Geo Focus: Canada
Matt Fellows explores the situation in the Canadian pro-audio market.
With the second-largest land mass in the world but a population of only 35.5 million people, Canada has always faced unique challenges in the pro-audio industry. Matt Fellows explores the situation as it is today.
Often overlooked in the business, Canada’s pro-audio market caters to a population of just over half that of the UK, a country it dwarfs 40 times over. This has meant many Canadian pro-audio businesses have found themselves in a prohibitive situation, focusing primarily on the importance of overseas business. But in the wake of financial crises over the past decade, how is the market faring within Canada currently?
It may be tempting to write off Canada as an ailing addendum to its North American neighbour, the US, and therefore victim to the same well-publicised financial woes, but industry experts are quick to dispel these assumptions. Dave Dysart, president of HHB Canada, points out: “One key consideration is that Canada did not suffer nearly as badly through the last recession as the US did. Our banking laws protected our economy from the effects of the sub prime mortgages, and stock market variances.”
Barry Steinburg, sales manager at Xilica Audio Design, echoes this sentiment: “Canada’s banking system, government protection structures, and lack of debt meant that Canada was less affected by the economic downturns around the world than many other countries.”
Having safely dodged the recession’s bullet, the current pro-audio climate is tentatively positive, with most people we spoke to agreeing that things could be a lot worse. Danny Bracken, senior production account manager at rental and staging company Allstar Show Industries, comments: “The market is somewhat healthy. Not overly but far from being in a recession. We’ve been experiencing a slight growth here in Alberta for the past five years – sometimes up to 35% per year.”
Steinburg believes that “the pro-audio market in Canada is stable, quite healthy, and growing”, and Peter Janis, president of Radial Engineering, thinks “as a whole Canada has enjoyed a very healthy economy over the past several years”.
Dysart notes: “Contracting and live sound markets are quite strong in most territories. We have an active Canadian music scene, and Toronto in particular is one of the strongest live music markets anywhere.” On the other hand, however, “the MI market is somewhat soft in most areas, although business appears to be picking up. It is dominated by one retailer, who has over 65 stores. We are seeing the rise of a new generation of specialist MI retailers, who focus on specific market segments and appear to be able to succeed even in a market dominated by one key retailer.”
So the market appears to be holding steady in spite of financial distresses, but how has it fared under the forward march of technology affecting the industry? In the studio and recording markets, president and founder of Holophone and Area 51 Productions Michael Godfrey believes that the “current industry climate is poor and getting poorer for studios – there are too many small ones and artists can now compose at home”.
However, Dysart disagrees, arguing that the market is on the up: “The recording market has recovered to a great degree. We are seeing the return of larger studios that understand their role in the production process and market their facilities accordingly. Some examples would include Noble Street Studios and Revolution Recording in Toronto.”
This paints a picture of a market saturated, but not one where larger studios are out of luck. However it is a contested arena thanks to the closing quality gap between professional and personal recording equipment and the latter’s overall rise in availability. It can be seen that Canada, like so many other markets, is feeling the effects of the rise of ‘cottage industry’ and will continue to feel it for the foreseeable future, as Janis notes: “Cottage industry is the framework moving forward and business opportunities can often be located anywhere so long as there is electricity and an internet connection.”
While this places the market upon an uncertain and potentially inert landscape as Godfrey asserts, Dysart believes that this is instead an untapped opportunity for some industry sectors rather than a death knell: “The constantly increasing amount of horsepower available allows for the production of top-class material outside of the traditional model. The smart studios and production companies recognise this, and cater to this method of working.”
Janis certainly agrees on this mentality of the ‘smart’ company, highlighting how he has capitalised on this market shift, overhauling production focus and design to match demand: “As budgets become constrained for recordings, there has been a shift to home-based recording. This has spawned an increased demand for higher performance, pro-oriented acoustic treatment. With improved PA systems and the universal adoption of in-ear monitoring, there is now a greater focus on improving the signal path from the instrument to the PA. This has increased the demand for higher quality direct boxes. And with so many artists working at home and then heading on the road, the equipment that they use in the studio now must play double duty. So this has brought awareness to the importance of product durability.”
The internet is another area where technology has changed the rules of the game. Companies have been forced to rethink their market penetration approach as consumers find themselves increasingly well armed. This is happening worldwide, and Canada is no exception, as Dysart explains: “We have seen similar changes to those seen in other markets. The increase in web-based retailers is occurring in Canada, although perhaps not as quickly as in other countries. The consumer is more price savvy, as the internet is a great leveller when it comes to comparing prices. As we all know, you get more power at a lower price than ever before.”
James Dreyer, owner of Dreyer Bros Sound, believes that he has felt the effects of this shift in the install sector: “Ten years ago we were making an easy 25-point margin on most sales – online retail has done a good job of killing that margin overnight and now we are lucky to see a seven to ten point margin on sales.”
So how will the industry sectors unfold in the future, now that the market has stabilised and is enjoying gentle growth? Dysart says: “We will continue to see growth in the live sound and recording markets. Regardless of how much content people can access over the web, there is still a desire to see live music and events. Delivery methods will continue to be refined, and broadcasters will need to keep up. The links between broadcasters and telecommunications providers will become tighter.”
Zoning in on the recording sector, Janis comments: “I believe the shift will continue towards smaller, more agile recording and post facilities that will offer ‘value-based’ production for artists, TV and film. Gaming will continue to play a major factor, and the shift towards improved audio will likely move the consumer up a notch from compressed files, but audiophile quality will likely be reserved for the few.”
And focusing on installation, he comments: “The move towards fully networked solutions means that the audio contractor now must become an IT specialist. This will cause multiple markets to converge, including home theatre, security, hi-fi, sound contractors, AV contractors, and anyone that is supplying technology to businesses or homes. Entrepreneurs will shift to solution-based offerings with service contracts. Major corporations will view the ‘connected home’ as the future and competition for products and technology will be fierce.
The awareness of better audio coupled with an ageing ‘baby boomer generation’ will force restaurants, banks, airports and theatres to pay greater attention to improving audio intelligibility. This will create demand for better audio systems with an ear towards better acoustic treatment.”