No AVID at NAB 2008

[Ethan Cooper]

**The following is from an official Avid press release**

Avid Announces Major Shift in 2008 Strategy in Response to Customer Feedback


(TEWKSBURY, Mass.--November 13, 2007) Avid Technology, Inc. (NASDAQ: AVID) today announced that it will introduce a major shift in its approach to serving industry professionals in the digital content creation, management, and distribution industries.

Based on extensive market research, Avid plans to announce a series of customer-focused initiatives in 2008 - all of which will be designed to make it easier for customers, prospects and the media to interact with the company. The company said it would reveal the full details of its 2008 plan to the public in February, which will set the stage for a blitz of new user-community initiatives, technical support programs, highly-personalized events, and innovative product announcements throughout the year.

The company also announced that it will not have an exhibition booth at the 2008 National Association of Broadcasters (NAB) Convention, but plans to be in Las Vegas next April to meet with customers.

"We are always evaluating the most effective ways to build closer relationships with our customers and keep pace with the ever-changing media market. Over the past few months, we've been collecting data from all of our constituents, and the findings have been clear - we need to connect with users in new ways," said Graham Sharp, vice president and general manager of Avid's Video division. "As a result, we'll unveil a series of initiatives in 2008, which we believe will shake things up for our industry - in every region of the world and across all facets of our business. In the past, we've seen how investing marketing resources in alternative, customer-focused activities, can be more effective with our users - and to our bottom line. It's time for Avid to start giving something back to the industry and these activities will create a more vibrant community where customers and newcomers can learn, share, and understand where the industry is headed - and how they can help shape it."

Those who are interested in receiving more information about Avid's customer-focused initiatives in 2008 can register for e-mail alerts at: www.avid.com/we-are-listening

About Avid Technology, Inc.
Avid Technology, Inc. is the world leader in digital nonlinear media creation, management, and distribution solutions, enabling film, video, audio, animation, games, and broadcast professionals to work more efficiently, productively, and creatively. For more information about the company's Oscar®, Grammy®, and Emmy® award-winning products and services, please visit: www.avid.com.

*** Ethan's Commentary***

I don't understand what this means... anyone care to expound/speculate? Is this signaling a shift in their strategy, or is it simply a way to change public opinion of their company? I find it hard to believe that a company like Avid is forgoing NAB. Granted, they don't get much out of going. I mean it's not like they can even compete with Apple's hype machine that regularly blows them out of the water, but I just can't seem to wrap my head around the fact that they aren't going to be there. I'd love to hear some speculation on this one.

[Chris Hurd]

As big as their booth has always been at NAB (one year it was two booth spaces, for Avid and Pinnacle), it looks like they're going to save (rough guess here) about half a million dollars by not exhibiting this year. Thanks for the news,

[Ethan Cooper]

Chris,
I understand money savings, and the fact that they are so established in the industry that they really don't NEED to be there, but it's still odd that they aren't going. I mean, have you ever heard of an industry leader not going to NAB? Maybe I just haven't been around long enough.

[David Parks]

http://www.tvtechnology.com/pages/s.0016/t.9631.html

Here's a response from the new interim CEO pretty much admitting some strategic mistakes that Avid made. But also talking in "marketing speak" and buzzwords.

"She said Avid needed to deepen relations with its enterprise customers and she conceded that some products had been rushed to market, resulting in some dissatisfaction among customers"

(Alert URL for February announcements) www.avid.com/we-are-listening


I think they realize there is a lot of competition for attention at NAB and want to have a clearer message to customers.

We'll see what they do in February.

[Peter Ferling]

Interesting. I received an email request from Avid to participate in their online survey, and they indicated that the survey was directed towards professionals in the field and not just users of avid products -avid products were not even mentioned.

The thirty survey questions, save one or two, were not product focused or product specific either. I came away with the feeling that they were trying to improve either their communcations or customer service issues.

It's quite obvious that in a world of where many NLEs are on the same level of capability, that the clear winners are those whom are quick to answer the needs of users dealing with software and configuration issues and missing deadlines. Having an expensive booth is par for the course and really not solving a more dire problem -trust.

