AV Magazine
Pro AV markets in EMEA continue to grow faster than the economies of the countries in the region, but future growth forecasts are notoriously unreliable. Peter Lloyd looks at overall market performance and changes to product sectors. Adrian Pennington surveys user attitudes and routes to market.
Benelux: Hotbeds of potential exist in a conservative market
How would you describe the current business climate for AV?
Wouter Dierinck, business unit manager, TD Maverick: Compared to just four or five years ago, the potential is very good.
Filip Cogghe, key account manager NEC: The region is three to four years behind the UK. Government investment in AV for public services like health and education is static at best.
Gwenaelle Villette, business development manager, Peerless-AV: Experiencing satisfying and stable growth despite a volatile economic and political situation.
Should Benelux be treated as one zone?
Cogghe: Many people make the mistake of thinking they can manage Benelux from the Netherlands. If a company is based in Holland there’s a huge problem selling in Belgium because few people in the Netherlands speak French.
Dierinck: Language can be the difference between success – and real repeat business success – here. Nevertheless, the Dutch and Belgians understand each other very well and there are more things that are aligned than real differences.
How would you characterise user attitudes to AV?
David Van Dem Berg, regional sales manager, Polycom: Generally, clients require a deeper understanding of the value AV adds to their business overall to help justify their investments.
Dierinck: The Netherlands tends to be more experimental. Belgium can be more conservative – there’s a cultural attitude to prove that it makes sense from a business perspective. Belgium also tends to be more brand loyal, with distributors and partners going for things that they know fits them well.
Which verticals are showing growth?
Jan Breel, ceo, Avtrade: Corporate AV is the bread and butter of the Benelux, but there’s been substantial investment in cultural venues, such as the Continium Discovery Centre, Kerkrade and National Military Museum, Soesterberg. Broadly, the Netherlands is installation-orientated whereas the rental market is stronger in Belgium.
Dierinck: Businesses are looking to improve their meeting spaces and want more than just a classic projector-based way of working to bring their companies to life. The Benelux is also prominent in EDM (Electronic Dance Music) and hosts some of the world’s highest profile music festivals.
Does the route to market differ?
Steven Kemland, manager, Face: The step between a manufacturer and the end user is much smaller in Belgium than in most other countries. A distributor is, in many cases, distributor, dealer and integrator in one.
What does it take to be successful there?
Dierinck: Collaborate with a local player or speak the language natively. There’s an attitude that business is done by people, and invoicing is done by business. It is a very local way of working.
Where are the regional hotspots?
AV Magazine: Netflix and Uber established European HQs in Amsterdam; Delft is a hotbed of youth innovation, housing the country’s largest tech university; the OECD ranks Eindhoven as a world-leading city for invention.
Han Dohmen, sales manager, L-Acoustics: In Belgium, tech companies are concentrated around Leuven. There’s a very active corridor between Brussels and Antwerp.
Dierinck: Now is the moment to invest in the south of Belgium (and Luxembourg). Education is a growth area. The European Schoolnet aims to link 29,000 schools.
Germany: ‘Hidden champions’
Describe the current business climate
Stefan Kruger, sales director, DACH and Eastern Europe, Peerless-AV: In a slight decline which will impact the AV market. However, new innovations continue to help offset some of this.
Hans Stucken, senior marketing executive, Absen: Overall economic growth is stable but the Euro is very weak which has advantages and disadvantages, depending on how your business is structured.
Tobias Stumpfl, ceo, AV Stumpfl: Germany’s economy is largely driven by car manufacturers. If they are in bad shape (as VW is) then they cancel events or make them smaller.
What are the characteristics of German AV?
Kruger: Very particular about the quality of products and solutions. Product aesthetics, as well as the functionality, is key.
Stumpfl: Many decisions are made through structures and need to be approved by multiple bodies. This results in long preparation times, but high-quality decision making.
