Avid up for sale?

[zephonic]

Seems to be the word. It’s still a profitable company, but apparently valued at $1B. Not sure which industry players could take that on?

 

I’m mad at Avid for making Sibelius subscription only, hope Behringer buys them.

[Anderton]

You mean like this?

 

And this?

 

I found this part interesting: "Avid CEO Jeff Rossica admitted...that profitability had been hit by 'substantial and unexpected gross margin headwinds for audio hardware.'"

 

Hmmmm...maybe Carbon didn't have a chance against Universal Audio? Or Focusrite/SSL/ etc. is cannibalizing the low end?

 

Maybe Goldman Sachs will come up with a bundle - Avid and the Queen catalog for 10% off

 

 

[Notes_Norton]

12 hours ago, zephonic said:

I’m mad at Avid for making Sibelius subscription only, hope Behringer buys them.

I went MuseScore. If there is an alternative, I'll shun subscriptions.

 

MuseScore is quite good for my needs.

 

I know any corporation needs to make continuous profits and have continuous growth in order to stay solvent. But IMO, they shouldn't do that by milking their customers with a subscription service for a product the customer could simply purchase.

 

But what does a corporation do when the software product is mature and doesn't need regular updates? I don't have an answer for that. Downsize? Make new, different products? Perhaps corporate structure is not the best model for software companies? I obviously don't have the solution. I'm too busy keeping my two “mom and pop” businesses profitable—and it's working.

 

Well, I wish Avid luck, and hope they get their problems ironed out in the best possible way.

 

Insights and incites by Notes.

[Anderton]

2 hours ago, Notes_Norton said:

I know any corporation needs to make continuous profits and have continuous growth in order to stay solvent. But IMO, they shouldn't do that by milking their customers with a subscription service for a product the customer could simply purchase.

 

But what does a corporation do when the software product is mature and doesn't need regular updates? I don't have an answer for that.

 

I might have an answer...

 

There are always new people coming into a field and interested in products. It's not necessary to keep going back to the same users over and over again, although you can with value added stuff (e.g., a new synth or processor). That's what FL Studio does - free program updates, optional-at-extra-cost goodies.

 

Interestingly, as you may know my eBooks have free "point" updates. When I first decided to do that, it was because I was going to have to update books anyway. Given how fast technology changes, I didn't want people to feel burned because they bought a book and two months later, the product had changed. Also, the books had to stay current to attract new buyers.

 

I figured people would buy the books, get the updates, and the income stream would dry up. That wasn't the case. When a point update comes out, a whole bunch of new buyers come out of the woodwork. In the case of the Helix book, maybe it's a new Helix owner. Maybe it's someone who was skeptical about free updates but then decided to buy after seeing they were real. I don't know, but it was a pleasant surprise.

[Anderton]

Back to Avid. Maybe Yamaha will buy them? For the first nine months of 2022, Yamaha netted approximately US$12.75 billion, with an operating income of US$1.33 billion. So, I think their credit is good

 

I don't know how that would affect Cubase, though. Maybe they'd give Pro Tools the awesome MIDI features from Cubase, and call it ProCuToolsBase.

[Notes_Norton]

9 hours ago, Anderton said:

Interestingly, as you may know my eBooks have free "point" updates. When I first decided to do that, it was because I was going to have to update books anyway. Given how fast technology changes, I didn't want people to feel burned because they bought a book and two months later, the product had changed. Also, the books had to stay current to attract new buyers.

I do the same with my Band-in-a-Box Style files and e-Fake disks. As long as I'm in business, all updates are free.

 

Right now, we are redoing a Fake e-Disk that is a companion to the Pop/Rock Fake book. https://www.nortonmusic.com/fake2.html  -- They aren't on disk anymore, but I don't know what else to call them. When I started in the early 1990s, they went out on 5.25" and 3.5" floppy disks. It's all direct download on the 'net now.

 

Anyway, there have been many hundreds of new styles available in BiaB since then, both from PG Music and Norton Music, so we are redoing all 250+ songs in the collection. We're using new styles when appropriate, and taking advantage of the features that were not available in BiaB when we compiled that e-disk in 1992 or so. Hundreds of hours of work are involved, and when it's done, we'll offer it free to anyone who bought the e-disk from me.

 

Why? Because it's the right thing to do.

