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The Sound of MUSIC

While Uli Behringer, chairman/ CEO MUSIC Group, was studying to be a sound engineer, he relates that apart from a couple of old Telefunken mixing desks and reel-to-reel recorders, there were only two microphones for approx 200 students.

Uli Behringer, Chairman/CEO MUSIC Group

While Uli Behringer, chairman/ CEO MUSIC Group, was studying to be a sound engineer, he relates that apart from a couple of old Telefunken mixing desks and reel-to-reel recorders, there were only two microphones for approx 200 students. When they wanted to borrow equipment, they had to sign up on a list and then wait approximately four months for the “big moment.”

“It soon became clear to me that this was not the way I was going to make it as a sound engineer,” Behringer states, “and that what I really needed was my own studio. Bear in mind that 25 years ago, the prices of professional audio equipment were way out of reach for mere mortals like us, and recordings were only ever made in professional studios who were charging up to $2,000 a day for rental.”

Being a student, the only cash he had would come from his earnings as a pianist, so, as he puts it, “There was no way I could afford the gear back then.” One day, a friend brought him a mixing desk for repair, and when he opened the desk, he realized that the total cost of all the components was about $200, but the console retailed at $2,000. “I remember this really irritated me,” he recalls, “and I perceived that it as greatly unfair to ask so much money from a musician.”

Behringer started to make a few pieces of equipment, at first just for him and a few friends, charging only a very small amount for the units. Once the word had spread that these units sounded really good and were very reasonably priced, suddenly all of his colleagues wanted to have them. To his astonishment, he had already sold 10 units before he had even started to build them, so he then converted his apartment into a factory.

“At this moment,” he remembers, “I knew that it would be my personal mission in life to stand up for musicians and create excellent and affordable audio equipment, to let musicians make the very most of their talent. And to this day, nothing has changed, and my own personal mission has become our company philosophy.” Now he, together with his MUSIC Group team, manages a large portfolio of brands such as Midas, Klark Teknik, Behringer and Bugera.

The MUSIC Group employs more than 3,500 people with offices all over the world. “What you are ultimately looking for are synergies in order to scale your business,” Behringer remarks. “For many years, we have focused on building repeatable and scalable processes in order to get efficiencies. Now as our organization has matured, we have built an umbrella organization on top, which is called the MUSIC Group, hosting all our brands. It is a corporation with two very separate operational structures.”

On one side, the company has what he calls “common operational assets” such as sourcing, high-volume manufacturing, engineering services, logistics and warehousing, information technology and infrastructure services, system development, finance, back-office operations such as graphic, technical authoring, internet and legal services, etc. “Those are functions that benefit from ‘scale and critical mass,’ and by design, are provided through separate companies employing best industry practice and technology,” he explains. “They are wholly owned by the Group and are there to provide strictly, where applicable, a shared services resource.”

On the other side, there are brands such as Midas, Klark Teknik, Behringer and Bugera. Those are distinct and separate companies with their own identities and intrinsic critical infrastructure such as management, R&D, sales, marketing, channel distribution and medium-scale manufacturing. “This separation is essential as the brand values are different, and the intended use of the products is in very different market segments,” Behringer adds. “We believe that this kind of operational framework provides all our brands with a competitive advantage and tremendous operational efficiencies that would be otherwise unattainable economically within each entity.”

Behringer sees himself as a person driven by passion and believes the organization reflects that spirit. “My passion for music is what led me into this business,” he insists. “I was committed to making the tools needed by musicians and engineers alike affordable and accessible so that they could pursue their dreams. But I quickly discovered another passion that has driven me these past 20 years. A passion to build a business that is the very best it can be. I love working with people who share the same passion, as there is nothing more rewarding than to achieve goals and celebrate with great people.”

He says he cannot imagine running a business where the products are generic and the customers anonymous. “In this company, we understand the needs of musicians, and every decision we make in business is centered on this understanding. For us it is a culture—a way of life. In business, I guess you could call it a critical competitive advantage.”

When asked what are the biggest markets for the company, Behringer replies, “We are committed to growing all of the brands and businesses of the MUSIC Group. Some of this growth will come through the growth in market share of our current brands. We see very strong growth in Latin America and Asia, and we are continuing to invest in the very best people, systems and processes to ensure that we continue to delight our customers and earn their repeat business.”

He points out that acquisitions are also part of the growth equation. However, he adds, “While we are always looking for great brands, market share and technologies, what is most important to us are the people behind the brand. We have been in business 21 years before purchasing Midas/KT, so we are prepared to be very patient while awaiting the next great acquisition.”

And what about the competition? “The question is more, how is the competition dealing with us?” he laughs. “We are strongly in favor of competition as it stimulates innovation and leads to a better quality and prices for the customer. Behringer has been proving this for more than two decades, and we’re proud to say that we have been able to bring the price of professional equipment down to consumer level. We are often referred to as the founders of the ‘Prosumer’ market, which has made it possible for musicians on a tight budget to fulfill their musical dreams.”

According to Behringer, his company was the first to move production to China back in 1990, and in 2000, it was the first to open a factory “entirely our own. Nowadays, just about every manufacturer is using Chinese production, and this has escalated the price war considerably.”

Behringer produces more than 3 million units a year, which he believes is a huge responsibility because the associated risks are far greater than, say, for someone “who knocks up a few units in his own backyard,” he notes. “There’s an old adage that goes something like: ‘The greater the production volume, the more important it is to have best quality.’”

As far as what the company has planned for the future, Behringer reports that there are initiatives going on “as we’re truly reinventing ourselves. We recently changed the Behringer logo, which symbolizes dramatic change. We entered the Install market with our Eurocom product series, and we’re building a new plant in China with 3,800,000 square feet. At the same time, we’re implementing a high-end ERP/MRP system and automate large parts of our infrastructure, just to mention a few.”

Behringer concludes, “We always say that we fly the plane while we’re still building it. It’s a truly exciting time!”

The MUSIC Group
music-group.com

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