1. Pricing for equipment has drastically fallen. As a result many companies have created new product lines based around mid-ranged desktop systems. Now for the first time, comparable technology is available on sub $10,000 systems that had cost over $100,000. 
   
   
2. Lower pricing means more users are getting into the market. As a result it is creating an entire tier of desktop professional video users which include everything from corporate, education, government and most importantly the digital content professional/web designer.
   
   
3. High-speed modems are enabling streaming web video content.
   
   
4. Supporting technology and tools, such as digital video camcorders, are also now within the price range of more users.

• Avid
• Discreet
• Fast Multimedia
• Matrox
• Media 100
• Pinnacle
• Panasonic
• Quantel
• Softimage
• Sony Electronics

        By the end of 1999 the total market for digital video editing systems, which includes all add-on and complete turnkey systems will reach over $611.7 million in revenue.(*) By the year 2004, we project this figure will increase dramatically to $2.8 billion, thanks to the exponential grow in the mid-range market. The following chart outlines revenue projections for the video editing market.

Digital Video Editing Market – Market Projections (in revenues)

        The high-end and mid-range systems differ in several ways.  Most notably, the average price of a high-end system is roughly $162,194 and these systems typically run off IRIX-based machines. the Mid-range systems on the other hand have an average price point of $8,723 and are NT-based systems. This pricing has actually fallen quite steadily since the beginning of 1999, and the most popular systems are still priced above the average at $12,999 to $14,995, at least for the moment. We can expect to see prices in the mid-range continue to fall over the course of the next 12 to 18 months.

        The total compounded growth rate for the video editing market is 29%, 6.9% for the high-end and an impressive 43.5% for the mid-range products. The mid-range already outpaces the high-end in terms of total installed units with 59% of all units on the market. Impressive growth in the mid-range is also apparent in that 87% of all new units sold in 1999 being mid-range units.

        The current leader in the high-end video editing market is Avid with 42% of the market, that includes total sales of Softimage’s DigitalStudio. In the mid-range Pinnacle is the current market leader with 41% market share, followed by Media 100 with 20% and Avid with 12%.

        The following pie chart outlines the user profile of current video editing systems today

User Profile Breakdown - Digital Video Editing Market

        Together the traditional markets for video editing which include broadcast, post production and film make up the bulk of today’s systems with a combined 47% of the market. However, the growth markets as we head into the year 2000 will be corporate, government, education and most importantly, the emergence of web design for streaming video content. At the moment web design for video applications only makes up rough1y 1% of the total video market, but as the industry moves to provide video content over the Internet, vendors are scrambling to developing applicable tools.

        We expect that 2000 will be the year the video editing market takes off. Expect to see present companies reposition themselves in the face of these new growth opportunities with the introduction of new products, features and pricing strategies. We can also expect to see many new entrants poised to focus on specific segments of the market, particularly in the streaming video space. Needless to say, this is a market worth watching over the next 18 months, and the possibilities are endless at the moment.

Please note that this research does not include any consumer video editing systems. A Market Spotlight on the consumer video market will be made separately.