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Digidesign: is this as bad as it looks? DSP Audio Systems
Old 12th September 2007
  #1
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Digidesign: is this as bad as it looks?

AVID owns Digidesign. I've heard that AVID is loosing money, that Pro Tools sales are on the decrease etc. Here's what Yahoo Finance says about the situation (see the image - the red line is Avid, the blue is Apple). I don't know much about finance or stock market (I'm not really interested in the topic either), but is the situation really as dramatic as this chart suggests? I don't want Avid/Digi or anyone else to go downhill - but to me, this looks like they've been going steadily in the wrong direction for two years now - which at least could be taken as an indication of a need for rethinking their product range - soon.
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Old 12th September 2007
  #2
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There were reports about this already like a year ago. Basically they were stating AVID was losing money because of it's Digidesign department, as PT HD sales were down a lot for 2 reasons:

- PTHD cards weren't compatible yet with the new Mac Pro's of that time (solved now)
- Mac Pro's were way better value for money regarding processing power/dollar (even more in favor of the Mac Pro's now)

We'll see where it ends, but IMO Digidesign is gonna be forced to go fully native with PT over time if they want to avoid to go down even further.

And there's the question what Apple will do with Logic. If the big expected Logic update was indeed worth the 3year wait, it's not gonna make it easier for AVID/Digidesign.
And then there's the Apple/Apogee alliance. AVID/Digidesign must feel the heat more and more...

My bets are on Apple.

Too bad I don't have stocks heh
Old 12th September 2007
  #3
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But don't forget the fact that apple almost died and actually ipod save their butt.
All I want to say is from a downpoint it's much more goodlooking to achieve any result than some fall over the years. I don't know what will happen, but in every few years there is some rumours about it, then digi/avid do something, sales goes up, bashing continues.
TD
Old 12th September 2007
  #4
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Logic 8 is fact now: http://www.apple.com/logicstudio/logicpro/



Watch out Digidesign heh
Old 12th September 2007
  #5
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to hell with digidesign.. die die die..LOL
sorry i had to do it

i think if they come out with a new product range and drop prices a little it they'll get the client le client base back. ppl that have hd's aren't really trippin. i know ppl with mixplus systems still. if it sounds good thats all that matters to them
i personally left pro tools and i havent looked back and now with logic 8 im thinking about making a switch again though i really dont wanna learn a new daw and new pltform... but hey whatever's good for business is good for me

the pmc made digidesign monitors are str8. but once again.. are they really worth 1800 each... mmmm not imo... i've heard monitors my ears and like more that cost the same amount if not less..
Old 12th September 2007
  #6
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I know I'm not the only one hoping AES brings some new Digi offerings.
Old 12th September 2007
  #7
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And let's not forget that with pt7,3 there are many new features even in le. Hopefully more to come. Besides that it's never funny if a company is in trouble, I think they are far from the real trouble. They always have something new in their pocket. Even for us, users the best is if more companies left on the market.
TD
Old 12th September 2007
  #8
Gear Maniac
 

Competition is a wonderful thing. Now digidesign just has to step up and improve their product and lower prices. (ha! ha! nelson from the simpsons laugh) Good days to be a consumer.
Old 12th September 2007
  #9
Lives for gear
Yes, it is as bad as it looks. As far as stock trading goes. Stock prices don't necessarily correspond with how much money the company is making.

Being a public company, Avid's financials are publicly available. I lost money on them a couple years ago.

Their sales have gone up. But they lost 43 million net in 2006., and have lost 55 million in the past 12 months. Also their earnings per share has gone down. The 4th quarter of 2006 kicked their ass, however, they are projected to do much better in 2007.
AVID: Avid Technology, Inc. Stock Report | Financial Statements

Just surf around on Avid's snapshot page on Morningstar.com and you can see how all these things affect stock prices and trade activity.
AVID: Avid Technology, Inc. Stock Report | Snapshot
Old 12th September 2007
  #10
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I haven't followed Avid's stock, but hasn't their flagship hardware-turnkey editing system been aced by Final Cut Pro, at a fraction of the cost, in many sectors?

