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More on Avid Layoffs & Rebranding Strategy
In response to SCRI’s articles in last week’s News Briefs (Avid Layoffs, Office Closings & SCRI Caution on 2010 Broadcast Equipment Suppliers Financial Results), Avid contacted us to offer up a statement from their CEO, Gary Greenfield, and to clarify timelines regarding layoffs and rebranding mentioned in the SCRI articles. This week's newsletter includes the response from Gary Greenfield, as well as further clarification and analysis on the story. Also more on the upcoming 2011-2012 Broadcast / Pro Video Marketplace (B/PVM) Product Reports (25) due in January. Also a story on the acquisition of DVS by Rohde & Schwarz
Avid Statement to SCRI from CEO Gary Greenfield:
Here is the statement from Avid’s CEO Gary Greenfield, provided to SCRI as a follow up to our story last week.
"We are in the process of a realignment of our business, which means we are reinvesting in new areas of growth for the company both from an innovation and geographical standpoint and want to stress that this was not a cost cutting measure.
As we look across the business and continue to focus on the three-phased plan that we outlined in 2008 of getting healthy, driving growth and transforming the business – we are moving beyond the “get healthy” phase and making some targeted adjustments that position us to take advantage of positive signs of growth that we see in areas like Brazil, India, China and the Gulf States. It is in that context that we are aligning some new job opportunities with new sources of growth in these burgeoning markets.
In fact, our plan for 2011 is to invest in these new geographies and redistribute jobs from this recent realignment, while maintaining a relatively flat operating expenditure.
In terms of office closures, we've consolidated multiple offices in small geographic areas. For instance, we have a number of offices in the Bay Area. We recently moved all of our hardware engineers in Northern California to a central location in Mountain View. We’ve also consolidated a number of our infrastructure resources to central locations."
Avid Layoffs & Rebranding Strategy Timeline & Analysis
Regarding clarification of timelines, Avid notes that their rebranding exercise started in January of ’09 and not, as reported, with the acquisition of Euphonix in April ’10.
Second, a sentence we included which was sourced from Xconomy | Boston stated that "According to an Avid spokesperson, some 120 Avid employees will lose their jobs; the announcement comes a little more than a year after Avid laid off 410 workers, or about 15 percent of its staff at the time. In another recent disclosure, Avid revealed that it plans to move its headquarters from Tewksbury to three office locations in Burlington, MA." This statement in fact applied to the layoffs and cost cutting announcement made by Avid in December ’09, and not to the current layoffs in October ’10. Avid has declined to provide any information on the number of jobs that will be lost as a result of the current restructuring just announced.
Avid also told SCRI this week that “there was never a confirmation from an Avid spokesperson at that time (Dec. ’09) of the number of people (laid off)”. The Avid spokesperson quoted in the story was sourced from the Boston Business Journal., which published a story on December 4, 2009 stating: “Avid Technology Inc. said Friday it will cut 120 employees as it restructures its business. A company spokeswoman was unable to say how many of those job cuts will occur in Massachusetts. The company, which earlier this week detailed plans to move its headquarters from Tewksbury, Mass., to Burlington, Mass., said it will incur between $7 million and $9 million in termination-related costs.”
According to the Form 8-K filed with the SEC on December 6, 2010, Avid states that ”The Company expects to incur $10 to $12 million in severance costs relating to the elimination of positions and about $4 million relating to the closure of the office facilities.” Avid declined to provide any information on the number of jobs that will be lost.
As mentioned in last week’s SCRI News Briefs, It remains to be seen whether Avid’s horizontal rebranding and homogenization strategy can stem off loss of market share to such companies as Apple, whose Final Cut Pro and Logic Series DAWs (digital audio workstations) are increasingly prominent in the video post and film communities. SCRI’s 2009 & 2010 Broadcast / Pro Video (B/PVM) Marketplace NLE Reports showed Avid losing share to both Apple and Adobe. It will be interesting to see how the market share picture looks in the new 2011 reports currently being tabulated and due for publication in early 2011.
SCRI Caution on 2010 Broadcast Equipment Suppliers Financial Results:
One of the points of the SCRI article (SCRI Caution on 2010 Broadcast Equipment Suppliers Financial Results)) was to caution SCRI subscribers on reading too much into companies announcing revenue increases, when compared to 2009.
