Where Cisco wants to take video
Cisco’s acquisition of Pure Digital, makers of the Flip video cameras came as little surprise to the digerati. What Linksys was to wireless home networking, the Flip is to consumer video. Good enough, simple, and inexpensive.
Cisco made its name as a big iron networking powerhouse. With its heavily publicized purchase of Linksys the company bought its way into home networking. And with its less heavily publicized acquisition of set top box maker Scientific Atlanta, Cisco gained control of another digital gateway into the home.
So why would a networking company want into the acquisition business? GigaOm has written extensively on the purchase – the reasoning behind it and whether Cisco overspent.
Cisco is just the company to make video accessible to all. Every household has at least one camcorder. Mostly it sits idle. Acquiring the video is easy enough – hit record just as granny is about to blow out the candles or the cat is about to flush the toilet. The moment can now live forever on tape, disk, or flash media. Therein lies the problem. It’s cumbersome to do anything with it after the material has been recorded. Cuing up the media to show to family and friends around the flat panel is a pain in the neck. Editing and distributing the video online is a similar pain, just head south 36 inches.
The Flip camera solves half the problem. With its USB port, the camera can attach itself to any Mac or PC. Now comes the scary part for a guy who makes his living designing editing software… The Flip camera comes preloaded with all the editing software the consumer needs. Plug the camera into the computer, and it prompts the user to install all the necessary software to edit and publish his video online. The FlipShare software doesn’t compare to Pinnacle Studio or iMovie, but it doesn’t have to. It’s so easy that people will actually use it.
Cisco has the capability to solve the rest of the problem. As GigaOm noted, it can eliminate the computer. Shoot, push to the cloud, and edit on the cloud. No Macs. No PCs. What Polaroid did for photography 50-some years ago, Cisco can do for videography. It can make it instant, inexpensive, and fun.
Cameras preloaded with editing software will be a minor disruption to business as usual. Editing on the cloud is where this is all going, and the industry will be turned on its head.
Avid mea culpas and understatements
Avid’s interim CEO met with analysts last week. TV Technology had a blurb. The whole call is available here.
Avid Technology could have handled its 2005 acquisition of Pinnacle more skillfully and it needs to improve relationships with customers—notably those disappointed with some editing products, Avid’s interim CEO said.
“Looking back, if I could wave my magic wand, I would have had the company grow not quite so fast as it did in some of those boom years,” Nancy Hawthorne told analysts at the J.P. Morgan Small/Mid Cap Conference in Boston Monday. “We did not integrate the several acquisitions that we did particularly well, and as a result, we have kind of a mishmash of different systems, and the company has not been positioned strategically to operate as a seamless entity in presenting a lineup of products to the marketplace.”
The company also rushed some products to market, she said, a resulting in “a quality issue,” particularly in the video business, bringing a severe flattening effect in 2007.
“Some things people just have not been ordering because they’ve been unhappy with Media Composer and the editing products,” she said.
Avid has spent most of its development efforts in the video business in 2007 on fixing those problems with new versions being released now to certain customers. “It’s working out well and it’s beginning to release the flow of orders,” Hawthorne said.
The company’s consumer business is now at best break-even, she said. “So we do need to understand what role the lower-end technology plays in our lineup. Is it strategically critical to us, or is it not?”
Is this news? No. What else can she tell analysts looking for an answer to missed numbers? The fact is that we all know that Media Composer Adrenaline is an expensive disappointment. Many of us rolled our eyes at the Pinnacle acquisition. Why was Avid looking to get into the highly competitive, low margin consumer space? Was it going to take on Apple’s iMovie?
The Pinnacle acquisition has yielded no real benefits to Avid’s professional editing base. Why hasn’t Title Deko Pro found it’s way into Xpress Pro, Media Composer, and Symphony? Marquee is frustrating. Pinnacle also had some very cost effective networked storage solutions… and we can guess why we haven’t seen those migrate to the Avid product line.
Having spent the better part of the past year jumping between Final Cut Pro and Media Composer, neither has my undying support. There’s broken stuff in both, but only one company is publicly admitting it.
