Live Sound Assets

May 1, 2006 12:00 PM, By Keith Clark

SR COMPANIES MUST KNOW THEIR STRENGTHS BEFORE EXPANDING INTO SPECIALIZED MARKETS

Polls


Mix Regional

The Mix Regional section for Mix's May 2014 issue focuses on Nashville. Send us your studio news: updates, sessions, new rooms, club performances and installations. Let the Mix audience know what is going on! Send photos and descriptions to mixeditorial@nbmedia.com.

First, the good news: Worldwide ticket sales for concerts and special events reached $3.1 billion in 2005, an increase of about 11 percent from 2004 (courtesy Pollstar 2005 Concert Industry Business Report). The not-so-good news: The actual number of tickets purchased decreased about 6 percent, meaning that the larger overall sales figure for last year probably has more to do with higher ticket prices than with audience attendance.

photo:Patrick Stansfield

It's not news to owners and management of SR companies that theirs is still a competitive business environment. The figures above demonstrate, in a very general sense, the touring market's complex and “at odds” nature, yet SR companies do more than just supply a rig and crew for top-ticket shows. Are there revenue growth opportunities for live sound equipment/service companies?

Recent in-depth discussions with diverse SR providers, all of whom have spent decades carving out a living in live sound and related professions, indicate that there are plenty of prospects for growth. Fixed installation (churches in particular) remain promising, and there are myriad other ways of growing revenue.

First, though, it's important to understand that the live sound market doesn't comprise just one type of company; rather, it runs the gamut, from the very large, major touring companies that primarily serve the mainstream concert market to very small regional companies that take care of virtually any audio need within a limited geographic area. And then there are companies of every size in between. Add in companies that specialize in certain types of work, such as corporate or theatrical, and it's a wide swath indeed.

It's also important to note that there has been increasing fractionalization within the entertainment industry in general. Years ago, who would have thought a monster truck rally, pro wrestling match, roller derby, etc., would demand concert-caliber audio (as well as video and lighting) to bolster the “wow factor” of their productions. This trend has been nothing but great for live sound providers, creating more opportunities to keep their systems and people busy.

TAKING STOCK
Although there are numerous paths to take to realize revenue growth, an SR provider should first look at what the company already provides. Michael MacDonald, president of Pilot Business Strategies (Thousand Oaks, Calif.), a consulting firm serving audio companies, suggests capitalizing on existing strengths. “Look at the core issues of importance in all shows requiring live sound reinforcement; for example, what's going on right now with wireless systems, where there are emerging and quickly escalating challenges,” he says. “The management of RF operation, particularly at larger events, is an area that seems pretty obvious. These events are soon going to require a structured management effort, where all RF users on-site will have to register their systems with someone qualified to administer this effort, police it and provide specialized services like spectrum management. Many live sound companies are quite capable of filling this need, and it will provide a good return.

“And it becomes even more important when you go to an international level, where governments could soon be charging wireless users for access to portions of the frequency spectrum,” he continues. “A shrewd RF manager could save a lot of money in these situations, minimizing the number of wireless channels needed and then managing it well.” MacDonald mentions another niche that's usually “stock in trade” for most sound companies. “There's room to carve out a profit by providing system-tuning services,” he says. “Night after night, live sound companies are out there tuning systems, and they learn to do this quickly, efficiently and correctly. On the other hand, systems contractors commission a system maybe once a month or so, and as a result, sometimes they aren't nearly as proficient or effective at [system tuning]. So live sound providers can look to leverage their system-tuning expertise in support of contractors because they already have the trained staff and equipment in stock. This could be potentially lucrative, say, charging a fee of $1,500 to $2,000 for the standard tuning of a single system.”

At the same time, some aspects of concert sound work predicted to boost revenue opportunities haven't quite panned out as anticipated; for example, the recording of live shows. Ralph Mastrangelo, VP of Clair/Showco-Nashville, says, “It's a little easier to record live shows in a cost-effective manner now, but it would be a stretch to call that a revenue stream. Rather, it's more of an additional service of value that we can offer clients, and because this is a service business, it's important.”

Jack Boessneck, executive VP of Eighth Day Sound, a large touring company based in Cleveland, Ohio, echoes the point that smart growth can be attained by first looking inward. “Realize what assets you have now. Run a SWOT [strengths, weaknesses, opportunities and threats] analysis of your current business and translate that into complementary areas, working to leverage what you already do well to areas that might have a need.”

