By James Kirby
Futuresource Consulting

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. Against the backdrop of canceled events and closed public spaces, many markets experienced significant decline during 2020 and will take years to recover. Despite declines over the past year, the installed audio markets have provided a strong base of demand for many manufacturers and continue to show the fastest levels of recovery. This is especially the case for commercial audio, which is home to PA/VA, background music and conferencing applications.

The corporate, government and higher education markets have been key to the positivity of commercial audio over the past year. Corporate was one of the most positive areas for 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 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, while relatively consistent student enrollments 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 videoconferencing calls, while the hybrid learning requirements also pushed institutions to reevaluate their entire 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 non-essential 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 retailer’s post-pandemic will be around 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 this 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.

Significant challenges faced the professional audio market during 2020, and while many of the same conditions apply this year, the commencement of vaccine roll-outs and a clearer timescale of recovery are providing greater confidence across the sector.

Find out more about Futuresource’s Professional Audio market report here.