July 29, 2019 by Sean Wargo

Live PerformanceWe live in the experience economy – so say the soothsayers of trends. In simplest form, this means consumers are buying into holistic experiences rather than just isolated transactions. Or, rather than just buying the burger, they want not only the fries to go with it, but the entire meal and everything wrapped around it, including the social experience of talking about it afterward.

For an industry based upon creating a compelling value proposition, like pro AV, this is money in the bank. Consumers’ willingness to spend up to get a more engaging total experience, whether in a store, at a show, or at any other venue, suggests more revenue potential for the business. In theory, this in turn increases improvement project scopes and budgets as the decision makers seek to ensure an exceptional experience. Integrators then benefit as these companies turn to the experts for best aligning technology with these needs. The question is, does this happen in reality? According to recent research from AVIXA, the answer is a mixed bag.

AVIXA recently turned its research lens on the live performance sector, as another volume in its growing series of Market Opportunity Analysis Reports (MOAR). Live performances are one part of the broader live events market and often represent temporary installations of AV hardware for touring shows across a diverse set of venues. Thus, leasing and support service are common aspects of the AV provider solutions for the space.

Given the experience objectives of performances, one might expect show producers to be investing greater amounts in the various components of a show, one of which is AV in all its forms. Audio, lighting, video, staging, environmental effects, audience response, and even AR/VR all can play a role. Thus, the goal of AVIXA’s research was to determine how performances are faring as a business and what this means for providers serving them. Here’s a bit of what was learned: 

  • For starters, live performance is faring quite well, and the experience economy does appear to be in full effect. Ticket sales data from Pollstar and others suggest concerts and live theater generates more than $10 billion each year in the U.S. Furthermore, average ticket prices are rising as consumers are increasingly willing to spend more for a show.

  • And yet, AVIXA forecasts predict that live events as an AV solution area, of which performances are a part, will decline from $10.2 billion in 2018 to $8.6 billion in 2023 in the Americas. What’s going on here is a fundamental shift in the investment for entertainment facilities, with more expected to be spent on more permanent integrated solutions than temporary ones by live events producers. This is further supported by the data from the producers themselves.

  • According to the surveys among the producer community, many of the resources needed for technology management and usage, exist in house. And further, their level of investment in owned hardware (instead of leased) is increasing. The resource issue even crosses into the mid-to-late phases of show production, in which AV is installed and operated – places where outsourcing often has occurred. Unlike traditional production though, the good news for AV solutions providers is they are more often involved in the up-front scoping of a show’s hardware needs. This is a coveted seat at the table many integrators would love, since it has clear impacts on project scopes and budgets.

The in-sourcing ultimately makes some sense from a logical point of view. If exceptional experience is the desired outcome, production companies are clearly voting with their dollars for more certainty in the outcomes. Owning equipment and staff can be seen as a way to try to control for unknowns and be in a position to better guarantee a successful show. The flaw is in the changing nature of technology and the complexities of effective utilization, making it hard for a production company to keep the hardware and supporting skills current. This is the strength of the provider community.

In the end, it is those strengths, coupled with flexibility and a focus on excellence, that will keep providers relevant in the face of more insourcing. Plus, the trend toward ownership ultimately doesn’t mean producers aren’t seeking solutions, just that the nature of those solutions is changing. Pro-AV providers are already adapting. According to interviews with the provider community, many who serve the performance space are using different words to describe themselves. Instead of saying they are strictly live events firms, with the implication they are more from a leasing model, they are listing themselves as AV integrators first. While labelling is a subtlety, it also indicates the firm’s focus and sends a message to the market about the skills they offer. Using an integrator label can provide a different, and perhaps, welcomed message to a performance producer looking for more permanent solutions. Whatever the case, as we continue to say over at AVIXA – winning the business continues to be through a diversity of offerings. With that, happy prospecting and many successes whatever your approach to the healthy performance market. Learn more about MOAR Live Performance. 

About Sean Wargo

Sean Wargo is Senior Director of Market Intelligence for AVIXA. He is responsible for helping AVIXA realize its strategic goal to become the authoritative source for market intelligence in the AV industry through data capture, analytics expertise, insight delivery, and world-class market research.  Sean was formerly the Vice President of Research at BDS Marketing, LLC and Director of Industry Analysis at the Consumer Electronics Association.