Thats my take.

[Thomas Smet]

Unless Avid would have some huge new product to show at NAB I see little point in them going. NAB is kind of a showoff PR stint in many ways and when you only have the older products everybody is used to people just walk by and go to the flashy new junk. Really it would be a waste of money and time for Avid to go this year if they have nothing new planned. I'm pretty sure everybody going to NAB already knows what Avid is and what their stuff can do.

[Ethan Cooper]

Peter,
You make some nice points. While I was trying to figure out their move it struck me that while Avid is well known as an industry leader, they have an image problem to overcome. I've often seen it written on message boards that "I've switched to FCP (or Adobe) from Avid... god I hate Avid" but rarely have I heard it stated with the same disgust in reverse. It's usually a more muted, "well, I tried FCP and didn't find it to meet my needs, looks like I'm heading back to Avid".
My gut reaction to their announcement was that they are going to attempt to mend their reputation, while at the same time look to solidify their hold on the high end market, hence the lack of need to be put on parade for the masses at NAB.
I've been to NAB the last couple years and it's been much like this:
APPLE: *fireworks going off all over* wow! look at our greatly improved product!! and now we drink the kool aide...
ADOBE: (much the same as Apple, but without the kool aide)
AVID: hey... we added a tool bar to our already stable and well entrenched platform... anyone there... hello??

[Ethan Cooper]

Originally Posted by Thomas Smet

Unless Avid would have some huge new product to show at NAB I see little point in them going. NAB is kind of a showoff PR stint in many ways and when you only have the older products everybody is used to people just walk by and go to the flashy new junk. Really it would be a waste of money and time for Avid to go this year if they have nothing new planned. I'm pretty sure everybody going to NAB already knows what Avid is and what their stuff can do.

I agree, but I'll ask again:
Has anyone seen one of the major players in the video/film world not show up to NAB while they were still a major player? Avid not going is like Sony not showing up in my book.

[Chris Hurd]

Ethan, my take on it is that their decision not to exhibit at NAB is establishing a major precedent. They're making the bold statement that "we don't need to go to NAB" and for a company as big as they are, it is perhaps a big, new step to take in which a lot of other companies may soon choose to follow.

I've attended and worked a ton of trade shows for the last ten years and there's definitely been a drop-off in their popularity. NAB might still show increasing numbers, but I think that growth rate is slowing down. For Avid to bow out is probably the big move that some other companies, big and small, have been waiting on.

Who here remembers COMDEX? It was huge... and then it was gone.

[David Parks]

I remember Comdex and had Compaq Computer as a client. They were I believe the first to drop out because of cost. Of course now they're HP.

But with the internet and everything I haven't been to NAB in over 10 years. I'm not saying NAB will go away, but is it really needed?

I can get most of the info on new products here at dvinfo.net for FREE!!!

Kicking the tires, I can get a demo at my local dealer or many times I can download a 30 day free trial.

This is Avid's chance to turn their reputation back around and they know it.
As a company they admit that they're perceived as arrogant and want to connect more directly probably like the early 90's.

I had the opportunity of attending 2 Avid User Forums back in 1994 and 1995. They were unbelievably useful. You got to talk directly to guys who were developing the application provide input into new features.

We'll see in February.

[Meryem Ersoz]

long AAPL, short AVID has been a nice pairs trade for about 3 years running...Avid earnings has been flat to lower in the past year, while Apple's growth in the multimedia space has been through the roof....

my speculation is that Avid is trying to do a better job of servicing their existing customers, because they are not doing a good job of attracting new customers. re-trenchment is not a bad idea, it's quite common actually, for a business to try to extract more dollars from deeper pockets than to try to find new pockets.

i'd say this is more about Avid than NAB, though NAB will undoubtedly feel the blow of losing a large vendor. it's a good strategy, to thumb their nose at NAB, though, because it distracts from the fact of Avid is currently a no-growth business, and they can add those dollars to their bottom-line. even if you add that half-million to their bottom-line, however, while it helps staunch the bleeding, the actual earnings scenario is still flat, at best.

it might be a good turn-around play, eventually, because they are still a profitable company with a great client list. but certainly not right now, not with a Hollywood strike on the table.

