Despite difficult economic conditions across the globe, Switzerland has seemingly managed to abandon the economic sinking ship.
The country currently enjoys the highest nominal wealth per adult in the world, according to Credit Suisse, and the eighth-highest GDP per capita. But how does that extend into the pro-audio market?
Roger Roschnik, CEO of studio monitor maker PSI Audio, brings us up to speed on the current state of play: “The climate and market are very good and healthy compared to neighbouring countries. People still have money to spend on music and other hobbies and government spending has not been reduced.”
The country also enjoys a strong position in the pro-audio industry as a hub of distinguished manufacturers: “There are a lot of brands in Switzerland that are strongly valued, such as Studer, Revos, Nagra, Thorens, Lenco and PSI Audio.”
And there’s hardly been a better time in recent years to be such a manufacturer; Claude Cellier, president of Merging Technologies, has seen his company perform well over the past three and a half years in part because of the security that Switzerland’s financial climate provides.
“Our company has fared pretty well in the current climate since the Swiss National Bank decided to top the Swiss franc versus the euro currency to 1.2, allowing us to benefit from a relatively stable and predictable competitive environment,” he explains. “One of the big bonuses of being a Switzerland-based manufacturing company is usually the stability that our environment provides. Political stability, economic stability, social stability – all are deep-rooted givens that Swiss businesses enjoy as premises to their operations.”
Grey skies ahead?
So the country’s fertile economic ground appears to contribute to the industry’s recent comparative successes. But just because it may not ostensibly be struggling as much as its neighbours does not mean it doesn’t have its own unique challenges; with the lucrative financial landscape left uncertain as a result of exchange rate fluctuations in December and January, Cellier further notes: “Not only is the Swiss market a relatively small market, but on top of that it is further divided into four different language zones, which doesn’t make things simpler to manage.”
However, such a multi-faceted culture does afford the shrewd manufacturer an opportunity to capitalise: “The per capita expenses are probably one of the highest in the world, and due to the different cultures that coexist in our country it makes it an invaluable test bed for new product introductions,” Cellier adds.
Facing the music
The markets perhaps closest to Switzerland’s heart, however, are the live and studio sectors, and music has always been a large part of its culture, even when compared to the rest of Europe.
“Switzerland has always had a vivid music scene,” states Christian Müller, studio manager at Powerplay Studios. “Because of the strong financial situation here, young amateur bands can afford to record music.”
And on the live scene, Keith Watson, global marketing director at Studer, comments that the country “has a vibrant festival culture”, with some of the biggest festivals in Europe such as Paléo Festival Nyon and Montreux Jazz Festival.
Now, a love for the medium is a great thing, but does it keep the money flowing? “Music has never been very lucrative in Switzerland,” explains Roschnik. “So it has attracted passionate people more than greedy people.”
But passion alone doesn’t generate a smooth business climate in the studio or live sectors, as Müller points out: “We are very small, so making a living as a musician is not so easy, even with touring.”
“Individual purchasing power is high but the market is small with less money in the music industry than other European countries,” he continues. “We are still moving from a market of music professionals to a market of music lovers. This means many more potential customers, but with less money, less technological knowledge and more emotionally driven.”
What you don’t often hear, however, is the sense of tentative optimism from those in the industry as, rather than lament the changing climate as it slides into challenging and unfamiliar territory, companies instead seek to capitalise on the benefits of the ?new market.
”The drop in margins was less of a shock to the industry than in countries with formerly large and lucrative music industries such as the UK, the US and Brazil,” remarks Roschnik.
Müller explains how his studio has discovered new business avenues to support existing and ailing methods: “We’ve opened new markets, such as the digitising of audio archives. In the next years, all of our tapes need to be safe before they ‘die’. We are definitely the studio with a huge know-how in analogue and how it is connected to the digital world in daily use. So transfer is a strong market for us. Once, machines seemed to be a risk – now they are an opportunity.”
A major trend that becomes apparent when examining the Swiss market is the consensus ?among professionals that quality in audio is making a comeback.
This belief is corroborated across the country in a number of sectors as professionals hold high hopes for a more audio-savvy consumer base.
“The past decades have been an endeavour to provide music to people wherever they are through connectivity, file compression, small devices and so on with little or no focus on quality,” Roschnik details. “People are now rediscovering sound quality and demand for high-quality music, equipment and listening conditions will continue to climb.”
From the manufacturing viewpoint, Daniel Zurwerra, AV consultant at install specialist Virtually Audio, comments on how demand for audio quality is beginning to overtake demand for video quality, and how it may affect production: “I see more and more people realising that sound really affects us. Thus, it’s worth it to design products not only for the eyes but for the ears. For instance, the most annoying thing in a videoconference is bad sound.”
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In the studio, demand for high-quality audio is also rising, with consumers seeking out the aid of professionals to secure it, as Müller remarks: “The market is recognising that good sound needs a good ear from a trained engineer. So that service will remain a need to consumers.”
And demand is even burgeoning in the live sector, with Watson commenting: “The expected quality level in general is very high. There are a lot of venues and events often competing within a very small area, and this also applies to rental companies.”
Upon further examination, such coherence across the industry is further indicative of the key role that audio quality will play in the future of the Swiss market and beyond; it is a key differentiator in the market. And this differentiation maintains a cross-sector relevance.
Roschnik argues that quality is a proven incentive to customers and a recipe for success: “We produce loudspeakers that are the last element in the music chain before the ears and can’t be dematerialised. Our company has always produced handmade, innovative and top-quality products that users will typically keep for over 20 years. Our most powerful sales weapon is comparative tests and blind tests that we consistently win. The professional can trust what they hear.”
On the recording side, Müller reasons that Powerplay’s service offerings will help it stay ahead of the curve in the changing climate, embracing emerging trends with a workflow that incorporates home recording for overdubs before final mixing in the studio, making things more affordable and convenient for clients.
“The musician can lower his production cost and still has a good quality sound. He will spend more energy on the quality, because everybody can work at home now. So, if he would like to stand out from the bulk, he has to bring his music to another level.”
Roschnik attests that this climate may not actually be entirely new, but rather its latest manifestation and that, in the manufacturing sector at least, the same techniques used in the past will secure safe passage forward.
”For many decades Switzerland has had to compete on innovation and know-how rather than price,” he adds. “We plan to continue doing what we do best: design and manufacture the best quality speakers we possibly can, based on scientific evidence and subjective listening.”
And it appears as if other pro-audio companies are prepared to follow suit.