Meeting in the middle

Istanbul is the only city to span two continents. But does having one foot in Europe and the other in Asia give you double the opportunity or leave you in no man’s land? Anna Mitchell talks to Yavuz Kurt, Playback Music, to find out what this means for the AV industry.

Playback Music has been involved in the Turkish audiovisual rental market for 20 years and active in sales and distribution for the last ten years. Yavuz Kurt, the company’s regional manager for Europe and the Middle East, has worked in the industry for six years and observes that, even during his time, the Turkish audiovisual market has grown considerably.

“The industry is getting bigger,” he explains, “but the companies involved vary greatly in quality.” In the 1980s the Turkish government began a programme of wide-ranging fiscal reform which encouraged a private-sector, market based model of business. Despite some savage recessions the reforms did stimulate rapid growth, a perfect breeding ground for numerous small integrators, distributors and installers to flourish in.

Surprisingly Kurt objects to the idea that this is good news for industry arguing that there are too many small rental companies in the audiovisual marketplace. “It actually affects the market in a bad way,” he argues. “The point is if you’re going to do any business with quality equipment, such as Meyer Sound or L’Acoustics, then you need to charge for it. Some small companies they work with low-end equipment. So you return a tender for let’s say €10,000 for rental price. These other companies will offer a quarter of your price. The equipment they have is cheap and they give cheap service with cheap products. So, in my opinion an environment that encourages small companies is not necessarily a good thing if they bring down the reputation of the industry.”

However, the Turkish market has faced setbacks, most recently due to the global economic crisis that began in 2007. Kurt notes numerous projects and events have been cancelled but says the situation seems better at the moment. “But,” he cautions, “whilst the situation seems better many companies still do not want to make really big investments. Business are still purchasing products but only if they need them and only when they need them. This is driving business in the rental market”

He adds that sales companies have also been forced into offering payment terms in order to shift equipment. “Some companies do not take money for about six months and then offer payment terms for one year. This has caused huge problems when, for example, an installation company fits out a club or a bar but doesn’t take payment for six months or a year. Then, when payment terms are not met they have to take the equipment away. So the new equipment has not been paid for and has to be sold as second-hand.

“Generally everyone is suffering. We were hit last year and the problems still continue. The situation in Greece means that it might get even worse later this year. Even though we are not in the EU I think the situation in Greece will have some effect on Turkey.

“The tourism industry is getting bigger,” Kurt adds, brightening a little. “As new hotels spring up they’re demanding room control systems and displays but we’re not really seeing any upgrades in the existing hotels. Also, as far as the install market is concerned these new hotels don’t mark any great increase in activity for conference or boardroom equipment. In Turkey it is mostly rental companies that handle conference applications. This is better for conferences when you never know how many people attend or how big the organisation is.”

Kurt has to import the large majority of the equipment Playback uses and says that he will usually try and import from within the EU because the taxes and customs are far cheaper. “Turkey is in the custom community inside the EU,” he explains. “We still have to pay tax but it is cheaper and faced with similar equipment from a manufacturer outside the EU, or a manufacturer inside the EU we’d always chose one from within the Union”

Relations with both Middle Eastern and European neighbours are very important to Kurt and Turkey’s audiovisual business. “A closer relationship with the EU would be advantageous to us,” he explains. “If we can have good relations with the European rental companies and if we have chance to do work internationally then that will help our business. The point is when you’re in the EU and you are a rental company based in say Germany and you want to send products to Italy it is so much easier. You don’t have the same kind of customs issues or paperwork. From Turkey, when you send products you are facing transport, plus custom expenses and time – that is a disadvantage for us. Turkey’s ties with the Middle East are great for business, we’ve got numerous projects coming up in the region.”

Although the audiovisual business is growing in Turkey, from Kurt’s point of view it doesn’t sound like it’s completely back on its feet yet. However, it could be that Turkey’s unique positioning, spanning Europe and the Middle East, provides the most interesting opportunities. Companies operating in the audiovisual industry in Turkey are in a good position to tout for business in either region. Furthermore, if Turkey proceeds to cement its ties with the European Union these opportunities may increase rapidly.

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