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Mark Terry Guides KMC Into Pro Audio

By Clive Young. KMC is a company that might not immediately ring a bell in pro audio circles, but that could be changing quickly.

NEW YORK, NY—KMC is a company that might not immediately ring a bell in pro audio circles, but that could be changing quickly. A player in musical instrument retail distribution for more than five decades, KMC has spent much of the last two years making in-roads into pro audio after it was purchased in 2015 by Canada-based JAM Industries, the largest pro audio distributor in North America. With a new parent company came a new focus and leadership to match in the form of industry veteran Mark Terry, who was named president, KMC/CEO, JAM US Music Group that same year. KMC quickly founded a pro audio division and has been making moves ever since. Case in point: This June, KMC Pro Audio became a U.S. distributor of Mackie loudspeakers, mixers, portable P.A. systems, recording and studio monitoring products.

But why would KMC suddenly make such a determined move into the pro-audio marketplace? In truth, it was long overdue, according to Terry: “KMC is a nine-figure musical instrument retail distributor; we sell to 6,500 dealers across the United States. Historically, we’ve sold everything a music store needs—except for pro audio, not counting microphones. We’ve always done millions of dollars in Shure, Audio-Technica, AKG and so on, but KMC had never gone outside of that.

“If you look at the data, sound reinforcement, recording and DJ combined make up the largest single segment of the average music store’s revenue, so it makes sense for KMC to expand into this space, because we’re already calling on these dealers, already have credit lines with them, long histories and so on.”

Bolstering KMC’s push into pro audio is its massive parent company, JAM Industries, which distributes considerable amounts of pro audio, lighting and video gear throughout Canada; Terry sees KMC taking on a similar role in the U.S., becoming an stateside version of an existing framework. “The idea was to make KMC the full-service distributor where we have a large number of premium brands to offer complete variety, whether it’s an MI store that’s selling pro audio or a sound contractor who’s selling pro audio,” he explained.

Among the pro audio brands in KMC Pro Audio’s roster are Audio-Technica, Focusrite, Galaxy, Monster Cable, RCF, Sennheiser, Shure, Ashly Audio, Audix, Ultimate Acoustics, Samson Technologies, PowerWerks and the Harman Professional Solutions Group brands—AKG Acoustics, Crown, dbx, JBL Professional and Soundcraft. Since 2015, KMC has brought on roughly 20 lines in the pro audio space and is in negotiations to distribute numerous others.

As a result, KMC has a deep bench when it comes to well-known brands that can hit different price points, and that’s by design. “There’s not many companies that distribute pro audio in the United States,” Terry noted. “There’s a few that have two or three brands, and there’s a couple of other companies that have a mixture of brands—broad selection, but they’re relatively small. [Meanwhile,] the profile of who sells this stuff to end users has changed; now you can buy the most expensive microphones, wireless systems and P.A. systems through any number of what might traditionally be considered retail outlets, like web sites, music stores, pro-audio storefront-type dealers. Those dealers need wholesalers and distributors to support them. I think that’s where KMC becomes very relevant today and in the go-forward future.”

Terry estimates KMC’s sales fall roughly at 40 percent in recording and 60 percent live sound, with KMC’s offerings in the latter focusing on broad-appeal product categories like portable P.A.s as opposed to line arrays, which it doesn’t carry.

While sales may lean towards live sound currently, that may change as the company is starting to expand into the 70-volt world, bringing in new mid-level contracting product lines to support the effort. Terry elaborated, “The small and mid-sized independent contractor is a newer customer for us and one that we think our formula works really well for, because not only can we hold the inventory for him and get it to him quickly, but we also offer financing, and that’s not common in the distribution business of pro audio.”

KMC has the people, products, clients and financial capabilities, but one thing it doesn’t have is a “distruptive” business plan, and that’s very much on purpose, as the company is aiming to provide support for existing retail channels rather than circumvent them.

“If you look at macro business trends,” Terry explained, “there’s lot of discussion about ‘disintermediation,’ which is all about manufacturers selling stuff directly to end users. In certain categories, that’s definitely happening—when I got my first iPad, I ordered it with Apple directly and it came from a factory in China to my house. That’s extreme disintermediation.

“In a specialized market like pro audio [where a given project] requires a number of pieces of highly technical gear, the value that a pro-audio dealer/integrator/installer brings is tremendous—and those businesses need distribution. Say it’s a church or nightclub installation; there’s hundreds of different items that go in there from a 100 different vendors, and if a contractor has to start calling each one, he’s eating up his profit margin pretty quickly. But if he can call and get most of it from one source like us, he can cut that down to a list of 10 or 15 vendors, get it all financed, get it all on one bill, get it all shipped together. That’s vitally important.”

For now, KMC is focusing on adding brands and building relationships with customers. While Terry joked “it’s kind of the largest pro audio distributor you never heard of,” that sobriquet may not apply much longer.

KMC Pro Audio