What happens when the AV service industry is commoditized?

I had a great discussion recently with one of my AV colleagues and friends, who I have known for about 5 years.  He works for a well known and successful AV integration company.  We were discussing AV service from an integrator’s perspective; specifically that in this difficult economy it seems some integrators are focusing less on profit and service and more on simply landing jobs.  Government bids are notorious for that- competition so intense that you can practically see the profit being squeezed from each job.  Many times resulting in a slippery mess of “You get what you paid for.”  However, it seems that more private jobs are going in the same direction; companies no longer competing on quality of service, but price.  Will this result in a commoditization of the AV service industry?  More importantly, if it does, what does this mean for AV businesses?  Will AV integration companies be forced to close their doors, unable to support the financial pressures that seem to envelop the service industry?

The stellar, stand out service companies will not necessarily fade into the background and become part of the rest.  End user feedback and word of mouth will always play a role in the service industry.  But will it hold less weight?  Is it an option for AV Service companies to refuse to bid or negotiate on the price of a project citing a higher level of quality than the other bidders?  Perhaps this is the only way for the best AV integrators to continue to be recognized and supported- those AV companies which firmly believe that quality of service cannot be compromised.  Further, it seems that this is the only way for our industry to continue to be recognized for its impressive service and knowledge.  This is how we set ourselves apart from other service industries which have become commoditized.  Personally, (and because I have a biased love of the AV industry) I think we are better than this.  How is it possible that we can allow end users to view AV service as a commodity?  Level of service is not so consistent or uniform between all AV service companies, as to be simply differentiated by price.

I have offered a lot of questions without answers.  I would love to hear your thoughts and continue this discussion.  Hopefully we will find that this commoditization is a response to the economy and will decrease in frequency as the economy recovers.  But let me propose one more question- once commoditization has occurred, is there hope of reversal?