 

I create new styles, and new fake e-disks and release them every couple of years. If the people like what I have to offer, they buy it. If they don't like it, they don't have to spend any money. I get a lot of my current users buying my new offerings, but not all. If I release a country disk, the jazz folks won't be interested, and so on. I try to tap different genres with each release.

 

But we have an advantage over AVID and others. We are not a corporation, but a small business.

 

A corporation needs perpetual growth. If it doesn't make more profit than the previous quarter, more profit than the one before that, the one before that, and so on, the stockholders will 'jump ship'. After all, what good is it to own stock that doesn't keep growing?

 

As a small business, we just have to make 'steady as she goes' profits. More is nice, but no more than keeping up with inflation is necessary.

 

Perhaps the answer might be for software companies to be small, private businesses, instead of corporations. Corporations require perpetual growth, and we all know, that isn't possible forever.

 

Insights and incites by Notes ♫

 

 

 

[Anderton]

Interesting comment from an industry insider who shall go unnamed:

 

"I wouldn't doubt it if Apple bought them and then buried them. That would be one way to catapult Logic's primacy and resurrect the infamous Final Cut Pro. It won't turn out that way, but stranger things have happened."

 

That actually sounds pretty logical to me. Logic has been chewing away at Pro Tools' market share (and pretty much any other programs that run on the Mac). As to interfaces that can handle video, there's always MOTU. And for a company that can take on Carbon, there's Universal Audio. Apple wouldn't even need to make hardware interfaces, and Avid already has an infrastructure in place to keep maintaining the program.

[nursers]

23 hours ago, Anderton said:

Interesting comment from an industry insider who shall go unnamed:

 

"I wouldn't doubt it if Apple bought them and then buried them. That would be one way to catapult Logic's primacy and resurrect the infamous Final Cut Pro. It won't turn out that way, but stranger things have happened."

 

That actually sounds pretty logical to me. Logic has been chewing away at Pro Tools' market share (and pretty much any other programs that run on the Mac). As to interfaces that can handle video, there's always MOTU. And for a company that can take on Carbon, there's Universal Audio. Apple wouldn't even need to make hardware interfaces, and Avid already has an infrastructure in place to keep maintaining the program.

This is a great point - I'm one of those that LOVED Pro Tools, but jumped to Logic Pro after the constant changes in pricing / subscriptions and then constant iLok shenanigans. Best thing I ever did was get away from Avid. Ironically, if Apple do buy them and let them wither, it'll be exactly what Avid did (I believe) to the Rocket Network technology when they bought Rocket Network (I worked part time for them and that was what introduced me to MPN back in 2001 when I was one of a small team support Rocket Network on these forums for Logic / Performer and Cubase).

[Nathanael_I]

I suspect they need capital to restructure hardware contracts that have become uneconomic with supply chain, China tension, etc.  A big part of AVID's business is stable and diversified into many professional sectors.  Hobbyists don't see it.  But big portions of video and audio post-production run on Avid tooling.  Their numbers for subscription revenue have been going up. The public markets are hard right now, so selling is one way to raise the needed capital. 

 

My HDX + MTRX is the best recording system I've ever owned.  I'm very happy with it.  Zero latency, stellar sonics, seamless "hybrid" mode operation.  They are not cheap friends to have.  But they also deliver things for audio editing that no one else even attempts. 

 

The group that owns SSL & Allen & Heath might be interesting.  They have built a very nice business.  Owning Avid would take them to the next level as a player in the music manufacturing space and there are hardware synergies to drive in parts ordering.  They are a logical buyer.

[analogika]

Apple buying their biggest contender (which would put their combined market share half the entire market — or well more than that, depending on whom you read) and then killing it is sure to get them in serious trouble with Brussels, and probably Washington. 
 

That worked twenty years ago, but I’m pretty sure it wouldn’t, today. 

[Doerfler]

4 hours ago, analogika said:

Apple buying their biggest contender (which would put their combined market share half the entire market — or well more than that, depending on whom you read) and then killing it is sure to get them in serious trouble with Brussels, and probably Washington. 
 

That worked twenty years ago, but I’m pretty sure it wouldn’t, today. 

This crossed my mind also, the devel is in the details, as is said.  Apple can afford the litigation if they think they can win

[Anderton]

7 hours ago, analogika said:

Apple buying their biggest contender (which would put their combined market share half the entire market — or well more than that, depending on whom you read) and then killing it is sure to get them in serious trouble with Brussels, and probably Washington. 

