Like the digital video hardware market, the same growth trends are being seen in digital video software market. As system and storage pricing drop, video editing is becoming more affordable to many groups outside the traditional boutique and post production facilities. The industry is seeing more and more individual enterprises and educational facilities opting to invest in their own equipment instead of having to rely on third party production studios to do their video work.

      There are a number software vendors in the video space including:

      ·          Adobe
      ·          Apple
      ·          Artel Software
      ·          Digital Origin
      ·          Discreet
      ·          eyeon
      ·          in:sync
      ·          Interactive Effects
      ·          Newtek
      ·          Nothing Real
      ·          Puffin Design
      ·          Right Hemisphere

      Aside from the software vendors listed here there are also an increasing number of new companies entering this market that also support streaming video for the web.  Streaming video is very much an emerging market with trends and vendors unique to that market. As such it will be treated as a separate market analysis, so please look for a future Market Snapshot dedicated to specifically to the streaming video market.

 

      In 1999 the total video software market reached $270 million. That figure is projected to increase at 5 ½ times by the end of 2004, with revenues expected to reach $1.48 billion.

Digital Video Software Market – Market Projections (in revenues)

       The market can actually be broken into 3 main segments:

      ·          Editing software
      ·          Compositing software
      ·          Paint & Effects software

 

      The editing segment, not surprising, makes up the bulk of the video software market at 70% of the overall market. Compositing software comes in a distance 17% of the total market with paint/effects following at 13%.

Segmentation Breakdown - Digital Video Software Market

 

      It is also not surprising that Adobe rules the video software market owning roughly 58% of the total market, with Premiere for editing and After Effects for compositing. Looking at the individual sectors, Discreet holds second place in the compositing market with 15%. And in the Paint/Effects market there is no one company that dominates in that space at the moment.

 
      Adobe currently is the overwhelming leader in this market, however because of the growth opportunity in this sector there is a lot of room for additional companies to gain a substantial presence over the next several years.

  
      As for platforms, the Mac still dominates this market with currently 58% of all products being Mac-based. A combined Windows and Windows NT does makes up 41%, with Unix making up only 1% of the overall market. This is really not surprising considering the Mac has had such a head start particularly over Windows-base packages. However growth of new software and system sales is primarily on the Windows side,  with most of these packages having been on the market for only the past 18 months. So to have a combined market penetration of 41% to the Mac’s 58% shows how quickly Windows is becoming the platform of choice.

 

 

 
Platform Breakdown - Digital Video Software Market

 

      Finally, what will become increasingly important to these users, particularly new users, will be the ability to easily move seamlessly from editing to compositing to paint and effects. Therefore, interoperability will become increasingly important. Also important will be the ability of these packages to be open and flexible enough to support new technologies such as the Internet and  streaming video.

 

      Aside from these more professional packages, there is also a surge in consumer-based editing and effects packages. This is attributable to the growing number of digital cameras and digital-ready computer systems now available. As a result many of the professional video software vendors have created “Lite” versions of their packages specifically for the consumer market, while there are still other vendors that are only targeting the consumer market. In any case, this is in and of itself an increasingly growing and competitive area and will be addressed in a separate Market Spotlight on consumer video products.