Avid 2011 Annual Report Download - page 35

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unfavorable impact of currency exchange rates.
Video Products Revenues
The 1.2% decrease in our video products revenues for 2011, compared to 2010, was primarily the result of decreased revenues
from our professional video-editing and, to a lesser extent, consumer video-editing product lines. These decreases were partially
offset by increased revenues from our shared storage and Interplay product lines. Avid Media Composer software had strong unit
sales, largely driven by version upgrades and promotions during the 2011 periods designed to encourage users of certain
competitive products to switch to Avid Media Composer, but professional video-editing revenues were down due to decreased
revenues from our hardware-based video-editing solutions, driven largely by a shift from hardware-based to software-only
solutions. The decrease in revenues from our consumer video-editing offerings was also largely driven by a shift in mix to
software-only products. Video products revenues increased in Europe and decreased in the Americas and Asia-Pacific regions
during 2011, compared to 2010.
The 8.9% increase in our video products revenues for 2010, compared to 2009, was primarily the result of increased revenues
from sales of our ISIS shared storage systems and professional editors, as well as increased revenues from our Interplay
production and media-asset management products and our broadcast newsroom product lines. The increase in our ISIS shared
storage revenues was driven by increases in both volume and average selling price, while the increased revenues for professional
editors and Interplay products were the result of increased volumes. The release of a new version of Media Composer during the
second quarter of 2010 was a significant factor in the increased professional editor volumes. The increase for our broadcast
newsroom product lines was driven by an increase in average selling price. These increases were partially offset by decreased
revenues from our consumer editor product lines on lower sales volumes, which was due to overall weakness in that market and
our lack of new product introductions. Video products revenues increased in the Americas and Asia-Pacific regions during 2010,
compared to 2009, but decreased in Europe where our revenues were impacted by unfavorable currency exchange rates.
Audio Products Revenues
The 3.7% decrease in our audio products revenues for 2011, compared to 2010, was largely the result of decreased revenues from
our higher-end audio systems, including the discontinuation of certain older product lines; partially offset by increases in revenues
from our audio control surfaces, Venue live-sound consoles and speaker product lines in the 2011 period. The 2011 audio control
surfaces revenues benefited from an increase in revenues attributable to our April 2010 acquisition of Euphonix. The decrease in
revenues from our higher-end audio systems was largely due to slower than anticipated market adoption of some of our Pro Tools
HD hardware products launched in the fourth quarter of 2010, as well as a shift in mix to Pro Tools software-only products, which
experienced strong first quarter 2011 sales following the 2010 Pro Tools 9 introduction. Audio products revenues for the first half
of last year also benefited from successful upgrade promotions, not present in the 2011 period, for high-end professional audio
products. Audio products revenues decreased in all regions during 2011, compared to 2010.
The 11.0% increase in our audio products revenues for 2010, compared to 2009, included revenues of $11.4 million related to our
April 2010 acquisition of Euphonix. While this accounted for 41% of the 2010 increase, revenues from our professional audio
products and VENUE live sound product lines were higher in 2010 on increased sales volumes. The increased volumes for our
professional audio products was due to increased sales volumes resulting from sales promotions offered during the first six
months of 2010 and the introduction of Pro Tools 9 during the fourth quarter of 2010. Audio product revenues increased in all
geographic regions during 2010, compared to 2009, despite the impact of unfavorable currency exchange rates on our revenues in
Europe.
Services Revenues
Services revenues are derived primarily from maintenance contracts, as well as professional and integration services and training.
The 10.9% increase in services revenues for 2011, compared to 2010, was primarily the result of increased maintenance revenues,
driven by new maintenance contracts and improved renewal rates for existing contracts, as well as increased revenues from
professional services and training. During 2011, we began to include a one-year of maintenance contract with certain product
sales. While this has had a slightly positive effect on 2011 maintenance revenues, the effect on future maintenance revenues will
depend on the level of renewal rates on these contracts. Services revenues increased in the Americas and Europe during 2011,
compared to 2010, while Asia-Pacific revenues decreased due to lower professional services revenues in that region.
The 1.0% decrease in services revenues for 2010, compared to 2009, was the result of decreases in maintenance and training
revenues, partially offset by an increase in professional and integration services revenues, and included an increase of $5.0 million