An In-Depth Look At A Key MI Market Segment

By Dan Ferrisi

When considering the scope of the music products industry, one easily zeroes in on guitars, basses, drums, keyboards and all the other sexy stuff that immediately comes to mind when one thinks about rocking the house on stage or laying down tracks in a studio. Equally critical to delivering music, and ringing MI retailers’ registers, though, is pro audio equipment: speakers, amps, mics and more. Our May issue hosts our annual focus on the pro audio segment of our industry; in this story, we will take a much closer look at it.

In our search for insight into the pro audio segment, we turned to four of the best in the business, whose in-depth knowledge (and affiliation with best-of-breed companies) will illuminate our perspective: Richard Ruse, Senior Director of Global Sales, JBL Professional; Ray van Straten, Director, Marketing Communications, QSC Audio Products; Mark Menghi, Director of Marketing, Samson Technologies; and Philip Betette, Vice President of Marketing and Sales, Yorkville Sound.

Our first question was a simple one: Looking back on 2011 and judging the first months of 2012, what would you say is the relative strength (or weakness) of the pro audio segment of the MI industry? How robust is your own business at this time?

According to van Straten, “This is a great time to be in the pro audio business. The best market data we have available supports our own conclusions that sound reinforcement, as a category, continues to flourish. As a company, we are capitalizing on the major shift from passive loudspeakers and power amplifiers to active (powered) speakers. Just a couple of years ago, passives outsold actives by about 50 percent in the retail space. Today, active loudspeakers outsell passives two to one by revenue. We see that as a win/win/win for customer, dealer and manufacturer. A sale of an active loudspeaker means the customer (usually) gets a higher level of performance and convenience, the dealer typically makes more profit on the transaction and has an easy, low-maintenance product to put to work in their rental inventory, and a manufacturer like QSC sees far fewer warranty and service problems, owing to the inherent closed-system design. Our K Family of loudspeakers has struck a chord with customers across a very wide range of applications, and our business is most certainly enjoying the benefit of that.”

Betette explained, “Looking back over the 2011 year, there was quite a bit of change. I think we were all surprised to find 2011 as difficult as it was. Jumping ahead, I would like to say that 2012 will be better…but I said that about 2011.

“This year, though, we have a ‘learning curve’ on our side to help. Some of the larger problems in 2011 were outside of our relatively small segment of the music industry’s control: the economy, unemployment, fuel prices, etc. Most retailers, distributors, manufacturers and sales firms have made the necessary changes in their business to operate in this environment of economic uncertainty. The pro audio segment of the music industry is difficult, because it is so small and vulnerable. To capture the interest of our customers, we have to continue to innovate and add value to the products we introduce. Remember that we are really part of the larger overall consumer multimedia market. This means the products we introduce need to complement the consumer buying trends that we compete with for income.
“Yorkville has been successful at doing this because we watch consumer buying habits, work with our retailers and invest in modern technology.”
Menghi stated, “The strength of the MI industry is that every company has great products that are ‘must haves’ for musicians at every level of the game. Samson’s strength is that we are always looking forward. Whether we’re upgrading older products or coming out with all-new heavy hitters, we are always thinking about the future ‘needs’ and ‘wants’ of all musicians. For the 2011 to 2012 fiscal year, Samson has brought some great new products to the pro audio world, and some new focus to our approach. And, I assure you, we’ve got some amazing things in the works for 2013.”
And, finally, Ruse remarked, “We’re seeing greater velocity over the past two quarters, and we feel that the business is becoming a bit more predictable. Although we have had a major operating software change and suffered a bit due to the learning curve, the market for JBL is strengthening. Powered speaker sales are vigorous, while passive sales still constitute a substantial share of our business. Overall, we are positive about the future.”
Our second question was this: What broad trends are shaping the pro audio market in MI at this time? How is the market evolving, and what are the principal factors directing the evolution?

According to Ruse, “The obvious trend is the shift from passive to active speakers. Consumers enjoy the simplicity and convenience of the set-up and tear down. Our PRX600 Series have on-board DSP that allows us to tune the speakers for optimal performance, and we can attain a level of performance that is difficult to duplicate with the standard complement of EQs and compressors. With that being said, there are hundreds of thousands of legacy amplifiers, both in portable systems and in fixed installations, that consumers continue to employ. Short of changing the entire system, the single most profound way to improve your system is by upgrading the speakers. The speakers are the ‘voice’ of the system, and a properly tuned speaker functions well in real-world environments where the ambient room noise, the acoustical energy of the live band and even the humidity can impact intelligibility.”

