The strengthening outlook for AV in the United Kingdom
With 67.3 million people to entertain, educate and communicate with there are substantial opportunities for the UK’s AV companies, writes Adrian Pennington.
Image: David Hockney: Bigger & Closer not smaller & further away at the Lightroom
AVIXA’s current Industry Outlook Trends Analysis (IOTA) shows the UK market for pro AV growing by 7.6 per cent in 2023, reaching U$7.7 billion. Growth slows over the next five years, with a compound annual rate of 5.5 per cent. Although this forecast was put together before the war in Ukraine impacted higher inflation and rising interest rates (within the UK and Europe) the return to in-person activity and continued experimentation with hybrid work have been strong tailwinds for pro AV in the UK as elsewhere.
“This has helped the industry weather some of the storms coming from the general economic situation,” says Sean Wargo, vice-president of market intelligence, AVIXA.
He advises that some categories of hardware continue to have long lead times, “delaying completion of projects, negatively impacting cash flow, and creating an overhang of work.
“While clearly a challenge it also means there is a buffer of unmet demand in the market as things slow down a bit,” he says. “Staffing remains a constraint as it has become difficult for providers to find the staff needed to complete the work, thereby also resulting in pent-up demand.”
While Brexit is “clearly” still a factor, the issues identified by AVIXA are “likely greater contributors to the overall situation in the UK. Or at the very least are exacerbating any of the challenges created by Brexit,” says Wargo.
While AVIXA prepares an updated forecast later this year, reports from vendors to AV Magazine support the impression that the UK has weathered the storm and is preparing for a brighter future.
Back for good
“Pro AV is very busy, with order requests for everything from enterprise applications down to small meeting rooms,” says Ben Turnwell, regional sales manager, Clear-Com. “It has picked up in leaps and bounds since remote working was the only option, and the need for good audio and good communication has been a top business priority.”
Kramer’s country manager, Mike McHale adds: “While the year has started off a little more quietly than we’d have hoped, we’re still bullish about the prospects for the market. We are still seeing supply issues affecting some of our competitors but Kramer has not been negatively affected to any great extent largely thanks to our dedicated production planning team and the financial resources of Fortissimo Capital (owner of a majority stake in the firm).”
This is echoed at Promethean where UK chief, Simon Port says: “It’s been challenging recently, not just for pro AV, but all industries in the UK. For education specifically, technology funding has been under immense pressure as schools try to close budget gaps caused by rising operational costs.
“That said, as we look ahead to the next six months, early indications suggest that the tide is starting to turn, with a more positive outlook on the horizon. Energy prices are reducing, and feedback from customers is that they are growing in confidence about allocating future spend.”
Supply chain challenge
There’s a note of caution struck by Inesh Patel, business development manager, Sennheiser citing “unprecedented” levels of uncertainty and unpredictability, “making it difficult for industries to plan for the future.” He says: “The ongoing financial climate and the ‘cost of living’ crises further exacerbate the situation, leaving businesses unsure if their plans will come to fruition.”
Supply chain issues are having to be managed. For example, Ingus Lasinskis, operations director at flight case maker, 5 Star Cases says: “There’s a lot of uncertainty in forecasting. Although some customers may have ordered cases from us which are customised to fit a specific product, they are facing delays from other equipment manufacturers which are also experiencing the impact of the supply chain.
“We’ve been able to address this. Historically, a lot of our business has been in the live events market but, following the pandemic, we diversified outside our traditional markets and created new products to serve them.”
Live event surge
There is excitement about business opportunities in some quarters, particularly live events. Adam Marsden, regional sales manager, Datapath describes company activity as “extremely busy” on the back of a market resurgence and a strong ISE which he sees continuing over the next 12-18 months “and hopefully beyond.”
According to Clear-Com the touring industry “has grown massively” since 2021 and will continue to grow because the public’s expectations of a gig have gone up: “People expect immersive video and audio, and high-tech, sophisticated performances which require huge crews and a wealth of different suppliers for the kit.”
Adds Turnwell: “Theatre is also back to just about one hundred per cent. Venues are open at max capacity, and since travel is also back in a big way, people are flooding in from all around the globe, particularly to London’s West End. Watching streamed video no longer cuts it for some people. They want to go out, have a drink, a meal, and make it an overnight excursion with a hotel room, so those businesses are also growing alongside the growth of theatre and live production.”
Upcoming major live events likely to attract AV business include the King’s Coronation: “We’ll see a temporary rush for audio equipment, which will be very welcome for the UK’s recovering hire companies,” says Sam Nankivell at audio distributor, 2B Heard.
Further ahead and the UK general election in 2024, and continental events UEFA Euros 2024 in Germany and the Paris Olympics next year will likely be supplied in part by UK firms. “We normally see a rush for companies to upgrade town hall spaces to include suitable live feeds, and of course the pub and sports bar market will be looking to upgrade their offers,” says McHale.
