Already Europe’s largest market, German pro AV is moving away from its conservative roots but users need to be educated.
As if by design, business in Germany is spread pretty evenly across its various states making for an AV dealer base which is focused on particular verticals. The seat of government and therefore corporate HQs is Berlin, finance clusters around Frankfurt, the automotive industry is centred on Stuttgart, the super yacht business is in the North, Hamburg is home for broadcasting and the creative industries, while universities are concentrated in the middle of the country and heavy industry along the Rhine delta.
“It’s very regionalised. There’s not one single national integrator but instead very local SIs and dealers that operate within that particular vertical,” explains Robin van Meeuwen, president and ceo, Crestron EMEA.
Crestron organises its business in the country accordingly with its head office (of five) which includes sales, training and an experience centre based strategically between Munich, Stuttgart and Nuremburg. “Growth on the government side is tough just now so if I’m looking to regions of most growth it’s in the south particularly in automotive and corporate,” says van Meeuwen.
This is in accord with other evidence. A large majority of AV business, perhaps 80 per cent, comes from the south and south west of the country. Frankfurt, home of the European Central Bank, dominates the financial sector, with Dusseldorf being the ‘fashion capital’ and the leader for retail projects.
The Königsallee in Düsseldorf is Germany’s version of Rodeo Drive – the peak of excellence for all elements of the retail fashion experience. According to Aubrey Wright, managing director at full service provider Handy AV, the street is one of the most elegant and exclusive shopping destinations in the world.
“You can order a speedboat at Sunseeker and have a bespoke suite made at Brioni, then have lunch at the fine dining Brasserie 1806. The AV in the Kö (as the locals call it) is, like the shops, some of the best in the world.”
The use of digital signage in major German cities is being driven by the retail sector “with more and larger videowall solutions required,” reports Thomas Barz, managing director of mounts specialist, B-Tech Deutschland.
Demand is high in international shopping districts such as Berlin’s Friedrichstrasse and Kurfürstendamm, home of Europe’s largest department store KaDeWe, Cologne’s Schildergasse, the busiest shopping street in Europe and Marienplatz, in the heart of Munich’s old town. Handy AV itself works extensively for German brand Adidas and will be upgrading Primark stores throughout Germany this year.
Barz finds the level of competition for suppliers “one of the most intense in Europe”. Pricing is very sensitive, he adds, making it difficult to compete against larger companies that run on volume and lower margins. “However, by having an office, showroom and full stock located in Germany, with local sales and service personnel, we compete on the whole package of mounting solutions rather than just price.”
More than most countries, Germany expects to have the best service possible, together with very specific solutions but at the same time expect it to cost nothing, adds Barz. “Users have to be educated on the benefits of investing in the solution rather than just looking at the cheapest.”
The local AV industry is Europe’s largest, valued by AVIXA at $8.1 billion in 2016 and forecast to increase by three per cent year-on-year until 2022. It reports that the market is driven by corporate collaboration and enterprise media use, backed up by a large telepresence and conferencing market. The country also has a very established and advanced control room market for civil uses. Heavy industries, especially around Dortmund, Dusseldorf and Koln, are increasingly adopting IP video to provide employees with health and safety information.
“The landscape of AV users in Germany is still scattered, and explains why growth is not expected to slow down in the next five years,” says Wouter Bonte, strategic marketing director, events, pro AV & events at Barco. “The economy has recovered and is growing rapidly. The majority of pro AV integrators in Germany are fully booked and are battling a war for skilled technical people to increase their capacity.”
He adds that many conference rooms are “old-fashioned” with one small display, whether projected or with flat panels: “The devices are not managed centrally nor communicate to each other.”
Exterity ceo Colin Farquhar also notes the country’s “large analogue footprint” but suggests increasing crossover between pro AV and enterprise applications “as more organisations experiment with products and consider how they can get users to access content via IP to Smart TVs, Wi-Fi connected tablets, smartphones and other emerging devices.”
He describes Germany’s “unique b2b sector” as largely made up of mid-sized, often family-owned businesses. “We’ve often found that customers tend to have a regional bias and prefer to buy from companies that have invested in local expertise and talent,” he adds. “However, the combination of low unemployment and the large number of exports means that German pro AV is likely to maintain steady growth for the foreseeable future.”
