say for it financially is that it has no long term debt. However, with its cash pile draining down from $225 million in 2007 to $33 million today, Avid might need to raise debt or dilute existing shareholders soon if struggles continue. And with losing money being the standard operating procedure and inventory levels surging 74% over last year, I'd have to agree with Fool contributor Anders Bylund when he said don't go near Avid.

Have any thoughts on Avid's turnaround attempts? Drop a comment in the box below!

Fool contributor Dan Radovsky has no position in any of the above companies but has slaved over a hot Avid in a previous life.

The Fool owns shares of Apple. Motley Fool newsletter services have recommended Adobe Systems and Apple. Motley Fool newsletter serviceshave recommended creating a bull call spread position in Apple. Motley Fool newsletter services have recommended creating a diagonal call position in Adobe Systems. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Read/Post Comments (4) | Recommend This Article (7)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On May 21, 2011, at 3:30 AM, realtvguru wrote:

    With all due respect, I think this article completely missed the mark. Avid's customer base is extremely loyal and pays for the upgrades and expansion. In addition, American Cinema Editors publishes an annual equipment survey that statistically shows that pros do not use Final Cut Pro as a majority, in fact it's quite the opposite as Avid provides an integrated technology called Script Sync and Phrase Find that Apple does not.

    Most pros lean on Avid for collaborative tools involving Unity/Isis, cloud services, and Interplay. Avid is the future of high end editing, as well as News, and content monetization for clips. Why would a production company pay for tiny Apple systems in an expensive office buildings when they can have an integrated Avid cloud service hiring the top Avid editors around the world and saving the overhead on their office space? This affects the bottom line and show runners/post production supervisors notice. Why would a news organization buy Final Cut when with an Avid Interplay system, they can instantly purchase the clips they need and edit it to make the 6pm news hour? It would be foolish to do anything else.

    The majority of high end jobs are in Reality Television, Non-Fiction Documentary, and Avid has a lock on that market. Students coming out of FCP only film schools suffer because they can't get real jobs and learn from experienced editors. In fact when production companies, try to hire editors on the cheap, they struggle. Why? Their ratings suck, no one watches. No one watches! They need seasoned storytellers who can deliver a show that audiences care about and return to week after week. Outside of the writer and director, the editor is the most important storytelling on the payroll and Hollywood's most experienced producers know that. They pay a premium for it.

    Based on the presentation Apple provided at NAB, Apple is not going for the high end market, they are clearly going for pro-sumer. This is not the same market at all. Apple is seeking wedding videos, internet home-video users, high school musicals, not high end pros. Avid clearly owns the high end of media and that hasn't changed. There was no talk by Apple about the specifics of "deliverable" capabilities, or rather the main output of professionals to television networks, feature film studios, and distribution companies. When a television network hands a producer a thick novel-like stack of papers and requirements for delivery, the new FCP may not be able to address, Avid is the solution most turn to.

    Most films, television shows, and high end web are mixed on Avid Protools. Not other mixing solution compares on the market currently, having Avid systems integrated in the workflow makes mixing a breeze.

    Avid is not distracted by iPods, iPads, iPhones or hardware. In fact as a strategy, they've done just the opposite, they listen to their customers and adjust to support them. Look at Avid's tour dates this year to see that that company is actively meeting with it's clients, learning, listening. Steve Jobs is not hanging out with editors to hear what they have to say, asking what they need. Even Final Cut Pro users have complained about this. Avid's software updates have addressed thousands of requests over the last 5 years.

    Avid has been opening third party hardware solutions, collaborating with camera systems that Apple has neglected, and embracing customer feedback from education markets to the highest budget movie. Red and other tapeless formats are a breeze on Avid. FCP not so much.

