Instead of an empty timeline and me making the decision on what’s up first, I’ve got the full interview, logged, ready to start editing.

The Timeline index combined with Lumberjack’s on-location muscular logging,  makes this perfect.

Multiclip, logged, ready to edit thanks to Lumberjack. Click for full size.

For reference, I chose the “by person” string-out. Had I had multiple interviews I could have created string-outs by content keyword (activity notes.)

Specifically starting with a brand focused beginning – “I’m going to tell you about….” or faking it instead of making something real.

In other words, think like an audience, not like the marketer. If the video isn’t interesting to the audience it won’t be watched.

Terence and Philip consider whether or not the Television Industry needs a visionary like Apple’s Steve Jobs to innovate into the future. The Television industry will undergo upheaval anyway, with or without a visionary, but in what direction?

Conventional wisdom says that, without Digital Rights Management (DRM or copy protection) e-book piracy would rise and authors and publishers would lose all sales to those “pirates”. Well, Tor Books has said that cutting DRM hasn’t hurt business. Likewise David Pogue, on reporting about the Tor books experiment, notes that when he and his publisher O’Reilly experimented with going DRM free on one of his Missing Manual series, there was no drop in sales from the DRM version.

Quoting from Ars Technica

Tor announced last April that it would only retail e-books in DRM-free formats because its customers are “a technically sophisticated bunch, and DRM is a constant annoyance to them. It prevents them from using legitimately-purchased e-books in perfectly legal ways, like moving them from one kind of e-reader to another.”

This week, Julie Crisp, editorial director at Tor UK, wrote that the publisher has seen “no discernible increase in piracy on any of our titles, despite them being DRM-free for nearly a year.”

David Pogue’s article on the subject goes on to examine what makes the difference between a person deciding to pirate or not to pirate, and it’s not as simple as DRM or no DRM. As Tor books and his own experiements show, DRM has little affect. What does have an affect are:

• Copy protection doesn’t have zero effect (it discourages casual pirates)
• It’s not only “fair product for a fair price”, friction in the transaction counts
• Pricing is relevant. Consumers rebel against e-Book pricing at the same level as physical books (for good reason)

Pogue concludes:

Even though we don’t know for sure, there’s mounting evidence that e-books are more like music files than DVD movies: removing copy protection doesn’t hurt and might help. And there’s very little evidence that copy protection is stopping piracy.

That doesn’t mean the issue is settled either way. The point is, there’s very little evidence. More publishers in more categories should perform more experiments like Tor’s. Let’s quit opining about what will happen, and find out.

I worked out at NAB that it was likely that “CS Next” wasn’t going to be CS at all, but subscription only. To me this make great sense for Adobe: with the success of Creative Cloud already assured it was inevitable. But it’s good news for users as well.

Under the Creative Cloud (which we are paying subscribers to) we get all the Adobe apps – the old Master Collection – for very little per month. It will also likely mean that updates do not have to wait for a company-wide roll out. Updates to any app can be rolled out when they’re ready.

There will be some that prefer to “own” their software, the truth is that you never have. Software is licensed not sold.

The small downside to the flexibility and value of Creative Cloud is that you have to connect to the Internet once a month. Frankly I don’t know how you could be in business or production without a connection to the Internet once a month. (We did run into an odd situation driving to NAB where Greg wanted to prepare with Audition for the BuZZ but had to authorize it on his laptop: challenging driving across the desert but a really unusual situation.)

All in all, a good move Adobe. (And yes, the new CC offering is very amazing.)

You might also be interested in 5 Myths About Adobe Creative Cloud and Adobe’s FAQ on the subject.

Netflix’s chief content officer has a novel way to combat online piracy: give people easy and affordable ways to access content. In an interview with Stuff, Netflix content chief Ted Sarandos said that “the best way to combat piracy isn’t legislatively or criminally but by giving good options” and observed that “when we launch in a territory the Bittorrent traffic drops as the Netflix traffic grows.”

