On the road again

When Germany’s massive manufacturing base took at hit in 2008 it had a knock-on effect for the country’s audiovisual distributors and integrators. Anna Mitchell finds out which sectors the market is looking at to get it back on its feet.

Germany is a major power beating all its European neighbours to be considered the fourth largest economy in the world, according to the International Monetary Fund. On global terms, it is the second largest exporter and the third largest importer of goods.

In recent times the country has nourished a successful audiovisual market buoyed by a strong manufacturing base, numerous trade shows and conferences as well as a great deal of government activity.

All this supported the audiovisual market with countless opportunities for companies involved in visualisation technologies for research and development, conferencing equipment, rental and staging equipment for corporate events and technologies associated with hospitality.

However, all these strengths meant that when the financial crisis hit in 2008 Germany had a lot to loose. Traditional revenue streams were devastated as manufacturing in particular took a massive hit. Mike Waldeyer, technical director of Videlco, says the downturn in the automotive industry affected his company. The German distributor regularly supplies visualisation equipment that allows automotive companies to develop their designs using 3D tools and collaborative technology.

“Automotive is quite a big market but in the last year, due to the crisis, there have been some projects that have been stopped or put on hold,” said Waldeyer. “But it remains an interesting and growing market. When the companies change their design process for realistic projections it saves them a lot of money.”

As jobs in the automotive market return I was keen to find out if the German Government’s efforts to shore up the important industry had provided a knock-on effect to help the audiovisual industry. “Government aid for automotive companies did not help us. In Germany we had a rescue package from the government and I think it was of help to some manufacturers but the foreign car companies, for example Toyota, benefited as well. Of course as the manufacturers recover they will invest further but it’s a long process and you cannot say that it is government support that immediately helped our company. It will take some time to get us healthier. But, overall there are definitely signs the market is recovering, manufacturers like VW, Audi, and BMW are growing again.”

Rescue packages aside, the government in Germany, like many of its counterparts the world over, is cutting costs. Waldeyer didn’t pinpoint a specific sector that has taken the brunt of the cuts but predictably education has suffered and special projects and programmes that had previously bolstered the audiovisual industry are, in many cases, on hold.

Waldeyer goes on to explain that the medical market in Germany is looking promising right now. He says that the market has really woken up to benefits audiovisual technology can offer. “Video technology offers benefits for safety and education,” he explained. “In universities many operation rooms are now equipped with video equipment from which they distribute the video signal. They also record the streams and review the content after the operation. The video will be sent to medical congresses all over the world and doctors will gather together to watch lives streams from an operation room.”

Unfortunately Waldeyer notes things aren’t looking so good in the digital signage market right now. “Of course the market is set to grow,” he notes, “but currently there is not a real market for [digital signage] in Germany at the moment. Some suppliers have gone bankrupt here because of digital signage projects.” He cites a particular company that undertook a digital signage roll-out in a bank and, rather ironically, nearly went bankrupt at a result. “I guess they gave too good prices and too much support,” muses Waldeyer. “The digital signage market is demanding a low price point and it doesn’t make any sense for us to make gifts if people don’t want to spend the money. I guess the point is that in digital signage the end customer doesn’t have a real concept for it now so if you go to a supermarket and you see screens there, often they are consumer screens with rubbish content. In many markets I know they’ve already packed these screens away. They don’t really have any concept of how to earn money with it. They were sold all these things with the promise of return on investment and sometimes it just doesn’t work.”

Germany has traditionally been a strong supporter of the European Union, at the forefront of its development and a strong advocate of strengthening the relationship between members. However, Greece’s recent financial difficulties that led to a massive bailout package, partly financed by eurozone countries, has left a sour taste for many members. So is the Union still good for business?

“We are a distributor and our customers come from all over Europe; Germany, Italy, Austria and Switzerland,” said Waldeyer. “And of course our customers have a lot of jobs around the EU and it’s getting easier for them to have jobs in Spain or France or wherever. It’s opened up the boarders and it’s easier to work in foreign countries. Also, as companies grow they have offices in France, Spain, Germany etc so it’s very likely our customers who have got in with one company will do jobs at all the other offices.”

Talking of the eurozone, Waldeyer anticipates lucrative opportunities resulting from the Eurovision Song Contest, an event that Germany will host in 2011. “I hope the Eurovision Song Contest next year will help us. It will require lots of audiovisual equipment, for example media servers, Vista Spyder systems, matrix switchers and fibre transmitters. A lot of people will come to Germany for it and it will have a knock on effect for the hospitality and entertainment industries.”

The Football World Cup held in South Africa has also been a surprisingly good opportunity for the German audiovisual fraternity. “I’m sure it’s probably a good market for everybody,” noted Waldeyer, “but there are some German rental companies involved for projections and broadcasting.”

So what does the future hold for Germany and the audiovisual market? Waldeyer thinks the AV/IT bond will strengthen over the coming years. “I think audiovisual will merge together with internet and computer technology as we go forward,” he says. Companies that want to remain at the forefront of the audiovisual market in Germany should therefore ensure they have IT expertise on board in order to survive the future. “Sometime analogue video will drop off as computer, internet and networked technology is growing very fast and getting cheaper.”

The audiovisual market that is emerging from the recession in Germany is very different to the one that went into it. The rapid pace of technological development is providing numerous opportunities for integrators that know how to utilise it to create worthwhile solutions for their customers. However, some companies’ failures in the much-hyped digital signage market provide a stark warning that customers, more than ever, will only deploy solutions that provide them with tangible benefits.

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