How Final Cut Ended up at Apple: an Excerpt from John Buck's 'Timeline: a History of Editing'

Did you know Final Cut wasn't actually an Apple product but a Windows program written by Macromedia that Apple purchased? Did you know Apple purchasing Final Cut was a result of Adobe rebuffing Apple over a Mac version of Premiere? Did you know Apple was in danger of going under when it purchased Final Cut? Even if you already knew all of these things, the particulars of how Final Cut ended up in Apple's hands is a fascinating story for anyone interested in video editing. John Buck's $4.99 book Timeline: A History of Editing (also available on iBooks) tells the full tale. There's also a Volume 1 book, which covers editing up until the digital age. Let's take it back to 1998:

In the days after Randy Ubillos’ Final Cut demonstration at the 1998 NAB, Macromedia’s stock climbed as analysts speculated on the company’s future. Computergram magazine signalled the first of many rumblings about Final Cut’s future.

Macromedia Inc hasn’t been saying very much about its next generation Final Cut digital video editing, compositing and effects tool since Compaq Computer first previewed it at NAB. But the hype machine is now beginning to build up for the tool, which is due to be launched during the first half of this year on Windows 95, Windows NT and Macintoshes. Rumours suggest that Apple Computer now very much focused on the digital content creation market, is very interested in the tool, which uses its QuickTime 3.0 technology, even to the extent that it was considering buying the tool outright. 

Final Cut’s product manager, Tim Myers recalls:

We were pretty unsure about whether a move to Apple at that time was going to be a good thing or a bad thing. It certainly wasn’t in its second wave of success, far from it and it was very questionable whether they were going to be able to pull it off. And a lot of us were thinking if Apple is struggling just selling computers right now why would they want to support and sell an editing product?

Project manager Will Stein had moved to Macromedia from Apple, and now it seemed he was headed back there.

I will be the first to admit that I was not crazy about the idea of going back. The Apple I left (under Gil Amelio) felt like it was going down fast. Apple under Steve (Jobs) felt like it had a chance, but the company had been severely damaged.

Over the ensuing weeks, Isaac Babbs and Andrew Baum spoke with Steve Jobs and Phil Schiller ( a former staffer at Macromedia) about the acquisition of the Final Cut intellectual property. It seemed that a one off payment from Apple would secure the Macromedia software assets, however for the project to be a success somebody needed to convince the Final Cut team to stay together, and continue coding and building the product. Andrew Baum recalls:

We agreed pretty quickly that we were going to make a deal on the software. Steve then asked to have all the engineers and other people involved with the project over to Apple to talk with him. 

Will Stein recalls:

I remember getting a call from Rob Burgess at home on a Saturday morning. Rob told me the deal with Apple looked like it would go through, but that getting a critical mass of the development team on board was going to be part of the package. Since some of our senior engineers were predominately Windows developers, we anticipated this being a tough sell. 

Baum continues:

Of course you have to remember that Apple itself at that stage was not in great shape, this was pre-iMac. But Steve talked us through some of his plans especially his ideas around FireWire, which involved the unreleased laptop code named Pismo. It would have FireWire on the motherboard and be released as the PowerBook G3.

A sale to Apple would allow Macromedia to recoup the $10m that it had spent creating Final Cut. Isaac Babbs recalls the deal:

There are no ifs, buts or maybes. Because Macromedia was now totally focused on the Web, it would sell Final Cut or shut it down. But the deal did seem to happen magically. Steve Jobs had decided he wanted to make sure people could edit video on a Mac and he wanted them using QuickTime. Serendipitously we had one of the best editing products in development and it was QuickTime based. 

Because Randy Ubillos had become good friends with Apple’s QuickTime leader Peter Hoddie, and Director of Engineering Tim Schaff over a number of years, Jobs probably knew more about it than anyone outside of Macromedia.

Baum is clear in his recollections of the sale.

If Apple hadn’t decided to buy Final Cut then, it would not exist today, it was that fine a line. 

Babbs adds:

Steve was smart enough to see the value in Final Cut, and he executed the desktop video-editing paradigm to perfection. It was a brilliant move by him.

Final Cut would be perfect to drive sales of larger and more expensive Macs, but Jobs had new consumer Macs in development that would use Firewire I/O for the first time. He knew that the technology would make for a paradigm shift in desktop editing so he decided to ship a video editing application with the new computers.

Jobs approached Adobe Systems, and asked them to create a consumer version of Premiere that Apple could bundle with the unreleased Mac code-named Kihei. With Apple’s future still uncertain, and Premiere sales growing on the Wintel platform, Adobe said no.

As a result Jobs decided to build the app with an in-house team, and he turned to Sina Tamaddon. With the acquisition of NeXT Software, Tamaddon had joined Apple as thehead of Worldwide Service and Support, then the Newton Group before Jobs asked him to lead a new division called Applications.

Another NeXT alum Glenn Reid had moved away from contract work to be VP of Engineering at Artifex Software. He returned to the office one day to find a surprise.

There was literally a message on my answering machine from Sina Tamaddon’s assistant at Apple, and when I called her back she wouldn’t say what it was about. I didn’t really want to go work at Apple. I said, ‘tell Sina that if he wants to hire me, forget it, because I’m happy with what I’m doing’. Sina at the time had a business card that stated his role simply as, ‘Office of the CEO’. He was indeed Steve’s right arm in creating what became the Applications Division, which is now many hundreds or thousands strong.

