Changing with the times
Author: Zoe Mutter, Editor at AV Magazine
Life is still in lockdown in many parts of the globe and while there’s no doubt the social-distancing measures will save lives, the restrictions – which have led to cancelled events, venue closures, delayed projects and reduced sales – will take their toll on the AV industry. Change is unavoidable. Now is the time for creativity, agility, flexibility and quick decision-making and execution, says Jon Sidwick, senior vice-president at distributor Maverick: “Those who pivoted immediately are doing well and you feel motivation and optimism in the way they are treating the crisis. Those who are stopping and waiting for the storm to pass might not be there to see it.”
As recovery plans were put into action, workforces were quickly mobilised for home working. In the longer term, there is bound to be a change in the way people work, the use case for their workplaces and services required, says Stuart Davidson, technical director at integrator, AVMI: “People have been forced to work remotely for such a long period, businesses have had to find a new normal in how they operate and it is inevitable some of this will stick.”
While integrators such as AVMI continue delivering essential services to key customers, most site activity has given way to activities that can be delivered remotely as design teams prepare projects for delivery once it is safe to ease restrictions. “While overall trading figures are impacted, perhaps not surprisingly, we have not seen a significant reduction in new opportunities. Smaller opportunities such as adds, moves and changes have naturally slowed, but these have been replaced by larger capital projects,” says Davidson.
Indications are that the quiet period has given AVMI’s customers the opportunity to pick up larger projects that have been delayed by business-as-usual activities, and that the customer base is confident the industry will bounce back relatively quickly. However, many of AVMI’s colleagues such as engineers, field or managed service pros have had little or no work to deliver. “The pandemic stopped sub-contractors’ workload overnight. This is the biggest concern and one we hope to help resolve as soon as possible,” adds Davidson.
Meanwhile, some clients of Jeremy Elsesser, president at integrator Level 3 Audiovisual, have moved projects into next year because they are unsure what the environment will look like, while others still want to push ahead with projects and proceed with the design and fabrication. “We’re having new conversations with clients. It’s very variable between clients as we still don’t have a clear view as to when everything will turn back on,” he says.
In these unprecedented times, technology is seen as a critical enabler for collaboration and communication in the business environment, public sector, broadcast industry and at home, as Donald Stuart, MD at integrator, Electrosonic emphasises. “Never before has the AV industry had this exposure. How we are communicating, supported by video conferencing, throughout this pandemic has been essential in driving connectivity and collaboration for positive outcomes,” he says.
Governments in the US and UK have deemed AV as an essential service, not just for health services but because everyone other than frontline workers is working remotely, highlights Daniel Rogers, vice-president, AVI-SPL. The global integrator has not experienced many postponed or cancelled orders and Rogers has seen opportunities to provide remote management and services to ensure facilities are kept up and running.
“There are huge conversations outside the AV world about how to encompass everyone in a brave new digital environment and how you bring wellness into the environment too. The new normal is not in three- or six-months’ time, it’s now, and we won’t go back to the same working environment as before,” says Rogers.
Disruption to business
Although the design work keeps coming, projects had to be put on hold for Emma Bigg, AV designer and strategist at Octavius RE. “The main issue is that people are not paying. Certain companies are battening down the hatches and ceasing communication with suppliers. It’s caused me to reflect on the working relationships impacted by this behaviour and has proven I need to be more discerning in who I choose to work with moving forward.”
Consultant Bob Kronman, director, Kronman Associates has seen projects put on hold and some consulting work delayed, but most clients still plan to proceed as and when possible, subject to the financial impact on their businesses: “There was an immediate reduction in project planning while the implications of closing down were assessed. The biggest concern is maintaining cash flow for the business so we can continue to pay suppliers.”
And while resellers are purchasing products from distributor AVM, the difficulty remains with resellers getting into locations to carry out installations, says Mark Nisbet, MD, AVM. “Reports back to us are that there is no consistency. Some integrators are managing to find pockets of projects that can be installed and some are finding they are unable to gain access to locations.”
