This is the third and final installment of a series on the effect Apple's (Nasdaq: AAPL) decision to replace its Final Cut Pro editing software with a less-powerful program has had on the video production industry, and on the companies that may fill Final Cut's void. (Check out Part 1 and Part 2.)
The FCPX rollout
"There has been more noise generated by this event than anything I can recall in my career," Mark Raudonis, the man in charge of post production at Bunim/Murray Productions, told me. "It was passionate, vocal, and persistent."
Raudonis was talking about the reaction of his colleagues in the video-production world regarding Apple's ending development of one of the video industry's standard editing tools, Final Cut Pro. After years of wooing editors away from their former editing favorite, Avid's (Nasdaq: AVID) Media Composer, Apple cut them off without warning, and instead offered them Final Cut Pro X, a product aimed somewhere between iMovie and Final Cut.
"Apple has released the program that I believe they wanted to release and are targeting the audience that they want to target and, unfortunately, that's not us," said Raudonis, whose company has made the decision to switch back to Avid.
Adobe, more than a blemish removal tool
Avid would likely be the first name that would come to the minds of many editors and video producers needing to switch from Final Cut, but it isn't the only viable choice. Adobe (Nasdaq: ADBE), probably best known for its Photoshop photo-retouching software, also produces a nonlinear video editor called Premiere Pro. One of the things that sets Premiere Pro apart from its rivals is its ability to work seamlessly with the other programs in Adobe's Production Suite, most importantly After Effects, the industry standard video-compositing software.
Bill Roberts, director of video product management at Adobe, told me that Apple's release of FCPX has given them the opportunity to show the industry what Premiere Pro can do.
The Motley Fool: Has this been a good thing for Premiere Pro?
Bill Roberts: Oh yeah, it was an excellent thing … It triggered people to have a look at the other platforms. When they had a look at where we've gone to with Premiere, the nice thing was they were hugely surprised … We had a tremendous burst of sales from that point forward.
TMF: After the initial promotional discounts, has it still continued, people looking into Premiere Pro?
Roberts: We've been having some great success in broadcast … We've had some big wins with Turner, CNN, with BBC. A lot of our success in film has come out of the whole suite being used collectively. We had a crucial role in David Fincher's last two films, The Girl with the Dragon Tattoo as well as The Social Network …
TMF: Do you see Adobe and Avid going head-to-head, going directly for the same business?
Roberts: If we want to talk about [a] bloodthirsty battle, not so much. I think we have different strategies towards the market. Avid has a great legacy in Hollywood. The top film editors now have twenty years of editing on Media Composer. It would be somewhat folly on our part if we said we are going to convert all these guys. We're focusing on up-and-coming people. In the long run we're not winning by taking away the seats; it's winning by grabbing the new digital natives who are coming up.
The digital natives
Some of that new wave may be washing ashore from Austin, Texas., the home of Arts+Labor, a video production and marketing company that has recently made the jump from Final Cut Pro to Premiere Pro. I talked with the company's creative director, Erik Horn, about the transition.
The Motley Fool: Do you have any problems finding editors trained on Premiere Pro, or do you have to bring them up to speed?
Horn: A few are hesitant when I ask them to use Premiere instead of Final Cut. But I actually found that the learning curve to go from Final Cut to Premiere is pretty simple.
TMF: Do they approach it like, "Well, it looks like Final Cut has changed so much that it really is a good idea to start learning other platforms, other editing systems?"
Horn: Pretty much what I've seen is everyone knows that Final Cut is probably on the way out so no one is really learning X. There's a lot of people who are still holding on to Final Cut 7, still working in it. But then the people I've seen training in alternative software, it's pretty much 100% Premiere.
TMF: You weren't taken aback abruptly … when they did roll out [FCPX]?
Horn: I think I was mostly taken aback on how they did it. There was almost no concession to the huge user base they had basically created. That was a pretty big move bringing over professionals to use Final Cut from Avid, especially in Hollywood, and to dismissively lose them … It was just so very "un-Apple."
TMF: Final Cut would only run on Apple machines. It seems that they are leaving it open now for people moving to … PCs. I understand that you are using Dells (Nasdaq: DELL) now?
Horn: We were primarily a Mac house … and we have been making a smooth transition into using the [Dell] Precision workstation environment with Adobe.
TMF: It seems to me that Apple is taking a chance here, people moving away from the Apple OS and their hardware …
Horn: I've really enjoyed working on the Precisions … and I've actually noticed quite a significant speed increase in a lot of the work I've been doing. If I were going to be building a shop from scratch right now, I wouldn't be using a Mac at all.
TMF: Strictly from price, or from performance?
Horn: Both.
These video professionals are not saying that Final Cut Pro X is a bad program -- they just recognize that Apple has made a calculated business decision to go for a broader, more consumer-oriented market. It's still a bit early to know if Avid and Adobe can use Apple's sea change to lift their own revenues. I think we'll have to wait another three to six months or so to find out.
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