AV rental means business
From product launches to share holder’s meetings, there is a need for AV equipment in all aspects of business life. However, it’s often the case that for the remainder of the year the equipment simply isn’t required. In these situations firms can turn to event staging companies and rental firms to meet their needs.
Think of rental and staging and the first thing that leaps to mind is often the rock and roll touring scene or live entertainment such as theatre or the Broadway shows. But away from the glitz and glamour that these present is a more serious side, the world of corporate or business events.
As we’ll come to see the line between business and entertainment is becoming more and more blurred.
In order to successfully analyse this market, it’s necessary to follow the value chain right the way from the manufacturer at the top, to the client, in most cases a production company at the other end.
But what exactly is a business event? The simplest way of putting it would be to describe a business event as any event staged by a company or organisation in order to grow or improve their business. This therefore covers everything from the huge motoring shows of Milan or Frankfurt, to a major share holders meeting for a blue chip firm, to a branding exercise or product launch, right through to a training session for sales or brand managers.
One man with a clear idea of what this market entails is Stephan Paridaen, President of Barco’s Media & Entertainment division. He described how Barco views the definition.
“We are active in what we call the events business, what most other companies would classify as rental and staging. This we categorise across two axes. One axis runs between corporate events on one hand, and entertainment on the other. The other axis has dry hire at one extreme, and full integration and value added services at the other.
“You can pretty much place any event somewhere along those two axes, but Barco itself is very rarely involved in the dry hire market. Our products are typically used by companies who add some value. You probably wouldn’t see Barco product in use in the situation where thirty people hire a projector for a hotel room and hold a sales meeting.
“Within that side of things which are away from dry hire, we typically make a differentiation between corporate and entertainment events. I would say that corporate events include car shows, which is a particularly important example, or the ICT sector exhibitions like CeBIT. A third example, which is important to use would be share holder meetings. We also see the major sales meetings as part of this, for instance where large organisations such as Microsoft gathers all its sales management in a single room.
“You might think that these events are not all that common, but if you consider that most of the companies within the fortune 500 do these things probably more than once every year, that’s a lot of events.”
But what are the things that drive this market from a manufacturer’s perspective?
Paridaen commented: “As the cost of professional equipment, especially LED, has come down, there is a proliferation in the kinds of events, and companies, that can afford to use it. What we’re seeing is the traditional pyramid structure. To start with LED was only used at the car shows, because that’s where the big marketing dollars were being spent. As the equipment goes down the cost curve both in terms of capital expenditure, and therefore also in cost per day of rental, we see ever-expanding demand, by an ever increasing pool of events.
“New types of events can now afford to use LED, it’s moved rapidly into IT shows, and even into things like the Farnborough air show or building shows. Because the amount of applications is growing all the time we still see huge potential for growth in the market. The days of 50% of the applications being car shows are long gone.
“Another thing that’s happening at the very top end of the market is more and more creative use of LED. This is leading to a blurring of the line between what is corporate and what is entertainment. Every booth now looks like a complete stage in some cases.”
So in Stephan’s eyes the key driver is affordability. But he also notes that there has been a general change in the behaviour of consumers, and therefore marketing spenders. People are spending more and more of their disposable income on experiences rather than goods. The upshot of this change in behaviour is that companies are choosing to do their branding and marketing in ways that reflect this, by offering an experience, such as a show, rather than perhaps TV or print advertising.
Another manufacturer with a keen interest in the corporate events sector is Lighthouse Technologies. Roberto Segato is southern European sales director for the company. He broadly categorises the market in the same way as Paridaen, including such things as auto shows, incentive events and conferences, as well as citing political events as an increasingly important sector.
At the present time he sees the markets of old Europe as the strongest. Italy performs very well because of the auto industry whilst Spain is particularly keen on political applications. The number of regional, autonomous authorities means that there is an election somewhere almost every month. In the future Roberto envisages strong growth in Eastern Europe, where his remit covers the Balkans and the former Yugoslavia, as well as in Russia.
The next step down the value chain is the rental company. One of the largest of these in Holland is Mansveld Experience Technology. Richard Kluitmans is the company’s divisional director:
“The market is just beginning to grow again at this moment. The last year has been difficult for us. The budgets for marketing events have been pretty small, but the economy is starting to grow now, so budgets are growing for marketing, and for new product launch projects.