Meanwhile, audio technology and solutions company d&b audiotechnik is looking at industry opportunities that are still active. “Since the construction industry has not been impacted as much yet, planned projects are still going on – in particular audio system installations in theatres, live music venues and stadia. It is a good time for venues to evaluate their current systems,” says CEO Amnon Harman.
d&b’s supply chain has not been significantly affected yet. “As the crisis unfolded, we acted early and built up inventory in preparation for whatever was to come. With a lower than planned demand we have enough buffer to fulfil this year’s business,” adds Harman. “With about 75 per cent of our workforce being in Germany, based on a proven government program we can reduce the work capacity quite flexibly and ensure limited financial impact for employees. In our international offices we had to implement a reduction in working hours and salary.”
An experience evolution
When the majority of planned events disappeared and the markets companies such as global AV equipment supplier Creative Technology operate in went into in lockdown, revenue streams dried up almost entirely. The impact has been broadly the same across the multiple countries and sectors of the live markets CT operates across, despite slight differences in timing, with some regions expected to return sooner than others.
“Everyone is in survival mode, irrespective of size,” says Dave Crump, CEO, Creative Technology. “So far, the adaption has been about cutting costs, conserving funds and protecting jobs. Once that is done, forward-looking companies are turning their attention to securing what work they can in evolving sectors, such as temporary field hospitals, and undertaking development activities normally postponed because we are too busy.”
Creative Technology is part of a larger group with central resources so is less reliant on government loans than some. “However, prudent financial management is crucial to maintain the reserves that will get us through. Innovations and development initiatives are fruitless if businesses don’t survive – and many will not,” adds Crump.
Social-distancing measures have led to a huge shift to virtual event solutions; from audience-free studio productions and webcasting through to live streaming, virtualised edit kits and remote production to enable events to continue being delivered.
“Technology to deliver virtual events continues to improve and offers a credible alternative in an environment where people cannot physically gather,” says Scott Nodsle, group director, operations, at event planning, design and technology company PSAV International. “But this does not mean face-to-face meetings can be fully replaced. Meetings and events connect and inspire people, and our long-term strategy is to develop creative ways for our local, regional and global partners to continue to meet, both live and virtually.
“We’re still receiving enquiries for meetings and events this year, most in autumn and beyond, and growing activity into next year. Our industry was impacted more than many others but it is resilient.”
Production solution specialist White Light’s MD Bryan Raven has already seen venues reducing the capacity of their meeting rooms to provide a level of social distancing and is in talks with several venues about their ability to provide a mixture of online and real content for meetings.
“In the short term, it is obviously a disaster from a commercial point of view, but we have to keep the human tragedy in the forefront of our minds,” he says. “We are an industry that by definition provides technical services to organised gatherings and without them we don’t have an industry, so we have to adapt,” Raven adds.
While the QEII Centre has been closed the sales team has been finding solutions for clients, offering alternative dates and scaling down if required. “Because this situation has never happened before, the future is completely unknown. However, we are confident the QEII Centre has assessed the changes required for when we do re-open,” says Deborah Jones, AV/IT sales manager, QEII Centre.
And with the touring industry at a standstill it is difficult for freelancers in the industry to make plans for the foreseeable future. “Whilst the odd event without audiences might require production equipment and crew, the majority of our industry anxiously awaits some indication as to when concerts will resume,” says freelance tour production manager, Chris Vaughan.
Putting plans in place
Consultant Bigg has been seeing corporate clients ploughing ahead with design concepts and preparation work: “It’s encouraging as there’s a real sense of positivity and confidence, although the concept of office working will change.”
Project planning has continued for Joe Benn, AV ops regional manager, EMEA, Google: “The shift to working from home was also not that severe because of our video-first culture and as all our systems are cloud-based.”
However, the pandemic has affected the day-to-day operations of AV deployment engineers such as Ayhan Behic from Snap Inc, who has experienced delays to builds: “I work specifically in global AV deployment, so the impact has been huge. We’re currently not deploying new builds or remediation work and have had to put the brakes on deployment projects currently in progress.”