As laid out in detail in SCRI’s 2009 & 2010 Broadcast/Pro Video (B/PVM) Reports, 2008 and 2009 showed large declines in product purchases across the board, and hence in manufacturer revenues. We suggested that SCRI subscribers are better served by viewing financials over at least a 3 – 5 year period (as per SCRI Reports).
For example Avid reported in its 2010 Q3 financials that revenues had increased 8.5%, compared to ’09. As a frame of reference, YTD financials for Avid show revenues for 2009 were $629.0 million, from $844.9 million in 2008, and $929.6 million in ’07 –- a 31.3% decrease from 2007 to 2009.
Avid’s decline in revenue is largely a result of its broadcast, as well as its professional and post sectors which together account for 78% of Avid’s total revenue (39% each, according to a recent Avid analyst day presentation).
This decline in broadcast and pro video revenue is indicative of the industry across the board. This was reported by SCRI, in specific vertical market and product type detail, in the 2009 and 2010 Broadcast Pro Video Marketplace (B/PVM) Reports.
Updated SCRI Reports will be available in early 2011, and results will be compared to prior years in historical context, rather than just to ’09. The Broadcast/Pro Video Quantitative Analysis Exec. Summary provides units and dollars for each of the 25 product types, across the 8 vertical markets, and in total, going back 10 years.
How are SCRI Broadcast / Pro Video (B/PVM) Reports different than other research reports in the industry?
SCRI is an independent broadcast pro video research firm (established in 1984) and is not affiliated with any potentially vested interest trade association such as the IABM or NAB, as are some other research providers in this industry.
Nor does SCRI rely on manufacturer provided information as do some research firms in this industry, thereby eliminating any potential bias from any single manufacturer, or bias from not including all manufacturers.
SCRI takes a micro product & vertical market specific view of the broadcast & pro video market space rather than more broad based approach as do some other research reports in the industry.
SCRI provides quantitative “bottom-up” (end-user derived) market sizing product reports in the broadcast and pro video sectors since 1984, Our data is product specific and designed to be used by product managers for market planning. Not broad based like some other research reports.
Also SCRI focuses on eight vertical end user broadcast & pro video markets in the USA across twenty five specific product types, rather than providing broad based global estimates based on manufacturer data and/or interviews, as per some research reports in the industry.
2011 - 2012 Broadcast/Pro Video Product Reports (25):
Video Camcorders; ;Video Cameras; Camera Mounting Systems; Character Generators; Clip / Still Stores; Composite/Component Encoders; Digital Effects Processors; Graphics & Effects Software; Graphics & Effects Workstations; Master Control Switchers; Non-Linear Editing Systems; Production/Post Switchers; RAID Video Storage; Routing Switchers; Standards / Formats Convertors; TBC's / Frame Synchronizers; Telecine Equipment; Terminal Equipment; Up/Down Converters; Video Compression Encoders; Video Disk Recorders; Video Monitors; Video Servers; Video Test & Measurement; VTRs
For further information on the upcoming 2011 Broadcast / Pro Video (B/PVM) Reports contact, SCRI’s Research Director, Desmond C. Chaskelson (email@example.com).
Rohde & Schwarz takes over DVS Digital Video Systems AG
Effective December 14, 2010, Hanover-based DVS Digital Video Systems AG has been integrated into the Rohde & Schwarz group of companies. DVS, which was founded in 1985 and now has 110 employees, is a leading international manufacturer of hardware and software for professional film and video postproduction. "We are confident that this partnership will result in the transfer of valuable technology from the studio to broadcasting. Moreover, DVS will benefit from the international Rohde & Schwarz sales network", stated Jürgen Nies, Head of the Broadcasting Division at Rohde & Schwarz.
© 1984 - 2009 SCRI - SCRI INTERNATIONAL, INC (firstname.lastname@example.org). SCRI is an independent research and news
organization providing market research reports and objective coverage of the broadcast and pro
video sector and all major trade shows, including NAB and IBC, since 1984. SCRI and is not
affiliated with any trade organization or manufacturer.
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