With the NSCA show rolling into its show this year, InfoComm becomes that much more relevant to a wider swath of professionals in lighting, staging, projection and rentals. Thus, InfoComm’s recently released annual survey of its increasingly inclusive constituency offers some insights into where these sectors might be headed.
Of the several hundred companies polled, 11.1 percent identified themselves as rental and staging companies — relatively small, but up from the previous year. (Reflecting InfoComm’s origins, that vast majority of respondents — 56 percent — are systems integrators.) Nonetheless, among the four main company categories (the other two are dealers/resellers/distributors and independent design consultants), rental and staging companies reported average 2007 revenues of $19.7 million, virtually on a par with the rest of the groups. Business is good.
Respondents in the lighting/staging/projection categories are also as optimistic about future trends as everyone else seems to be. The respondents are strongly positive when forecasting the demand for AV products and services in their primary market area. Only 2.7 percent forecast any level of decrease in demand, and only about one in ten expect demand to remain constant. About half of all respondents feel the market demand for AV products and services will “somewhat” or “significantly” increase over the next three years. This rosy view is consistent across all industry segments and is particularly true of rental/staging companies. Nearly 65 percent of the respondents in this group expect increasing business.
Those who forecast an increase in the demand for AV products and services over the next three years were asked their view of what’s driving this increase. The responses ranged from the global economy to issues specific to very narrow market niches. Examining broad themes shows that technology factors are paramount, followed by user benefit and economic/macro factors. (Responses differed by region, with North Americans citing a technology-driven “push” and Europeans generally pointing to an end-user driven “pull.”)
Virtually all who are forecasting a demand increase are considering or acting on strategies to address or prepare for this increase. The most common strategies include:
- Hiring additional technical staff:
- 57.4 percent
- Increasing training for staff: 54.9 percent
- Expanding company focus to encompass new technologies: 41.4 percent
- Increasing marketing efforts: 39.2 percent
- Expanding the company focus to encompass new vertical markets: 29.1 percent
- Expanding existing offices: 28.7 percent
The only strategies that lag in popularity are those that involve a narrowing or specialization of the company’s focus. It appears that relatively few respondents are looking for opportunities to solidify a more focused niche in the face of an expanding market. That’s a natural and healthy response in a flux economy.
While relatively few expressed pessimism about the industry’s fortunes, it’s worth looking at the factors that are causing negativity. According to the report, they include “commoditization” issues (i.e., competition from big-box retailers and increasingly user-friendly technology products), increased competition from within and without the industry, striving to maintain margins in an increasingly competitive marketplace, and the increasingly real menace of inflation-driven higher costs.
Is the seemingly pervasive optimism of the staging business just whistling past the graveyard? We shouldn’t look at the Broadway numbers, the usual bellwether for theatrical economic soundness, in a strike-marred year. Live Nation, though primarily geared to music touring shows, is a useful surrogate. Based on its year-end 2007 numbers, the company reported revenue of $4.2 billion, an increase of $473.3 million, or 12.8 percent, as compared to 2006. In other words, consumers were getting out of the house and going to see live shows.
We won’t know if this is a trend that will hold true in a year of economic recession, but if Hollywood’s numbers are any indication, ticket sales to all types of events might stay on an even keel, with revenues running 4 percent ahead of last year and attendance up 7 percent over last year as of Q1 2008, according to box-office tracker Media By Numbers. Data from The National Association of Theatre Owners also suggests a silver lining to the economic clouds, with U.S. box office revenues rising in five of the past seven recession years dating back to the 1960s.
So this might not be the year to skip a visit to InfoComm (in Las Vegas, June 14-20). Take the time to look around the show in depth. You’re likely to see a wider array of companies and products, and the fact that NSCA is rolled into this show, you’ll be able to pocket the savings of one less plane ticket and three fewer nights at a hotel. That’s how I look at it.
