• Features

• 27/11/2015

After several years of economic stagnation, is the French AV market ready to be born anew in the wake of a Presidential election. InAVate talks to those in the know to find out if it’s a case of Gallic charm or….

The French market has always had a reputation for being a tricky one to tackle to the outsider. Particularly one would say for those of an Anglo-Saxon origin. It has a tradition of being intensely loyal to its own companies, and it’s common for French brands to perform much stronger at home than anywhere else. Some have also commented that the French are particularly conservative when it comes to selecting new products or brands.

Despite being the world’s six largest economy, France has not had an easy time of it over the last decade, having been dogged by long term unemployment around the 10% mark and GDP growth figures varying between 0% and 3%. Successive governments appear to have been unable to stop the rot caused by high taxation and restricted working practice. However, the country has elected a new President in Nicola Sarkozy, and the hope appears to be that if he can carry out his ambitious reforms of the French economy, things will get a lot better.

The possible down side of this is that currently government spending accounts for some 57% of the total economy, if this is affected by Sarkozy’s tax cutting plans, it could damage business in the mid term while private companies begin to pick up the slack.

According to InfoComm’s research into the European ProAV market, undertaken in 2006, France is the third largest market in Europe after Great Britain and Germany, accounting for 15% of the total. That equates to around € 12,750,000.

So much for the outsider’s view, what about those on the inside? One man who knows more than most about the French AV market is Extron’s Jerome Gueras, European Business Manager. Whilst now living and working in Belgium, he has long experience of his home market. “The big trend for the French integration market in the past four or five years has been the consolidation amongst integrators. There are basically two large companies now dominating the French market, the slightly larger – IEC – even operates on a pan-European basis.”

The growth of these companies has largely been by acquiring or merging with small and mid-sized competitors in a manner that strongly reflects the pattern amongst the manufacturing fraternity. One might argue that, in this respect, the French market is more mature than others in Europe. These are serious firms who have competence not just in AV installation, but in the rental and broadcast sector, telecommunications and other low-voltage activities.

Gueras continued: “This is very healthy for them, but perhaps not for the market as a whole, because if you don’t work with them it can be very difficult.”

There is fierce competition between these two companies for business, which has resulted in somewhat of a price war. Mikael Fauconnier, Marketing Manager of French control product manufacturer Vity remarks: “Sometimes the final negotiation provides a margin of under 8% for the reseller and this is a dangerous aspect of the market.”

Price pressure is a problem also observed by Tannoy’s Mark Trense, French Sales Manager. “There are a lot of brands available and a lot of cheap product. Also there is a lot of ‘I saw this price on the internet’ going around. My opinion is that resellers and dealers need to get back into the habit of selling the added value aspect of installation rather than cutting each other’s throats on price.”

Part of the problem is that there is almost zero clearly defined structure to the AV market in France. Whilst those in the UK or elsewhere may bemoan the influence of the consultant in driving down price, or at least getting a good deal for their customers, Jerome Gueras believes their absence from the French market is harming integrators.

“Since the beginning of the French AV market, no one has been able to charge for system design, there are almost no consultants. What happens now is that one company writes the specification, and it goes out to the tender process, but they write it in such-a-away that no one else can comply with it.”

The other factor behind the negative price pressure is that the largest customer in the French AV market remains the government. Most of the large projects are owned by it and as with most public institutions world wide, price is the number one factor on the list.

Another peculiarity of the market is the seemingly very long lead times. Tannoy’s Mark Trense claims that it can be eight and eighteen months before an enquiry becomes and order. Christophe Masson goes even further, suggesting that up to four years is possible for the largest projects.

So against this background, what’s the state of the market at the moment? Well, opinions vary, but the general consensus is that it’s nothing spectacular. Christophe Masson is communications manager of audio distributor SCV Audio. The company looks after the Harman Pro group of products in the country.

“My general impression of the installation market is that it’s very quiet. We’re seeing a very small amount of growth year on year, certainly nothing to shout about. I think most of the distributors would agree with me. It’s hard for the end user to spend a lot on new projects at the moment, and the government has basically stopped for the past year, waiting for the election.” Masson blames the state of the economy for this.

Yves Astafieff is Mitsubishi Electric’s man in France and he also blames a sluggish economy for some average performance. “Generally the market is quite difficult, our growth has been less than 2% in this time and therefore communication budgets and AV investment is being cut back.” However he does mark out digital signage as an area of growth, an opinion backed by Extron’s Geuras: “There are a lot of large shopping malls and super markets who are investing in this. It’s definitely a market for the future.”

Another man with a rosier view of the situation is Alexander Schopss, EMEA sales manager for French manufacturer Analog Way. His company enjoyed a good 2006. “Last year we achieved over 20% growth in France, which is great. We don’t expect this continue so much next year, mostly because of the election. We would expect things to take a while to settle down.”

Continuing the optimism amongst the French manufacturing fraternity comes from Stéphane Ecalle, marketing director of L’Acoustics. He reports excellent, steady growth over the past three years in all markets. However he agrees that the election will likely result in a short-term slow-down.

Stéphane Bono is Technical Manager of integration firm LST. The company operates in the institutional and retail markets as well as having good sidelines in the yachting and residential markets. He’s also positive about things. “I believe the market has been pretty good over the past three years. Clients are enthusiastic about new technologies such as HD. I hope this same enthusiasm will carry over into 2007. One thing that is a problem is a lack of information in the market. A lot of my customers are coming to me with questions about the new technologies. Full HD, HD Ready, DLP or LCD or 3DLP projection are all terms which are confusing people. They want answers.”

This lack of information seems partly to contribute to the perceived conservatism in France for the adoption of new products. SCV Audio’s Masson commented: “In France it is quite difficult to influence the Prescripteur (literally, opinion former). Once they are used to one brand, it’s very hard to convince them to try another. One reason for this is that we do not have a dedicated press for the AV market in France. It’s difficult for them to keep up to date with what’s new.”

So, what of this election? The right-wing candidate Nicolas Sarkozy has won, and with him comes the promise of lower personal taxation, the reconsideration of the 35 hour working week and the opportunity for companies to invest more money. Jerome Geuras is optimistic about the future now that the election is over. Masson is more cautious, given the long lead times that exist, it’s possible that any benefit from a change of regime won’t be seen in publicly funded projects for four or five years.

So it certainly isn’t all doom and gloom, and the market remains steady, just don’t expect fireworks in the near future.