Wright calls the overall market idiosyncratic. “A significant amount of planning, research and thought goes into projects there, probably to a much greater level than happens in the rest of Europe,” he says. “Energy costs can shape pro AV projects to an extent that doesn’t happen in other countries. Electricity is very expensive (second in Europe behind Denmark and almost double the cost of the UK). This can affect projects to a large extent. We’ve seen a slow expansion of digital signage, in part due to energy costs.”
Datapath’s sales and account manager Sven Matern concurs: “High costs of power have quite an impact on AV use in the region. Displays and systems that run at low power consumption are always going to be favoured over higher usage solutions.”
This will be a keen topic when the Digital Signage Summit Europe convenes in Frankfurt next July.
It may not come as a total surprise to learn that process and thoroughness are a big part of the AV industry in Germany. “Patience is needed, with some projects taking several years of planning before integrators get to work,” says Matern. “As AV-over-IP becomes more commonplace (across all of Europe, not just Germany) it is interesting to see the push and pull between the fast moving IT industry and the AV industry, where the pace of change is slower.”
Bonte finds the biggest demand for high-end AV applications is found in museums, other visitor attractions, corporate experience centres and theme parks. “The corporate segment is expected to drive growth in the near future as many enterprises are upgrading the AV capabilities of their headquarters and experience centres – across industries: from technology innovators to healthcare, from financial institutions to energy players,” he says.
Transportation, especially airports, as well as fast food, fashion and automotive, have all been showing growth for Peerless-AV. It is also targeting hotels and hospitality in 2018.
“Some of the more established automotive brands often want functional, reliable and proven solutions,” reports Melinda Von Horvath, the company’s vice-president of sales and marketing – EMEA. “However, many of the fashion brands, especially at the high end, want to push boundaries in terms of the size and scale of AV installations.”
Joachim Fischer, general manager, DACH sales at NEC Display Solutions, suggests retail is becoming increasingly specialised with particular opportunities for growth in the 4K/UHD sector. “On the other hand, we have the fast-growing area of innovative and collaborative conference solutions.”
While Brexit is generally considered to have a negligible effect on overall business in Germany, Frankfurt is already being boosted by banks relocating from London. “The focus of the UK market increasingly points to Germany and many major companies and final customers are settling down there – especially in the financial vertical in Frankfurt,” notes Fischer. “In the past, the German market was always somewhat conservatively oriented. Due to growing possibilities in terms of collaborative solutions and also in signage, this is beginning to change. The market is rapidly catching up in terms of cutting edge technology.”
“Brexit is already giving us a great opportunity to impact the corporate market in Germany,” says Max Hedayat, vice-president of sales, DACH for SiliconCore. “The spending budgets for new offices relocating from London to Frankfurt is picking up and with it the high standard and cutting edge technology demand. Brexit is a great opportunity for Germany to increase its number of corporate HQs in a variety of regions.”
In Wright’s view the region is conservative overall but with pockets of high innovation in the major cities. Bonte too spotlights a subset of players applying cutting edge tech in the form of future labs, virtual and augmented reality applications, projection mapping in domes, or massive 4K or 8K LED displays being used to ‘wow’ the consumer.
Users are starting to take a more progressive approach to AV technology. One example is Elbphilharmonie in Hamburg which deployed professional AV to deliver high-quality productions and performances. This, says Farquhar “perfectly illustrates how users in the region are becoming more willing to make bold choices with AV technology, particularly in the stadiums and venues sector.”
Soccer clubs TSG 1899 Hoffenheim and SV Sandhausen 1916 recently adopted AV technology to provide fans with a more immersive match-day experience. “This marks a clear shift in the AV culture in Germany, and we anticipate that in the near future it will establish itself as one of the most forward-thinking pro AV markets,” says Farquhar.
Case study: Baerlocher
Baerlocher, the Bavarian plastic additives company, uses Lifesize video conferencing technology to connect with employees, customers and partners worldwide. Headquartered in Unterschleißheim, near Munich, the firm chose 25 licences of the cloud-based application to equip conference rooms at eight main sites with Lifesize HD camera and phone systems.
Case study: BMW Welt
Munich visitor attraction BMW Welt had a recent AV overhaul to coincide with the luxury marque’s 100th anniversary. Consultants Macom appointed Kraftwerk Living Technologies to install a range of presentation systems including Crestron Fusion and DigitalMedia. The impressive exhibition space features a 28 metre high ‘double cone’ of glass and steel to which high resolution LED technology was fitted, spanning 150 sq m. This included screens, LED spindle and an LED highlights videowall. The business club, used for board meetings, has an LED wall, VC and sound system, controlled via Crestron.