Avid’s Consumer Strategy

Nancy Hawthorne, Avid’s new interim CEO, spoke to stock analysts at the JP Morgan Small/Mid Cap Conference in Boston a couple of weeks ago and said some interesting and important things. The company “did not integrate the several acquisitions that we did particularly well, and as a result, we have kind of a mishmash of different systems, and the company has not been positioned strategically to operate as a seamless entity in presenting a lineup of products to the marketplace.”

That’s certainly true and it’s great to hear a high-level Avid executive say so. She also talked about the company’s new focus on product quality, again a very positive thing.

She stressed the company’s expertise with big enterprise customers, and, regarding the Pinnacle division, commented, “we do need to understand what role the lower-end technology plays in our lineup. Is it strategically critical to us, or is it not?”

A week later Apple dropped the price of Final Cut Express from $300 to $200, added a mixed HD/SD timeline, and improved compatibility with iMovie.

All of which begs a key question: can Avid make a business at the top of the professional market and avoid direct competition with Apple, or is there really only one, increasingly democratized market that everybody is part of, one way or another? To put it another way, can you envision a future where young people use iMovie and FC Express and then come to Hollywood and switch to Media Composer?

Maybe — but for that to work, Avid would have to be innovating like mad in the professional world, with a product that was clearly and unambiguously superior. If FCP and MC are even roughly competitive, then it seems to me that you have to go after mindshare — which means you gotta get ’em young. Apple hasn’t won this game yet — iMovie ’08 got a decidedly mixed reception when it was introduced, and there’s a huge paradigm shift between iMovie and Final Cut. Avid, coming later to the party, could build something more consistent and scalable.

But either way, whether Avid wants to go after the whole shebang or just the professional market, they’ve gotta get busy with the software, making it sing for the people who use it, namely editors.

My intuition is that there’s only one game in town. Focusing on the pro market can only succeed as a temporary strategy. In the end, you’ve gotta duke it out at all levels. Otherwise the pressure from below will kill you.

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4 Comments on “Avid’s Consumer Strategy”

  1. editblog Says:

    I think talking about iMovie isn’t needed in this discussion. It’s the young filmmakers who do their shorts and family videos then graduate to wedding and corporate stuff using FCP that causes them to never look at Avid. When they move up into the “real” professional editing world, doing a feature and big concerts and such they still want to use FCP as that’s what was learned on and it works. It all boils down to the FCP feature set at the price point. That’s where FCP has won its battles.

  2. matzi Says:

    I think there definitely is a market for editing/postpro software/hardware out there that consists of segments which blur into each other rather than stand apart. I don’t think though that the market is being democratized.
    The principles of democracy are hard to apply the ones of a capitalist market system . But I guess you are right in the sense that the market entry barriers have really come down over the last couple of years if you want to own your nle system. On the other side that doesn’t seem to be true for the existing media markets. They seem to have established barriers that seem to be higher than ever before.
    Hollywood editors are and probably will be Avid’s only and most prestigious client base if Avid doesn’t figure out how to position the brand and their products in the near future. You would think that a company that size would know the answers already to the following questions: who uses our products and how do people use them. That seems to be the 101 of marketing. I hope they make it happen.

    Btw I really enjoy reading your blog.

  3. John Kary Says:

    “which means you gotta get ‘em young. Apple hasn’t won this game yet”

    While you talk about this from an editing standpoint, the genuine hype around everything Apple has made them the hippest company around for younger generations. I’m willing to bet that over half of college students own an iPod, with an even higher rate in the media-oriented majors. Then most high schoolers at least want one.

    Many others are buying Macs just because they like their iPod. This exposure to the Apple brand as a hip-company has penetrated to the younger generations already. As they go through school, more and more will be familiar with, and embrace what Apple has to offer.

    How does that relate to FCP? Brand recognition. If more kids want to get into video editing using FCP (or FCE or iMovie) they will do it at a younger age. Not to mention the instant-gratification of FCP with drag-and-drop and mouse-dragging based editing is a lot more friendly to a newcomer than Avid’s workflow. Young people, if not most Internet users, expect instant results, and expect something to work around them–Google and Wikipedia has spoiled us rotten.

    I think this recent customer-focused strategy by Avid is them realizing that they are in trouble as more young media producers become of age where they can go pro. They will stick with what they know, and if they have 5, 8 years experience on FCP when they hit their early 20s, that can have a huge influence on what system they use.

    PS: I don’t own a Mac, or an iPod, so this is in no way a biased comment :)

  4. Robin Buday Says:

    In response to John’s comment:

    I am 23 and I’ve been using FCP since I was 15 (Premiere before that) and I’ve lived in Hollywood for 3 months. During those three months I’ve realized one thing: If I want to get anywhere in this town I have to learn Media Composer. I’m buying it tomorrow…

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