Oliver Schwendke, key account manager, GLP: Innovative, with far-reaching applications in TV, events, touring and exhibitions. And long product cycles.
Reto Brader, vice-president of sales, Barix: Perfection! German clients are well-educated and looking for the perfect fit in terms of quality, functionality and price. End users have lots of experience and a clear idea of what they want. There is limited willingness to pay for features outside the scope of the requirement specification.
Stucken: The US and UK still have a huge influence on developments related to the look and feel of many events and installations.
Where are the hotspots of activity and investment?
Kruger: Munich is very influential in the development of local AV. There are major digital signage projects in Munich, Stuttgart, Berlin as well as in Austria and Switzerland. Retail, transport and museums are all looking to create a more positive customer experience.
Brader: The upgrade of the country’s internet infrastructure will foster internet-based AV solutions in the coming years.
Stucken: There are an incredible number of ‘hidden champion’ companies that might not be based in one of the traditionally bigger commercial centres but in very small towns instead. And still they might be the market leader in a particular segment.
Which product sectors are in demand now?
Kruger: Large format digital signage in all forms from in-window displays to wayfinding kiosks to giant video walls.
Schwendke: Brighter LED lights and alternative sources, such as laser.
Stucken: Premium-quality LED products.
Which market verticals are seeing strong growth?
Brader: Wherever consumers interact with companies: bank outlets, restaurants, retail stores, car dealerships, fitness centres, hair and beauty salons. These all desire to improve the customer experience and enhance their brand recognition without adding expensive labour resources.
Stumpfl: Corporate installations including digital signage, experience centres and building automation. In rental and staging there is growth in 4K video gear (servers, switchers, screens).
France: fresh opportunities
What current macro-economic factors are influencing investment?
Christophe Malsot, country manager, Creston: The economic downturn has meant a number of companies and headquarters having to restructure; many are moving to smaller buildings and therefore redeveloping their AV networks. This was a good trend for our market. The high-end residential market was more impacted by the crisis and we notice a decrease here.
Gwenaelle Villette, business development manager, Peerless-AV: France is ranked third in Europe for digital signage growth after Germany and UK. We expect more favourable conditions in the next six months with new jobs created, and higher customer demand leading to more projects and an expansion in vertical markets.
Vladimir Aubin, sales director EMEA, BroadSign: Business can be expected to slow down six to nine months prior to the next presidential election in spring 2017.
Where is the main focus of activity and investment?
Villette: The Ile-de-France/Paris is still the main focus. However, some big integrators in the north around Lille and others in the region of Lyon have significantly increased their business.
To what extent has Euro 2016 galvanised AV?
Malsot: This is a great opportunity for French companies. Many stadiums (such as the Stade de France and Parc des Princes) have been refitted. The construction of new stadiums (in Lyon and Lille) also brings new business.
Villette: Outdoor displays into bars and cafes are a real opportunity as customers want to sit outside to watch international football games.
What other major projects are there?
Colin Farquhar, ceo, Exterity: The authorities aim to create a mega-university which will encompass 19 of the most respected institutions countrwide with its own requirements for internet and Wi-Fi connectivity and pro AV.
AV Magazine: The €30bn ‘Grand Paris’ is a massive effort to improve infrastructure and transport by 2030 including an ambitious plan to create an automatic metro – the Grand Paris Express – and 72 new stations.
Which verticals are seeing strongest growth?
Malsot: Corporate remains strong and is still developing with solutions like 4K, bringing fresh opportunities. Recently, the hospitality market had a big increase with hoteliers wanting to create a new experience for their customers with AV/automation solutions.
Villette: Retail and transportation are considered the most important and showing most potential.
Aubin: Retail, corporate and banking are ‘hot’ at the moment. There’s a lot that can be done in these venues through DOOH communications and messaging to engage with a specific audience, increase brand awareness/loyalty and augment spending.
Which product sectors are in demand now?
