More Than 7,000 Media Composer Software Subscribers Point to an Untapped Market, Company Says
About 7,000 customers have opted for the subscription approach to Avid Media Composer, the company said this week, indicating that many of those are new Avid users who are either migrating from Adobe Creative Cloud or looking to expand their creative chops.
In a conference call reviewing its earnings in the fiscal Q4, Avid also offered a high-level preview of NAB announcements, promising new features in storage and asset management as well as monetization of created assets. Avid will also use NAB as a platform to showcase Pro Tools developments, including the recently announced Pro Tools First, a free entry-level version.
"We ended 2014 with over 5,300 subscribers, which represented a 65% increase from Q3 2014, and from the end of February we are up [to] about 7,000 Media Composer subscribers, most of whom are new customers," said Avid EVP and CFO John Frederick in the company's prepared financial overview. "We believe that many of these were Adobe customers who are now opting for more professionally oriented solutions at the same price point as the Adobe offering."
Meanwhile, more than 90,000 annual support contracts were purchased for Pro Tools and Media Composer software during the fourth quarter. But Avid prizes the new subscription customers because they represent a tier of users— independent creative studios and individual enthusiasts — that the company believes it has left largely untapped to date. Avid President and CEO Louis J. Hernandez described a future version of the Avid Marketplace that would allow those users to buy and sell "media assets" alongside larger studios, post facilities, and other media companies.
Coming up at NAB, "there will be some enhancements to our media suite, which include the asset management where we have a very strong position and that is a higher growth area we'd like to capitalize on," said Avid President and CEO Louis J. Hernandez, responding to a question. "You will also see some storage announcements and hopefully a series of other announcements that'll fully demonstrate that we want to connect the creative process to the consumption of the asset around the content marketplace, the App Store, etc. — some of these very new areas that people are not used to seeing Avid deliver."
Avid, which re-emerged on the NASDAQ exchange in January after a painful process of financial restatements, saw net revenues decline to $530 million in the year ending December 31, 2014, down from $563,412 in the previous year. Net income declined to $14.7 million, or $0.38 on a per-share basis, versus $21.2 million and $0.54 per share in the previous year. Avid countered the bad news in the numbers by noting that its overall business model is shifting to higher-margin products and indicating that bookings had stabilized after a years-long negative trend.
"In the six-quarter period ending Q4 2014, we reversed the trend of declining bookings by reporting year-over-year quarterly bookings growth in five of the last six quarters," Hernandez said. "This booking stabilization is a clear sign that the transformation effects have been successful despite the dampening effects of restatement."