Avid, the makers of Pro Tools, has revealed that it exceeded 500,000 paid cloud-enabled software subscriptions as of December 31, 2022. We look at the numbers and the impact of this growth.
In an earnings call to investors, the software and hardware company reported that paid Cloud-enabled software subscriptions increased by approximately 23,100 during the quarter to approximately 506,000 as of December 31, 2022, an increase of 23.2% year-over-year.
Subscription revenue for the three months ended December 2022 was $42.5 million, an increase of 24.6% year-over-year. It is worth bearing in mind that subscription revenue comes from Pro Tools, Media Composer and Sibelius music composition software.
Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2022 | 2021 | 2022 | 2021 | ||||||||||||
Net revenues: | |||||||||||||||
Subscriptions | $ | 42,452 | $ | 34,059 | $ | 151,330 | $ | 108,443 | |||||||
Maintenance | 26,463 | 31,416 | 109,845 | 122,411 | |||||||||||
Integrated solutions & other | 47,184 | 53,591 | 156,238 | 179,090 | |||||||||||
Total net revenues | 116,099 | 119,064 | 417,413 | 409,944 | |||||||||||
($ values in thousands)
Avid has made significant progress in growing their subscriber base since launching ther model several years ago. However, to put this in context, Adobe has 24.5 million active Creative Cloud users, some 20 million more than Avid. The Adobe offering is much broader, with tools for graphic designers, photographers, as well as video editors and motion graphics professionals. The Adobe numbers do still show the potential for a subscriber model to power growth and revenue, Adobe revenue was $19.59 billion in 2022 with growth +24.07%. It is expected to exceed $28 billion by 2024.
Speaking about the increase, an Avid audio team spokesperson said; “we have significantly increased our software engineering capacity as a result.”
Love or hate Avid and their pricing model, they have been showing signs of new innovation, with products like Avid Carbon and the new MBOX Studio interfaces. Furthermore, the Hybrid Audio Engine has breathed new life into what many considered old technology, putting some of the other key hardware and software players in the audio industry on the back foot, as they consider how to respond to Avid’s renaissance.
Avid may have made some missteps when they initially entered the subscription market, as one industry insider told us at the time “Avid has pissed in the subscription stream for all of us.” Meaning, their early communications errors made the subscription model a hard sell for others following behind. However, under the leadership of Jeff Rosica, and the corrections he has made, Avid has found a new energy and has come back fighting. Watch this space.
Whilst for some, this information may feel like it belongs on the pages of Forbes, however, the decisions made in Avid’s boardroom affect those of us using their products. How do you feel about subscriptions?