While venues, museums and attractions temporarily closed their doors, some business has continued behind the scenes as museums shared their collections online and provided learning resources.
“The pandemic highlights the importance of digital access and the need for its continued investment,” says Jo Saull, head of technical services at the Science Museum. “My role involves keeping the museum’s galleries operational and without those spaces to work in there’s been a real sense of loss. The financial impact of this is huge for us, as it is for many organisations, and it will take a long time to recover.”
Kevin Murphy, director of sales and marketing at Kraftwerk Living Technologies, an international integrator which works on fixed installations for theme parks, museums and science centres, acknowledges museums and the cultural sector will not exhibit in the same way post-pandemic.
“The enquiry level is increasing though, some coming from the Middle East, some from Europe and a number of enquiries from China where we have a small team. We’re managing without travel by remotely programming, but there’s no doubt business will be impacted – most theme parks are shut which means they’re not getting revenue and they won’t spend in the near future.”
There are some early signs of recovery in the sector, however. For example, the Science Museum’s touring exhibition Superbugs has reopened at the Chongqing Science & Technology Museum in China after a three-month temporary closure.
Locked down learning
As with almost all universities, the University of Hertfordshire closed campuses and moved teaching online. As this was already in place in a limited capacity at the university, the mechanisms could be scaled up. “This was a rapid change, completed in a week with skeleton staff on campus looking after the remaining residential students,” says Adam Harvey, solution architect, AV and digital media, University of Hertfordshire. “Microsoft Teams use at the university went from around 250 users to over 25,000 almost overnight. I work in a wider IT Services team that covers all IT and AV support – supporting all the users new to remote working and to Microsoft Teams has been a huge impact.”
Harvey is designing, advising and planning for upcoming projects with no fixed delivery dates and managing installs that are ready to go but cannot move forward until the team can get on site to install: “The main task is managing our supply chain to ensure we have what we need when we need it. As many AV companies have furloughed staff we’ve had to adapt to deal with those changes.”
University of Southern Carolina (USC) also shifted from on-campus to remote operations. “What would have been years of attempting to introduce a new way of thinking was instituted and accepted in just a few days,” says Joe Way, director, learning environments, USC.
USC had a head start on reacting to the crisis, having become Zoom and Slack enterprise customers two months prior. “However, the response meant a faster rollout with a much shorter user acceptance testing window than we would have desired,” says Way.
Post-Covid-19, USC will continue to embrace UC technologies for business meetings, online instruction, and general communication, even if in a limited capacity. “By the time we’re back in the office, everyone will be used to communicating through these methods and expect them to become part of normal operations. I expect most higher education institutions will follow suit, finding ways to create hybrid campus-online classes and workspaces,” adds Way.
“As some higher education projects have been stalled due to restricted campus access and because some installation companies have furloughed staff this means even planning is slower as we’re not sure when they will happen,” says Caroline Carter, AV project manager, Imperial College London. “There is talk that I will be deployed to other projects once it has been decided where my skills are best suited.”
Support to ease the strain
On the whole, AV professionals we spoke to were impressed by the government support offered and the speed at which it had been adapted. “As with governments everywhere, there has been a level of response that no one would have believed a few weeks ago, with billions spent on supporting furloughed staff and company loans. Of course, not every government has got everything right, but a lot has been done well and importantly this is keeping companies alive,” says Sidwick.
The majority of the staff at White Light are on furlough leave whilst the company tries to reduce running costs. “Sadly, most of these reductions are in the form of deferments rather than waivers, so we still have to pay tax, rent and lease repayments, so we are building up a large debt that will need to be repaid. That means the economic model will need to change,” says Raven.
Also recognising the world has changed, Greg Jeffreys, director and consultant at Visual Displays, a specialist in designing, supplying and installing projection systems, has had to furlough half his team. The company also experienced practical problems such as delivering items completed before lockdown and therefore getting them invoiced and paid for.
