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The Future of Professional Speakers Following the Outbreak of COVID-19

Professional Speaker Market Insights, Analysis and Commentary

13 Oct 2020 - The market for professional loudspeakers posted global revenues of nearly $3 billion in 2019, an increase of almost 7%, according to the latest professional loudspeaker industry report from Futuresource Consulting. One of the key themes of the report this year was the impact of COVID-19 and its significant effects on forecasts moving forwards. The segment most affected by these restrictions is Live and Touring. “Over recent years, the touring industry has experienced consistent growth, driven by a range of factors, including the music streaming economy, an overall increase in the use of events as promotional tools, and significant growth in consumer demand for live events,” comments James Kirby, Pro Audio Analyst at Futuresource Consulting. However, the segment now faces difficult times and the “new normal” presents a serious challenge. Kirby mentions that, “with concerts having been cancelled worldwide for some time, large production companies and brands within the industry have faced significant losses and cuts in staff over the past six to eight months.”

Whilst the worst of lockdowns is over for some industries, events will likely be one of the last sectors to return to normality. That said, Kirby says that, “the return of the market to previous levels is expected over the coming years following effective treatments or a vaccine and will be driven forwards by the underlying societal demand for memorable and shared experiences, which has become entrenched in modern culture.”

The installed leisure segment, which supports many of the same event applications, is showing early signs of improvement and investment. “As well as being a more positive area for touring brands during the crisis, the installed events space is full of venues, big and small, that are beginning to invest in audio ready for the return of demand over the coming years,” says Kirby. Although this market still faces many challenges, with revenues down significantly in 2020, Kirby comments that, “it has become key to sustaining business for manufacturers and is showing much more stability than the rental market, with more recent improvements indicating early positivity for the broader events markets.” However, he also states that, “positivity varies significantly by sub-vertical, and more diversified industries with greater cashflow, such as worship, sports and corporate events, are demonstrating significantly more market confidence.”

Portable sound, being an area also dependent on gatherings and performance, has been impacted significantly by the crisis. This is largely because of government regulations on pop-up social gatherings, small day-festivals, and hospitality events. However, looking forwards its recovery is expected to be faster than that of the touring market, driven largely by the resurgence of smaller events, gatherings, and the reopening of practice venues in the mid-term. The report mentions that over the past few years, the portable sound market has seen relatively slow value growth compared to other verticals, mainly due to falling ASPs. However, it has also shown significant innovation during this time. Powered products, more compact solutions and integrated DSP are just a few of the trends which have been driving growth. “The home studio monitor segment of the portable sound market has also been an overwhelming area of positivity, and moving into the pandemic, this is one of the only areas which will receive significant revenue gains as a direct result of social distancing policies,” says Kirby. “This, combined with continued innovation in the sound reinforcement market, will be key to portable sound’s growth over the forecast period.”

The second largest market in this report, installed commercial, having already achieved the highest growth of any vertical in 2019, is also expected to be the most resilient throughout the pandemic. The report explains that this is because of the greater ratio of larger projects in this vertical, but also comparatively strong performance from some key sub-verticals, such government projects, higher education, and corporate conferencing. Until 2020, the installed commercial market was demonstrating consistent growth driven by PA/VA technology, background/foreground music and commercial events spaces. “The EU regulation of EN54 has made a significant impact on the European PA/VA market, and spill over effects of this standard have continued to impact the rest of the world. This is especially the case in the Middle East but has also been witnessed in Asia and the Americas. In Europe, some countries have even implemented in their building technical code that any new building over 300 people in capacity must have an EN54 compliant system installed,” Kirby explains. Alongside this, the upgrading of background and foreground music in a range of applications has continued to take hold, with establishments aiming to improve the customer experience in different ways; a dynamic which the report covers in detail by sub-vertical. Kirby mentions that all these trends are expected to be somewhat dampened by the outbreak of COVID-19. However, “these factors will also evolve as a result of the crisis, bringing some unique positivity in the long run.”

The smallest vertical in the report, cinema sound, is also expected to show declines as a result of the outbreak. Dynamics here follow those of live events spaces, however, Kirby explains, “in the longer term it is likely that COVID-19 will have accelerated consumer content-viewing habits, ultimately causing an even greater negative impact on the growth of cinema.” That said, also mentioned is the overwhelming desire to differentiate the professional cinema experience, which will likely be intensified following the crisis. “Combine this with the need to separate audience members, and this will likely lead to greater emphasis on luxury complexes with improved seating, displays and immersive sound.”

Despite all the pressures faced by the industry over the coming years, the rate of recovery is still expected to be significant, with many verticals completely recovering well within the forecast period. That said, there will be many strains in the mid-term, with all channel companies, suppliers and end-users being severely impacted. Overall, the market will have lost a significant amount of potential compared with previous forecasts, with little support from governments to keep channel and the events industries intact. Brands will have to carefully navigate this crisis and push resource into positioning products for markets which will see the most positivity over the next few years. For those that can weather the storm, demand will continue to pick up moving through 2021, and in 2022 the total professional loudspeakers market will eventually reach pre-2019 levels.

The Professional Loudspeaker Market report covers all major verticals for pro speakers: touring and rental, portable sound, installed leisure, installed commercial and cinema sound; the report displays current value and volume sizing, product category splits, as well as regional and vertical forecasts through to 2024. Combined with commentary and detailed explanations at a sub-vertical level, the total report also provides best case and worst-case forecasts for the years ahead. For more information on this report and the professional audio markets, please get in touch with Leon Morris via leon.morris@futuresource-hq.com

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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.