 

That's a really good point.

[analogika]

On 6/3/2023 at 6:04 PM, Doerfler said:

This crossed my mind also, the devel is in the details, as is said.  Apple can afford the litigation if they think they can win

 

I think Brussels is slowly trying to establish that the actual point of fines is not being able to afford them.

[Nathanael_I]

Yes, the price of GDPR fines is a percentage of revenue.... You make 100B a year, great, break the law and it will cost you billions... 

[analogika]

…and there it is: 

 

Private equity firm STG to buy Avid Technology for $1.4 bln
https://www.reuters.com/markets/deals/private-equity-firm-stg-nears-14-bln-deal-avid-technology-sources-2023-08-09/

 

I have no idea whether this is good. It's not InMusic. 

[Anderton]

2 hours ago, analogika said:

I have no idea whether this is good.

 

The track record of non-MI companies buying MI companies hasn't been all that great. The usual approach is buy, strip, flip in 5 years. We'll see...

 

IMHO, a lot of the problems occur because although a company may have financial struggles, there's usually a core group of creative people who made the company successful at some point. When the new financial teams start directing the creative people based on what worked with companies like medical equipment manufacturers, the creative people no longer have the freedom to be creative, so they leave the company. The company loses it soul, the customers become disenchanted, and the downward spiral begins. 

 

If it was up to me, the goal or taking over a company would be to make it a creative success first, supported by financial success to guarantee a long-term successful outcome. But venture capitalists who flip companies seem to be allergic to long-term thinking.

[bill5]

On 6/3/2023 at 7:20 AM, analogika said:

Apple buying their biggest contender (which would put their combined market share half the entire market — or well more than that, depending on whom you read) and then killing it is sure to get them in serious trouble with Brussels, and probably Washington. 

? Why?

 

Shame it didn't happen. 

[analogika]

16 minutes ago, bill5 said:

? Why?

 

Shame it didn't happen. 

Because of antitrust laws. 

[bill5]

Hm - yeah getting and squashing Pro Tools would have given them a huge share, but IMO not an out and out monopoly. Oh well

[Anderton]

6 hours ago, analogika said:

Because of antitrust laws. 

 

Wait - there's a law against trusting Avid?

[bill5]

If not there should be!

[analogika]

9 hours ago, bill5 said:

Hm - yeah getting and squashing Pro Tools would have given them a huge share, but IMO not an out and out monopoly. Oh well

 

Antitrust is not about monopoly, per se. It's about unfair market advantage.

This is often misunderstood: you don't have to be the sole player to be the bully determining the rules for everyone else. 

 

By some accounts, ProTools and Logic combined have somewhere around two-thirds of the DAW market. 
 

[Anderton]

6 hours ago, analogika said:

By some accounts, ProTools and Logic combined have somewhere around two-thirds of the DAW market. 

 

I assume that's for the Mac, yes? FL Studio sells a huge number of copies, but I think that's mostly for Windows. Then again some might not consider it a "DAW" in the usual sense.

[analogika]

Google Bard, whom I do not trust as far as I could tip a server cabinet, says

 

VendorMarket Share (2022)

Avid  24.1%

Ableton  18.7%

Apple  14.7%

Steinberg  12.8%

Image-Line  7.7%

So, in any case, not really much concern, even if Apple were to buy ProTools. 

Though I fail to see why they would — the major advantages of ProTools would require a complete heart transplant, which is not going to happen. 

[bill5]

Hard to know who's right or even close, but last I read, Pro Tools has about 2/3 of the pro studio market, but if you include all others, it's only about 20% and they're like the third or fourth-best seller behind FL Studio and I forget who else.

[Anderton]

Here's an interesting report about the DAW market in general from Fortune Business Insights. 

 

I don't think we can get accurate answers for individual DAWs, because so many companies are privately owned, and don't have to reveal sales. I do a fair amount of research on sales according to retailers, because I want to write books about DAWs with the greatest number of users (for the obvious reasons!).

 

I do find it interesting that my Studio One book outsells the Pro Tools one by a huge factor. Of course, there could be many reasons for that...like more Pro Tools owners may have been using the program for decades and think they know what they need to know, while Studio One gets more new users who want additional tips and tricks.

 

I'm going to do an FL Studio book soon, I think it will do very well but who knows? Writing books is like exploring for oil. Some wells are gushers, and some are dusters.