Why is this not obvious to everyone? ‘Piracy’ (aka unauthorized distribution) is largely unmet demand. Simple economics tells us that the best way to solve the problem is to meet the unmet demand and then piracy drops.

Yesterday I pointed to Even more Original Programming Sources and since then I’ve found stories pointing to AOL’s original programming, (which also references original programming by Yahoo, Netflix and Hulu); and Vimeo will be the exclusive online distributor for the new Kristen Bell movie via their VOD platform the same day as it hits the theaters.

AOL’s plans are quite extensive (and likely expensive):

AOL is also giving more of a push to its online programming with 15 new shows.  The company announced Tuesday that it has enlisted A-list celebrities like Sarah Jessica Parker, Gwyneth Paltrow, and Jonathan Adler to either host or star in original Web series. AOL plans to debut all of the shows on its AOL On Network, which is the company’s video platform, and across its 1,700 partner sites.

It’s great to see such diversity in original programming sources. We no longer have to wait to be discovered by the big players. If you have an idea you can get it produced and out there, even if it’s only via YouTube and advertising support.

Edelstein will serve as President of the “next-generation production company”. Aboard as advisors are Myspace co-founder Aber Whitcomb and investor Kevin Washington.

“We are not taking movies and stuffing them inside an app; we are crafting stories that embrace app technology and the viewing habits of the new generation of consumers”, Edelstein said in a statement. “Delivery direct to tablet and mobile devices is going to be the most personal form of storytelling”.

Anything that boosts production and finds new ways of telling stories visually is fine by me. I’ll definitely be interested in the results, particularly whether direct to app makes financial sense,  as we seek to find ways to reinvent the financing of the television business.

The Conviva report used a small bit of code in the volunteers’ media players and the results were not pretty. After summarizing them for us, Dan Rayburn concludes:

Conviva’s data shows that a staggering 60% of views were impacted by stalls, low resolution or buffering. 39.3% of streams were impacted by buffering and 4% never started. That’s over 900 million streams that never started! Ironically, for all the talk of HD, Conviva’s data showed that many consumers are watching on a screen capable of displaying high-quality (HQ) video, yet 63% are viewing below HQ resolution. And when it comes to buffering, for a live event lasting 90 minutes, Conviva’s data showed that 10.8 minutes of that content didn’t work thanks to buffering. Can you imagine turning on the TV to watch a movie and not being able to see 12% of it? Consumers would not stand for it.

I’ve long argued that download (and caching) provides a far better experience than real time streaming, and it appears the results agree with me. Although I can’t help a nagging feeling that Rayburn is subtly promoting this:

On Monday May 20th, at the Content Delivery Summit in NYC, we’ve got a session with Redbox, Comcast, Level 3 and Conviva discussing, “Managing OTT Video Quality For Service Providers and Network Operators.”

However, it doesn’t seem to be going to stop Netflix’s plans to replace broadcast Television.

It seems to me that Netflix’s biggest challenge is that they have no control over the means of distribution, other than making sure they have enough bandwidth at their end. Between their server and the viewer, the channel is completely out of their control, and (as above) not a pretty picture.

On the other hand, I’m very encouraged by Netflix’s plan to spend $2 billion a year on original television-style production. That’s effectively a new major studio in the production market.

In the original piece I referred to:

Over at The Mac Observer, John Martellaro writes what I’ve been wanting to say for a long time: almost everything written about Apple by “analysts” is either completely worthless because they know nothing; or is being written to manipulate the stock price.

Now we can add to that Ian Betteridge‘s article Just How Did Apple “Journalism” Get This Bad? After several examples of how “analysts” post articles that are linked to no sources, not based in fact, but rather:

To these guys, you’re not people anymore: you’re insects they can manipulate at will, for cash. Personally, I think it’s time we all stopped letting them manipulate us – and started getting the kind of journalism real human beings deserve.