-R
Old 12th September 2007
  #11
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Isn't the comparison of apple and avid kind of like apples and oranges? Avid deals with a lot of pro audio stuff while apple hits the consumer market in a huge way with ipods, iphones, imacs and so on. It's better to compare apple to microsoft.
Old 12th September 2007
  #12
"the bases are loaded"

swing away,
Old 12th September 2007
  #13
CKK
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Quote:
Originally Posted by Jonboy79 View Post
Isn't the comparison of apple and avid kind of like apples and oranges? Avid deals with a lot of pro audio stuff while apple hits the consumer market in a huge way with ipods, iphones, imacs and so on. It's better to compare apple to microsoft.
HAHAHA

You are right - apple has never been a pro company!?!

Just a frikkin company - lol

If you cant tell - I'm being pretty sarcastic.
Old 12th September 2007
  #14
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Quote:
Originally Posted by Jonboy79 View Post
Isn't the comparison of apple and avid kind of like apples and oranges? Avid deals with a lot of pro audio stuff while apple hits the consumer market in a huge way with ipods, iphones, imacs and so on. It's better to compare apple to microsoft.
Tell that to all the editors who are sittting around with their dusty Avids that they used to rent out for a huge day rate. Avid will soon be what the Synclavier is to samplers.

This new Logic 8 thing is huge. Everything you need for 500 bucks. And it looks like it will be lots of fun to boot. I'm immediately getting one for the house.

-R
Old 12th September 2007
  #15
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Quote:
Originally Posted by Jonboy79 View Post
Isn't the comparison of apple and avid kind of like apples and oranges?
It probably is.

Now, when Logic 8 is out, I guess it's time for Avid/Digidesign to launch Pro Tools LE Pro?

Quote:
It's better to compare apple to microsoft.
The reason I posted the stuff from Yahoo Finance was that it looks like Avid is in big trouble - but (as someone pointed out) the problem may not be as serious as it looks from the stock market graphs. STill, Digidesign probably knows that they need a product in the midrange between LE and HD - I hope they'll make something for this price segment, because that'll push Apple/Apogee to improve their products in the (few) areas where PTHD still outperforms Logic 7 (and 8).
Old 12th September 2007
  #16
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Quote:
Originally Posted by CKK View Post
HAHAHA

You are right - apple has never been a pro company!?!

Just a frikkin company - lol

If you cant tell - I'm being pretty sarcastic.
I said Pro audio did I not? Saying "pro" and "pro audio" are two totally different things. My point was Avid doesn't have a ton of little gizmo's for the general masses to enjoy and thus increase market value. While Apple does get used a lot in Pro Audio via their computers and Logic they don't have near the amount of Pro Audio equipment a company like Avid does. Also, where did I say never? It's like you took a few words I said and compiled it into what you wanted it to say, little ridiculous if you ask me. If you're going to quote me, quote me properly.
Old 12th September 2007
  #17
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Quote:
Originally Posted by nativeaudio View Post
It probably is.

Now, when Logic 8 is out, I guess it's time for Avid/Digidesign to launch Pro Tools LE Pro?


The reason I posted the stuff from Yahoo Finance was that it looks like Avid is in big trouble - but (as someone pointed out) the problem may not be as serious as it looks from the stock market graphs. STill, Digidesign probably knows that they need a product in the midrange between LE and HD - I hope they'll make something for this price segment, because that'll push Apple/Apogee to improve their products in the (few) areas where PTHD still outperforms Logic 7 (and 8).



Yeah, I do agree it's time for Digi to take the plunge into full blown Pro native. With the speed machines are running at now days it's silly not to take advantage of it. I think they should keep their LE line, open it up to all interfaces and give at least 48 tracks with ADC. That would get most people by. Then offer maybe a "Pro Tools Pro" that also runs natively with whatever interface you want with 192khz support and most of the goodies of HD. Then, for ****s and giggles keep the HD stuff as well for people who want even more power and exlusivety.
Old 12th September 2007
  #18
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A good or well liked product can't save a poor company.

Avid is a great example of a very non-agile company. They go for slow growth and locking people in and hoping they stay for the long term. They are the 800lb gorilla. They are the Internet Explorer of audio applications. A more agile (not smaller although) and better funded company like Apple (who can purchase any technology that they want to) can come by and knock the pants off them businesswise.

This will be a case study in MBA classes in 5 years of how NOT to run a company. Digi/Avid is arrogant, slow and bloated. They assume that because they are on top, that they will always be on top.

Yea, Studer was the 'name' in every studio 20 years ago too. What % of studios have a Studer installed now? Same with SSL, etc... poor management, not keeping up with the market, and slow reaction times kill companies.

