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The Company develops, markets, sells and supports a range of software and hardware products for the production, management and distribution of digital media content.
Avid Technology will play a major role in the upcoming years in the digital TV industry. More and more companies want to expand their HDTV reach and come up with new channels or improve the content on the current ones. I believe this company has room to grow and will outperform in the next 12 to 18 months.
Insider ownership is at 24% in this stock, and institutions are apparently over-reacting as they usually do to it's recent downtrend. I like that combination.
Content and content creation tools are only peripherally related. Avid's strong suit is the professional market with very high standards. Unfortunately the purely professional market is disappearing as more and more content is generated by people with good enough tools, to produce good enough content, to reach a good enough audience to generate good enough profits. Production standards outside of high profile flagship products is dropping everywhere. Avid will not exist within 6 years
Avid have just been down to the pawnshop to unload some of the family jewels. The total on the pawn ticket is just $17m!The company's consumer video editing line is being sold to Corel. This includes Avid Studio, Pinnacle Studio, and the Avid Studio App for the Apple iPad, as well as other legacy video capture products.Audio products for home users, including the popular M-Audio range, are being sold to inMusic, the parent company of Akai, Alesis and Numark. The products involved include M-Audio brand keyboards, controllers, interfaces, speakers and digital DJ equipment and other consumer product lines. Avid will continue to develop and sell its Pro Tools line of software and hardware, as well as associated I/O devices.Avid says that due to these changes, about 20% of its workforce will either transfer to these companies or be fired. This is beginning to look like a company that is not quite sure where it is going or what it is doing. CEO Greenfield says that they are concentrating on the pro market, but their product range is a loose bag of companies that have been bought during the good years, with no plan on integration into the parent.Apple has taken away huge chunks of its video editing market with the brilliant Final Cut Pro and ProTools audio editing is loosing ground to smaller and far nimbler companies like Cockos (audio editing suit 'Reaper') and Prosonus with the new 'Studio One' digital audio workstation.In its day, Avid killed Sony Broadcast and its tape-based product range. With its top-heavy cost structure and plush offices in prime locations around the World, it is beginning to look like the kind of basket case it sought to replace.
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