Last Thursday, a few dozen #AVTweeps—integrators, PR reps and even a few manufacturers—came together for the first-ever #AVchat session created and moderated by Linda Frembes, known on Twitter as @AVWriter.
The theme of the chat was how the turbulent economy has affected the health of the AV industry and how AV has seen integrators, manufacturers and distributers change to combat the storm.
Here is one reality that I think all of us agreed upon right off the bat: AV weathered the economic downturn reasonably well, but hasn’t recovered as quickly as all of us had hoped. Also, there are still quite a few obstacles that are keeping the different segments of AV from capitalizing on the opportunities that are coming in, even as the economy improves.
According to Dawn Meade (@AVDawn), who was among the most vocal of participants said, “to be brutally honest, our integration business is down about 65 percent since 2008, which is ugly.”
For sure, other integrators were singing (if silently) a similar tune.
There are still some vertical markets that are slow in picking up, like rental and staging and medical markets. But, Meade’s statistic is still surprising considering the general consensus that a few key vertical markets including education and digital signage are experiencing a boom as far technological advancement goes, along with an increase in public and private investment for AV applications.
So why aren’t all AVers able to capitalize on those segments?
For integrators, part of the problem is that they’re still operating using a traditional AV business model (making money off gear, not services) and haven’t been able to break away. Plus, while the economy has somewhat recovered, it hasn’t made gains sufficient enough to create more buyers and offset the rising cost of doing business.
Integrators are still dealing with “lots of tire kickers [and] few buyers” due to the lingering economic downturn, Meade said. DanielTehan (@TehanTECHguy), an AV consultant, agreed, saying, “Some clients have champagne tastes and can’t even afford the beer.”
Mike McMonagle (@ThatGeekGuy), an integrator from Houston, TX, went on to point out that a big issue is when online is selling the same brand for less than distributer costs, and small integrators can’t compete or make up the difference with extra services. On the Internet, end-users can sometimes find products for the same price or less than what distributers get.
But there’s a much broader reason that AV is struggling to harness opportunities in emerging markets. The battle lies in who AV has to share these new markets with, especially when it comes to AV’s most promising emerging vertical markets.
Despite gains in digital signage and education, as AV engineer Paul Konikowski (@pkhikebike) stated, opportunities don’t seem to be coming into AV proportionately. “DS, it’s like owning an automobile dealership that specializes in pickup trucks, and asking your sales people to sell motorcycles,” he said.
To which we responded, “If everyone’s selling trucks on the Internet, you better learn how to sell motorcycles”—at least for now.
AVTweeps all around see IT as a threat. And it makes sense: up until recently, AV and IT weren’t really direct competitors. But in the corporate world, however, IT has snuck in, especially to profitable segments such as digital signage.
Even InfoComm International (@infocomm) admitted that IT often holds the purse strings in some of these new areas. Meade clarified her stance on IT saying, “It’s not that IT is doing something groundbreaking,” she stressed, “it’s that IT exists in the corporate world. People know IT is.”
Later in the discussion, and everyone seemed to agree, Meade said that as a result of its corporate presence, IT is eating up the AV market and doing it cheaply in large part because IT established itself early in some markets.
Among some of the biggest concessions for integrators, custom integrator Nezo Audio Design and Integration (@NezoAudio) said that they have started doing small jobs it previously would never have considered.
Caster Communications Inc. publicist Nick Brown (@PRNick) mentioned that some AV installers have had to travel farther to look for jobs, even if it means leaving family or relocating temporarily. Others like integrator AVI-SPL (@avisplinfo) pointed out how the strategic adoption of teleconferencing solutions have had a positive impact on business and helped to mitigate some market pressures now and in the future in terms of cost savings.
To add insult to injury, market pressures have also been creating some major cash-flow issues as companies delay payments further than before.
If you’re a small integrator, you’ve got little leverage to work with. We (@ravepubs) said, “companies [are] stretching payment terms from 30 or 60 days to 90, 120 or longer. Little guys have no leverage.”
Meade took it a step further with this horror story: “The whole net-360 thing some clients are trying to pull makes it hard for us Little Fish to keep up!”
When Frembes asked which AV manufacturers have offered the best pricing programs and support in the market during the economic storm (and which have been especially difficult), there were a couple instances of name dropping (both positive and negative), but not too many specifics.
I think Warren Peterson, V.P. of Digital Strategy and Business Development for AV Science Inc. (@AVScience), most accurately summed up the attitudes of most companies when he said, “[It] seems more like ‘you must feel our pain’ versus ‘we want to help you weather the market.’”
I think you can safely apply Peterson’s statement to all segments of AV.
Everyone got punched these last couple of years and everyone’s scrambling to regain their footholds—sometimes at the expense of other AV segments.
The conversation wasn’t all doom and gloom, but some of the “solutions” that were offered, I could tell, left something to be desired by the group.
Among those solutions, a greater emphasis on education through certification and training was tossed around. Omega Audio Video, Meade and a few others were quick to point out how training, while appreciated, is often too big of a burden to be required for smaller integrators.
“Some of us only have 2 – 5 [people] in our AV division and we can’t close for a week for all of us to go to your little classes!” Meade said about training and certification sessions.
Nezo Audio agreed: “We’re always looking to get more certifications, but not at the point where I’m spending thousands of dollars to get them.”
When increasing online certifications was mentioned, there were key objections to that, too. Omega Audio Video said that online training was either “terrible” or that the products were too complicated for online training anyway.
Other solutions were poignant and gathered quite a bit of steam. To combat the cash-flow dilemma, Kimberly Lancaster, the president and founder of Caster Communications (@newscaster), suggested that “one idea [to combat slow-paying companies] is to set split payments, 50 percent upfront plus a discount on final if paid in net-30. It works well, even quarterly.”
Peterson suggested that manufacturers loosen up territory restrictions. “The ‘secret’ everyone knows,” he said, “is that only honest players follow them anyway.”
Both statements by Lancaster and Peterson were met with a slew of re-Tweets.
Small integrators said they have found support from distributers. “Distributors are a godsend to the Little Fish, especially when the big guys don’t play too fair,” said McMonagle.
HomeAV company Omega Audio Video (@OmegaAudioVideo) responded saying, “Without my main distributor I’d be out of business as a smaller company.”
So at the end of the day, most of the discussion skirted topics we’ve all heard before. The refreshing bit, though, was not the content of the conversation itself. The revolutionary thing is that for the participating integrators and non-integrators in the AVChat—whether they were driving the discussion or just keeping up with the conversation—had an arena in social media to discuss and compare their experiences with the economy the last couple years.
More communication is a good thing. A more unified AV is more equipped to find a solution that benefits the greater good. So I guess we’ll be seeing more #AVchats with larger and larger audiences.
rAVe welcomes that, and more.
Thanks @AVWriter for setting this up.
Editor’s note: Find out more about #AVChat at Linda’s blog here:http://frembes.com The next #AVChat is scheduled for Feb. 24 from 4 – 5 pm EST, topic TBA.