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Sunday, March 2, 2014

Major Changes Around The Corner For Music As Avid Delists

Avid a-la-mode image
It came as no surprise last week when Avid Technology received a notification letter from NASDAQ that the company would be delisted and trading of its stock would be suspended. For many of us in the creative end of the entertainment business who have watched the company try to battle through its troubles during the last few years, the question was more of “when” than “if” this scenario would happen. The writing had been on the wall for some time.

If you’re not aware, Avid Technology is the maker of video editing tools that are used at all levels and stages of the creative process in both television and movies. In 1995 Avid acquired Digidesign, the maker of Pro Tools, which is the standard audio editing hardware and software, giving the company leadership in both the audio and video editing sectors. In fact, Pro Tools is the standard digital audio workstation used in the creation of nearly every major motion picture and television show, as well as most of the music you hear today. While there are other very capable software audio packages available, Pro Tools is truly a universal standard when it comes to any audio job on a professional level.

But leadership comes at a price, as does being publicly traded. Over the years Avid has tried to wring every dollar out of its various technologies with what some would characterize as ruthless upgrade plans, and every time their substantial customer based would wince with pain but eventually give in. After all, if the rest of the professional world was doing it, you were forced to as well.

Of course what eventually happened was that the market became saturated both on the audio and video side, and you can only force someone to upgrade every year or 18 months or so, which isn’t exactly a great recipe for sustained growth. The company tried to expand by acquiring a number of companies with markets at the neophyte or even consumer level in an effort to increase its user base. Of course, as is often the case, Avid integrated those companies into their infrastructure, which unfortunately wasn’t capable of speaking to those markets, and the investments brought little of the expected return. As a result, the company began to hemorrhage cash and the stock went from a one time high of around $67 down to less than $5 when it was finally delisted. Read more on Forbes.
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9 comments:

Anonymous said...

Just use tape machines. Really.

Anonymous said...

The sole reason for the NASDAQ delisting is because they haven't filed financial reports since 2012. They are re-stating the reports so that they are more accurate.

Per Avid at the end of 2013 had $48 million in cash and no debt.

Avid is recalculating their financials largely around the issue of upgrades. Avid is performing a “restatement” – a re-issuing of financial data – based on the way they account for software updates.

Avid announced at the beginning of January that the restatement was taking longer than originally expected, and they publicly anticipated being delisted by NASDAQ.

Anonymous said...

Additionally, you can still trade Avid stock OTC, currently at about $6.

I wouldn't write them off.

Rand said...

Pro Tools for recording is like Apple for phones. It's not the only choice, nor is it the best. But try telling that to all the sheeple that are addicted to it.

It ain't the tools one uses as much as the skill in using them. And someone with skill can use anything to get the right results.

Ron Wikso said...

I've been using Nuendo for years, to make recordings with some of the most accomplished musicians/producers in the world, that are as good or better than anything you can do on Pro Tools. And many top industry engineers also use it and other platforms.

When I started using DAW software in the mid-late 90's, Pro Tools cost 20 - 30 times what any other product out there cost. In fact, I first started using a product called T-Dat 16, which was made by a German company called CreamWare, because it could do MORE than Pro Tools could at the time, particularly in the area of number of simultaneous tracks that could be recorded (I wanted to be able to record a drum kit using as many as 13 tracks, which Pro Tools could not do at that time, but T-Dat 16 could...and it was on Windows!!).

You might argue that at one time there was a reason to pay the "Pro Tools Premium" but from what I can see, there is certainly no longer a reason to do that. And as far needing to be on Pro Tools in order to be able to exchange session files with others, I have never had an issue collaborating with people who are on other DAW platforms and/or operating systems.

With technological advances being what they are, it's only a matter of time before the competition forced Pro Tools to compete on price.

brian botkiller said...

This article by Forbes has been passed around by everyone and it says nothing that is in concrete. Everyone is decrying Avid saying they're going out of business, no one has any business to say anything like this. Delisting is one part of restructuring. In reality, Avid might go private, which would be a better move in the long run, anyway.

I would be careful with what you post from one article by Forbes based on supposition.

Anonymous said...

Avid took a hold of Pro-tools in 2004/2005.. not 1995 :)

Sjoerd Koppert said...

In my opinion the best possible outcome. If AVID returns to private ownership they might start working for / consider their client base instead of wringing out every cent profit possible to satisfy shareholders.

Danik said...

"Anonymous said...

Avid took a hold of Pro-tools in 2004/2005.. not 1995 :)"

AVID acquired Digidesign in 1995

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