Check out GM sometime. Those pension contracts they agreed to years ago have set them bankrupt. Enter Toyota, who is bitchslapping them in so many ways.
Old 12th September 2007
  #19
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Jazzpunk's Avatar
 

Quote:
Originally Posted by Jonboy79 View Post
Isn't the comparison of apple and avid kind of like apples and oranges? Avid deals with a lot of pro audio stuff while apple hits the consumer market in a huge way with ipods, iphones, imacs and so on. It's better to compare apple to microsoft.
Not really correct as Apple took a big chunk out of Avid's stranglehold on the video market with Final Cut Pro. There has long been speculation that they will attempt to do the same on the audio side.

Puts them in a very different league from Microsoft.
Old 13th September 2007
  #20
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if anyones noticed.
those losses coincide with a major new initiative of computer manufacturers in ramping up
this new era of multiple processors on pc's.
quads are now 900 buks.
capable of way more than the LE limit of 48 traks.
crikey i can do 80 traks on a dual core.
why the heck should i get LE.
that limits me...
when i can use software that'll give me unlimited traks,
as far as my computer platform will allow.
once 16 core pc's become commonly available soon,
i think it will have further impacts.
some people are talking about future pc;s with 1000 cores.
add in the fact that even a lot of free plug ins are dam good.
the impacts are obvious.

from my hi tech background, ive seen some pretty big names drop down.
beaten sometimes by smaller agile competition.

at the earliest my strategic suggestion would be to drop pt le to 100 buks.
make it all native.
make it unlimited traks and able to work with any win/mac compatible sound device.
just imho. but the age of expensive audio software i feel is rapidly drawing to a close.
consumers with v powerfull affordable quad pc's will drive this fact.
Old 13th September 2007
  #21
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For me in my house we will not use digi designs.
Old 13th September 2007
  #22
PDC
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Quote:
Originally Posted by RKrizman View Post
I haven't followed Avid's stock, but hasn't their flagship hardware-turnkey editing system been aced by Final Cut Pro, at a fraction of the cost, in many sectors?

-R
On the entry level with a novice operator in a semi-pro environment, yes. But you cannot network FCP sessions like Avids. When Apple gets that down, the cat will be out of the bag so to speak. There are still a few things FCP is lacking.
Old 13th September 2007
  #23
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Manning, all your experience eh? I can't see how in the world it would be a good move for Digi to make LE 100 bucks (just a little more than upgrade costs). Maybe that's what YOU want, but from a business standpoint, no C-level officer would recommend that.
Old 13th September 2007
  #24
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Quote:
but the age of expensive audio software i feel is rapidly drawing to a close.
consumers with v powerfull affordable quad pc's will drive this fact.
There will always be cheap software for consumers. There will always be expensive software for professionals. And most likely there will always be plenty of stuff that falls in the middle.

But I agree...doesn't make much business sense for Digidesign to sell Pro Tools software for a hundred bucks and "untie" it from their hardware...
Old 13th September 2007
  #25
Gear Maniac
 

OK, here is what I see going on. I am not tight with the company nor do i read wall street research or any of that. I do know a few things about these types of things. Someone mentioned an MBA case study someday - they may be right. But there are a couple of things that are interesting and not as intuitive as the situation seems. As for the future, Apple and what is happening to studios, film production, etc I ain't no fortune teller. Avid is still in control of their destiny but the sands of time are getting quite empty.

Basically, the stock price is experiencing an falling out of love with large investors, which I always thought was like wall street picking up like a hooker - it was bound not to last. You can't exactly look at the direction of the stock price here, although IMHO it still has a long ways to fall. There can be a key difference in a stock price between low / no growth and a bankrupt company. Currently the Avid stock has more do do with growth and competition, but it is far from going out of business. The reason the stock price was high to begin with has to do with a couple of reasons (noted below). the second thing to note is that you cannot compare apple stock to avid - most of apple;s stock is valued on the ipod and iphone, crazy as that sounds. Maybe even a steve jobs premium given his magic touch.

A private equity fund took a huge stake in the company in 2003 - if you look at the stock price from 2000-2003 the company valuation was *extremely* low. A hungry banker saw a company with a very strong brand and a very defendible market position - a wet dream. So they bought a massive stake and everyone started following the smart money. The street was in love. Looks like it was only lust. Hey, we've all been there.

