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David Keene on Samsung/Harman Merger

It’s not every day that mergers or acquisitions in the AV world make the front pages of mainstream media, as did the announcement late last year that Samsung was acquiring Harman Industries. Harman has of course been such a big part of live sound for decades. In fact the modern loudspeaker and P.A. industry was born when Hollywood converted from silent films to talkies and the outfitting of movie theatres for sound gave birth to the top audio manufacturing companies that are still huge today– including JBL and other Harman companies. Fast forward to the 21st century, and we saw Harman expand out from audio and delve into the world of lighting (acquiring Martin) and video (acquiring AMX). So through the decades– to today–Harman has been in the thick of it.

But what to make of the news of Samsung acquiring Harman? Conventional wisdom says Samsung wanted Harman’s automotive technology products and auto industry relationships, mainly. For pro audio, AMX and Martin were just along for the ride. I don’t think it’s that simple. I have analyzed this in longer forums. In summary: going forward, we need to watch how distribution models surrounding this new Harman/Samsung marriage evolve. Traditionally in the pro AV world there has been kind of a “tale of two cities,” a dichotomy between audio and video in terms of how the two classes of products go to market. Generalizing, pro audio products from companies such as Harman, and their competitors, were distributed through “reps,” rep firms. (And also, Harman for example, never sold pro audio product directly to end users.) Video products on the other hand went through “dealers.” (This model above, has been kept in place by Harman, for AMX.) Today, Samsung, in the pro AV market, sells LCD, and LED displays through dealers, but also through big “Distributors” such as Ingram Micro, Almo, Stampede, and others. This is very different than the distribution model on the pro audio side. How will this play out with the combined Samsung/Harman? That will be key to watch as this merger develops. If you missed it, InfoComm International released late last year, their 2016 Global Pro-AV Distribution Channel and Trends Report. That report explores the ways pro-AV products and services move through the market—from manufacturer to end-user organization—and identifies factors that influence the various channels. Read it, and then look at the Samsung/Harman news in that light. I think we’re in for some exciting developments as well as challenges and some changes.

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