From Bob Turner's 'The Cut'

On Friday, a press release announced that Sony Pictures Digital was purchasing all of Sonic Foundry's desktop software products and related assets, including the Vegas and Video Factory family of NLE software, the SoundForge family of audio editing products and the Acid family of Music Creation products. Although not specified, it probably includes their kids' software product, Super Duper Music Looper as well.

It is obvious what Sonic Foundry is getting out of this! They are suffering from their debt load -- especially given the weak economy. The $18 million sale (plus the assumption of certain trade payables, accrued liabilities and capital leases associated with the desktop software business) will help them considerably as they focus on their MediaSite Live Web presentation offering, and on their MediaWorks Suite media asset management solutions - especially considering the size of the players they are up against. Rumors have Sonic Foundry also selling off their media conversions solutions and their media evaluation solutions for an additional $6 million.

In fact, yesterday Sonic Foundry's CEO, Rimas Buinevicius, offered the keynote address, "Preparing for the Digital Tsunami" at Streaming Media NY where he outlined the applications, technologies and market forces driving current and future growth of rich media. This will now be Sonic Foundry's future.

It is important to note that Sony Pictures Digital is a separate division from the one that markets Sony's Professional and Broadcast audio and video products. This in itself surprised me a bit, because Vegas Video was demoed in the Sony booth as the head-end for their DVLince solution. It would make sense for Sonic Foundry's products to be used with DVLince and with DVCAM solutions and as a offline feeder product to the XPRI solutions.

As a side comment, I was intrigued that the 8-page pdf brochure mentions that DVLince works with various NLE solutions, but the graphic on the DVLince web page implies that it uses a Pinnacle Systems product.

It is also interesting to note that Screenblast products were displayed in Sony's booth at NAB. This indicates that there is a cooperative relationship being developed between the different Sony divisions. Just because one division "owns" a software package, it does not imply that another division cannot benefit from a "special relationship" and utilize the software package. If the trend in our industry is to partner with 3rd party manufacturers, surely a manufacturer can also partner with different divisions within a company.

It is true that the majority of what Sony Pictures Digital offers is entertainment programming. But Screenblast is a Sony Pictures Digital company that offers both software and services to consumer and prosumers such as wedding videographers. The Screenblast web page offers a Flash-based tour of what Sony is offering, a Create and Share page, including templates for audo and/or video scrapbooks, video greeting cards and videogames members can create, a Tips and Tricks page, and a Clips and Effects page where you can download graphics, video clips, sound effects and music loops. They do have a page that markets Screenblast Movie Studio, Scree

Industry pundits have commented that Screenblast appears to compete with the Apple's iLife family of products and Apple's push into multimedia creation tools such as iMovie and iTunes. (The new Soundtracks applet in Final Cut Pro is a better comparison than iTunes). I was troubled by not understanding what Sony Pictures Digital wanted with these Sonic Foundry product families until I remembered that comparison.

The press release quotes Patrick Kennedy, executive vice president of Sony Pictures Digital as saying, "We are excited to integrate this world-class team and their products into our ongoing efforts to produce and deliver the next generation of consumer entertainment services."

Impressive, Under-rated Software

The words "consumer entertainment services" stand out glaringly when I read that statement! The reason is that I thought of these products as professional and not consumer-oriented products. I think of Vegas as far more of a competitor to Final Cut Pro than it is to iMovie or Final Cut Xpress. There is a growing list of professional editors that feel the same way. Those who saw the Vegas Demos at NAB were truly impressed with the following features:
HD editing capabilities -- and 5.1 Sound Surround mixing capabilities demonstrated in the Microsoft booth (the product supports Windows Media 9 and RealMedia9)
The new color grading capabilities (with built-in Waveform, Vectorscope, Parade, and Histogram monitors windows and a Secondary Color Corrector control)
The much-improved MPEG-2 and AC-3 encoding
The impressive improvements in media asset management
The new advanced video effects capabilities (with split-screen preview) including the impressive Motion Blur
The integration with DVD Architect
The 24fps editing and native support for the Panasonic AG-DVX100 24p DV camera
The incredible improvements in transport controls (both scrubbing and keyboard control)
The overall improved performance.
It has always been attractive to those coming from professional audio to video editing because of its excellent full-featured audio editing capabilities. In spite of what many consider is Vegas' "non-standard" graphic user interface, this product was becoming recognized as a surprisingly powerful and underrated professional nonlinear editing software package.

