AV Magazine
Canada is far from alone in experiencing the socio-economic shock of the pandemic, but the innovative nature of its culture and AV sector in particular are grounds for optimism.
Canada is about a tenth the market size of the US but its geographic spread and dispersed population centres mean the country has always been quick to adopt new communication technologies.
https://www.avinteractive.com/features/territory-features/optimism-in-the-extremes-27-08-2020/
“We are known as a pioneer and an early adopter,” says Mustafa Zaidi, executive director, Canada at Crestron. “When a new technology comes out into the world, Canada is very welcoming to try and use it to help gain efficiencies for its citizens.”
“The pre-disposition for working with performance media at a distance has been baked in for years,” says Samuel Recine, vice-president, sales (AV/IT Group, Americas & Asia Pacific), Matrox. “It’s a very diversified economy, has a strong educated workforce, and a climate where government directly encourages technological innovation.”
This is now being put to the test. By all reports the pro-AV business pre-Covid was strong and rising. “There were a number of pending installations including retrofitting government buildings, new builds in recreational centres, and we saw strong growth potential in restaurant installations,” says Tim Marshall, division manager, Erikson Audio (a Powersoft distributor).
“Pre-Covid, we were on a great trajectory,” agrees Zaidi. “We’d passed the phase where all we talked about was digital transformation and how companies could achieve the most favourable digital footprint. Now the focus has shifted to data and analytics and people are starting to push the limits of what AV can do.”
The pandemic is devastating many verticals. “Houses of Worship and entertainment venue business is likely to be virtually non-existent for the remainder of 2020 and well into 2021,” says Marshall. “Businesses have taken such a huge hit and are slow to reopen under strict conditions which is crushing their cashflow.
“Some integrators and contractor customers are not likely to survive the current state of business, and probably disappear, or perhaps re-emerge as smaller businesses, single-owner operator businesses or not come back at all. That is going to shake up the whole sales channel,” he adds.
The sheer number of closing venues is also putting an unprecedented amount of used inventory into the market. “There will be very little, if any, AV budget or renovations and installations in restaurants, hotels, fitness centres, theatres, nightclubs, bars and sports venues well into 2021 and beyond.”
Off the menu
Touring and live sound is “non-existent” for new product and sales opportunities until well into 2022, Marshall forecasts. “Even then there is going to be so much used inventory in the market from closed venues, liquidated touring companies and downsized touring systems that the market will likely need to reinvent itself.”
Even if the ability to present live events starts to come back in a reduced form, the number of companies and teams available to support and provide for those events heavily exceeds demand.
In Quebec over 100,000 jobs are directly or indirectly connected to the live event market meaning that over 100,000 people are currently unemployed, reports Andrew Hope, managing director of Canadian distributor, AVL Media Group (which is currently involved in supplying audio equipment to integrator TG Baker for the new Toronto Light Transit System). “This sad reality has led us to shift our short-term focus and reduce our reliance on live events,” he says.
Steve Curran of Broadcast Pix reseller Videolink believes the AV market is in “major trouble” with boardrooms and huddle room installs non-existent. What has been created is a business need for live streaming through PTZ cameras and cloud recording.
“Demand for live production systems with encoding and streaming capabilities have quadrupled for our company,” he says. “We are so overwhelmed we’ve hired another salesperson and contracted IT and service technicians to help with troubleshooting and servicing clients.”
Record demand
Lockdown has seen a surge in live streaming communications tools. Videolink highlights major demand for higher resolution PTZ cameras, live production switchers and recording equipment for use with live call video platforms, such as Zoom.
“Houses of Worship seem to be leading the need to promote their services online,” Curran says. “We’ve seen a steady increase in SRT streaming through point-to-point locations and distant studios. Toronto has seen increased activity in remote production studios using SRT and NDI technology to use video transport systems to operate additional camera studios from other cities and locations.”
From an integration point of view, more customers are looking for solutions that can be based on standard IT-type wiring. “Essentially people are looking into simplifying installation and looking much more at remote monitoring and control,” says Hope.
It’s a global trend that Covid has accelerated. “Pro-AV has been gradually migrating away from proprietary hardwired AV infrastructure and towards open standards-based media that works on IP,” says Recine. “Work-from-home and shifts from international travel towards large multi-group meetings online have all greatly reinforced what we’ve been advocating all along.
“The thing that Covid has put a spotlight on is that not all IP solutions are created equal and true standards are required to handle corporate and government AV requirements when people and equipment are not co-located.”
Matrox reports an immediate surge in March and April for solutions to capture, encode, live stream, and record for on-demand streaming later. But the focus in these months was “speed” including ease-of-installation.
“Now that we’re in the middle of summer, the need for speed has been replaced by high quality long-term discussions about how to build pro-AV environments that can more flexibly handle exceptional experiences in facilities as well as on the internet,” Recine says.
There has been “record setting” demand for some product as a result of Covid as AV/IT budgets originally allocated to the fiscal cycle are reallocated for getting back to the office. Two-channel audio interfaces, inexpensive studio microphones, headphones, USB microphones and anything related to those product groups are selling “at record pace” according to Marshall.
