Major Changes Around The Corner For Music As Avid Delists

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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