FINDING NEW REVENUE STREAMS
After running a thorough “company examination” — determining core assets and clients — many sound companies are taking their current strengths and “tuning” them to possible new clients. Gary Gand, co-owner of Gand Concert Sound (Northfield, Ill.), advocates creative thinking: “All around any live audio company, there can be dozens of venues that need sound, but a lot of times, they don't know they need it.” For example, he points to the Chicago Botanic Garden near his shop, which has grown to be a world-class organization, occupying more than 100 acres of property and hosting fund-raisers, guest tours, lectures, receptions and even weddings. Yet management hadn't considered the possible advantages of sound reinforcement to enhance many of these events until Gand approached them.

“I stopped by one day and pointed out that they have a lot of needs for sound systems, and eventually, they came to agree with me,” he notes. “This process started with a small, portable rental system and has grown to several portable systems that they now have available on-site. We've sold them these systems, but it could just as easily be a rental deal and perhaps even accompanied by an additional staff/service agreement. The point is that we realized some growth by recognizing the need for sound of another local organization.”

Some tips? “Identify a potential facility and then get out your legal pad and list out all of the possible uses that facility could have for sound and ways they can benefit from adding sound reinforcement,” Gand advises. “Then approach the management armed with your information. Regarding possible facilities, be creative, open your mind. Museums, parks, community centers, roller rinks, bowling alleys, the local Little League — just keep your eyes open as you drive around town.”

So how about getting into fixed installations? After all, there's a church on every corner and tons of commercial facilities that could benefit from a bit of Gand's creative thinking when it comes to sound, right? Well, not so fast. It's true that numerous sound companies have made successful forays into fixed installs, but it's not as simple as it might appear. Although many of the larger touring companies now also provide installation services, these operations are often set up as a different department led by individuals with long-term experience in systems contracting.

In other words, the install business can be its own world, far removed from live sound. For example, most states in the U.S. require some form of license and bonding to qualify for work in the permanent install business, points out Bruce Main of Vector Corp., a manufacturers' representative. There are state codes to follow and, often, local ordinances, as well. Inspections are a norm. Labor issues are very different. Ditto union issues. Insurance is yet another concern, not to mention a different financial model, where a single project can tie up valuable capital for months on end.

This is not to say that pursuing installation business is impossible; rather, it's best to walk into the situation with eyes wide open. The pro audio industry is full of horror stories about successful live sound companies that have been decimated by pursuing the perceived nirvana of install riches.

“Our company has separate rental and install departments and they really don't overlap except for some minor equipment issues. The rental guys never set foot on actual install projects; the customers, politics and time frames are totally different,” Gand says. “Unless a live sound company is very liability-tolerant with good insurance and smart people who really understand the contracting world, I really don't recommend getting into it.

“However, and this gets back to taking advantage of what a live company already does well, I do advocate offering additional services to the more traditional install customers,” he adds. “So instead of walking into a local church and trying to pitch them on a new installed system for their sanctuary, instead offer to sell or rent them equipment that will supplement what they already have or that allows them to go in a different direction.”

GET INTO THE CLUB GIG
A continual trend in the SR world is local nightclubs installing higher-end, state-of-the-art pro gear — sometimes as high end as the consoles and P.A.s carried by stadium tours. A business-savvy SR company could advise these club owners on the proper gear to install, especially when the acquisition must suit a club's troublesome acoustics and limited budget.

Large-scale touring company Rat Sound (Oxnard, Calif.) joined the installation market by focusing on clubs that host live music acts. “We're seeing what I call a ‘Hard Rock Café approach’ propagating these venues, where they're wanting to offer much the same types of systems we send out for touring,” notes company co-founder Dave Rat. “There have been a lot of new technology developments that these venues want, and there's pressure from artists and management to stay competitive with what's on tour and in competing clubs. And that's where we come in with our expertise with this gear and technology, along with an understanding of what is liked by bands and sound engineers.”

The company offers what Rat terms “parked” touring systems, which can be put into place within the venue much like a portable system, but includes items such as arrays flown in accordance with installation codes. It's a best-of-both-worlds approach, and one where upgrades don't require major structure and infrastructure changes.

