Electrifying growth

Electric Sound, which has just become Electric Sound Benelux, is one of the household names of European Pro Audio distribution. Following a year of change and development, InAVate spoke to General Manager John Haug about the company he has helped to shape over the years

What is the background to the Electric Holding group?

Well, Electric Sound Benelux is probably the most well known and by far longest existing company in the group amongst our customers, and it is a very long running company – since 1958. And since that time we have taken care of a number of brands that we still carry, like Dynacord, Beyerdynamic and König & Meyer because those companies were also around at that time. In the beginning the company was mainly covering the MI market – sound reinforcement for musicians – and fixed install was a very, very small part.
We also had a strong base in things like electronic organs, guitars and also MI retail stores. But as everyone knows, the MI business is not really a flourishing business all the time, and certainly not the most stable business. We decided to explore other areas as well by doing two things. Firstly, we encouraged our buyers who the installation side already to push that angle more and pushed our suppliers more into the development of fixed install products . Secondly we looked around for other brands that could complete our portfolio.

How did the growth into the fixed installation market develop?

One of the brands we picked up 18 or so years ago, which is a very strong brand in fixed installation, is Rane Corporation. But the installation side really took off when Dynacord and Beyerdynamic got really serious about the installation market. Dynacord saw a continued increasing demand for critical systems, and they came to the market with ProMatrix, which was of course for us an opportunity to get into that market.
Another area of that, which we went into from the very beginning, was conferencing systems when Beyer started to produce discussion systems under its own brandname. We were very lucky to see that product at the time, and to have a market leading solution in the wireless conferencing market. One of the things we decided immediately was that we would have to limit the number of customers for these products. It’s very tempting to sell fifty systems in a year through fifty different clients, but that would be deadly in terms of the time we’d need to spend on service and support. We didn’t think we could support fifty dealers who had all sold one system, it’s impossible in terms of management and also training. We agreed contracts with a group of well chosen dedicated dealers that offered them exclusivity but also certain conditions. I believe it’s far better to work in a structured way with partners with whom you have contracts and are really fighting for your product, than to throw it out in every direction. You will have fights on margins, there will be problems supporting systems sold by people who don’t know how to operate them and all this. Conversely we also then looked at our other markets, like MI and applied the same structure to those, and to our other brands, like Dynacord and worked closely with a small number of partners in each market.

Why did the various parts of the Electric Holdings group come about?

Well we took on the distribution of Electro Voice products in the year 2000, from their existing distributor but of course there is a lot of cross-over in markets with our Dynacord range. So we said, we’re not going to put this all in the same hand, we created a completely separate company to distribute EV, which was eventually Electric Audio nowadays called E Audio Benelux.
And then at the start of this year we looked again at the Electric Sound portfolio. It was still selling a great deal of MI stuff, and instruments etcetera as well as all the pro sound and fixed installation equipment. It was clear to me that it was extremely difficult to sell on the one hand Beyerdynamic high-end wireless digital conferencing systems and on the other hand electric guitars. It was decided therefore at the beginning of this year to split up Electric Sound into Electric Sound Benelux and Electric Instruments Benelux , this means we can create a separate image, separate marketing and so forth because in the MI market you have to do things differently.
I would say that this is perhaps one of the problems that Prevost in Belgium was suffering from, before we took it over that company in april 2007. They had everything in one basket. Brands were competing inside the company, one manufacturer was shouting, why are we not doing so well, whilst another is doing so well. With Prevost we have taken almost all of the personnel on, but the company will be undergoing a number of changes. The brands Dyancord, Beyerdynamic, König & Meyer as well as Cue will sail under the Electric Sound Benelux flag, while Electrovoice, Klark Teknik will be handeled by E Audio Benelux . Prévost has a huge amount of expertise in the area of fixed install and will under that identity still handle brands like Toa and Apart as they used to do.. They are very skilled in engineering and putting systems together and the business of integration. It is an area that we did not have so much knowledge of. Now we can order completely built racks fully programmed from them.

Describe the relationship between Electric Sound Benelux and your dealers.

We have always had a policy of being completely honest and straightforward for our dealers about who we will sell to, which products and in what markets. We have strong contracts in place. For example, with the Beyerdynamic digital wireless congress systems we say to our dealers, we will only sell to you, we will not go directly to the market, but in return we require you to attend product training events to make sure you can correctly install the products. This are not optional, you must attend if you want the deal and sustain your contract with us . This process is made easier by the limited number of dealers we have. It’s possible to do this and communicate with twelve or fourteen dealers, but not with fifty.
Conversely with other product groups, which are broader in application like the Beyerdynamic and Dyancord or EV products, we still sell directly to the rental companies, as well as some into dealers. So we say to our dealers, we do not guarantee the exclusivity, but also there is no need to get trained and so on.
Now that we are also distributing Cue systems since 2004 in Holland as well as since the take-over of Prëvost it is not surprising that the same dealers that were doing the Beyerdynamic products are now taking on the Cue products. Again we are only working with dealers that are properly trained.

Now you are dealing with Cue systems, will you look perhaps at video products and related ones?

No, we have to realise that we are not a video company. There are plenty of distributors with more knowledge in this than us, and have excellent relationships with video suppliers like Extron or Kramer. We prefer to maintain good partnerships with these dealers and distributors so that when these big system integration projects come along we can work with them to provide a complete solution rather than taking their business. However we are now in a unique position in the Benelux of being a company with expertise in programming touch screen control systems and also pro audio.
To start all over again from the beginning, right now and learn video is just not something we are going to do.

What is your opinion of the Benelux market at the moment?

It is rapidly growing. The economic situation is extremely good, profits are growing and unemployment is falling. There are a lot of organisations, not just private or corporate organisations, but also the government organisations are now catching up with the systems they are using in terms of renewing. In that respect, if you are not having a flourishing business right now, you will never have one.

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