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Challenging Times Ahead for Touring, Rental and Events
Update: Futuresource Consulting continue to monitor the changes happening across the Professional Audio landscape during COVID-19. As part of this, we're providing a series of educational YouTube videos, the most recent of which covers the Professional Audio sector and can be accessed here.
The professional audio industry is one of consistent long-term growth, and leading into 2020, new product and vertical opportunities are set to continue for the foreseeable future. However, COVID-19 comes as an unprecedented crisis for many, and the professional audio industry is no exception.
The largest pressures for the pro audio industry are expected in the touring and events markets, sectors which have now completely shut down for most nations. Tours have been cancelled, festivals cancelled or postponed, theatres shut, and sports fixtures scrapped. This was an early reality of the virus outbreak, with leading statements from governments all around the world banning or discouraging large gatherings to prevent the spread.
China had a full lock-down of near to 60 days, and many expect other countries to follow a similar pattern, if not longer term and more lenient. Although the Chinese government has relaxed its measures somewhat, Futuresource understands from channel contacts that the events market is still completely stalled. Despite many restaurants and clubs having re-opened over the past month, organised gatherings of more than 250 people are expected to take much longer to recover. More recently China has experienced a slight resurgence in the number of reported cases, so this may impede further relaxing of policies relating to events. Governments want to manage the spread of the virus to within the capacity of health systems, and large gatherings bring too much unpredictability to the resurgence of the virus.
That said, as time moves on, it is likely that governments and bodies will continue to release updated and softer guidelines on the size limits of events. Many events that are currently being postponed are being shifted to October/November 2020, which seems realistic for smaller events of below 2,000 attendees, but beyond that many expect stadium tours and festivals to eventually be pushed into 2021, with many large events “skipping” a year.
The impact of this on professional audio and other event technologies will be significant. Although many brands in the audio industry experienced fairly solid sales for the first two months of the year, many rental companies have completely halted stock replenishment or new purchases for the foreseeable future. It has been reported that rental houses will sit on their old stock until event restrictions begin to show relief, and even then, cash reserves will be significantly depleted. Some smaller rental companies that run at breakeven point, will not be able to weather the storm, and the same goes for some smaller audio manufacturers. In the touring and high SPL loudspeaker category, one manufacturer is already rumoured to have been heavily cutting staff.
For high-SPL speaker brands, some sales will come more readily from install sales of continuing projects over the coming months, and in a small amount of cases larger projects will go ahead that will actually take advantage of down-time to refurbish. However, many event spaces that were due to upgrade will likely postpone given current uncertainty. Many of these spaces now switch their strategies to one of content streaming and creation, providing some demand for microphones and other recording equipment, but leaving out speaker and live sound installation until event demand begins to pick back up towards the end of the year.
One positive to come from a staggered return by larger event space capacities may be temporary surplus demand for smaller events and venues, bringing initial post-isolation music and events back to the local communities first. Following this, the wider market is likely to be faced with consumers hungrier than ever for live events and the shared experiences which have become so important to modern society. It is important to keep sight of the long-term growth and success of this industry, and although in the short term the impacts will be severe, many will continue to plan and install for what will likely be a much more positive new year.
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This blog forms part of the Futuresource B2B Technology COVID-19 series and draws insights from our regular reporting, all of which can be viewed here. Our analysts will be updating these blogs periodically to reflect the latest news and insight impacting this category.
As your business navigates through this difficult time, we would like to remind you that Futuresource is here to help. As always, our Analysts can provide ongoing helpline support and debriefing calls to provide an open discussion around the impact of the virus on your particular industry and business.
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Here at Futuresource Consulting we deliver specialist research and consulting services, providing market forecasts and intelligence reports. Since the 1980s we have supported a range of industry sectors, which has grown to include: CE, Broadcast, Entertainment Content, EdTech and many more.