“For business events, the busiest time of year is between February and the end of May. The holiday seasons in July, August, November and December are much slower. However, we can cover this with our fixed installation business. We don’t depend only on the rental market.
“Product-wise we stock a full range of audio and video equipment, although we often also rent from partner companies if necessary for larger events. We were also the first company in The Netherlands to have the Philips Candeo. We’ve had it two or three months now and it’s been a fantastic investment. The rental price is very good, and it’s been out every week since we’ve had it.”
Over in Germany Dieter Cramer is MD of Balance Audio, the audio side of events company Show-Tec. Over the years his company has been heavily involved in working for the car companies at the various auto fairs, as well as other clients.
“We’ve recently done what’s called ‘The Big Picture 2006’. This is an event hosted by a major German TV network at which they show off their programming schedule for the coming year to potential sponsors and advertisers. We provided LED displays and show lighting, as well as having to cope with both surround sound for movie and show trailers and a live sound rig for onstage performance. Our audio inventory is almost exclusively Meyer Sound.
“However, I’d say that the markets are changing for us. Over the last six or seven years the business events – car shows and so forth – have been the largest part of our business. But right now we’re looking to move back more towards touring, which is what we did before.
“It’s always a question of what the market needs, and what we can do to get the most return out of our equipment. With these car launches and the trade shows, budgets are getting tighter, and the clients are becoming more adept at dealing and becoming tougher on the price. The competition here is also greater than before. We’re getting to the point where we think that going back to touring might be more profitable.”
XL Video has operated in the UK for almost twenty years. General manager Al Green explained what he understood by the term business event.
“I’d include share holder’s meetings, awards ceremonies, training events. These things can range from plasma and sound reinforcement for fifty people to a presentation for 9,500 in Earl’s Court.”
“Business overall is very healthy indeed, and there’s an enormous amount of headroom left for a successful company like ours to grow market share. Our only constraint is the amount of equipment we can buy and store. We’re currently considering our third change of premises in six years to accommodate our stock.
“The problem therefore becomes an issue of trained staff to operate the equipment. Training technicians is a long process, and there are a lot of people who start that don’t work out. We’re looking to make space in our new premises to provide people with formal training not only for people that we’re taking on, but maybe also for others, who we can support into getting a job afterwards.
The final element of the corporate rental chain is often the production company. These provide an interface between the rental company and the end client. They provide a realism buffer and know what is required, and what is or is not possible either from an AV or a logistical standpoint.
One such company is GSP who operate as an event management and production company across Europe. Managing director Emma Gold described the business.
“We work all over the world, including a hell of a lot of projects in Europe. Whilst the UK is our home, and our largest market I’d say that 20% of what we do is abroad. If someone comes to us and asks us to do a project in country X we won’t turn that down just because we’ve not been there before.
“Quite a lot of the time in that situation we’d take our core design team out with us, and on the production side for lighting or AV we’ll get that locally.
“However, quality is paramount for us, so if we’re not happy with a local service, we’d have no qualms at all in shipping gear in from elsewhere. For example, we did a job in Luxembourg in April, and the companies that we started working with, we weren't happy with the levels of stock they had, so basically we brought all the stuff in from Germany from companies we knew and could rely on.
“We’re always talking to our suppliers, be that manufacturers or rental people, because we have to keep up with the newest and latest thing. This is because of the huge diversity of clients we have. We’ve done events for Sky, Cannon and O2.
Lighting and AV technologies to us are a lot like PCs – you buy one, and then three months later it’s redundant. We really have to keep up to distinguish ourselves from the competition.” “I’d say that business at the moment was fantastic.”
At the end of the chain lies the client, and ultimately it’s they that govern how the rest of the market performs. If the client is making money then it will invest back into its business, its marketing activities and its events. If Europe’s economies continue to grow then there’s every reason to expect healthy business in the corporate events sector.
At the very top end we can expect to see continued adoption of the latest technologies as both production companies and clients vie with their competitors for the most spectacular events. Further down the scale, technology that was once the preserve of only the largest marketing budgets is becoming more and more affordable, helping to grow the range of potential applications and therefore the market.
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