Geo Focus: USA
As the shockwaves of the last recession subside, competing in the world’s largest economy continues to present a number of challenges for audio companies.
As the deleterious shockwaves of the last recession dim into history and market demands ebb and flow accordingly, competing in the world’s largest national economy continues to present a number of challenges for audio companies. Colby Ramsey investigates.
Despite widely reported downward pressure on margins across the board, some markets in the US are clearly showing signs of resurgence, signalling a return to strength for many American pro-audio businesses.
While increased competition from European loudspeaker manufacturers remains fierce, Rik Kirby, VP sales and marketing at Renkus-Heinz, believes this is indicative of the US market’s buoyancy compared to other regions, and suggests that persistent competition is resulting in an exceptionally healthy market from a domestic perspective.
Kirby says the loudspeaker market has seen a huge shift in focus towards sound quality and intelligibility over the last 5-10 years, driven both by end-user demand and the introduction of new technologies.
“In general the industry is doing a much better job communicating with end users and educating them in what’s possible with today’s products, so it makes sense that market demands have changed accordingly,” he says.
Dave Shadoan, president of rental firm Sound Image, concurs with this sentiment, describing the same economic pressure and competitive environment with regard to the integration and touring markets in the US: “Both markets appear to be strong, although in many ways it feels as though we are still in recovery mode,” he explains. “Audio manufacturing technology has improved significantly in the past 20 years and therefore, over the past decade, off-the-shelf technology has helped to level the technological playing field in a lot of ways.”
On the recording side, there may have been a number of high- and low-profile studio closures in recent times, but John Storyk, architect and principal at Walters-Storyk Design Group, believes there are still reasons for optimism in the studio and content production market.
“Studios are being created in many new and varied locations,” he says. “Virtually every project we see in recent times has an acoustic issue that needs to be addressed – either concerning isolation or internal room acoustic performance, or both. Our expectation for high-quality sound in constructed environments has risen to new levels of excellence.”
Meanwhile, manufacturers continue to feel the pressure as competitors offer extremely aggressive pricing in an attempt to buy their way into the marketplace. Shadoan explains that while anyone can buy the equipment, “it’s the people, their skill set and the overall service, that sets companies apart”.
He goes on to say that while manufacturers’ prices have increased, the rental prices have not followed suit, and he fears that “the long-term damage competing companies are doing to the industry is much greater than anyone can imagine”.
John Monitto, director of technical solutions at Meyer Sound, has a similarly positive outlook to Storyk when considering the economic health of the integration and touring markets, with some integrators turning work down or scheduling it out due to an abundance of business.
Educating the market
While some pro-audio businesses in the United States expand and show solid growth against the backdrop of economic downturn, maintaining margins remains a universal challenge for all.
Shadoan reflects on his earlier comments about companies trying to buy market share. “To provide modern equipment that is well maintained while we strive to offer top shelf service, a margin is required. We continue to improve efficiencies where we can, but this is not a trade off for the imbalance that has emerged,” he explains. “The expectations are high and the budgets are thin. It will not be sustainable over the long run for our industry.”
According to Kirby, the most crucial factor to consider when overcoming such challenges is to maintain a strong focus on educating partners and end users, clearly demonstrating and explaining differences between products to ensure that decisions are made based on performance, rather than just price or marketing.
“We’re forever at the mercy of imitators,” he says. “However sometimes it just isn’t technically possible to provide double the features for less money while still maintaining quality and results.”
Education is also an ongoing priority for the integration and touring markets, as Monitto explains: “Finding good technicians in the field and training them well to meet the growing demand is important. Technicians benefit from apprenticeships to hone installation skills so they are working efficiently and accurately.”
Storyk on the other hand is cautious of the web’s boundless educational capabilities, and warns that separating the important from the ‘voodoo’ will become more difficult as information becomes more readily accessible.
Despite this caginess, there are positives to the internet’s influence on the industry. Networked projects across the board are becoming commonplace, as more well-equipped pro-audio businesses look to integrate some element of networking into their products, particularly in the loudspeaker market.
Storyk is especially excited to witness the emergence of improved DSP-controlled audio, along with better acoustic modelling and prediction software. He explains that in terms of new technologies, the audio/acoustic industry in the US is a small community and has few political boundaries compared to other regions and industries.
Furthermore, Art Noxon, acoustical engineer and president of Acoustic Sciences Corporation, is seeing a significant shift in the home studio space due to the breakthrough of new technologies. He points out: “The reluctance of engineers to make substantial investments into their own home recording studios continues to diminish while the interest and opportunity for engineers to work and make records at home instead of in downtown studios is on the increase.