Malsot: The switching of HD AV signals. 4K distribution is increasingly required for larger companies (such as banks and insurance firms). We also see a trend toward collaborative solutions which enable IT, AV and facilities managers to optimise workspaces and building operations.
Middle East : Customer-facing projects make an impression
How’s the current business climate?
Eleuterio Fernandes, ME/Africa sales director, Exterity: The Middle East AV market will be worth $2.76bn this year (InfoComm International) of which the UAE will account for $1.24bn.
Mig Cardamone, sales and marketing director, Sennheiser ME: Confidence is returning with announcements of the mega projects that Dubai had become renowned for. Most of those have extensive AV requirements, but hopefully with a little more realism than was previously the case.
What do clients want from pro AV?
Steve Scorse, vice-president EMEA, SiliconCore: Impact to grab attention. A lot of the projects in Dubai are customer facing, with those in hotels, hospitality, transport and leisure geared towards tourism so these need to make the right first impression and establish each place as a destination, rather than just provide a functional solution.
How is this impacting AV routes to market?
Jan Tarakji, general manager, Pro Lab Trading: Highly competitive local companies that are more in tune to their client’s requirements are pushing out well established global players. There are too many players with access to non-exclusive brands which ultimately leads to price wars; excessive competition is sometimes downright dirty. The lack of general AV knowledge provides a lifeline to non-professional companies to operate here.
Cardamone: A reputation for delivering the ‘biggest and best’ projects fosters a can-do attitude that pushes the boundaries of AV technology.
How does Qatar AV compare?
Stephen Harvey, managing director, LM Productions: Business culture is less mature than Dubai. On-going business costs are high and there’s a lot of red tape in government tenders. It’s not an area you step into lightly. Many companies come to Qatar thinking they’re going to make quick money and are disappointed. You have to be in it for the long term.
How does business in Saudi Arabia compare?
Fernandes: It has remained quite stable and investors view it as an attractive place to do business, largely due to economic diversification, market liberalisation and a growing private sector. As a much larger country than the UAE, Saudi projects are also grander.
The eastern province hosts energy developments that are significant drivers of AV; the western region reaps the benefits of seasonal upticks in AV activity, particularly leading up to Hajj. The government mandates particular requirements for all commercial businesses like malls, hotels and airports.
What are the region’s key projects?
AV Magazine: Asian Games Cup 2019 and World Expo 2020 in Dubai. Smart City projects in Dubai and Saudi Arabia. FIFA World Cup 2022 Qatar is driving development including $45bn planned community Lusail.
Scorse: The government is the biggest client in the UAE, with AV high on the list of requirements for transforming facilities into smart buildings. Other hot sectors include corporate for auditoriums, lobby displays and meeting rooms for HQs, from the army and police to UAE-founded companies such as Emirates Airlines and global corporations with UAE head offices. The investment market is also growing with local market and multinational firms on the rise.
Eastern Europe: Poland dominates market and innovation
What macro-economic factors are influencing the AV market in the region?
Mariusz Orzechowski, director, NEC Display Solutions Europe; president, Polish Digital Signage Association (PDSA)/ founder member, POPAI Poland: In Central, Southern and Eastern Europe (CSEE), large investments are mainly carried out using EU funds and money from local budgets. More than half of AV investments in the region are implemented in Poland and these tend to be the largest and most advanced solutions. However, in Poland there are rapid political changes following October’s parliamentary elections with as yet undetermined consequences for the economy.
The crisis related to Syrian refugees could mean substantial public funds are frozen in individual countries to assist refugees. Shifting budgets to social needs may result in a reduction of funding elsewhere for AV projects.
What are the characteristics of Polish AV?
Orzechowski: Outstanding AV integrators can be found in every CSEE country, and the challenges and verticals in AV markets are very similar. But Polish companies are the greatest in number and are characterised by their creativity and initiative in developing bespoke AV solutions (producers of proprietary software, sensors, and mounting accessories).
Are there specific AV initiatives in Poland?