    Pros use Avid. Pros update and purchase updates of Avid which drives the market. That's why their debt is going down and their profits are rising. In the last several years Avid has completely revolutionized the company and invested in new technology based on what professionals use. Apple instead is making it safe for my neighbor to edit his home video; while I'd enjoy seeing those videos personally on a slide show movie night, they're not the one's that are going to connect with hundreds of millions of people around the world. Apple is going to make a lot of money making editing seem easy to everyone. But the truth is, editing and storytelling is a craft. Great editors are taught by even better editors. Editors mature like fine wine, and the high end editors, "the teachers of this craft" use Avid not Final Cut Pro.

    It's clear from insider lunch conversations and chats with post production professionals that a lot of television shows in the next year will be switching back this year to the safe, economically secure bet in Avid. Avid can deliver a show. FCP is now again an unknown based on the new release, unlike previous generations of the product.

    What is Apple offering?...

    64 bit. Everyone is 64bit. Avid has already noted that they're going 64bit on a system that works and taking their time to do it right instead of rushing it out. In the meantime, their legacy products still deliver consistently. Apple is building a new workflow from the ground up. Great for a consumer market, not good for a pro who needs the control.

    Face recognition from Apple? Who cares? Apple technology is image based, whereas most documentary, reality programming and web is based on story constructs involving audio tracks not picture. It's called a "radio cut" for a reason. In other genres, scripted projects will give editors the time to review all of the media anyhow and a good editor will select their favorite visual takes, rendering the new Apple technology useless. Without Scriptsync, it'll take twice as long.

    Docs are built on either scripts (audio based involving sound bites/interview) or verite cinema, involving audio covered by close-ups. Therefore, Avid's strategic investment in integrated audio technology will likely provide a streamlined service to customers that will save their bottom line in millions of dollars.

    Apple offers a $299 price point. Who cares? The Avid system for $2400 saves over 4 weeks of editing per editor. If it's a reality episode, hiring 3 editors, each charging $3500 a week, the Avid based post house just saved $34,000 because the FCP edit will require extensive repair from a seasoned technician or a schedule twice as long. And... Avid has always had notation and searchable technology built into the software since the beginning. Now it's just easier with the developments.

    Color tools? Avid's Symphony and DS Nitris system is the standard. Apple Color is cute but limited. And since Apple Final Cut Pro X hasn't addressed pro needs for Color and list management, the idea of taking a Final Cut Pro X cut into a Scratch, Di Vinci, Inferno, Luster, or any third party color management scenario, the software is not officially pro yet. Avid users get to collaborate with the extreme high end for finishing. That's the workflow for feature films and television. Avid again wins.

    Apple does not have the elegant "Trim Tool" that Avid developed years ago. Avid's trim tool saves extraordinary time for every editor who uses "Asymmetrical Editing" functions. Apple never got this. It's too complicated a technology for a pro-sumer, it's why the pros use Avid.

    So to summarize. Apple will sell lots of units. To my neighbor. Avid will actually be used by professionals around the world.

  • Report this Comment On May 21, 2011, at 7:36 AM, XMFDRadovsky wrote:

    You have obviously spent a lot of time crafting this comment, and I don't disagree with you. I was an Avid editor for a dozen years and loved my Avid (warts and all - it wasn't perfect; no system is). But the point of the article was not to dis the product, it was to point out that the company is deeply flawed as an investment.

    When I switched from Avid to Final Cut Pro (not my choice) I missed not having some of the tools that I had with my Avid. But there was no denying that it was important for any editor to realize - especially one about to go out in the freelance world - that more and more professional facilities were going Final Cut.

    I don't want to see Avid die, but how can a company stay alive if it keeps losing money? What will happen to that still large base of Avids out there when the company goes belly up?

    I recommend you download Avid's latest 10-K, or at least look at the last four years of statements that are available from the Fool website. I think you will then realize that any hope for all the Avid users out there would be if some other entity takes them over.


  • Report this Comment On June 24, 2011, at 1:57 AM, realtvguru wrote:

    Look at that stock rebound Dan! The major competitor, Apple just released FCP X and it's awful! Conan O'Brian is mocking it. They also discontinued the pro solution. Those of us who are loyal to the Avid way of editing stick by the company and I think you'll see a lot of FCP users buying Avid products this year. Avid's quality is going to bounce that stock right on up over the next few years just watch.

