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Regional Sound Companies Avoid the Pinch - ProSoundNetwork.com

Regional Sound Companies Avoid the Pinch

by Clive Young. With the economy staggering as it gets back on its feet, many industries are feeling the effects of the current financial climate. Even the concert business, long felt to be recession-proof, has taken a few hits, as festivals have been cancelled, ticket prices have dropped at a number of venues, and some mid-level national acts have decided to skip the summer shed season rather than endure a bloodbath in concert grosses.
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by Clive Young.

With the economy staggering as it gets back on its feet, many industries are feeling the effects of the current financial climate. Even the concert business, long felt to be recession-proof, has taken a few hits, as festivals have been cancelled, ticket prices have dropped at a number of venues, and some mid-level national acts have decided to skip the summer shed season rather than endure a bloodbath in concert grosses.

Things are generally looking up, however, for regional sound providers. While they're not immune to concerns, a variety of regional SR companies across the country report that business has started rebounding or never dropped to begin with, thanks to strategic planning.

A key for many regional providers has been diversification. James Cioffi, co-owner of Boulevard Pro (Oradell, NJ), explained, "That's been our business plan from the beginning; when installations get soft, the rentals pick up. We have a home theater division, we do installations for companies like the New York Sports Clubs, and we're a pro audio resource, so we sell Yamaha digital consoles and other products. We work with sound companies both smaller and bigger than us, and we have our own work: The trick is to be very service-oriented. We just did a big job for [Bruce Springsteen & the E Street Band drummer] Max Weinberg in his backyard; he could have called anybody, but he trusted us--he didn't want someone to screw up his backyard."

Underscoring the need to diversify, Pearl Pro Audio (Wood River, IL), which provides full concert production services to events, corporate, fairs, festivals and the HOW marketplace, has invested in remote recording services, and provides design/build and installation services as well. Owner Don Lanier feels the worst has already passed for regional companies, noting, "Things slowed down when the worst economic news was hitting hard and gas was four dollars a gallon, but you have to be proactive when that happens. Staring at the phone won't make it ring--you get out, go to charitable events, hand out cards, work the blogs, work the social networking boards and find new business. I'm very active in the local area and I keep up on things, then I target markets and work them. Now that it's warming up, the phones are ringing more, but we weren't really pinched at all."

Of course, many SR companies are seeing effects of the economy. In the Detroit area, numerous annual festivals have been cancelled due to low ticket sales and, reportedly, inability to secure corporate sponsorship from the auto manufacturers. That has led to an ultra-competitive marketplace for live sound services, according to Gerald "Curly" Wonch of EMCEE Audio Production (Clinton Township, MI).

"Last year was brutal--I had 75 percent less business," said Wonch. "Then 2009 came, the phone started ringing the second week of February, and it has stayed steady so far--I have already booked more shows through August than I had all of last year." Wonch noted local SR companies specializing in corporate work have started moving into the concert fold to replace auto industry work that dried up: "There's just one problem: The money is a quarter of what the big houses are used to charging, and the work is twice as hard. Go figure."

Local marketplaces are changing across the country, and how a sound company reacts often has to do with its image--and self-image. Paul Doty, CEO of West Coast Sound & Light (Modesto, CA), observed, "We've seen two companies in northern California go out of business in the past year--and we've also seen two new low-end, 'bottom feeder' companies come into the marketplace. A bottom-line-driven mentality is on the increase, so the challenge for us becomes how to provide value-priced production that doesn't go against our core values of service and quality. A company like ours needs to be flexible enough to be able to compromise and be creative for the client, without compromising who we are as a quality provider. If you walk away from that in a panic to survive, you lose yourself."

Backing that point of view is Tim Nesbitt, director of WCSL's southern California outpost: "Two years ago, we opened our second office in Los Angeles, and it is totally a different, highly competitive marketplace. I consistently see insane rental bidding where there is absolutely no way some of the bids can make any money; they are trashing the marketplace and only hurting themselves. We have to let them learn, and focus on projects that are profitable. Eventually, they will be out of business; you get what you pay for and it's that simple."

The process of bidding is changing in some areas, as Kelly Johnson, president of Main Event Sound & Lighting (Indianapolis, IN) noted: "Recently, I have been asked by the client to re-bid multiple times so the client can get the lowest possible price between my company and the other audio provider bidding on the same show." Despite economic sways, however, Johnson has been reinvesting in his company: "We had to get a new shop that is twice the size of our last one, due to gear and client expansion. It was a risk, but it is paying off."

A key to keeping busy these days seems to be flexibility; despite having lost business due to cancelled shipbuilding industry events ("hard to sell million-dollar boats right now"), Peter Benson, owner of Benson Pro Audio (Havelock, NC), remarked, "We are busier than ever--some of our best business comes from us being subcontractors for tent rental guys and event planners--we can wear anyone's T-shirt. Bottom line: I tell people, 'If it pays money, I'll come over and fix your toaster.'"