Sonic Foundry going down the tubes.....

[Dr Mordrid]

They face de-listing from the NASDAQ exchange after their price dropped to just $0.48 on Fridays close.

Todays close (Oct. 30) was $0.40 with no improvement in sight.

Remaining market capitalization: just $11 million.

http://investor.stockpoint.com/newsstory.asp?story=20021019/292e7272.xml

The Madison company, which makes audio and video editing and Internet streaming software, has been notified by Nasdaq that unless its stock closes at $1.00 a share or more for at least 10 consecutive trading days by Jan. 14, 2003, Sonic Foundry won't qualify to be listed on Nasdaq.

http://www.jsonline.com/bym/news/oct02/88804.asp

Based on Sonic Foundry's current cash position, company executives expect to have enough working capital for at least the next year.

That forecast, however, was based on enough investors converting their notes into stock. If this does not happen, the company said in the report, Sonic would need to find additional money early next year so it could make principal and interest payments of about $330,000 per month.

"If we cannot do so, we may be required to curtail or scale back our operations," the company reported.

I'd think once, twice and even three times before I dropped my $$ on Vegas Video.

Dr. Mordrid

[wkulecz]

Especially since they have a WPA like "activation" scheme that means if they go under you will not be able to re-install it or move it to a faster machine!

I'm begining to like Vegas Video since I've been using it to get its version of the MC encoder which lacks Ulead's Pulsating artifact problems, but I won't commit to it or recommend it because of this activation requirement.

--wally.

[dchip]

It will be interesting to see how all this works out, but, you're right, it looks pretty bad for SF right now. Delisting would mean they would have no ability to raise equity funds. How much they rely on those funds is the big key. Nevertheless, the comments about their cash position are also telling. Bleak, all the way.

I use Vegas Video. I love it as a NLE and audio editing package. I only have about $200 in it so no big loss for me, however, if SF isn't around anymore or is unable to continue to grow that product, I would feel some loss. It really is a very nice editing package.

[wkulecz]

If they aren't around to "activate" it, you can't use it despite having paid for it when you get a new machine.

--wally.

[Hulk]

Perhaps if Sonic Foundry did go under they would release a patch of some sort to allow their product activation codes to be voided. I own Vegas Audio myself and am thinking about purchasing Sound Forge. Why do the good companies go under? Piracy? Do they charge too much? Remember IQS? Innovative Quality Software with the SAW multitrack software. What a great program, hand coded in assembly language by Bob Lentini. I was editing video with that software (and quickly) TEN years ago on a Pentium 90. Amazing software. It didn't even require a Windows install routine, you just ran a tiny (around 1 MB) executable that WAS the program. I guess it was too easy to pirate and that did them in.

I also think that a lot of these companies get greedy with their asking price. Remember how MS took the market? A decent product, but more important it was the cheapest, get the user base. If some of these $300 programs cost $100 they might actually SELL a lot more copies.

[Dr Mordrid]

There are rumors around that they will be selling off parts of the company that are a drag; mainly the streaming media & a few others.

Dr. Mordrid

[wkulecz]

Vegas Video 3 at $150 or less would quickly kill off all the Video Studio, Video Wave, etc. crap.

Too bad SF doesn't get it, Instead they sell a crippleware Vegas version called Video Factory :-(

Would seem that it wouldn't take an MBA to figure out that 1/10 the profit on 100X the sales is a much more profitable business overall!

I think the "piracy" issue is way overblown. Pirates that actually use the program ultimately end up being customers for upgrades
and the "mindshare" of being hot warez has got to be worth something more valuable than a super bowl comercial attempts to buy. I interact with a bunch of college kids -- they collect pirated programs the way I used to collect baseball bubble gum cards. Whats intresting is none of them have or have even heard of MSP. They all have Premiere and Photoshop, a few have Vegas because of the status of having hacked its activation features, but if you ask them what to use for video they'll all say "Premiere"! They may be "pirates", they certainly don't seriously use any of these warez, but their recomendations do carry weight amoung people with morals and money to buy!

--wally.

[Dr Mordrid]

This is true....and will be even more true when MSP7 hits the street.

Dr. Mordrid

[Brian Ellis]

Wally

The other side of warez is that most of the pirating mods are done in the Far East, where income isn't sufficient to buy, say, Microsoft's wares.

If you are earning $100-200/month as a university graduate and you need an O/S and an office suite, which would you buy? XP Pro and Microsoft Office Suite at $10 each or the legal versions at the best part of a year's salary?

If Microsoft were to sell each of these at, say, $50 a throw, it would kill the piracy market and they would still make extraordinary profits from the increased sales of the legal stuff. What is interesting is that you never see software such as Red Hat Linux (you can buy the legal version 7.0 in the Far East for $15 and earlier versions for less) or Corel products pirated there. Do you know what I believe is one of the most pirated softwares in the world, even more than MS Office? AutoCAD! I doubt whether there are many architects, consultant engineers or such like in developing countries that use anything but a warez version. One computer I bought here was delivered to me with AutoCAD 14 already installed, as standard, and I paid far less for that computer than I would have done for AutoCAD alone! I know many who use warez versions of it, even if they have a legal Windows. I saw it for sale in Thailand for $10! AutoDesk tried to stem the tide of piracy with their Lite version, but that is still far too expensive. These guys need to use linear progression to determine the optimum price/sales for maximum profits. I'm sure that they would be surprised.

Don't believe me? OK, I won't talk about O/S because other factors enter into the equation but just ask yourself, how many proggies do I have which are not the latest version? I won't talk about Doc, who always has the latest, but of all the major softwares I use, for example, I have (legally bought)
MS Office 2000
Word Perfect 9 Suite
Corel Draw! Suite 9
Netscape 7 *
OmniPage 11
Acrobat 4
Norton System Works 2000 (antivirus updated)
IBM Via Voice 7
Partition Magic 4
MSP 6.51a *

Only those marked with * are the latest version (and the NS was free, anyway). So why haven't I upgraded all the rest? Because it is would be far too expensive to do so for my meagre income and all these satisfy my needs perfectly, so why upgrade? I believe that many "upgrades" should really be classed as "updates" and offered FoC or at a very low price (cf MSP 6.5>6.51a) and that anyone who insists on upping their software each year when there is no real advantage other than being able to boast that you have the latest, biggest and best, is frankly wasting their money and enriching Bill Gates even more (unless there is a real technical reason, which there rarely is). In other words, the software industry, generally, consists of a bunch of get-rich-quick artists who walk a tightrope between extracting max money for minimum work and pricing themselves out of business, like SF and many others we all know, in the past. Of course, like all generalisations, there are exceptions, thankfully, but these are usually smaller, lesser known, companies, which tend to give better value for money (and better support).

[wkulecz]

I'd love to see the payroll of the actual programmers vs the advertising and market budgets for these expensive packages
and then the pay ond benefits of the five top execs.

--wally.

[Hulk]

I recently spoke with customer service. I was told that in the unlikely event (their words) they go chapter 11, they would offer some sort of activation key generator to registered customers.

[wkulecz]

Got that in writing?

The've got to have a story to tell to keep people buying.

--wally.

[Hulk]

Wally - No, of course not in writing. But I have been dealing with Sonic Foundry for quite a few years. They have always been honest and produced a good product. This is one chance I think I am going to take.

[thop]

never tried vegas video but sound forge is just the best audio editor out there!

[Hulk]

Well I bit the bullet and purchased the full retail version of Sound Forge 6.0 Hopefully they'll be around for a while.

Great program.