High Tech: Making The Cut

How a small U.S. company dominates digital editing--and beats Japanese giants like Sony

Tewksbury, Mass., used to be known for its carnation industry. Now it nurtures something far more fragile--the images of Julia Roberts, Russell Crowe and just about every other TV and film actor. Located half an hour north of Boston, Tewksbury is home to Avid Technology, whose 1,700-plus employees are resisting the attempts of Japanese giants Sony Corp. and Matsushita Electric Industrial (the parent company of Panasonic) to penetrate the fast-growing market for digital video-editing software.

Founded in 1987, Avid makes tools that allow editors of movies and TV shows to manipulate the images, voices and surroundings of the stars. Avid has...

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