OK, i'm gonna have to wrap this up already, but they made a couple large acquisitons (M-Audio -- a success) and (Pinnacle - a disaster). As everyone on GS knows, the money tree is at the lower end of the market. Money flows downstream and music and film budgets (ad least advertising) are going one way. Digi is doing well with m-audio and pro tools but the high end video market is suffering - and pinnacle is now a pair of cement shoes. Certianly does nothng to shake a stick at final cut pro.

Jeez will i ever finish?

So pinnacle was such a huge investment for @whatever they have [email protected] and the CEO got the boot in July. Bottom line is that avid is a boat with Oars to paddle but no compass and map.

Th crazy part is that Digidesign is more profitable than Avid's pro video business. Also, it has a massive cash reserve that can keep it floating for years. Barring some miracle, I expect their stock to go to $15 before $40, but the company should have time to draw a new map and stop the leaks to figure out what it's new end game is.

The company supposedly has a stock buyback plan, but to me this is nothing but Blum capital (the private investor) trying to keep a floor on the share prive with PR and avoid the company from falling back into micro-cap land.

The company has lost its way but is safe for now.
Old 13th September 2007
  #26
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Quote:
Originally Posted by melodic_disaster View Post
OK, here is what I see going on. I am not tight with the company nor do i read wall street research or any of that. I do know a few things about these types of things. Someone mentioned an MBA case study someday - they may be right. But there are a couple of things that are interesting and not as intuitive as the situation seems. As for the future, Apple and what is happening to studios, film production, etc I ain't no fortune teller. Avid is still in control of their destiny but the sands of time are getting quite empty.

Basically, the stock price is experiencing an falling out of love with large investors, which I always thought was like wall street picking up like a hooker - it was bound not to last. You can't exactly look at the direction of the stock price here, although IMHO it still has a long ways to fall. There can be a key difference in a stock price between low / no growth and a bankrupt company. Currently the Avid stock has more do do with growth and competition, but it is far from going out of business. The reason the stock price was high to begin with has to do with a couple of reasons (noted below). the second thing to note is that you cannot compare apple stock to avid - most of apple;s stock is valued on the ipod and iphone, crazy as that sounds. Maybe even a steve jobs premium given his magic touch.

A private equity fund took a huge stake in the company in 2003 - if you look at the stock price from 2000-2003 the company valuation was *extremely* low. A hungry banker saw a company with a very strong brand and a very defendible market position - a wet dream. So they bought a massive stake and everyone started following the smart money. The street was in love. Looks like it was only lust. Hey, we've all been there.

OK, i'm gonna have to wrap this up already, but they made a couple large acquisitons (M-Audio -- a success) and (Pinnacle - a disaster). As everyone on GS knows, the money tree is at the lower end of the market. Money flows downstream and music and film budgets (ad least advertising) are going one way. Digi is doing well with m-audio and pro tools but the high end video market is suffering - and pinnacle is now a pair of cement shoes. Certianly does nothng to shake a stick at final cut pro.

Jeez will i ever finish?

So pinnacle was such a huge investment for @whatever they have [email protected] and the CEO got the boot in July. Bottom line is that avid is a boat with Oars to paddle but no compass and map.

Th crazy part is that Digidesign is more profitable than Avid's pro video business. Also, it has a massive cash reserve that can keep it floating for years. Barring some miracle, I expect their stock to go to $15 before $40, but the company should have time to draw a new map and stop the leaks to figure out what it's new end game is.

The company supposedly has a stock buyback plan, but to me this is nothing but Blum capital (the private investor) trying to keep a floor on the share prive with PR and avoid the company from falling back into micro-cap land.

The company has lost its way but is safe for now.
Wow. Great summary.
Old 13th September 2007
  #27
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T_R_S's Avatar
Maybe Apple will buy Digidesign from Avid.

Because I can't afford to take a loss on my AVID stock.
Old 13th September 2007
  #28
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Not very fair comparing Apple's numbers to Digi's. Apple's products can be used for many different things while digi's products can mostly be used only for recording. Ipods numbers alone pretty much make it an apples to oranges comparisson.
Old 13th September 2007
  #29
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Quote:
Originally Posted by Jonboy79 View Post
Isn't the comparison of apple and avid kind of like apples and oranges?
you mean apples and lemons? ... sorry, sorry... sorry... i'll show my self out.
Old 13th September 2007
  #30
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I just think the pro audio and video markets are pretty well saturated so there is no reason to expect further growth. That doesn't mean Avid won't sustain a dominant role for some time to come.
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