“There is increased demand for targeted messaging and content using existing audio and visual infrastructure with integration to security and life safety systems,” says Vince Schuster, vice-president, sales, Americas at MediaStar Systems. “For example, the human resources department or facilities management teams need to update signage to communicate social distancing or health standards. Remote workers need to have the same level of network security and access as if they were in the office. The needs of companies and organisations are now expanded beyond the walls of the traditional office space.”
Post-pandemic design
Zaidi says customers are now looking for more UC-based solutions, as these allow for a better remote or virtual working experience. “The need for meeting room solutions is still present, but the AV designs are changing. We see a rise in non-traditional meeting spaces, such as offices, cafeteria and hallways being outfitted with technology. The demand for digital signage solutions and people-counting sensors or occupancy readers is also growing. This technology was already available, but the adoption rate has increased tremendously.”
He cites as “groundbreaking” the CIBC Square in Toronto. This will house the Canadian HQ of Microsoft. Almost a thousand meeting spaces of different types from multiple vendors will be equipped with technology, the backbone of it all being Crestron’s XiO Cloud. “This will give the client insight into the management, monitoring and utilisation of their spaces,” he says. Phase 1 was due to be completed this year with the whole project by 2024.
There is lower demand in non-essential high-ticket items like large LED videowalls and projection mapping, although AVL reports supplying new LED videowalls in recent weeks into applications, including a casino and horse racing track. “We’ve also noticed that decision-making for traditional technology refresh cycles is going from three to five years as budget allocations are shifted,” says Schuster.
Regardless of Covid, the biggest challenge for contractors in Canada is tackling population density versus the sheer size of the country. “In the US, contractors can do most of their work within an hour drive of their home base and have enough customers in their immediate area to survive,” Marshall says. “Canadians may routinely have customers that are several hours from their office, and from a major city. In that case, the contractor’s product priorities are very different.
They never want to have to make a service call several hours from home, so they choose brands that are ultra-reliable, easy to troubleshoot remotely and easy to operate. They are less price conscious, more value conscious.”
The majority of AV business is done on the Eastern seaboard due to greater population density (Ontario represents around 40 per cent of the business in the country) but spanning five time zones, Canada’s provinces have different business cultures.
“British Columbia has a very laid-back approach – they are much more casual,” says Zaidi. “The further you go East, you’re in that ‘New York minute’ mode where everything moves faster and life is very, very quick.”
As a major resource economy “pro-AV serving industrial is very strong, including extreme environments,” says Recine. This is particularly the case in the west. Quebec has lumber and hydro, Ontario – manufacturing and finance, Ottawa and Waterloo are innovation hubs (although Google recently cancelled its smart city project in Toronto).
“In most large cities, AV companies tend to have more specialisation,” says Tom Murray, vice-president, Backman Vidcom (a PSNI Global Alliance member). “In Toronto, for instance, certain companies are known to be really good at a certain vertical, whether it is large construction projects, or broadcast AV, or digital signage. There seems to be a niche available for each AV company to pursue, while in less populated areas, companies tend to be good at many verticals, because they are forced to be as a result of the market demands.”
Quebec is an exception. The province is both unique and different in terms of culture, language, and conducting business. “For instance, Quebec actually has specific language laws that make it very difficult for AV companies from other provinces to conduct business there,” says Murray.
“More so than the other hubs, success in Quebec requires a well localised business strategy to embrace language and culture,” says Frank Gerstein, CEO at Toronto-based Westbury National (also an PSNI Global Alliance member).
French speaking
Montreal is a global hub for experts in science and technology and a world leader in artificial intelligence, says Recine. “Canada punches above its weight in AV/IT.”
One approach, says Schuster, is to have representatives in Canada who are bilingual in French and English with local support and warehousing in the eastern and western provinces.
“Many Canadian organisations maintain some level of US dollar accounts to protect them from adverse currency exchange events. If this is not the case, another approach is to have pricing set in Canadian dollars on a quarterly basis due to currency fluctuation and/or lock quotation pricing in Canada for a three-month period or a reasonable time for the project to be funded.”
The real unknown is what form the re- emergence back to ‘normal’ will take. “Those companies who believe that things will return back to normal, and that there is no need to adapt to new market conditions, are likely to be those that won’t survive,” says Murray. “There will definitely be opportunities associated with this change. We need to explore what those opportunities will be and what kind of leadership role the AV industry will have with this change, whether it’s a shift in new service, product, or experience.”
Gerstein believes massive change will lead to equally massive opportunities. “In retail, we see the need for more digital signage to support wayfinding and safety messaging. In museums, art galleries, and exhibit spaces there has been a sudden shift away from interactivity to passive engagement,” he says. “Although the new norms around human connectivity means less intimacy for the foreseeable future, this is an incredible opportunity for pro-AV to reinvent and solve the greatest challenges around how we work, learn, play and live, physically and virtually.”