Orzechowski: Increasingly important is the Integrated Multimedia Systems Event (IMSE). It is held in Krakow and supported by InfoComm and the PDSA. The largest event for AV channel partners is the NEC Competence Days Pro AV Solutions training, held in Krakow each autumn. The PDSA is a common ground for major players in digital signage.
Which verticals are growing?
Orzechowski: In all CSEE countries interest in video walls is growing most rapidly. This includes monitoring and control rooms, crisis centres.
Poland is remarkable in all of Europe for the number of AV systems in museums. Here, the professional and creative impact of Polish designers and integrators is most apparent.
The transport sector is still very attractive for AV systems in the entire CSEE. Corporate communication is gaining in importance and besides common retail signage in supermarkets and malls, we note the popularisation of digital signage systems, including video walls and sales networks from telecom outlets to banks.
Russia: Recession and sanctions biting
How is the business climate?
Timur Goncharenko, sales representive, Peerless-AV: Unfavourable. The country is facing a long and deep recession. Key factors influencing this are low oil prices, sanctions and isolation from overseas financial markets. Investment in AV has slowed down since access to bank loans has decreased, interest on loans has increased and the exchange rate has doubled.
Michael Nevzorov, senior business development manager, Mitsubishi Electric: Together, these factors mean that few new projects are being commissioned, and those that are approved, or are necessary for the country’s vital infrastructure, have restricted budgets.
What AV activity is being commissioned for World Cup 2018?
Goncharenko: Investment is concentrated in stadium AV infrastructure and hotel AV in 13 cities and 16 stadia including Kaliningrad, Krasnodar, Nizhny Novgorod and Samara.
Nevzorov: Budgets have been protected, to some extent, for AV solutions for public safety and the World Cup. International trade regulations mean that local manufacturers and system integrators have a distinct advantage over overseas companies tendering for these contracts.
What distinguishes Russian AV?
Nevzorov: If we omit the current macro-economic difficulties… the market is very dynamic and creative. System integrators are not afraid to challenge technical difficulties and are very flexible in adapting solutions to customer needs. Another characteristic is very tight project lead times. When the customer calls with an initial inquiry, they often expect a quotation for the whole project on the same day – and many Russians can do that!
Goncharenko: Import substitution is the key factor influencing AV business. With budgets cut, the technical requirements from clients remains the same which can mean more low quality/low reliability products being installed, even in major projects.
Where is the main focus of investment centred?
Goncharenko: All the main projects and key integrators are based in Moscow. Occasional big projects exist elsewhere (such as the Sochi 2014 Winter Olympics).
Nevzorov: Moscow, Saint Petersburg, Kazan, Yekaterinburg and Novosibirsk. Other cities might be strong in specific verticals – the small city of Surgut is one of the county’s main oil centres and therefore oil industry-related projects are quite common.
What other major projects are in the works?
Nevzorov: Ambitious plans to modernise old or build new airports, and many cities desperately need intelligent traffic control systems. Oil and gas remains a significant industry, especially with plans to extract oil in the Arctic zone and the construction of a new gas pipeline to China.
Goncharenko: Digital signage in museums, cultural centres, retail.
AV Magazine: DreamWorks Animation plans to open an indoor theme park located south of Moscow in 2018 and two others at St. Petersburg and Yekaterinburg.
Scandinavia: Denmark and Sweden thrive but Norway slows
What macro-economic factors are influencing the AV market?
Mads Norskov, sales director, Imago Sonas: The economy in Denmark is stronger now. There’s a lot of construction work. New hotels, conference centres and office buildings are being built this year.
Trond Solvold, sales manager, Dataton: Stavanger in Norway has been an AV frontrunner, but investment is on hold when it comes to everyday projects due to low oil prices.
What cultural characteristics mark out Scandinavian AV from the rest of Europe?
Solvold: The Danish are traditionally very strong on creative design and visual thinking; Norwegians are quick to weigh up and incorporate new trends; Swedes have a very open attitude to new technologies and ideas.