“As a specialist manufacturer and distributor, the pro AV reseller channel is extensively furloughed. We don’t have people to sell to at the moment. Apart from managing ongoing projects, we have no realistic pipeline,” he says.
“Key issues will be seeing the cash from the government come through and, for some, how much has to be repaid and when. Words are promising but it’s the deeds that make the difference,” says CT’s Crump.
As the situation develops, it is crucial managers continue supporting staff – those working full-time or reduced hours and those who have been furloughed. “They all need to feel part of a team and managers should communicate how they are reacting to the ever-changing landscape and ensuring everyone’s mental health is in a good state,” says Imperial College’s Carter.
Kronman feels the government is not offering AV SMEs enough help: “I don’t believe they understand our businesses. The high number of freelance and independent contractors struggling and who will struggle may change the way business is run as work returns.”
Vaughan has also found government support for freelance self-employed to be “woeful”: “The threshold of £50k pre-tax profits leaves many professionals in our industry with no support. Even those who qualify are not due to receive payments until June at the earliest. I started a campaign urging the government to refund freelancers’ January 2020 tax bill as this would represent around one third of their yearly income – the time we originally expected the industry to be closed down.”
Preparing for the future
Many AV professionals are ensuring they are in the strongest position possible after the pandemic by spending some of their time in isolation upskilling, from online business courses and product or certification training through to language and commercial skills training.
Like many others, Way’s team at USC has been taking advantage of AVIXA’s training – which the industry has been given free access to – and participating in free virtual conferences: “Even though we are much busier supporting our students than before, this is an opportunity for us to grow our skillset so when we return to campus, we can improve our services.”
Elsewhere, Creative Technology is developing a comprehensive suite of training modules for freelancers, external and internal staff and CT’s parent group’s NEP University online training and development program is being broadened and promoted internally, allowing staff to upskill even when furloughed.
As well as nurturing new skills, shared VR company Igloo Vision is using the enforced break from business-as-usual to develop new solutions, with virtual demos and applying shared VR to video conferencing and remote meetings. “As well as helping clients through the current impasse, we want to create something of lasting value – which could transform the way clients meet, share and collaborate in the future,” says Jake Rowland, head of business development, Igloo Vision.
Time to adapt
While varying degrees of disruption have been caused, there should also be some prospects for the industry post-pandemic as the crisis has accelerated AV and IT integration and unified collaboration. “One positive is it allows companies to step back, take a look at their business and make changes. There will be opportunities coming out of the crisis and we need to adapt and provide support to the channel and offer products that our customers need,” says AVM’s Nisbet.
Luckily, AV/IT are well placed to deal with the ‘storm’ from a technical point of view, highlights University of Hertfordshire’s Harvey: “If anything, it is testing systems and allowing time to implement improvements or projects that have been waiting in the wings for a while.”
The pandemic has already forced many to adapt and, in some cases, completely reinvent. Some are offering online or remote services and are leveraging experience of remote working tools to provide new services or products. Visual Displays’ Jeffreys has focused on markets that are government-funded and maintained its marketing spend, but pivoted messages to be non-sales, Covid-empathetic and supporting education and professional development.
While Light was already building a more flexible, technically evolving organisation – the timescale and ground rules just altered. “The changes to the industry were going to come anyway, just not this fast,” says Raven. “One positive is what is happening on the environmental and sustainability side. These issues needed to be addressed, it’s just a shame they have come as part of this human tragedy.”
AV companies are already diversifying. Manufacturer Aurora Multimedia recently introduced the Tauri infrared temperature check tablet which powers technology solutions provider Diversified’s VitalSign kiosks and tablets.
“This could very much be what people expect from the AV trade going forward,” says Brock McGinnis, principal consultant at avitaas. “It also gives us the opportunity to grab this as something we can become experts in before another trade does.”
“Where we may not have been installing many thermal imaging cameras a year ago, we will now be installing tens of hundreds – they will become commonplace in places such as stadia and attractions,” says AVI-SPL’s Rogers.
