About Avid Technology, Inc.

Movie and music makers are keen on Avid Technology. The company provides digital media recording and editing software and hardware. Products include its Media Composer video editing systems and its ProTools professional audio recording and editing systems, and are used by music and film studios, postproduction facilities, radio broadcasters, and TV stations, as well as independent professionals, and amateurs. Avid also makes newsroom automation systems, digital storage systems, and music notation and education software. With sales offices in about 20 countries, about 60% of revenue comes from outside the US.

Operations

Avid makes hardware and software for capturing, editing and distributing digital video and audio. Video products account for 43% of revenue and audio products, 27%. About 30% of revenue comes from services. The revenue breakdown according to product lines is video storage tools, 25%; professional video creation tools, 11%; media management products, 8%; digital audio software and workstation products, which includes ProTools, 17%; and control surfaces, consoles and live-sound systems, 9%.

Geographic Reach

The US and the Europe, Middle East and Africa region each account for about 38% of Avid's revenue. Asia-Pacific brings in about 16% with other countries in the Americas generating about 7%. The company operates manufacturing facilities in the US and Ireland. Besides its own research and development operations in Massachusetts and California n the US and Germany and Canada, Avid outsources some R&D to partners in Ukraine and Thailand.

Sales and Marketing

Avid sells through a direct sales channel made up of internal sales people for certain customers and markets and e-commerce sales programs. It also sells through independent distributors, value-added resellers, dealers, and retailers. Customers range from amateur enthusiasts to corporate communications departments to major movie studios.   

Financial Performance

Avid's revenue has trended lower since reaching almost $930 million in 2007. Revenue dropped to $563 million in 2013, the lowest point since the peak, and down from about $636 million in 2012. The revenue decrease was attributed to an error in revenue recognition the company discovered that lowered the revenue the company counted from its backlog of orders. The company did report an 11% increase in service revenue in 2013 from 2012 because of higher sales of maintenance contracts.

While recording its second year of net income in 2013, it was lower at $21 million than the 2012 net income of $155 million. That, too, was blamed on the reverberations of the revenue recognition problem as was the negative cash flow from operations the company reported. Cash flow from operations dropped to negative $26 million in 2013 from a positive $32 million in 2012 as the company spent money on restatement-related activities, restructuring activities, and management changes of $13.2 million.

Strategy

Avid has hit rewind and pause after its revenue recognition problem. With a new chief executive on board in 2013, the company has pressed play to organize its strategy around the theme of Avid Everywhere. The goal is to offer a studio of comprehensive digital audio and video tools from creating content to viewing and listening to it for a wide range of customers. The company has developed a set of modular applications called Avid MediaCentral Platform, an environment, available on-premise or cloud-based, for producing and distributing content. The company released several new and updated products under the new platform. They include Avid Media Composer 7, a nonlinear-editing tool; Pro Tools 11, a digital audio workstation; Avid Interplay Production 3.0 for media production and asset management; Avid Interplay Pulse for multi-platform distribution (renamed Media | Distribute in 2014); ISIS 5500 and 7500 shared storage systems; Avid S6, a state-of-the-art modular control surface for sound recording, editing and mixing; and Avid S3L, a portable and compact live sound system.

As it ramped up tools for professionals, Avid sold off its products for consumers for about $38 million. The move will allow the company to focus on markets where it expects the highest growth. Products axed include the consumer video-editing product lines Avid Studio and Pinnacle Studio as well as the desktop and studio monitors and MIDI keyboard/controller product lines.

To strengthen its relationships to those who use its products, the company started the Avid Customer Association. The group is to address issues affecting the industry as well as Avid products.

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Avid Technology, Inc.

75 Network Dr
Burlington, MA 01803-2756
Phone: 1 (978) 640-6789
Fax: 1 (978) 640-1366
www.avid.com

Stats

  • Employer Type: Public
  • Chief Information Officer; Vice President: Rick Broughton
  • EVP and Chief Financial Officer; Chief Administrative Officer: John Frederick
  • President and Chief Executive Officer: Louis Hernandez

Major Office Locations

  • Burlington, MA

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