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David Keene on Staying Ahead of the Commoditization Curve - Sound & Video Contractor

David Keene on Staying Ahead of the Commoditization Curve

The emerging trend of 2015
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As 2015 is shaping up to be a great year for the industry, several trends are emerging: the increasing sophistication and specialization of top staging companies, and a broadening out of event “technology” to include apps and other tools that come from other sectors. And add to that, a new pricing trend is emerging in, as Les Goldberg puts it in his column in this issue, “the environment of consolidation and dwindling competition” that leads to commoditization.

In the new era (a permanent one, going forward) of price transparency everywhere– in every industry– the trend of customers shopping on price will only get worse. But ironically that leads some companies to think that they only way to win business is to be lower on price than the competitors. And that the leads to what Goldberg calls “equipment providers that treat audiovisual as a commodity.”

Goldberg points out that a staging or AV rental company that sells below market pricing simply cannot sustain that model and be successful over the long term. Without continued investment, a company cannot stay up to date with the latest technology, maintain their inventory, or buy more equipment to support clients on an ongoing basis. Yet we still see too much of this kind of predatory pricing. It may be true that it’s not sustainable over the long term, but there are always new entrants into the market that can push that elusive “long term” forward for the industry as a whole.

We’ve seen this struggle for years, between pricing your services to reflect continuing investment in quality and great service, and pricing just to get the job at any cost to your bottom line or that of your customer. And in fact, there are periods in this industry where two or more years can go by without the introduction of new generation video or audio technology for live events, and that drought can mean that the predatory-pricing companies can get away with it longer as they and their clients don’t feel any urgency to work new platforms into the video projection mix for example. To that I can say thank God for 2015– I don’t think I’ve ever witnessed such a new crop of new generation video projectors, LED, and more, into the market. Laser Phosphor projectors are going to revolutionize video projection (it’s already happening); Direct-view LED of amazingly small pixel pitch– here now; Video wall technology with 1.8mm bezel and smaller, done. It was apparent at InfoComm in June. It’s apparent in the InfoComm Rental & Staging Awards. New technology is coming on line– so price predators beware, you need to ramp up your inventory and then adjust your service fees as well, because trying to commoditize AV staging services will quickly become impossible.

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