ProToolerBlog → Post » Dave Lebolt and Peter Gorges has left Avid

June 28, 2009

ProToolerBlog → Post » Dave Lebolt and Peter Gorges has left Avid.

You can check out the link above to read about the details but there is clearly a brain drain at Avid’s audio group that can only be the result of Avid’s decision to virtually eliminate the Digi brand and consolidate around Avid (professional products) and M-Audio (Retail Products).

David Lebolt is one of the brightest people I have meet in this industry, his understanding of how  business / channel / technology intersect is truly unique. His departure from Avid will create a void that will be hard if not impossible to replace.

I can see how this makes sense from a purely B-School financial perspective but I don’t think they realize how hard a transition this could be and their ability to execute this plan without serious damage to their portion in the audio industry is something I would not bet on.

Interestingly is you look at their first quarter numbers:

Three Months Ended March 31,

2009       2008

Revenues:

Video                                             $  87,502  $ 125,027

Audio                                                    64,127     73,239

Total revenues  (a)                       $ 151,629  $ 198,266

Contribution Margin:

Video                                             $  21,280  $  28,470

Audio                                                22,730     26,325

Segment contribution margin      44,010     54,795

It would look to me like the video group is in free fall and the Audio group is fairing much better. Why you would consolidate under a legacy brand like Avid instead of a segment leader like Digi does not make sense so me.

To keep this in perspective Avid has a new management team including some very successful smart people from Autodesk and  HP at the helm and their ultimate plan (which I obviously don’t know) may be a winner. Only time will tell.

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