What Frame.io’s $ 1 Billion Sale Says About Video Production | Industry trends


It is the scale of the sale of Frame.io to Adobe that has raised eyebrows and the envy of companies.

That a multimedia asset management software product can be valued at $ 1.275 billion is astonishing.

Respected analyst Devoncroft remained stunned, admitting: “We don’t have an explanation for the valuation level.” Especially when on the acquisition date “it is unlikely that profitability has been achieved”.

However, in an in-depth analysis, Joshua Stinehour, a former investment banker for the company, details the business rationale behind Adobe’s scoop and what he calls “Frame.io’s master class on building a strategic exit ”.

In this article, we’ll sidestep financial data to highlight the macro-trends this deal means – namely remote, distributed, cloud-based video production and SaaS business terms – that more than one other vendor is spying on as a way. towards large liquidity. outside.

Workflow challenges

It’s a bit misleading to call Frame.io an MAM (media asset management) although that is essentially what it is. They might prefer the term PAM (production asset management) because its software deals more with the front-end of production, moving media from set to release, rather than from release to broadcast.

Remarkably, the company has only been around for seven years and is still classified as a start-up. The initial product offered video review and collaboration by transcoding media into various resolutions for quick cleanup, playback, and tagging.

It also kept the original media for download, allowing Frame.io to work as cloud storage as well. Until 2017, it worked primarily with Apple’s Final Cut Pro, integrating ever since with the Adobe suite and other editing and visual effects tools from Avid, Blackmagic Design and more.

It is not bad to describe Frame.io as a “glue” between various technologies and stages of the production process.

In 2014, VFX Supervisor Emery Wells and Chief Scientist John Traver ran Katabatic Digital, a post store in New York City. Back then, video was still mostly transferred via FTP and tape formats were still in full swing.

A cloud-native post-production process was something for the birds. “How to download huge video files”, “Who will trust you with their content” and “Is it safe? Were the most frequently asked questions to entrepreneurs during the product launch.

“John and I started building Frame.io because we were fed up with seeing ourselves selling overpriced and disappointing software,” Wells wrote five years later.

Emery Wells, Co-Founder and CEO, Frame.io

“We set out to create a product that offered the world’s best design, lightning-fast search, quality social media comments and communication, and unconditional professional video capabilities all in one. “

He added, “We don’t just create things that we think filmmakers need. We innovate to solve the huge workflow challenges we face every day.

Forward thinking

At the time, the roadmap provided for the possibility for filmmakers to export original footage to a post environment as soon as it was recorded. To market the product, called Camera to Cloud, they hired Michael Cioni, founder of New York-based post office Light Iron (then acquired by Panavision).

There is no one better to bring the gospel of the camera to Hollywood. Some six years earlier, Cioni had proclaimed that post houses producing overnight dailies would no longer exist by 2017.

He predicted that the traditional job – audio sync, watermark, versioning, color space conversions, and even the work of the digital imaging technician – “will itself disappear by 2021, as increasingly intelligent cameras finish the job. daily projects and send them to cloud servers ”.

Frame.io Michael Cioni

At the time, Cioni told reporter Dan Ochiva in an article reprinted on the Light Iron website, that the latest cameras had more in common with supercomputers than with analog cinema-based technology. Still, the production community, only concerned with the next job ahead of them, doesn’t know how to integrate this technology, he said.

“Digital cinema production will take advantage of these supercomputer cameras and connect to our increasingly cloud-connected world,” Cioni said.

New devices will accelerate all of this, by associating audio tracks with each take, applying color LUTs on the fly to RAW footage, and uploading each take to cloud storage for anyone to access.

Digital cinema is getting closer and closer to becoming a real-time process, which is managed close to the set, ”he said.

This is more than prescient for someone who spoke in 2013 even before Frame.io launched.

Convenient camera for the cloud

However, Frame.io did not invent the camera for the cloud. The workflow was already possible by other means, in particular via Sohonet technology. But Frame.io’s evangelism, led by Cioni, is second to none.

When the HPA introduced the camera to the cloud earlier this year (billed as an unprecedented demonstration of how web technology can drastically transform decades-old production methods), it was Frame.io that claimed the lead. from the scene.

“By 2031, a media card will be as unknown as arriving on set today with a DV cartridge or DAT tape,” Cioni said during the live presentation.