More broadly in Scandinavia, there’s a strong principle of standing by what you say, an honesty sometimes misconstrued as naivety. We also strive to reach decisions as a group in the belief that the best decisions are based on consensus. This applies to decision-making on both creative and product development fronts.
Should the industry treat Denmark, Sweden and Norway as one region?
Nørskov: Viewed from abroad you will find a lot of similarities. When talking to partners in Sweden and Norway, I can see we succeed with a lot of the same things. But we are still different (in our languages), and a lot of companies fail having approached Scandinavia as one region. You need to have local presence.
Solvold: Different mentalities open doors. The Danes are tough negotiators. Swedes are strong on consensus, which can make the decision making process longer. In Norway, it has previously been easier to get acceptance for prices, probably because the Norwegian economy has been strong for so long.
Where is the main AV activity centred?
Nørskov: In Jutland, the harbour area in Aarhus, has changed from an industrial area, to one with offices and apartments. We’ve also seen Danish museums taking AV to a new level in the last couple of years (Mosegaard Museum outside Aarhus; the Maritime Museum in Helsingør).
Solvold: Gothenburg is a hotspot as it has a lot of heavy industry. Malmo and Lund in the south of Sweden are part of the thriving Oresund region, which includes Copenhagen. And let’s not forget Dataton’s own home region, East Sweden, which has become a centre for visualisation technologies.
Which major projects should we look for in Denmark?
Norskov: Copenhagen airport is always in development as it expands. Installation of the new Rock Museum in Roskilde is happening now.
Which market verticals are seeing strongest growth?
Norskov: Digital Signage and video conferencing grows every year with consequent demand for video walls, outdoor LED screens and better meeting room audio. Scandinavia generally, and Copenhagen in particular, encourages ‘smart and green’ investments.
Southern Europe: Education and signage stand out in Spain
How dynamic is the Spanish AV market?
Joan Maria Aixa Herrero, director, Maverick Iberia: Spain is an innovation hotspot, with large numbers of young companies developing digital signage solutions, or strong educational projects. Despite a significant improvement in the economy recently, unemployment is still above 20 per cent. So, it is positive in terms of investment but organic growth is slower than expected.
What cultural characteristics define Spanish AV firms?
Aixa: They are always willing to export their business into other European countries, and into Latin America where shared language is a considerable advantage.
What distinguishes Portuguese AV?
Aixa: Companies that operate there are limited by the size of the market. This forces them to develop new business in regions that have been Portuguese colonies in the past. These opportunities, especially in select African countries, can be massive and it really sets Portugal apart, compared to the rest of Europe.
Is the situation in Italy different?
Stefano Previtali, regional account manager, Powersoft: The difference between Italian AV and the rest of Europe is huge. There’s a lack of professionalism and respect. If something goes wrong, if the location is not good for the kind of show or the sound is unmanageable or nobody can see the projections, they will point the finger at the AV manager.
Is there any hope for the Italian AV market?
Previtali: Perversely, the economic crisis means companies with bad attitudes are losing out, while those providing the best answer to the market in terms of quotations, knowledge and technology are slowly winning through. Interestingly, price is becoming less important in favour of the solid organisation of events. So the situation is changing… but not as rapidly as it should.
Which verticals are seeing strongest growth?
Aixa: In education, Spain is probably – after the UK – the country with the most public investment introducing AV into the classroom. The volumes of interactive flat panels are small compared with traditional IWBs but overall sales grew 400 per cent in 2015. We expect a further boost in sales in 2016 and 2017.
Which products are in demand there now?
Aixa: Digital signage has the highest demand, and there’s further interest in everything related to cloud and big data required to manage information from beacons to facial recognition software. AV companies need to understand the importance of dealing with this kind of technology. From a meeting room point of view, we’ve seen a big interest in Microsoft Surface Hub, ahead of its introduction.