[Ethan Cooper]

It's still perceived in the industry that FCP is the editor of the working man, and Avid is the professional's choice.
In my opinion, it would be wise for Avid to stop wasting time and resources chasing the lower to middle tier editor (me) and focus on the segment of the market they still dominate and that's still hugely profitable for them. I mentioned this in a discussion on the Red forum, but since Avid has a history of buying up companies who can be of benefit to them, why not go after Assimilate (makers of Scratch) and bring an industry leading finishing tool into their arsenal, making them the high-end user's one stop shop. Makes sense to me... but I'm not Avid, nor do I know if Assimilate is for sale.
They've lost the war in the lower end of the NLE market in my opinion. Go back to doing what you do best and that's expensive gear for those who need and can afford it, and possibly keep some iteration of Xpress around for multiple workstation environments like news rooms, but also sell those guys your high dollar Unity servers as well.
Maybe I can send this in an email to Avid and ask if they'd pay me an analyst fee?

[Daniel Weber]

Having attended NAB for the past 8 years, I could see how AVID would make this decision. Their booth was always close to Apple's (except for last year) and the Apple booth was always packed and the AVID booth was much more empty. I have used both products exclusively and AVID support is awful. The company I used to work for spent $300K one year on edit systems and it was horrible trying to get support from AVID. Our Unity had more than half of the drives in it fail within a one year time. Each drive was replaced by AVID as long as we had our support contract up to date. It cost us $13K a year just to be able to pick up the phone and get tech support. We also had to pay for minor software updates. I got tired of the "we are AVID so you have to pay for it, we are the only option out there" attitude.

AVID has had some great products, but the ROI is not there anymore.

One more thing, I used to work in the high tech field in the late 90's and early 2000's. When a company make a major move to not attend a trade show like NAB, it can be a sign that things are not right. It will be spun as a cost savings move, but more than once I have seen it be a sign that the ship is sinking.

Just my .02,

Daniel Weber

[Ethan Cooper]

I'm not sure their ship is sinking, but they do need to bail some water. Sounds to me like they're regrouping, re-evaluating, and rethinking a few things. I'm not sure they have something in mind like I proposed a few posts ago, but it really does make sense to me if they go that route. Keep the big fish (or as Avid themselves say "Avid needed to deepen relations with its enterprise customers") and let the rest go. They may not be able to dominate the market, but if they play their cards right they can still own a profitable and high profile segment of that market.

[Ethan Cooper]

I'm a FCP guy who was trained on Avid, cut my teeth on Avids, and came to realize that FCP was where I needed to be for a price/performance standpoint. I got my former employer out of their $100,000 (circa 1990's) Avid systems and into FCP when we needed to go HD back in 2003 - 2004, and although he was a die-hard Avid guy who grumbled about FCP all the time, he didn't switch back. How could he?
The bottom line was that FCP could do almost all of what his Avids could do at a fraction of the cost, and he wasn't tied to hardware that was aging and being phased out with no economical alternative for upgrading.
In my mind, this is when FCP really took hold in the market. It's ability to work in HD on a budget at a time when working in HD on an Avid meant another $30,000 to $40,000 upgrade to an already aging system was the breaking point for the company I worked for and I'd venture a guess, many other companies like us.

Now the question remains, what will Apple do with their status as the leader in the lower to middle tier of the market? This of course supposes that Avid is conceding this segment of the market, but bear with me here. Once the innovator becomes the top dog, generally speaking bad things happen. Watch for a competitor to arise in the next 5 years. I'm not sure who it is yet, but you betcha when I see someone come along who reminds me a lot of what FCP was about 4 years ago, I'm buying stock... especially if I see Apple making the same mistakes that Avid did, namely, attempting to dominate an entire market and moving their focus from their core customers to a segment that they just can't compete in. We'll see.

Someone get this internet thing away from me. It's sucking up all my time.