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Avid CEO David Krall, Part 2

Exclusive interview with DMN's Charlie White By Charlie White

Editor's Note: Missed Part 1? Find it here.

(5/2/05) Heres part 2 of Digital Media Nets exclusive interview with Avid Technology Inc. CEO David Krall. In this concluding segment, Krall talks about Avids transition plans as the proposed purchase of Pinnacle Systems draws near, what he sees as little overlap between the two companies, and the challenges of moving into the consumer market space.

Avid Technology, Inc. CEO David KrallDMN: Right after you spoke with me about a month and a half ago about the purchase of Pinnacle Systems, I talked with Ajay Chopra, the founder of that company. He said, ?I think there will only be two or three companies left standing in the digital video editing and content creation market space. Ive heard that if a company starts with the letter ?A then itll be one of the ones left standing. That would be Adobe, Apple, and Avid. Do you think its going to happen? How do you see that?

Krall: I think the letter ?M is going to exist in the future, too. And I can tell you that our strategy is consistent with the vision of serving the industries that make, manage, and move media. I think that the industry always creates new players, so when people talk about consolidation, what they often talk about is consolidation of the historic entities. Very often the consolidation is that they get absorbed into larger companies, or in fact they even go away. But what you also realize, when you take a step back and look at it, is there are constantly new players?you just dont recognize them yet when they first come in. Theyre just small. So, I think the industry overall is going to remain vibrant with a lot of new things coming in. But in terms of consolidation centers, or gravitational centers, Avid has clearly made its claim to serving our customers in this industry?post, broadcast, audio, computer graphics?and were going to do everything we need to do to remain a leader in this space, and thats where I think the Pinnacle acquisition really served us on multiple fronts.

DMN: Can you talk about these multiple fronts? If this does go through, when its approved by the shareholders and all the regulatory bodies, whats going to happen? Wont there be overlap in some of the products?

Krall: Interestingly, if you were to look three, four or five years ago you would have seen a lot more overlap with Pinnacle and Avid. What happened over the past several years, though, is that both companies have grown into areas that support that growth, and these growth areas turned out to be different. The areas of overlap are actually very minor and declining rapidly. Thats what has made this fit better and better?its almost like two magnets coming closer together and now theyve grabbed each other. What is happening is, on the broadcast side, were planning to take the broadcast products and fold them into the Avid Video Business Unit, and thats going to be under Chas Smith as we talked about in the press briefing. Chas is the general manager of Avids video business. Then were planning for the consumer products to go into a new consumer division, so well now have three pieces?video, audio, and consumer. On the consumer business, as weve talked about, were very excited about the notion of connecting to that next generation of content creators. A point that I think a lot of people have missed in the industry as well as in the investment community is the notion that Pinnacle is the number one video editing company in the world.

DMN: And the companys software application, Studio, is the largest-selling video editing application in the world.

Krall: Exactly. So its phenomenal. Im a user. I enjoy it. I dont know if youve ever tried it, but its intuitive, and really easy to use. The reviews that come out comparing it to the competition routinely quote it at the top. There are actually some really exciting plans that are going to take the Studio product and advance that significantly by putting it on top of the Liquid engine, and thats something that Pinnacle has already talked about. Thats going to be what incorporates native HDV editing at that consumer level. 

DMN: Theyve had native HDV editing for almost a year now.

Krall: Its phenomenal. So, I think thats going to be a very nice path to take customers forward. And then, ultimately, as I mentioned in the press briefing, anybody who is going to become a professional in five years is most likely editing video today. We want them to learn on an Avid product, and we plan to have great ways to take care of them as they move up the family as well as plans for intermixing and cross-pollinating low-end audio products from M-Audio.

DMN: If youre going to be on an Avid product from the beginning, then that might imply that the user interface of Studio might begin to resemble the famed Avid interface of Media Composer.

Krall: I think we will have a very interesting opportunity to blend different elements of the user interface. There are a lot of things about the current Studio user interface that people know and love and actually would not want to see changed. Also, we need to be very clear that what a consumer needs to do is very different from what a professional needs to do. There are limits to how far we would actually modify either interface, but there would be other ways that we might look at being able to support the movement from one product to another, such as, media compatibility or project compatibility. There are interesting things that we can look at that you might imagine happening in the future.

DMN: Maybe youll tap that development team from iNews Instinct?

Krall: That might be their next project?

DMN: For example, its so easy to do an L-cut in iNews Instinct.

Krall: Right.

DMN: Thats a complicated thing for someone just starting out. If you can do it the way you can do it in Instinct in Studio or the next version of that, it seems like that development team might be instrumental in this new product line that well be seeing.

Krall: Right. Yes, a lot of low-end applications dont do things like that. But I think whats interesting is, even if you look at Studio today, it has color correction, it has image stabilization, it has things that years ago used to be considered advanced features and now youre able to implement on a consumer application thats available for $79 at CompUSA. So, the beauty is, the ability to move that advanced technology downstream and really be able to enable people to work in ways that they never imagined. The other thing that I think is really interesting is we believe that there is going to be a new method that will arise for capturing video thats going to be less oriented toward the traditional video camera and more toward either cell phone capture or using a digital still camera that has video capability. The ability to edit those videos quickly and efficiently is something thats going to be very popular. 

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Related Keywords:exclusive interview, Avid Technology, Inc., CEO David Krall, transition plans, purchase, Pinnacle Systems, overlap, consumer market space

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