Market
Spotlight on
Digital Video Editing Systems
The market for video editing systems (turnkey and add-on) is not a new market.
Companies such as Avid, Discreet, and Quantel have been providing video editing
solutions for years now. What is new is the explosion of mid-range products
shaking up the industry dynamics.
Company stocks in this sector have
been doing incredibly well lately. Pinnacle and Media 100 are both Wall Street
darlings at the moment. Additionally, companies such as Accom have posted strong
results for the first nine months of 1999. Even privately held companies have
done well. Matrox has seen revenue in their video group almost doubled.
This growth is due to a number of
factors that are simultaneously impacting the industry:
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.
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