“You won’t have removable camera storage. Camera technology will evolve into cloud transfer systems. It will take a decade [for RAW camera files] but the transition starts here.

It’s a vision that has the backing of Hollywood studios in the guise of tech think tank MovieLabs. The momentum towards cloud production is accelerating as the benefits of distributed and collaborative workflows are better understood.

There are huge efficiencies across the board, from not having to transport and house an army of creatives on set or in dedicated facilities. The energy saved (to achieve profitability and sustainability goals) is only part of the value-added equation.

Cloud native video and Pure SaaS

Frame.io’s technology was designed from day one to be “cloud native”, rather than a “cloud-based” adaptation from legacy equipment is another benefit. The wording is subtle but important, especially if your technology is cloud native.

Reprogramming technology originally designed to work on custom hardware is generally considered less optimal than technology written from scratch to work in a browser on any device, from anywhere. .

Another key part of Frame.io’s success is its Software as a Service pricing model.

“With few exceptions, all vendors with outside investors need to transition to a SaaS business model as quickly as possible to maximize shareholder value,” Steinhour said in his summary.

“Any tech professional in the media technology industry (customer or vendor) who is reluctant to migrate to the cloud is likely hurting their organization’s shareholder value. “


It is solid and the analyst knows it. “To tech cranks, we grant you that there are still technical hurdles preventing all workflows from moving there tomorrow,” he retorts preemptively.

“But to that same audience, we bring the full value of the business (budgets, attention from senior executives, quotes in investor communications, etc.) to vendors (and customers) who want to take advantage of valuation levels of their peers, you need to be in the cloud.

These business goals reflect the deeper operational benefits of cloud workflows.

“A successful SaaS business model requires more than a benchmark in the sales media and an unconvincing call option in the price list. It’s a lifestyle. “

Adobe rationale

It’s not hard to see what Adobe has seen in the native SaaS PAM of one million cloud users. He had previously bolstered Creative Cloud with acquisitions such as stock content marketplace Fotolia and social media site Behance.

The company itself claims that Frame.io can boost Adobe Premiere Pro and After Effects applications for video editing with review and approval capabilities, and it can be integrated with Photoshop.

In the last quarter, 60% of Adobe’s revenue came from Creative Cloud [per CNBC] Creative Cloud revenue grew about 24% year-over-year. Adobe has increased the price of Creative Cloud, highlighting improvements over the years. At the same time, Adobe aims to add Creative Cloud subscribers.

Who’s next?

Of course, Frame.io isn’t the only one leading the way in cloud video production. Every technology provider is turning into this. But its fundamentals – native cloud, SaaS, collaborative video tool – are not shared by many suppliers of older generation kit delivery kits.

A company that is neither a start-up nor a former supplier could be one to watch in this space.

Forbidden Technologies was founded in 1996 by British tech genius Stephen Streater, and launched FORscene in 2004 at a time when many people scoffed at the idea that professional video editing would ever be done online. In 2010, he was testing a new video codec, called Osprey. The bones of that became Blackbird, to which the company changed its name in 2019.

Now, with clients like A&E Networks, Bloomberg, and CBS Sports, it can claim to be the world’s fastest professional cloud-based video editing and publishing platform and directly targets Avid, Adobe and Apple.

Although its latest financial results for the year 2020 show a record turnover of 1.57 million pounds sterling (compared to 12.87 billion dollars in Adobe’s fiscal year 2020), its growth is 45% (Adobe’s annual ratio is 15%).

Consider that the value of the entire video editing software market is around US $ 700 million. Researcher Expects Market to Reach US $ 779.8 Million by 2028; another states that the market has already reached $ 779.8 million in 2018 and is expected to reach US $ 932.7 by 2025.

Even though Blackbird only held 10% of this market – which is not unreasonable – its current market capitalization of around $ 150 million is conservative, especially when you consider its recent strategy that disassociates the Blackbird product. of the underlying technology.

Its recent strategy of working with third-party streaming providers to integrate Blackbird into their technology stacks (see agreements with Tata and EVS) and license base IP (codec) to vendors to launch their own editing platform. browser-based video (with LiveU a likely candidate) and Blackbird investors are hoping to celebrate their own billion dollar salary.

  • IBC365 reached out to Frame.io for an interview, but was unable to provide one until the sale closed in the fourth quarter.


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