Look at the examples that lead up to this conclusion. They’re just sad, particularly as one analyst posted how developers were abandoning Apple’s iOS and OS X when a week later the WWDC sells out in 2-3 minutes. There’s a complete reality disconnect there.

The excellent Asymco site (where you’ll find a lot of deep factual analysis of Apple and other companies) featured an Interview with Chosun Daily of Korea about Apple where Chosum answers the question “What are the truth and false about the ‘Apple shock’ currently? In what perspective should we see this?” Here’s part of his answer:

Second, I’d point out that the number of people watching and commenting on Apple has grown almost as fast as its sales and earnings. When Apple was small the people who studied Apple were few. (You could see this today for other, modest tech companies. There aren’t 50 analysts writing reports every day and 2000 bloggers tweeting about Lenovo even though it’s a successful and growing PC company.) Because of this growth, I would guess 80% of the observers have not observed Apple’s prior painful episodes first hand. For them this is the first time a “dominant” Apple has slowed. The amplification of so many voices raising alarm makes it seem truer, but it isn’t.

Both articles are well thought out, and enlightening reads. Bottom line: Apple still has close to the most profitable business on the planet. By every metric the business is sound and growing. Clearly they’re not out of ideas, with Tim Cook stating during the  Q2 investor call  ”the potential of exciting new product categories”. A new product category is not a new iMac (or MacPro) but a new category like iPod, iPhone and iPad.

My only speculation is that Apple is an experiences company more than a hardware or software company. It is trending toward being a sales and services company, with good revenue from media sales and rental, and a great business in App sales commissions. Every $6 billion sent on to developers is another $2.5 billion for Apple. There’s the potential for Siri to move on to booking tables or travel (etc) and Apple taking a cut on that in the future. Or (please, please) a rethink of the Television (type content) distribution model. Maybe Netflix has the best approach, but I’d sure like to see what Apple could do.

I know the temptation is to think that Variety would be arguing against a la carte cable selection for the usual argument: that the popular channels subsidize the less popular ones, which would not survive in an a la carte world. But no, the argument makes sense:

A la carte confuses the true brand currency of the TV kingdom: it’s the shows, not the channels. The programming-to-pricing ratio will be out of whack as long as the channel model holds sway.

To create a marketplace truly better off without the bundle, content companies would have to share their product in one massive trove for onestop shopping of tens of thousands of programs, where they can be re-aggregated by consumers free of traditional borders including channels, production companies and the conglomerates themselves. Then let great user experience and data-mining take care of the rest.

That may not mean the channels of yesteryear go away entirely. But the notion that unbundling will leave channels more important than ever, is folly. A la carte is a delusion we’ve held onto for so long that no one bothered to notice how obsolete it already is.

Nice.

HBO programming president Michael Lombardo has just announced that not only is the huge piracy [of Game of Thrones] a compliment, but the phenomenon hasn’t hurt DVD sales at all. A couple of months earlier the show’s director, David Petrarca, said that unauthorized downloads actually do more good than harm. Petrarca explains that the show needs “cultural buzz” to thrive and survive, and this buzz is being generated in part by pirates.

Mmm.

The panel included moderator Seth Hallen of Testronic Labs and panelists Al Kovalick, Media Systems Consulting; Robert Jenkins, COO, CloudSigma; Mark Lemmons, COO, T3Media; Sean Tajkowski, Tajkowski Group; and Steve Anastasi, Warner Bros. Technical Operations, and the subject was how “the cloud” would affect the production industry (implied “in ‘Hollywood’”). I’m quoting from Debra Kaufmann’s excellent summary of the retreat at CreativeCOW.net.

Tajkowski noted the merging, and inter-dependence, of the data and the motion picture industries. But all that data has created a looming crisis. “Although digital acquisition saves a lot of money on the front end (i.e., acquisition),” said Anastasi, “It is about to cost a lot more on the backend, with regard to storage and archiving. The studios are about to get a bill and will be shocked.

