Avid, once a dominant player in video editing systems, has tried virtually everything within its power to right what is seemingly a listing ship. With competition coming from a number of Macintosh and PC-based vendors, who offer less expensive NLE products based on off-the-shelf technology, Avid has tried to follow suite but has not been as successful.
The company brought in a new management team two years ago in an effort to at least make the company’s manufacturing and product development more cost-effective and efficient, which, in turn, might make its stock price a bit more attractive. The latter has been somewhat successful, with the stock now trading at 18 after hovering at around 12 for most of 2010.
The company recently moved its headquarters, where William J. Warner founded Avid Technology in 1987 and introduced the then-innovative Media Composer two years later, as part of a companywide consolidation of its product lines.
Indeed, besides the issue of new technology development (Avid now offers most of its most popular editing systems in less-expensive, software-only versions), Avid also appears to suffer from a disparate portfolio of product lines — Avid, Pro Tools, M-Audio, Pinnacle, Sibelius and, most recently, audio console maker Euphonix, which it bought in the fall — that encompass a wide array of users and skill levels. This can include students and other consumers creating videos and music at home, live sound engineers running the sound at the front of house at a music concert and large and midlevel broadcasters working to get critical news to air every hour of the day.
That’s why Gary Greenfield, chairman and CEO at Avid, said his biggest challenge at the moment is educating the market at large about what Avid stands for.
“What we are about is audio and video solutions,” he said. “(It’s) all we do. We aren’t a company selling very diverse products to very diverse customers, and we aren't just focused on video. Our customers … are all focused on the same things: creating content to share with an audience, whether that’s one person or millions.”
Greenfield said customers have been “very supportive” of the changes occurring at Avid over the past year and “understand the value of bringing all of these products under a single brand.”
“Since the beginning of the brand transformation in early 2009, we have told customers that Avid is focused on being open, delivering fluid and dependable workflows and building collaborative solutions that make it easier for our customers to achieve their creative vision,” he said.
He cited the recent Pro Tools 9 launch as a good example of this new strategy. The company, for the first time ever, introduced the latest version of its audio mixing software under the Avid brand, dropping the Digidesign name. The new software-only application can be used with off-the-shelf hardware and offers new features including automatic delay compensation. These same characteristics and the ability to run software on any platform are found in other Avid products, including its Media Composer editing application, ISIS 5000 storage system, Interplay networking and others.
“You may be surprised at how often our customer base overlaps.” Greenfield said. “For instance, most post houses or broadcast facilities have Media Composer and Pro Tools, an ISIS shared-storage solution and maybe a few Euphonix control surfaces. Several recording studios have Pro Tools, Euphonix control surfaces and M-Audio studio monitors and keyboards. And where we aren’t (there), we see an opportunity to educate our customers about our other solutions.”
The company reported in October that revenues had increased to $165.1 million for the three-month period ended Sept. 30, 2010, compared to $152.1 million for the same period in 2009. This is in the wake of a 15 percent reduction, about 400 workers, of its staff in 2009.
The company also closed its original headquarters in Tewksbury, MA, in June, due to its lease expiring, and relocated to a new site in Burlington, MA, which now houses a mix of audio/video engineers and software quality assurance staff. Avid continues to maintain its existing satellite offices in other parts of the world.
“We looked at what made the most sense operationally for the company and wanted to create an environment for our employees to feel innovative, collaborative and closer to the customer experience,” Greenfield said. “To enhance communication and interconnectivity between employees, we grouped teams into workplace neighborhoods.”
The new Avid offices include four video projectors displaying Avid customer and promotional videos on large glass panels in the lobby and a customer briefing center that has been outfitted with a high-tech video display that uses four rear-screen projectors to give a single 11ft by 6ft video image. There are also several areas that can be used for both internal and external training.
In addition to getting its house in order, Greenfield said Avid is focused on “looking more closely at story-centric workflows and how we can build more collaborative solutions that enable our customers to be more productive.”
One example is the Avid Integrated Media Enterprise, which is designed to help broadcasters manage their assets while providing them with a platform to be more agile in responding to new opportunities.
“This helps them get a clearer picture of how to monetize their assets and create deeper collaboration across every aspect of their business,” Greenfield said.
The management team that includes Greenfield, Kirk Arnold, executive vice president and COO, and Chris Gahagan, senior vice president of products, seems to have its hands full. When the new team was brought in, there was speculation that the purpose was to clean up the company in preparation of a sale of its assets to some other company. That prospect seems less likely today, but one never knows for sure.
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