Ray van Straten commented, “As I mentioned previously, active loudspeakers are a freight train that keeps on coming, and we expect to see that trend continue for some time. Undeniably, the introduction of more powerful digital signal processing and networking to retail-friendly pro audio products is moving the bar. Technology that was previously only found in much higher-end gear is now finding its way ‘down’ to the retail segment. I say ‘down’ a bit reluctantly, as technology can be a great equalizer. Today, a pro audio retailer can put a product in its customers’ hands that, in some aspects, rivals gear that is much more expensive. Up to a certain price point, the gear is actually quite ‘good enough’ for the majority of performance situations the retail customer is likely to encounter. I feel this also bodes well for the retailers, in that a customer who fully embraces technology is more likely to want the newer, better, faster thing a short time down the road. Once you experience mixing on an iPad over Wi-Fi while moving about the audience area, it’s hard to go back.”

Betette explained, “The broad trends that are shaping our pro audio market are the trends that are occurring at the ‘street level.’ By that, I mean, for a product to be successful, it has to be relevant. It has to matter to our customer and the end user. The products that have the best success are those that are powerful yet simple to use, represent value but are not cheap, and are high tech but not over-engineered. Some of the most successful product introductions recently were innovative products that offered a new approach for pro audio consumers to help them with their creativity. The growth of our Yorkville, Apex and ART brands represents an excellent example of working with our customers to identify trends and products that work for them in terms of solutions for their customers. I see the market evolving due to our consumers’—our end users’—state of mind. That is to say, this is a plug-and-play world where the product has to be intuitive and offer new solutions. Our customer will continue to trade up, buy new products, and look for new and interesting tools. Our job is to create these new products that excite and add to their projects and better them sonically and creatively.”

And, finally, according to Menghi, “The one current trend in the MI industry is non-traditional ‘instruments.’ Thanks to improvements in technology and programs like Native Instruments’ Traktor and other programs in that realm, there is a big push to capture the attention of the ‘non-musician’ and young music creator. These people may not have traditional instrument abilities, but they’re still able to create music through the digital audio medium. Technology is one of the biggest factors driving the current evolution of the MI market. Ten years ago, if someone said that Samson would create a microphone that could be used to record music directly to your computer, people would have said you were crazy. Today, we have developed an extensive line of USB microphones to cover any computer recording application, whether you’re in a home or professional studio, or on the go. Twenty years ago, the idea of an iPad was ‘future talk’ but, now, it’s current and the tablet market is revolutionizing the way people live and connect. The more that technology influences our daily lives and culture, the more it will influence our musical output, as well. MI manufacturers now embrace new technology and use it to their advantage. This past NAMM, I saw a slew of incredible new products that are focused on iPad integration.”

For our third question, we turned to pro audio retail selling: Music retail storeowners are frequently experts in playing guitar, banging drums or playing piano, but might not have the same personal connection to pro audio gear. What are the keys to being effective in selling pro audio in MI retail stores?
Menghi explained, “Don’t be afraid of change. When invented, people embraced the wheel and the light bulb, and look how far we’ve come today. Retailers should be up to date on new technology and cultural trends. There shouldn’t be whole product lines that young musician customers are only getting from online sources, rather than walking into physical stores. There will always be a market for traditional instruments, but don’t forget the ‘non-traditional’ technology instruments.”

Ruse remarked, “Understanding the fundamentals of gain structure and flow logic: No matter the quality of the equipment, if it is set up incorrectly, the results will be underwhelming. Also, being able to qualify what a customer’s true needs are and being able to realize that ‘selling by the numbers’ (i.e., specs) may not get the job done. Wattage ratings, sensitivity, frequency response and power ratings can all be determined by using very gracious science. The ‘proof is in the pudding’; set up the system correctly and listen! Let your ears be the final judge.”

According to van Straten, “It’s going to be important to have someone on your staff that is able to sell PA. The gear rarely sells itself (a quick bow in reverence to the ADAT and the DX7.) But, here are the two biggies you simply cannot ignore: training and, if you have a showroom, demo-ready inventory (oh, and electricity). You must insist that your pro audio manufacturers provide your staff with regular training and support, most especially if your audio salespeople are new to the category. Your salespeople need to know how to hook up the gear, review its key features and benefits, explain how the product compares to other products from manufacturers you don’t sell (your reps will be happy to oblige) and, finally, how to demo. The more gear you can have hooked up and ready to play, the better. Constantly having to get to the back of the racks and loudspeakers, plugging and re-plugging cables from among a rat’s nest of wires, and then crossing fingers to make sure everything was done correctly is not conducive to a smooth transaction. Have lots of high-quality audio sources ready (not MP3s) from across a broad range of musical styles at hand so that there’s something of appeal to listen to for everyone who comes in the door.”
Lastly, Betette commented, “I think this is one area where the pro audio industry has benefited greatly from the current trends in modern technology and music. All those music retailers who play instruments realize that musicians want, need and love to record their creations. From an economic point of view, this makes the pro audio market more than an add-on: It is an extension of business for every combo retailer. The modern home recording/project studio is a logical extension for every musician. These home recording studios are exciting, fun to work with and help all musicians to become as creative as—or more creative than—they ever dreamed. The product available is not only recording products and sound reproduction products, but also actual tools and instruments in their own right. I don’t believe there is a successful retailer in business today that does not understand the need to support pro audio at some level in their store. Their customers are involved in pro audio, home recording or project studios. They need to be able to offer these products to them. An effective way to sell these products is to dedicate space to demo and teach customers how to use the products. It is very effective to let an end user hear and see the results of editing and recording their own music.”