“If you need to work on an amp rack, just unplug and roll it out, or replace it with another one. If a band wants to bring in its own system, just unplug the house system and move it out of the way,” Rat explains. “It's also no problem to patch additional elements into the system — that's what we all do on the road.”

On the regional live sound level, there are more fairs and festivals to serve than ever before. Positioning for contracts for any of these events largely comes down to one smart practice: networking. Identify the organization's key players and/or sponsorship groups, go to their meetings and fund-raisers, and start talking.

“Your quality of work is the only advertising you should need to do,” states Teri Hogan of Mico, Texas — based provider Sound Services. “Serve people well, provide the best sound you possibly can each night out, and you reap loyalty of repeat customers in addition to word-of-mouth endorsements among potential clients.”

Eighth Day Sound's Boessneck picks up the thread: “Do your customers read the paper? Do they look at the Yellow Pages? And even so, are they going to call you based on an ad? Or is the better answer to get out there and meet the right people face to face and sell your services?”

Hogan notes that her company has seen an increase in corporate audio work via a liaison cultivated with an area A/V company specializing in the corporate market. “We're also doing more fairs and festivals,” she adds. “One of the specific areas where we've been adding a new festival each year is the Celtic music market, which has become huge in our region. Early on, we were contracted to handle a few shows, did them very well, and as a result, came to be recognized as specialists in understanding how to handle this type of music. We've worked hard to meet the specialized needs and expectations, which has resulted in being at the top of the list for supporting the growing number of Celtic events.”

ROOM TO MOVE
We opened this discussion with some large, relatively unrefined numbers on last year's ticket sales, but let's take a more fine-tuned look to see where the market is headed. At Pollstar's annual Concert Industry Consortium (CIC), held this past February in Las Vegas, keynote speaker Michael Rapino, head of concert promotion giant Live Nation (formerly Clear Channel), pointed out that only 29 percent of the U.S. population attended a concert in 2005, with only 4 percent of that group attending two concerts and just 2 percent attending three or more concerts. He also pointed out that only 1 percent of U.S. consumer entertainment spending went to concerts.

“The good news is that concert consumer spending is miniscule compared to total entertainment spending, so there's a lot of room to grow,” Rapino noted. The question for live sound providers is how to help encourage this growth.

David Scheirman, a 30-year concert touring industry veteran who now serves as VP of tour sound for JBL Professional, believes that the answer comes primarily from what sound professionals should already be doing as opposed to miraculous business plans. “We need to ensure that every show we serve has the appropriate sound level, spectral balance and coverage throughout the listening area, appropriate to the program, content, listening space and the expectations of the audience,” he says. “Every show we do is vital, and requires care and attention to detail to give the audience the best they can get. Or, we can treat every show as a chore, let our egos get in the way and contribute to a nationwide trend of not wanting to go to a show again because it didn't sound very good.

“The fact is that the public regularly gets a better audio experience from their home systems, in their cars and at movie theaters than they do from a live show,” Scheirman says. “Who's fault is that, and who's going to do something about it?”


Keith Clark is a freelance writer/editor specializing in pro audio. He can be reached at keith.b.clark@comcast.net.






Acceptable Use Policy
blog comments powered by Disqus

Mix Books

Modern Recording and Mixing

This 2-DVD set will show you how the best in the music industry set up a studio to make world-class records. Regardless of what gear you are using, the information you'll find here will allow you to take advantage of decades of expert knowledge. Order now $39.95

Mastering Cubase 4

Electronic Musician magazine and Thomson Course Technology PTR have joined forces again to create the second volume in their Personal Studio Series, Mastering Steinberg's Cubase(tm). Edited and produced by the staff of Electronic Musician, this special issue is not only a must-read for users of Cubase(tm) software, but it also delivers essential information for anyone recording/producing music in a personal-studio. Order now $12.95

Newsletters

MixLine

Delivered straight to your inbox every other week, MixLine takes you straight into the studio, with new product announcements, industry news, upcoming events, recent recording/post projects and much more. Click here to read the latest edition; sign up here.

MixLine Live

Delivered straight to your inbox every other week, MixLine Live takes you on the road with today's hottest tours, new sound reinforcement professional products, recent installs, industry news and much more. Click here to read the latest edition; sign up here.

[an error occurred while processing this directive]

The Wire, a virtual press conference offering postings of the latest gear and music news, direct from the source. Visit the The Wire for the latest press postings.