A new world of AV
While social distancing measures are still in place in many parts of the world as the search for a vaccine continues, it is difficult to predict when the industry and life will return to ‘normality’. While some AV professionals think signs of normal life and installations could return over the summer, most expect the industry will not fully recover until spring 2021, with physical meetings and large-scale events taking the longest to bounce back and a complete financial turnaround possibly taking years.
Covid-19’s impact will be long-term and fundamental, says Maverick’s Sidwick: “We know home working will be more normal, and retail will be different, but this is the tip of the iceberg. We will be in a mixed work environment for a good while, everyone will not just go back to how they were before. New ways of working, limited location access even for staff, customer flow restrictions in retail and most meetings being conducted with more external than internal participants will be challenges our channel will help solve.”
“Our early research also shows people don’t want to touch anything in spaces such as offices, so systems will need to allow them to walk into a room and for everything to fire up without touching anything, using voice activation or their own device. Managed services will be a fundamental part of business going forward,” says AVI-SPL’s Rogers.
When talking to partners to work out what the next few quarters might look like, the Maverick team has heard different views depending on product and user sectors. “Some areas are already showing signs of amazing growth, especially around collaboration and unsurprisingly healthcare,” adds Sidwick. “Following this, we believe education will still be very strong over the summer, as usual. There’s a lot of debate around retail and signage as there is now a whole different set of requirements which will need AV. The events industry is far harder to predict.”
CT’s Crump anticipates some event uptake as soon as gatherings are allowed, but fears it will be some time before they return on the scale we are used to: “There will be a real corporate and personal financial hardship as a result of this crisis, which must impact on events which are largely discretionary.”
While Way believes that by the end of June the USC team will be back in the office, along with scaled social distancing and safe workspace protocols, he does not think the situation will return to ‘normal’ until next spring. “We’re exploring ways to perform hybrid teaching for the fall semester should we not be able to utilise classrooms to full capacity. The AV industry will hopefully be back on track by the end of summer, but it will likely take over a year to be back to full strength.”
Kronman has noticed some consulting, design and project planning already starting to gain momentum as clients look to implement new technologies like temperature sensing and facial recognition. Venue and community access as well as monitoring personnel using AV solutions on existing networks are part of the developing strategies for re-starting business. Planning for flexibility in projects, so budgets can be used in stages or finance can be arranged to reduce immediate expenditure, is essential when working towards longer term goals for clients.
“The design of AV solutions in all verticals, and the integration with IT, will almost certainly accelerate when business resumes. I’ve continued to stay in touch with and encourage clients to think past the current situation. It helps to take time and get to know more about clients’ long-term plans so we can research what technology is available now and what’s coming.”
Some restrictions relaxed
Construction and project delivery work is likely to be one of the first restrictions to be relaxed. However, avitaas’ McGinnis highlights that while some companies’ pipelines might be full now, the economy will be very different moving forward: “If our trade has been place-based and people aren’t in those places anymore we have to sell products and services in another way or completely restructure our businesses.
“We don’t know how far away we are from returning to revenue, but we do know most businesses will only see 65 or 75 per cent of their 2020 revenue expectations, so the expenses can’t continue, for all sizes of company,” he says.
“Cash is king at the moment,” points out Kraftwerk’s Murphy. “If you have cash in the bank and you’re in a business with long-term contracts – a lot of our contracts are two to three years which is common for installations – you’ll survive.”
AVI-SPL’s Rogers anticipates more consolidation: “We’ll see more partnerships between manufacturers as well as suppliers. We’ll all have a significant role to play.”
Although the AV world has been massively affected, it is an agile industry, and often the first to adapt and profit from global change, as QEII’s Jones points out, suggesting the pandemic could be “the midwife of technological progress.”
Sidwick also references the AV industry’s incredible resilience: “AV is often seen as a luxury, but now many aspects of what we sell have become mission critical. In a time when efficiency and impact are key it’s often investment in AV that delivers this, so whilst we have some major industry challenges today, I believe AV will be in a very strong position as we come through this.”