Sonic Foundry offers a .pdf file on their website, "Vegas 4.0; Learn to use the new features". This is an excellent tutorial that goes into depth on the richness of the new features.

So What Happens to Vegas?

So what happens to this product? What happens to the people who purchased this product expecting both support and promised continued development? I have asked that question to just about everyone I can think of to ask, and have gotten a consistent "I cannot comment on this at present". These Sony and Sonic Foundry representatives do promise more news in the yet-to-be-determined "future". In fairness, SEC regulations and penalties has those I asked "playing it safe rather than sorry".

If I invested in a Vegas-based studio, or used their audio software packages as my preferred toolset, would I be concerned? Probably.

It does appear to me that Sony Pictures has designed a marketing strategy which is designed to compete in the content creation solutions arena where (in the impression of the press and the public) Apple has achieved significant success and where this content creation success has helped Apple's computer sales efforts. When I take a look at the Screenblast Create and Share web site, I can see that Sony is offering competitive tools and web services to be successful in this consumer market space. Sonic Foundry's Video Factory has evolved into Screenbalst Movie Studio and the Screenblast Movie Studio/Music Studio web site also features Screenblast SoundForge and Sreenblast Music Studio -- both of which have been designed in whole or in part by the team that Sony is about to acquire.

The big question is, "Will Sony use these products from Sonic Foundry to compete with Final Cut Pro in the educational and professional arena?" It is frustrating that we can know that change is coming but nothing can be said by those who know until the deal is completed - probably sometime next month.

I feel strongly that Vegas will continue to develop in the professional editing arena and compete in the same professional market arena in which Apple's Final Cut Pro competes. I believe that Movie Studio (a.k.a. Video Factory) will compete in the iMovie market segment, and Sony Picture Digital's Screenblast unit will market Vegas to the professional NLE market in the aggressive fashion that they are capable of. They may even tie Vegas into a Sony Vaio "content creation" bundle.

To establish good will in the video postproduction industry, I believe that they will support current Vegas customers, and may even offer Vegas licensees discounts on software upgrades or perhaps even discounts on hardware/software bundles. I also see Sony benefiting from the present Sonic Foundry dealership relationships and the shelf space where Vegas, Acid and SoundForge can be found today.

This could be a very good thing for Vegas. I know that Sony has tremendous respect for the 70 people in Madison, Wisconsin that they hope will join the Sony team. And I know that Sony does not like to enter market segments that they cannot successfully compete in. Given the solid foundation and quality of the product, Vegas has the potential of becoming a major player in the professional nonlinear software market - especially when you consider Sony's marketing capabilities. While it is significant that this is Sony Pictures Digital and NOT Sony Broadcast and Professional, I look at the way Apple markets Final Cut Pro, and realize that this, too, may be a very good thing for Vegas.

If I had a Vegas suite, I would be concerned, but I would not panic. This acquisition could be highly beneficial for Vegas licensees. When I learn more, I will let readers know.

Hee hee hee... thanks Zorro2!
I got the same feeling this Mr Turner has... and they obviously can't talk too much right now: better defer success than accelerate failure...

I see Zorro2's point. SoFo didn't have a Broadcast and Professional division available to look over the shoulders of the diligent Vegas engineers and take note of a new race car on the track. Potentially, if everyone over at Sony keeps their eyes open, it can be a very good thing. First the Vaio, tomorrow the world. (No, that's not a German joke.)