  • Report this Comment On July 19, 2011, at 3:46 AM, laeditor wrote:

    I would like to respectfully disagree with some of your statements. I should say that I am a professional television editor having worked on over seventy five television programs for over thirty different networks.

    "Second, it was a small fraction of the cost of an Avid, which made it cheap enough for colleges to train the next generation of video professionals"

    Editors cannot be trained. It's an innate skill. You can only teach software. But colleges do not train video professionals anyway; as the vast majority of students in film school will never work in the industry and the vast majority of people who work in the industry never went to film school. Colleges do not influence the professional market in any way unless it's directors coming out of NYU or USC. I have been editing for twenty years and have met just a handful of editors who went to film school. It's rare. This is a common misconception though; that FCP has become ubiquitous in film schools ( because it's cheaper not better ) and therefore there will be no one left who knows how to operate an Avid so it will have to go belly up. Well, no one ever learned how to operate Avid or FCP ( to the point of being hire-able as an assistant ) in college and Avid or FCP jobs don't hire from colleges. You learn Avid or FCP professionally by working as an assistant editor over a period of years and most of those assistants have degrees in English or philosophy or something else other than film and video production. For the very few people in film school who do end up in post it always starts as an internship because you don't learn enough in college to be an assistant. Somehow students these days have been brain washed by film schools which have been in turn brain washed by Apple that FCP has somehow taken over and that Avid is dead. Not true. Then they go out into the world and cannot even get in as an intern because they don't know Avid. I have seen people show up for interviews and freak out when they walk by the edit bay and see an Avid because they somehow thought all professional jobs are FCP. They just assume this and then they have to tell the person they are interviewing with that they didn't know the job was on Avid. Even though ninety percent of professional jobs are on Avid they think it’s a FCP world because of articles like this because at that point in their life all they have are articles and blogs to go on. Needless to say they are shown the door. Why would would ANYONE show up to a professional job without Avid experience unless they were told ahead of time it was a FCP job or unless there is a serious disconnect between what is actually going on in the industry versus what students are being told. Well there is. That being said, to repeat my earlier statement, most people in post never went to film school anyway so the industry will never have to adapt to what is being taught in colleges because that is not where the talent comes from but the students who do want to be one of the lucky ones who do break in must learn Avid or it's a no go career.

    “Avid didn't react fast enough to this threat, and by 2007 Final Cut Pro had taken over nearly half of the professional editing market in the U.S., with Avid holding only 22%”

    Not true. But this is an easy statistic to misunderstand if you are not in NY or LA working in either film or broadcast. FCP represents 52% of users, true and Avid represents 22% of users, true and I assume the rest would be spread between other softwares. But that 22% of Avid users represents ( a guess because who can really know ) about 95% of the professional industry. There is a difference between a user and an editor. FCP is a professional tool but Avid is a professionals only tool. Not everyone who ever went to the Apple store to buy FCP uses it professionally, some do but actually most don't. I know PA's who have FCP on their laptop ( I actually don't know any PA's who don't ) but are they taking in $3500.00 per week cutting things that millions watch? No they are not. Heck my dentist actually has a copy of FCP and uses it to cut his family movies. He asks me for editing tips all the time as if I was a colleague. Granted someone will always come back with a list of big movies and television shows that they copy and pasted from the apple website cut on FCP. Indeed, but it's still like five to ten percent of the professional industry. I have probably worked on some of them having had cut several television programs on FCP so I am aware of it's place on the professional side of things but it is minimal and in no way has taken over the professional industry like you stated. On the other hand most if not all Avids are being used professionally and only professionally. I get about fifty calls per year ( obviously I only take about three ) and I'd say about forty eight of them are Avid calls. So the 52-22 statistic in favor of FCP means nothing because when you eliminate the amateurs it's like 95-5 Avid ( at least in NY/LA film and television ) and that is all that matters to the pros. Everything else is just noise.

