Monday, February 8, 2016

The Pro Audio Industry Is Not Dying... It's Changing

Written by Russ Hughes — Reading about the latest round of layoffs at Avid can garner a number of reactions, one of which can be the idea that the pro audio industry is dying... it's not.

An article on the Billboard website claims that recording equipment sales are up according to NAMM (National Association of Music Merchants) the trade association of the international music products industry. The article says;

"Recording equipment sales were up in the U.S. by a staggering 213 percent last year, making it NAMM's biggest market gainer in 2014-2015 as the silo increased exponentially from $31 million to $97 million. The rep also cited the decrease in prices for audio interfaces and laptops as contributing to more musicians' ability to purchase higher-end microphones which were previously only found in studios."

Several firms are hiring talent right now, in fact the very kind of talent we've just seen let go in the latest round of Avid layoffs. So what is happening?

Mike, the Editor of Pro Tools Expert, has often used the phrase the 'cottage-isation' of the recording industry, which means that there's less big studios and post houses and many of us are now working from home. The same is also happening in the supply chain, in the last two decades we've seen hundreds, if not thousands of small companies emerging as software developers and hardware manufacturers. What is ironic is that many were born out of the kind of layoffs we've seen in the last week.

The internet has made smaller companies able to compete on a level playing field, in fact it would be unfair to say a level playing field because smaller companies have less overheads, less layers of management and often fewer regulations to comply with. The huge company model that was conceived in the industrial revolution is finding it harder and harder to survive in a post industrialised economy.

The very people that start up new business from layoffs will often end up being competitors of the businesses that fired them. These smaller brands are more agile, more able to respond to customer needs quickly. They carry few staff so when a question needs answering or support is required you often speak to the person who made the thing, or a member of their family.

The internet changed everything.

You can now visit a website of a one-person operation situated in the middle of nowhere and browse their goods. Online payments make buying it (in most currencies) a breeze. Shipping options are more flexible and more diverse than ever, so delivery is rarely a problem, in the case of software it's a simple download. So what was once delivered by one large company is now being delivered by hundreds of smaller companies.

In his book "Niche: The missing middle and why business needs to specialise to survive" James Harkin makes an excellent case of why the larger brands such as GAP, GM and some brands no longer around such as Woolworths, struggle in the modern age of commerce. He asserts;

"As high street and main street businesses continue to suffer, there's a new rule in business: forget about the general audience and instead stake out an identifiable niche."

These are exactly the kind of businesses that are flourishing in the modern world of music making and audio production.

There's also an argument to suggest that creative people would rather buy from smaller businesses; the craftsman, the artisans and the designers. Buyers love to support people like Colin McDowell, Fabrice Gabriel, Cliff Maag or Michael Carnes (to name just four) with their money. We feel they are one of us, a fellow musician, or recording guru. We feel they empathise with us, that they want us to do well, that they care if we like what they make - it's their baby. They hang around at trade shows in T-Shirts, they shake our hands, they talk to us and we leave their presence often feeling good about ourselves - it's like we're all in it together. It's rare that any mega brand engenders that kind of feeling in us and that's why we find it so hard to connect with them and so easy to criticise them. It makes the job of the really good people working for big brands incredibly hard to do, because on the whole those people want to give you the same kind of service and feeling you get from the smaller brands. It's not impossible, it's just hard.

Make no mistake, there are still some huge brands creating and supplying gear to us, some are doing better than others, but now the challenge is not just from another mega-brand but from a hundred smaller ones.

Some of these smaller companies have grown and the challenge for any growing business is to be able to maintain the same spirit that they had when they started. I know there are several companies with a few hundred staff who work hard to do it and are succeeding. But it takes constant effort from those who started the company to make sure their values are pumping through the veins of every person who is part of the team. I know several companies creating software and hardware with several hundred staff who still manage to engender the same kind of feeling smaller companies do.

It has been a horrible week for some of our friends who worked at Avid, many of them had given more than 10 years of service to the brand, some were there from the earlier Digidesign days, right now they will be dealing with the shock and distress job loss brings. Speculation as to why this happened is pointless, it may be for the long term good or not, but none of us have the facts so we simply have to wait and see what plays out.

It is inevitable that the kind of news we've heard this week can cause us to wonder what is going on. But I'm optimistic about the pro audio industry; there's never been more choice, more diversity, better service, greater partnerships. I love owning a microphone made by a small British company and a pre-amp made by a small family company in the middle of Utah. Or a plug-in designed in a studio in Germany, or speakers from Finland... the list goes on. Homogeneity is dying and I for one am glad, surely creativity is about celebrating variety and we've never had as much to choose from.

Let's not proclaim that 'the sky is falling in' - the pro audio industry is not dying it's changing.

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