The professional audio market has traditionally been an area of long-term growth, driven by macro factors and innovation across a range of vertical and product segments. However, the outbreak of COVID-19 came as an unprecedented shock to the industry, negatively impacting many of the industries which previously provided long-term growth for audio equipment. Significant challenges faced pro audio during 2020, and still many of the same conditions apply this year, however the commencement of vaccine roll-outs and a clearer timescale of recovery are providing greater confidence across the market.
Touring & Rental Shows Growing Confidence
The touring and rental market has been the most negatively affected area of professional audio during the COVID crisis. A common phrase to describe the challenge faced by the events industry has been “the first to go, and the last to come back;” alluding to the devastating halt to live events early-on and the long-term implications of social distancing for the industry. These pressures caused significant declines in revenues for 2020, forcing many manufacturers to make significant cost cuts, and pushing some major rental companies into liquidation.
Despite the challenges faced by the touring and rental sector, more clarity and confidence is building around the future of live events. The market is still a long way from reaching pre-COVID levels, but a good rate of recovery is expected in the second half of 2021. These projections come alongside rising vaccination levels in some key countries, namely the U.K. and the U.S., as well as clearer timelines from regulators on the return to “normality.” Timelines from the UK government on the complete re-opening of the economy by the 21st of June are promising, and certain states in the U.S. have begun to lift restrictions on events. At the time of writing this, the states of Florida, Oklahoma and Texas now allow events at full capacity, although a cautious approach has been taken by many residents and businesses. Meanwhile, more states have eased restrictions on events to 50% capacity, including Maryland, Missouri, and Louisiana.
Live Sound Installations
The installation market for professional audio has been an extremely important area for the industry throughout these challenging times. Although not free from the effects of COVID by any means, the installation verticals have provided a healthier base of demand and have been a life raft for some. Particularly relating to live sound, the installation markets have kept many companies in business over the last 12 months. In H2 of 2020, the live sound installation markets showed significant resilience and echoed early signs of confidence in the return of live events. Larger projects with longer timescales fared better, but even some smaller venues with cash began to re-invest in quality equipment. This was noted particularly in areas where events were the secondary function of the business.
A live sound vertical showing particular positivity throughout the crisis was houses of worship. Compared with other venues, houses of worship demonstrated much more resilience. This was primarily due to the nature of donations being more resilient than event tickets, but also many facilities opened sooner than concert venues were allowed, and the industry was able to supplement physical meetings with virtual interactions more effectively. This was all comparatively good news for pro audio manufacturers, especially considering that in the US, worship is one of the largest install markets for live sound equipment. It’s reported that throughout the crisis, many houses of worship saw the opportunity to invest venue improvement and refurbishment as a way to encourage the congregation to return once restrictions had been lifted. Despite this, there were of course still many challenges for worship leaders throughout this time, and donations were down significantly for many. The result was a decrease in sales for pro audio vendors, but much less severe than in other verticals.
Installed Audio — The Fastest to Recover
Outside of live sound, the installed audio markets experienced overall more stability throughout the pandemic. The corporate, government and higher education markets were key to this, however, background music and PA/VA also offered a more stable base of demand. Corporate audio was one of the most positive areas of the industry over the past 12 months, driven forward by work-from home trends and the return to the office. Despite installed audio solutions being subject to project delays at the beginning of the pandemic, the overwhelming need to equip workplaces for the return to work created significant demand for audio products in the second half of the year. The long-term cultural impacts of the pandemic are only expected to see this market continue to grow, as companies worldwide cement long-term work from home strategies.
Similar workplace and communication trends were also witnessed in government and higher education, with conferencing and hybrid learning providing significant positivity for audio. In government applications, remote communication was a priority, however, spending remained positive across many audio-related activities. This was mainly because of the prearranged nature of budgets within the sector, which saw refurbishments of courtrooms, offices and other government buildings continue and even accelerate after lockdowns, with purchasers keen to spend their allotted budget as quickly as possible. In the case of higher education, allotted budgets also had an impact on the stability of spending, whilst relatively consistent student enrolments for the year also helped. However, more than anything, a rapid increase in the need for hybrid learning systems created significant demand for audio. At a basic level this included a microphone or headset for video conferencing calls, however, the hybrid learning requirements also pushed many institutions to completely reevaluate their AV strategies, driving demand for a range of lecture capture and sound reinforcement projects to go ahead while students were away.
Although not as positive during the pandemic, the PA/VA and background music markets take a significant share of pro audio and were important to overall market stability during the crisis. Retail is a key vertical here, and the restrictions on nonessential retail during the pandemic saw many delayed projects and significant levels of decline. However, the retail industry has benefitted somewhat from online sales throughout the pandemic, putting it in a good position for the return of footfall. One of the main challenges for retailers post-pandemic is encouraging shoppers back to the high-street, and it’s likely that improving the shopper experience will be key to this, providing a revived focus on AV strategy. Hospitality has also been in a similar position throughout the crisis, although hasn’t benefitted in the same way from online sales. Despite this, in many countries smaller hospitality establishments, such as bars and restaurants, were opened quickly at limited capacity, meaning at least some revenues will be reinvested whilst exiting the pandemic.
The hotel and transport sectors are likely to have the most long-term impacts from the virus across PA/VA environments. Both industries have been severely impacted by bans on international travel. The transport industry itself has seen significantly diminished revenues across aviation and domestic transport following stay-at-home advice. Some of this negative impact will move beyond the opening of economies, with business travel expected to be impacted somewhat longer term. Fortunately, in many cases, this sector relies on government funding for expansion, which has provided some positivity throughout the crisis. On the other hand, the hotel and cruise industries don’t have the same government backing. It has been a challenging time for these markets, with tourism down and business significantly diminished. It’s likely that international tourism will be impacted for some time, with many travel bans/quarantine periods still remaining in place. Hotels will experience a return to normality once travel restrictions are lifted in most countries, however, this won’t be for some time. Despite this, some positivity is being experienced for audio where hotels are refurbishing to attract local business in the mid-term. In the long term, it’s likely that hotels will increasingly look outside of their core function of accommodation, hoping to make up for lost time by attracting more business from events and other hospitality functions.
Conclusion — A Clearer Path to Recovery
Despite many severe declines witnessed across professional audio over the past 12 months, full recovery by most key verticals is expected by 2023. The installed sectors will recover fastest, although challenges still lay ahead for venues and establishments which have been badly affected during the pandemic. The events sectors have been hit hard by this crisis, however, 2022 is expected to be busier than ever for promoters and rental companies alike. It will take some time for the pro audio industry to heal, and for businesses to reach full strength, but there is still much to be excited about over the coming years. New opportunities for growth in areas such as conferencing, hybrid learning and content creation will be key, however even demand for public spaces, gatherings and events will be higher than ever. Over the coming years, markets will recover and grow beyond previous levels. Professional audio will again become an increasingly important part of business functions, powering many of the social and public activities which have been missing from our lives over the past year.