    "Avid still makes a good product, but the company is now such small potatoes in the video and audio editing biz"

    Not true. It’s actually a completely absurd statement. It dominates by a very wide margin with FCP being almost non existent with just a few exceptions and yes you can come back with a list of one hundred film and television broadcast projects on FCP but Avid can come back with a thousand but I have already elaborated on this above.

    "With Apple having just completed a bottom-up redesign of Final Cut, about the only hope that Avid has of regaining market share would be if Apple totally screwed it up. Possible, but not likely"

    Not likely? Care to retract that?

    "Avid has lost money the last five years, and about the best thing you can say for it financially is that it has no long term debt. However, with its cash pile draining down from $225 million in 2007 to $33 million today, Avid might need to raise debt or dilute existing shareholders soon if struggles continue"

    Now this I agree with. I think Avid is losing money in the hardware side of things. People just don't want to pay that much for hardware so they keep their hardware until it's EOL.

    With all due respect I can tell you that the reason the professional market is dominated by Avid is because it is capable of things that FCP isn't in terms of workflow. To get into specifics of that would take way too long so let's leave that out but one of the other responders touched on a few things. I can say that all of the FCP jobs I have been on have been a mess and it takes fourteen hours to do in FCP what you can do in a standard ten hour day on Avid. This is a fact. I have lived it many times. I have worked for seven companies that have switched from FCP to Avid and back because of this. Most companies never switch to FCP and out of the ones who do most switch back to Avid. Editor overtime pay piles up and they lose their savings with the apple choice ten fold. I have worked at companies that were half Avid and half FCP and the FCP guys where always there until midnight looking totally burnt out and the Avid guys where always chipper and well rested because they got out at 7pm and got more done. Anyone who knows what I know about the differences between the two workflows on a tv series with numerous editors working off of the same project would never write an article like this. But if you are so confident in FCP’s abilities then can I call you for help at 2am when I am on a FCP job when the project file size becomes to big for FCP to handle and the metadata rewrites itself and timecode hour 9 is now timecode hour 7 or the subclips won't matchback to the master clips? Can I call you when I can't get an output onto tape due to constant dropped frames or when I am passing flash drives back and forth to other editors all day long to share sequences? Can I call you when my render heavy sequence has chunky lag because FCP doesn't have playlength toggle or when it takes twice as long to replace master footage because FCP doesn't have phantom marks? Can I call you when I have to render 400 effects as opposed to 40 because FCP doesn't have expert render or when I have 9 cameras grouped together and three of them have timecode drift? Can I call you when I have to do footage counts without the decompose function or when I have to cut a tease without a clipboard monitor?

    With all due respect your article makes me question your qualifications. I checked your name on IMDB and I didn't see any credits. It makes me wonder why the editing enthusiasts outnumber the editors thousands to one? What's so exciting about watching editing from the sidelines? Clearly if you were in the game and knew the game you would not have made such obvious misstatements and stated untruths in this article, falling prey to rumor mill beliefs only held by people who have no choice but to view post production from thirty thousand feet because they cannot view it from the molecular level the way a professional editor can because they are not one.

Add your comment.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1497403, ~/Articles/ArticleHandler.aspx, 10/24/2016 9:39:21 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 23 minutes ago Sponsored by:
DOW 18,223.03 77.32 0.43%
S&P 500 2,151.33 10.17 0.47%
NASD 5,309.83 52.43 1.00%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/24/2016 4:00 PM
AVID $7.14 Down -0.04 -0.56%
Avid Technology CAPS Rating: **
AAPL $117.65 Up +1.05 +0.90%
Apple CAPS Rating: ****
ADBE $110.81 Up +1.78 +1.63%
Adobe Systems CAPS Rating: **
SNE $32.14 Up +0.03 +0.09%
Sony CAPS Rating: ***