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Class Act: How Many is Enough?
Posted Jan 23, 2006 Print Version     Page 1of 1
  

Have you noticed that the world of postproduction is shrinking? As of December 10, 2005, there had been at least four major production company mergers or acquisitions. In addition, a couple of editing companies went belly-up. Should we be concerned that the latest acquisitions are reducing the NLE choices available to video producers, and is this a pattern that will likely continue?


It should not surprise anyone that Avid has gone from broadcast/postproduction powerhouse to juggernaut with its acquisition of Pinnacle. Avid has created a company that can handle every part of a project, from ingest to distribution.

This situation is not unique in the industry. Recent mergers have pushed other companies in this direction. Another major acquisition this year was the Harris/Leitch deal. In an October press release regarding the purchase, Harris proclaimed, "No other company offers the breadth of products that span the entire digital media content delivery chain." At press time, we saw Thomson/Grass Valley swallow up Canopus. The Canopus folks say it will likely mean more backing for the same product lines, but we'll see.

To truly appreciate how these acquisitions will influence the postproduction world and the amount of NLE choices we have, one needs to understand the history of these companies.

Avid started swallowing smaller fish in 1995 with its acquisition of Digidesign, the dominant player in the audio production space thanks to ProTools. That same year, Avid acquired Parallax Software, Inc. and Elastic Reality, Inc., leaders in paint, compositing, effects, and image manipulation tools. Then in 1998, Avid acquired Softimage, Inc., a 3D animation software company. In 2000, Avid acquired the Motion Factory, Inc., a company specializing in applications for the creation, delivery, and playback of interactive, rich 3D media. For NLE users, all of this business activity seemed like stepping stones leading up to the April 2005 acquisition of Pinnacle.

But that's just scratching the surface of the Avid/Pinnacle saga. Pinnacle is another big fish that gained its girth swallowing smaller ones. Pinnacle released its Targa line in 2000 and was actively developing and distributing its Studio line in 2001. In late 2001, Pinnacle bought FAST, an NLE company from Europe. What was formerly known as the FAST line became their Liquid line of editing solutions. Pinnacle also acquired Puffin Design, which develops Commotion Pro (motion graphics/rotoscoping software). Next, Pinnacle acquired its DVD authoring tool, Impression, from DVD pioneer Minerva Systems. On the pro audio side, Pinnacle had acquired German manufacturer Steinberg and consumer DV editing and capture company Dazzle. So, leading up to the Avid acquisition, Pinnacle had assembled more than a dozen NLE, audio, motion graphics, and DVD solutions to fit just about anyone's needs.

On the opening day of NAB 2005, when Avid announced the Pinnacle deal, many were scratching their heads wondering what would become of the Pinnacle editing and DVD authoring line. I discussed this very issue with EventDV editor Stephen Nathans, the day the acquisition news hit. We were both contemplating why Avid would continue to develop Liquid Edition, a product that directly competes with their Avid Xpress line. In November 2005, the Liquid editing community breathed a collective sigh of relief as Avid released Liquid 7, a full-step upgrade with a rich set of new features added to an already great product.

Event/corporate editors have always enjoyed a diverse selection of NLE choices. Because DV-based editing is economical to develop and reasonably priced to purchase, it is a pretty reliable guess that many different companies will continue to create new products. But the Avid-Pinnacle acquisition may cause a chilling effect for companies considering developing their own products. It will be even harder for a new company to launch an editing solution that can compete at the level of the Avid Xpress line, as well as their new Liquid products. (It's easy to imagine that Sonic Foundry and their popular Vegas NLE would be long gone in this market if a company like Sony hadn't stepped in to put its considerable weight behind the product.)

As history tells us, most editing applications usually take a couple of upgrades before the software will meet the needs of today's editors. Very few independent companies will be able to develop a desirable new production and have the money and patience to wait (possibly several years and multiple upgrades) before seeing a viable return on their investment.

I'm not saying the sky is falling. I'm still happy with the NLE choices that I have. By my rough count, there remain at least a half-dozen professional editing companies to choose from (Adobe, Apple, Avid, Canopus, Newtek, Sony—and that's just the software side). However, think back to the year 2000, and you will recall that the number was well over two dozen. It's an evolving, competitive marketplace, and I still believe that the user will emerge the winner in the long run. The ultimate question remains whether mega companies and high-profile mergers are a good thing. Will the anticipated superior support, research, and development of a large company outweigh the limits the mergers impose on consumer choices?



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