“The technique for high-end home recording studio environments has been in the wings for over 20 years but only recently has the need for high-end home recording environments begun to be felt in the industry,” he adds.
Meanwhile, other sectors have been attempting to streamline their offerings in a number of ways. Shadoan asserts the importance of “vendors’ abilities to respond to development trends, as equipment packages become lighter, smaller and more well-integrated with personal devices”.
When it comes to buying habits around tailored loudspeaker systems, Kirby says that Renkus-Heinz has witnessed a ‘tremendous growth’ in steerable technology, allowing many applications to “achieve results that just weren’t possible ten years ago”.
Monitto observes that column arrays are being looked at more and more for airports, churches and other spaces that are acoustically challenging with long reverberation times. He reveals: “Designing systems with suitable headroom to maintain linearity has been discussed more and more. Audiences and mixing engineers are looking to systems that have lower distortion and sufficient headroom so there is less fatigue when listening to music.”
Kirby backs up this testament, citing the scale of the worship market in particular as one of the unique aspects of the US region at the moment.
“Certainly, there are similar projects worldwide, but we see the highest density of these high-technology projects in the US,” he says. “As churches vie to attract new members, their AV solution can be a big part of the attraction.”
The lie of the land
While the US pro-audio market as a whole remains generally stable, certain legislation and regulatory laws can have ubiquitous effects on the industry, causing some businesses to rethink their strategies – or not, as the case may be.
Shadoan believes that there is a growing awareness with regards to regulation in the US. He explains: “Our industry has managed to police and regulate itself in a fair way and we have managed to keep the regulatory commissions at bay. Organisations like The Event Safety Alliance are doing great things in this department and it’s long overdue.” He goes on to mention the requirement of the audio system to be a component of the life safety system as a related legislative development in the integration and installation sectors.
Within the loudspeaker arena, Kirby describes updated legislation concerning public places. “NFPA72 focuses on spoken word intelligibility,” he explains. “It aims to ensure that safety messages can actually be understood rather than simply be loud enough.”
On the other hand, Storyk describes stronger state legislation as having a particularly positive outcome on the studio design and content production market, and believes that it is creating a developing trend that will continue.
“We see more and more local building codes adapting to sophisticated new environmental noise regulations, and more jurisdictions adapting frequency-based and time-sensitive community noise codes,” he says. “This has led to improved acoustic isolation performance demands for new projects (specifically with respect to noise and isolation).”
Noxon adds that this may be a contributory factor to the increased investment into the wide gap between expensive designer built studios and economical DIY home built studios, a gap that is being filled by a new generation of high-end home recording suites.
While the US market still seems to be a leader both at technical and design levels, which ties in with the country’s status at the top of the economic pile, there may still be untapped opportunities in other regions. Storyk says: “Africa, China, the Middle East and Latin America are starting to develop their own robust market places and thus will begin to create their own nation’s set of audio/acoustic consultants and manufacturers.
“The audio/acoustic community has fewer political boundaries than other industries, probably because we all share our love for music – or at least I hope so.”
Additionally, from a touring perspective, the US market remains healthy and busy compared with that of Europe, which some believe has taken a hit due to the quantity of large-scale festivals. As Shadoan explains: “It has become the standard for bands to simply book the festival circuit in the summer where they receive strong guarantees, carry less equipment and maintain a smaller crew. From what we understand, the ticket sales at many of the European festivals are dwindling due to the saturation in the festival market.”
Inevitably, technological advancements will continue to play a key role in the future of the robust US market as offerings become more affordable, increasingly more capable and easier to implement.
Monitto is confident that we will see more attention paid to ‘good audio’ in the future: “The industry will be looking more carefully at incorporating good, low-distortion source material and systems into venues to make sound reinforcement or playback less harsh and fatiguing.
“So much of the listening public are hearing over-compressed playback audio sources and think that it’s the norm.” He goes on to predict that the live industry will see more and more designs implemented where systems are providing good, clean audio with effortless gain, low distortion and even venue coverage.
So as businesses in the US remain optimistic across the board due to exponential demand, it is difficult to imagine a time when the juggernaut will begin to lose traction. While downward pressure on margins seems to pose the biggest test for small and large-sized players alike, it is a challenge that is arguably balanced out by the sheer scale and momentum of the market as a whole.