For our final question, we zeroed in on product innovation: Name one of your company’s most recent product introductions, discussing what it means to the pro audio market and why it’s an innovative launch.

Clearly, the
pro audio
segment of the MI industry is enjoying considerable success and continuing to power ahead.

Starting out with Betette, he said, “It is difficult for me to name just one recent product introduction that has been innovative and successful for our company. We have a few very strong and popular brands that impact the pro audio market in different ways. Our strongest pro audio brand is ART: Applied Research and Technology. This is the ‘go-to’ home recording product that every retailer in the MI industry knows and trusts, and is the brand that every home recording/project studio musician and engineer knows and trusts. It is one of oldest names in this high-tech area and one of the most respected. Our family of tube mic preamps, tube compressors and tube channel strips continue to evolve as we constantly employ the creative application of modern technology. Our Apex brand of microphones and headphones is an example of a strong, well-respected line of products that supports the pro audio market. We offer  mic solutions for every aspect of home recording, project studio, live sound, pro sound, conference and corporate use. These products offer strong value for our end users, and provide rich add-on or go-with products for our retailers. The key to the success of Apex is paying attention to market trends and being ready to offer value-based solutions for creative individuals who are looking for ways to create and add excitement to their projects.”
Menghi stated, “At the 2012 NAMM show, Samson introduced the Graphite 49 and Carbon 49 USB MIDI Controllers. We are bringing both items to consumers at price points that are unheard of, making them affordable for everyone. The Graphite 49 is packed full of sliders, encoders and semi-weighted keys. Both offer professional functionality and feel at a highly competitive price. And, by utilizing Apple’s iPad Camera Connection Kit, the Graphite 49 and the Carbon 49 will run off of direct bus power from the iPad. In addition, both items are bundled with Native Instruments’ Komplete Elements software, providing a music production toolkit for the pro, as well as for the novice.

“At NAMM, Samson also introduced the CS Series Capsule Select Microphone. The CS Series mic offers the capabilities of two pro-level dynamic microphones in one versatile package. With easily interchangeable vocal and instrument mic capsules, the CS Series mic is perfect for capturing stunning vocal performances or miking your favorite instruments. It’s an innovative design that offers the quality, convenience and overall value that consumers are looking for. Whether you’re miking a vocal performance or your favorite instrument, it provides superior sound and versatility.”
Ruse remarked, “At NAMM 2012, JBL introduced our new PRX400 passive speakers, and we’ve worked closely with our sister company Crown in generating specific patches in their XTi amplifier software that, when used in conjunction with PRX400, provides very enhanced performance. There are on-board filters that allow us to precisely tune the system. This simply removes the guesswork, adding to the convenience, simplicity and overall sonic performance of the system.”

And, finally, according to van Straten, “Far and away, the product we’re most excited about right now is the KLA Series Active Line Array System. Coincidentally, at this last NAMM show, it won the Music & Sound Award for Best Loudspeaker. The KLA is the latest member of our ‘House of K’ loudspeaker line and represents a shift in the way both dealers and their customers are going to view line-array technology. Traditionally, line arrays are cumbersome, require special hardware to connect boxes together, need to be programmed via external DSP and are considered to be priced out of range for many customers for whom a line array is the perfect solution. The KLA removes all these barriers to entry and puts line-array technology in the hands of everyone. We’re having tremendous success with this product right now, because everyone—from churches and other houses of worship, to clubs and other performance spaces, to sound companies, as well as bands and mobile DJs—with an application where a line array is indicated now has access to it. This is an exciting development for pro audio and opens the door for retailers to pursue large system sales with an easy-to-sell, easy-to-deploy solution.”
Clearly, the pro audio segment of the MI industry is enjoying considerable success and continuing to power ahead.

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