Roxio to premiere revamped VideoWave

The Milpitas, Calif.-based Roxio is best known for CD and DVD authoring software CD Creator for Windows and Toast for the Macintosh. The company saw in MGI an opportunity to expand into other popular areas of digital media, said Vito Salvaggio, Roxio's vice president of product management.

Roxio agreed to buy MGI Software in December, completing the deal about two months later for $35.4 million. MGI's photo-editing and movie-making software is carried by most major PC manufacturers and can be bought at retail stores.

"With the purchase of MGI, they've brought on photos and video editing," said NPDTechworld analyst Steve Koenig. "Video editing may be one of the smaller lines of business they have, but they're right on track with a product like this. On the hardware end, DVD recordable is the key that unlocks that door."

Koenig predicted "that a year from now, DVD burners would be a standard" on new PCs as CD burners are today. Consumers can use the discs to burn home movies onto discs playable in consumer DVD players.

Roxio has not lined up any new deals for the revamped VideoWave product line, but Salvaggio said Roxio would likely make bundling announcements later in the year. That would be good news for the company, which last week posted a loss of 6 cents a share for its fiscal 2003 first quarter.

In recent months, VideoWave has been No. 3 in retail sales, but is in fourth place year to date, according to NPDTechworld. Pinnacle Systems Studio 7 Pro is the top seller with 28.3 percent retail market share, selling for an average $79. Broderbund's Extreme Media Digital Studio, selling for an average $60, followed with 18.3 percent share. Low-cost Magix Video Deluxe, at an average $37, captured the third position with 13.8 percent share. Fourth-ranked VideoWave had 9.8 percent share and sold for an average $110.

"They're just in time for back to school and a little bit longer time for the holiday season," Koenig said. "So the timing is good."

VideoWave will be available in two versions: Version 5 Power Edition and Movie Creator. The first version is largely unchanged from the VideoWave 5 distributed by MGI. But Roxio has swapped out the older optical drive burning engine for similar technology used in CD Creator. Power Edition can burn video footage to CDs or DVDs.

VideoWave Movie Creator is a revamped version of MGI's Cinematic, which offers fewer video-editing features than Power Edition but is significantly easier to use, Salvaggio said. Movie Creator offers more automated features than the Power Edition.

"Most people don't want to develop this new hobby of editing movies," Salvaggio said. "We decided to focus on personal movie making distinct from video editing."

Among its unique features, Movie Creator recognizes distinct scenes on the digital camcorder and organizes them separately during the import process. Movie making or video editing software typically imports the footage as one dump.

Movie Creator uses three modes for making movies: CineMagic, StoryBuilder and StoryLine Editor. Roxio expects the first mode to be the most popular with consumers. In as little as three mouse clicks, a consumer can import video to which they can choose a theme that automatically adds transitions between distinct scenes. A sophisticated algorithm edits the footage, reducing the length of scenes based on the theme, such as nostalgic or action.

The process is designed for novices who want to output good-looking movies but don't want to edit video, Salvaggio said.

Those consumers looking to roll-up their sleeves, so to speak, can use StoryBuilder to construct a movie with the aid of a series of wizards. Like other movie making software, Movie Creator serves up a large selection of transitions, special effects and graphic overlays. Besides the 92 supplied audio tracks, consumers also can use their own MP3s.

StoryLine Editor uses a more typical, manual approach to editing videos. Many of the features here are similar to those found in VideoWave 5 Power Edition.

"Roxio makes it super easy for the beginner, but as a user gains experience, they can de-select those handholds and get more involved in the process," Koenig said.

Like many new PC movie making releases, but unlike Apple Computer's iMovie 2, Roxio's product includes CD and DVD authoring and burning capabilities. This means a consumer can create and burn a CD or DVD that will play on most consumer video players. Apple took the route of separate products: iMovie 2 for movie making and iDVD 2 for DVD authoring.

But, unlike iDVD 2, Movie Creator does not offer Hollywood-style, full-motion menus for navigating DVDs.

"We will release a full DVD authoring package later this year with full-motion menus," Salvaggio said.

Both new VideoWave products can burn movies to CD-R, CD-RW, DVD-R, DVD-RW, DVD+R, DVD+RW and DVD-RAM discs.

Roxio will begin selling both products from the Web on Wednesday. They are expected to be on store shelves within 10 days. VideoWave 5 Power Edition will sell for $99 and Movie Creator for $79.