”Capturing metadata at the time of acquisition and following it all the way to the archive is a critical challenge to the industry, he continued. “Whoever comes up with that standard to keep those assets alive and searchable for many years to come will make a lot of money,” he said. “Without metadata, we can dump all kinds of files into the cloud, but if we can’t find them, what is it worth?”

Capturing metadata at the source means you do not have to capture it later (at considerable extra time and expense). Capturing metadata at the source means it is available for every step down the production chain: from location, to editorial, to distribution and to archiving and asset management. This is why we believe so strongly in the Lumberjack approach.

If anyone is interested, we started a private beta of Lumberjack this week through to the end of May (when we expect to release it to the public).  If you have a current reality or documentary project you can test with, and Final Cut Pro X, and want to beta test, contact me.

Sales of professional video-editing products accounted for approximately 11%, 13% and 13% of our consolidated net revenues for 2011, 2010 and 2009, respectively.

Let’s assume the 11% figure continued to hold for 2012 (probably not, and certainly not after Avid’s NAB 2013 pricing announcements). With consolidated net revenue of $436,746,000 for the first 9 months of 2012, that would suggest video software generated about $48 million.

While I believe most of Avid’s professional video software revenue is mostly upgrades (and in 2011/2012 crossgrades) if we used a wholesale Media Composer price of $1746 (70% of retail) then we get 27,500 units.

Again I do not think this is really a useful figure as many pay educational pricing, there have been some aggressive crossgrade deals offered, and most revenue probably comes from upgrades. It’s just an interesting data point.

Unfortunately it’s not easy to get any idea on what revenue Final Cut Pro X or Premiere Pro bring to their companies. Apple do not break out Pro Apps in their accounting, and at this point any attempt to guess units sold would be just that: a guess. Until Apple release sales figures it’s pointless guessing.

Premiere Pro is so tied into the Production Bundle sales, and now with Creative Cloud all Creative Cloud users are potential Premiere Pro users, it’s probably almost impossible to get a truly accurate number of users, as opposed to those who joined Creative Cloud and downloaded Premiere Pro.

Just as knowing how much revenue Avid makes from professional video editing software really tells us nothing about unit sales or upgrades.

I should preface this by saying that Avid have postponed their full year 2012 (and 4th quarter) figures:

…to evaluate its current and historical accounting treatment related to bug fixes, upgrades and enhancements to certain products which the Company has provided to certain customers.

This puts them in breach of NASDAQ rules, and they have received the expected letter from NASDAQ letting them know they’re in breach of the rules. It’s hardly a big deal: they have until the end of May to file a response, explaining how they will have the accounts ready before September (when there would be a problem).

I doubt that any reevaluation as above will materially affect Avid’s cash in bank.

For about ten years of my life back in Australia I was a Fellow of the Australian Institute of Company Directors (reservered for those on five or more corporate boards) and back then was pretty good at looking at company accounts.

On that face of it, the first three quarters of 2012 don’t look much brighter than a year earlier: the net loss for the 9 months to Sept 30 2012 is $69,617,000, an increase from the same period a year earlier when the loss was $23,477,000. And that is the official loss for the company, but because of a set of rules known as the Generally Accepted Accounting Principles (or GAAP) not all losses are cash losses.

For example, when a company buys an asset it has a value at the time of purchase. The cash balance goes down by the purchase price, and the asset (balance) goes up by the purchase price. However, over time, that asset loses value (at different rates for different types of assets), so each year the company depreciates the asset. This reduces the value of the asset on the balance sheet, and the drop in value (depreciation) is charged to the Profit and Loss account. Yet no money has left the bank.

Avid provide a reconciliation between GAAP and non-GAAP figures, which is useful to assess the performance of the company on a cash basis. Better but still not brilliant: the nine months to Sep 30 2012, accumulated loss is still $14,560,000.