Reid decided to take the meeting.

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Steve Jobs held a news conference to make a watershed announcement. He announced the first iMac.

I am incredibly thrilled to tell you that Apple is getting back into the consumer market. 

Jobs proudly unveiled the iMac, an all-in-one device made of translucent plastic that looked very different from any other personal computer that had shipped.

Apple has created a worthy successor to the original Macintosh as a fully integrated computer. No separate monitor, no rat’s nest of power cords and no external drives necessary. 

The new machine drew equal amounts of praise and criticism for Apple’s decision to embrace the emerging USB interface, drop all use of floppy disks, and not include a Firewire port. While Apple had no plans to add disk access, it was quietly preparing a FireWire enabled iMac.

Elsewhere at Apple company lawyers had completed the due diligence process on the Macromedia Final Cut deal, and cleared up all issues concerning the use of picture icons (picons) in the editing interface for a potential breach of the Montage patents owned by the Haberman family.

It was time to go public.

On May 11, 1998 MacWEEK reported that Apple had bought the Final Cut code.

The hand-off includes the technologies in Final Cut, the long-awaited QuickTime 3.0-based video editing package from Macromedia. However, sources cautioned, Apple has not yet determined whether it will ship Final Cut in its current form.

Spokesman Russell Brady told the press that Apple had acquired:

…technology and engineering resources from Macromedia, that will broaden Apple’s effort to make QuickTime the cross-platform digital media and digital video standard. 

MacWEEK believed that Apple had convinced the thirty plus staff from Macromedia’s audiovisual division to continue coding and building Final Cut at Cupertino.

Sources said Randy Ubillos, lead developer on Final Cut and the original author of Adobe Premiere, has moved over to Apple.

The Final Cut team continued to work from the Macromedia offices for a short period before transferring to Cupertino. Steve Jobs held a welcoming for them in the executive offices at Apple on June 1st 1998. Will Stein recalls:

Steve had the entire development group meet him in the boardroom at Apple to discuss the acquisition. It was a great meeting, and most of us left feeling more optimistic about Apple as a company, and Apple as a good fit for Final Cut.

Michael Wohl remembers:

Steve said, “We’re going to give you a $50m advertising budget. What do you think of that?” And I thought, well there’s probably only 15,000 users out there so that’s $3 grand per person!

While Apple was keen to embrace digital video, Macromedia was happy to be out of the game. It had transitioned to new applications like Flash and Dreamweaver, that now accounted for 20 percent of the company’s sales. CEO Burgess had picked the move to a soft platform ahead of his peers. Despite the acquisition Isaac Babbs remained at Macromedia.

It was a great time, and I guess I was the custodian of Final Cut for 17 months. My job was done, there wasn’t a role for me at Apple, and I was dedicated to Macromedia and perfectly happy to move onto other things.

Although Andrew Baum had worked to oversee finance for Macromedia’s Audiovisual division, his broad understanding of Final Cut, and its sales potential was a sought after skill for Apple. He recalls:

When we first went over (to Apple) DV wasn’t even really in the cross hairs of the team. It was to get a shipping product out the door. 

Baum would go from guiding Final Cut into Apple’s hands, to a position where he oversaw worldwide marketing activities including advertising, collateral, event participation and promotions, web site content, and press activities.

Of course once we were at Apple that changed, and I ended up working on some of the DV development under the threat of being immediately fired should anyone find out exactly what it was I was doing. I couldn’t work with anyone outside the group. 

No one else at Apple. 

Period.

Tim Myers, the Macromedia Video Products Product manager recalls the move.

When we started, Apple were still looking like a fifty fifty chance of being around for very long.

Then came another unexpected decision from a former ally in desktop publishing, Adobe. The Final Cut group had barely settled into their new office when Apple management met to consider a request by Adobe to shut down the project. With the Macromedia transaction completed and now public, it was only a matter of days before the makers of Premiere, made their displeasure of a rival editing software package on the Mac known to Apple.

Despite the rebuff on making a consumer version of Premiere for the upcoming FireWire iMac, Steve Jobs was in a tough position. In order to placate one of the largest makers of Mac software, Apple presented a business case to Adobe that argued Final Cut was drastically different to Premiere, and ultimately beneficial for the desktop market overall.  Adobe software products, and should the dilemma escalate, Apple could lose a critical supply partner and re-ignite fears of bankruptcy.

Eventually Adobe Systems backed away from its threats to Apple’s newly acquired Final Cut.

When an employment agent acting for Apple approached Mike Mages, he saw an opportunity to leave.

Once the opportunity to go to Apple came up I leapt at it. I was familiar with the KeyGrip work and had read the one line corporate announcement about the acquisition of a team from Macromedia so I knew what I was getting into. I also knew Tim Myers from his brief stint at KUB and had met Randy Ubillos on a few occasions. Apple was in a big resurgence and I wanted to be part of that.

Free to pursue the evolution of the product Randy Ubillos and the team set themselves a goal of launching at the January 1999 Macworld conference in San Francisco. They hired a consultant to re-work the user interface, while maintaining the back-end KeyGrip code. Andrew Baum explains:

We started to evolve the use of DV, we scrapped the PC version and re-designed the UI dramatically - and for the better. We fine-tuned the use of QuickTime and the Mac O/S. Of course when Steve Jobs says something has to be done by a certain time, it gets done.

Excerpted with permission from John Buck's Timeline tumblr. The full book is available on Amazon and iBooks.