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Technology Stocks : Avid Technology -- Ignore unavailable to you. Want to Upgrade?

To: Margureite deVille who wrote (502)	4/24/1998 9:27:00 PM
From: Anthony G. Breuer	Respond to of 777

Marguerite, Avid software will only run on Avid assembled boxes with their proprietary cards. I'm not sure about D-Vision, but I think it's probably the same. The others run on off the shelf boxes. Tony

To: Margureite deVille who wrote (502)	4/25/1998 10:34:00 AM
From: David Kuspa	Read Replies (2) \| Respond to of 777

Marguerite, you haven't heard from me in a while because I've been out of the nonlinear stocks for about a year. It's just too unpredictable and risky for me to be interested again. I've also been advising Media 100 shareholders to put their money to work elsewhere, as dollars in that issue will be dead for several more quarters at a minimum. Pinnacle's ReelTime and DC50 are digital video compression cards which use Adobe Premiere as a nonlinear editing software interface. ReelTime is only available on the Wintel platform and they have no plans to offer it for Macintosh. Currently, I don't believe anyone can touch them feature-wise, as it boasts component quality video input/output, professional XLR audio connectors, real time transitions and high data rates (not quite as good as Media 100's entry level OX, but good enough for high quality broadcast). It's shipping now and works with the current Adobe Premiere 4.2. They claim to have solved the audio sync problem with a special driver and plug in they wrote. When Premiere 5.0 comes out in a few weeks, this whole audio sync issue with anyone's card with be moot, since it can use the appropriate timecode bases in the timeline. The DC50 is similar to ReelTime, just without the real-time effects. It will be under $2K, and has the professional component video input/output and XLR connectors. Again, this is a BIG deal which no one else can touch so far. These professional input/output breakout boxes add considerably to the cost of other video compression cards in the market, usually several thousand dollars (it's a $2K option for Media 100QX's entry-level card--the one I'm currently using for most of my productions--for a total price of about $4K). Pinnacle has not said whether they will bring out a Macintosh version of the DC50 after the Wintel version ships in a couple of months. Pinnacle's cards and those from many, many others have achieved the necessary compression quality and feature sets to do broadcast quality production at a very low cost of entry to the market. Now that the upcoming Premiere 5.0 is clearly a much better, professional level nonlinear editing software interface, it's going to become even a more serious threat to the proprietary NLE software that both market leaders Avid and Media 100 bundle with their turnkey systems. When a lot of producers and editors see the power they can achieve using off-the-shelf Adobe Premiere 5.0 with low-cost generic hardware, they are going to wonder why they need to spend anywhere from $5,000 to $25,000 more on proprietary NLE editing software to have a very capable nonlinear system. And it is only going to get better, since Premiere 5.0 uses the QuickTime Media Layer technology for its engine. Adobe has given developers and manufacturers all the hooks in its software interface for them to add hardware acceleration or real-time features if their boards have these capabilities. By the end of the year, we may see real-time video boards bundled with Premiere 5.0 for considerably less than $5K. The market for Adobe Premiere is not as large as the one for Photoshop, but I would not be surprised if the initial response to Premiere 5.0 and its impending release isn't a factor in Adobe's stock price rising near its all time high after languishing for so long. This and the upcoming Photoshop 5.0 upgrade, rumored to be coming out in a few months, will be making pretty good contributions to Adobe's revenue stream. I thought about buying some ADBE when it was $38 back in January because I knew it was undervalued at the time (currently, it's at $50 and change), but I was committed to other stocks and didn't take time to do further research, as there's a lot more to Adobe than just the applications I use regularly. Still, I think it will be a big winner over the next year. I think in the coming 6 months, Post-NAB, Media 100 will be hurt the most. A dealer I spoke with last week says sales of their mid-line systems have dropped considerably in the past few months, and their entry-level Media 100qx to some extent as well. He claims that a lot of people are going with the new DVC/firewire editing systems and that he is selling a ton of these. Since Avid owns the high-end broadcast and feature film market, they have an upgrade cycle coming up as these broadcasters and post houses begin high-definition television production. But I'd be careful not to expect a smooth path, since they stumbled so badly with the PCI-conversion from older NuBus technology on the the Macintosh. High-definition data is considerably more to deal with on the desktop. It's a challenging and rapidly changing market that I'm not willing to put any bets on right now. It will be interesting to see if Avid will show much of an increase in its revenues over the next 2 post-NAB quarters. If you look at the last 8 quarters, they haven't really been going anywhere. Certainly nothing to compare to its growth rate up til 3 years ago. I'm sure they'll keep their margins high to satisfy shareholders with decent earnings, but I don't think this is a high-growth model any more considering where the field of desktop video is heading: more power to the creators, and less to stratospheric proprietary systems and their leasing companies. Good luck to all and as always, do your own research! D. Kuspa