While GAAP gives us a good long term picture of the health of a company  and non-GAAP gives a good idea of the health of the company as it would be without being burdened with a history, it doesn’t really help us determine whether or not Avid has the cash to survive. This is where there is good news.

While total assets have fallen by about $48 million, the one we most care about – Cash and Cash Equivalents – went up from $32,885,000 at Dec 31, 2011, to $71,359,00, although there is a balancing $29 million drop in accounts receivable. That is still a net increase of about $20 million in the bank.

Overall Avid’s current assets are down just under $7 million for the 9 months to Sep 30, but current assets still sit over $250 million. Total assets are on the books at around $555 million but  most of that are “intangible assets” like “goodwill” at $238 million. Essentially the value of the Avid brand. This continues to have value as long as we all believe it has value. The sad reality is that goodwill can evaporate if outside events force a change in the industry.

For reference, on April 19, 2013 Avid’s NASDAQ value is $244,450,551. The market does not (currently) value the Avid brand and intangible assets as highly as Avid does. The NASDAQ valuation is only slightly higher than the value of current assets.

Short to mid term I see no problem with Avid’s financial position. Keep watching the cash-in-bank and current asset figures: they tell us most about ongoing viability. I think the results also attest that Gary Greenfield did a pretty good job turning Avid around.

We don’t buy your lies any more.

Although Final Cut Pro 6/7 are probably still the most used NLE (although I’m beginning to think that’s debatable), schools have to look forward so their students have relevant skills for an industry that’s still three or four years away. In the “pro” market Media Composer still rules “Hollywood” (although not necessarily the latest versions); Premiere Pro is gaining some foothold where it never has before; and Final Cut Pro X has a lot more penetration into the Pro market than most people think it has.

In this lady’s case, the complicating factor is that her school has a deal with Lynda.com so that students (and faculty) have unlimited access to the Lynda training library, meaning students can teach themselves the details of whichever app the school decided to teach.

Here’s the problem: there is no way that anyone can accurately determine which NLE will be popular/dominant in 3+ years when the students graduate. I have my own educated guess, but who knows, Lightworks on OS X might turn out to be incredibly popular due to its power and near-free pricing. (Arguably though, the cost of any NLE is so low these days that, used professionally, they are all effectively free.)

Then it came to me in a flash (or maybe it was just the UV light catching my eye). The role of the teacher/professor at the College level (particularly) is not to teach button pushing. The job is to teach the skills of telling compelling stories using video as the medium. Whether you cut the piece in Premiere Pro, Media Composer or Final Cut Pro (7 or X), it makes absolutely no difference.

I suggested teaching a short introduction to each of the major NLEs (Final Cut Pro X, Media Composer, Premiere Pro) and then allowing student to choose which NLE they want to use. At some point in the course, assign a project that forces them to use “one of the other” NLEs than their default, just to make sure they get exposure to more than one NLE.  Reality is, they are going to need skills in all current NLEs if they are to be employable when they graduate.

One of the main changes I’ve noticed among motivated college age students now, is they seem to be well suited to processing “similarity” rather than processing “difference” which I believe our older generations tend to do. Having learnt the general principles of a NLE, they will be able to adapt to using any other NLE with little problem.

So, which NLE should I teach? All of them, and yet none of them. Devote your classroom to teaching the craft skills for efficient and powerful storytelling, and let Lynda.com (or other source) handle the details, because no matter which details you teach, the market will be different in 3-4 years.

And not just the market, the NLEs themselves continue to evolve. If you taught Final Cut Pro 7 in 2009, how well equipped are your students? If you taught Premiere Pro CS 4 in 2009, your students are facing a completely revised media engine, interface (and with the next release) timeline and edit tools. If you taught Media Composer 4 in 2009, you’d have taught only the beginnings of AMA and missed a whole range of modern tools (including the Smart tool, for example, and Stereoscopic editing).

Teach the technique, not the tool.