It’s worth noting that Datapath says the status of live events for UK AV is gradually improving, but its numbers are still not near pre-Covid figures. Brompton Technology which makes LED processors has also seen an uptick in large stadium and arena shows. “People are still happy to pay for entertainment,” observes technical sales manager, Patrick Goodden. “Despite the cost-of-living crisis, we are seeing shows like ABBA Voyage demonstrate people’s acceptance of new technologies being used to deliver unique experiences.”
Brompton suggests there’s more Virtual Production use in the UK than in other parts of Europe. “I would say the VP market in the UK is as strong as anywhere outside the US. The amount of media coverage VP has received means people are thinking about LED and what it can do.”
The new pop-up volume at Garden Studios is a case in point. This is a collaboration between Anna Valley and Garden Studios using rental panels to furnish a large and well featured LED volume available for hire in an inner London location.
“The worlds of live events and VP are colliding,” says Goodden. “Much of the tech that was used for live events was repurposed during the pandemic for VFX, allowing these companies to stay afloat while tours weren’t going ahead. This means that some event rental companies are now offering VP alongside traditional events.”
However, this also means there’s a skills gap, as people who were used to doing live events are having to retrain to work on film and TV projects, which stretches the resources of these companies.
Goodden believes that the growth of VP volumes in educational institutes will help fill these gaps and support other transferable skills, such as designing 3D worlds inside video game engines.
Command, control & display
Datapath’s highlights booming enquiries within for command and control. It has a new demonstration setup near London used by Midwich/PSCo teams. Together with an existing demo centre in Derby, the company aims to show integrators and clients “things they would never have even thought of,” says Marsden. “It gets the conversation going and helps the audience make the right decisions for their control room (or other environments) needs.”
On the display side the climate is “very buoyant” reports Luke Marler-Hausen, sales manager, Leyard Europe, who even calls the UK market the biggest it has seen to date.
“We expect demand to taper a little with caution being shown by bluechip companies, however we still expect strong business. Businesses seems to be transitioning to a longer-term strategy with strong environmental ethics which suit LED and microLED displays.”
“The UK has had a cautious start to 2023,” says Chalene Chandrasiri, sales director, Peerless-AV. “However, for us the corporate market is strong and will continue to grow. Higher education and the UC/VC markets are booming. We’re also seeing a big uplift in projects on dvLED.”
The retail vertical for display is delivering “strong brand growth” for Leyard combined with “an understanding among retailers that content and use of screens is paramount to how successful they are.”
For rental and staging, Marler-Hausen describes a cautious investment cycle, with the challenges less about equipment and more the need for skilled personnel to run the kit safely.
“On more than one occasion we know that rental partners have had to turn down projects due to lack of trained people. There’s a strong drive to improve this skillset loss now, which we fully support.”
Education – mixed messages
Lightware Visual Engineering has its eye on UK government funding for infrastructure projects, including the construction of new hospitals, schools, and housing.
“Pro AV is expected to provide solutions for audio visual communication, wayfinding, and signage,” says UK CEO Craig Storey. “Education and healthcare sectors are expected to drive growth here.” Overall, the industry is predicted to recover slowly but steadily over the next 12-18 months, with a focus on innovation, digital transformation, and cost optimisation.
Promethean’s Simon Port is less sure that schools will benefit from funding that may only be invested in the building’s fabric. “The temporary shift in budgetary pressures has led schools, colleges, and universities to push the lifetime of their technology even further,” he says.
“While the end of warranties has traditionally been the catalyst for an edtech refresh, there’s been a noticeable move towards warranty extensions and products still being used despite recurring faults.”
He adds: “The budget challenge has also driven change in how AV products are purchased.
“Leasing and finance agreements are growing in popularity in education, which is leading more channel partners to offer this service.”
While recovery in the hospitality sector is inevitable, “there are still some casualties and the industry may have other priorities besides AV in the short term,” remarks Sennheiser sales director, Ken Morrison.
“The loss of revenue and staff to other industries has forced many hotels to make cutbacks and increase prices to survive.
“The corporate world has fared better, but it’s a double-edged sword. While companies have become more accustomed to holding virtual meetings over platforms, it has led to some companies downsizing their premises as they no longer need as much space.”
Despite this, says Morrison, the demand for AV equipment continues to rise, and the need for high-quality experiences increasingly important, as everyone wants to recreate the in-person meeting experience as closely as possible.
This view is supported at Clear-Com. “Corporations have reduced office space and focused their budget and energy on increasing technology instead, so there’s a huge demand for mobile and wireless systems,” says Turnwell.
There’s nothing too unique about the UK market’s use of AV. As Morrison says: “Everyone wants simplicity and automation”. Rather what a company facilitates in the UK “sets a precedent for other AV and live events around the world,” says Turnwell.
For manufacturers coming into the UK market, “building out a strong channel model backed by robust support and transparent communications is fundamental,” offers Port.
This article appears in the May print edition of AV Magazine under the headline Strengthening despite Brexit.
Adrian Pennington
Visit the AV Magazine website to stay up-to-date with all the latest AV industry news.
Posted: 10th May 2023