When you hear that infectious fournote audio signature on television, you know without even consciously realizing it that there's "Intel inside." The makers of components of larger systems, who have tended to labor anonymously in years past, are waking up the need to market their own brands. It's a worldwide phenomenon that transcends market sectors: Siemens informs you that they may not make the television set, but they make the technology that makes it brighter; Boeing takes 30 seconds next to a Budweiser commercial during a football game to extol their aircraft despite the fact that most viewers aren't currently in the market for a $30-million 737. OEM speaker manufacturers are getting on that same boat. "The speaker manufacturers are being more assertive about increasing their brand awareness," says Jack Kelly, president of Group One Ltd., which distributes the UK-based Celestion brand in the U.S. Kelly adds that Group One made a strong effort to build brand awareness for Celestion to stimulate demand for Celestion OEM speakers in the P.A. market. (Celestion has long been a major supplier to guitar ampli- fier manufacturers.)
At a time when the industry is contending with decreasing revenues and margins as lower-cost suppliers enter the market, and as actual manufacturing by established brands moves offshore to compete, creating a recognizable brand image acts as a hedge against price erosion by creating an image that reflects the use of higher-quality materials.
Eminence, a speaker manufacturer named after the town it's headquartered in in Kentucky, has been a longtime supplier of OEM speaker products to companies including Fender, EAW and Community. Chris Rose, the company's marketing manager, says Eminence considers itself a link in a chain that extends from the components suppliers who punch out speaker baskets to the manufacturers of the enclosures, with Eminence and the handful of other established OEMs, including RCF, 18 Sound and B&C, as a nexus in the market. "There's a whole chain out there that results in a good speaker being matched to a good enclosure–that's where the magic comes from," he says.
However, the era of the Wizard of Oz, where the engineer works behind the curtain and the P.A. brand takes at least perceptual credit for the speaker, is coming to an end, Rose agrees. And that's a good thing for all involved. "When the brand is strong for the speaker, we feel it adds credibility for the enclosure maker," he says.
That's led to Eminence instigating a worldwide brand-awareness campaign, something that Rose acknowledges wasn't part of the corporate strategy until relatively recently. Six years ago, Eminence began af- fixing its own label to its OEM speakers. And China, the elephant in pro audio's parlor, was a major factor in the decision. "A lot of this coincides with so much of the manufacturing moving to China," he says. "The need to market the brand is probably the most dynamic change in the OEM speaker business in the last few decades."
That's not a glib comment, either for Rose or for the sector as a whole. Like much of pro audio in the 20th century, speaker manufacturing was as much a guildlike craft as an industry. A relatively small group of companies manufactured products and components for an equally familial collection of OEM companies and distributors. That bucolic landscape was largely ripped apart during the last decade, as anyone in the music recording business can attest to. A few pockets of pastoral quiet remained, but were soon caught up in the globalization of manufacturing. Speaker makers were among them.
Eminence, a city of about 3,500 people, is located between Louisville and Frankfort, in the Bluegrass region the state takes its motto from. It's emblematic of the type of business that making speakers was when Shanghai was an exotic travel poster instead of an FOB destination. The father of company president Rob Gault founded the company there in 1966. Rose says there's still a tremendous sense of obligation felt towards the community from which Eminence, the speaker company, has drawn its workforce for 40 years. Eminence has a factory in China now, and Rose sees it as a necessary and positive move–one that seeks to grow his business, not undercut domestic manufacturing. "Our customers are selling speakers to Costco and Wal-Mart now, in products that would never have been on our map a decade ago," he says. "Overseas manufacturing is part of what it takes to grow that, and developing the brand name is what you have to do to differentiate yourself and your product from the larger flow of products that come out of this bigger range of OEM manufacturers."
OEMs may face global competition now, and the estimated single-digit growth of the professional speaker sector means a lot of company growth will come from taking existing market share. However, there is a new and expanding niche in the market: boutique P.A. system developers that constantly need leading-edge speaker designs and refinements. Relatively new companies, such as EM Acoustics and Danley Sound Labs, are becoming growth opportunities for OEM speaker suppliers. The nature of the high-end, highly customized products they seek is also a hedge against Asian competition.
Another area of opportunity is audio companies entering the transducer arena, such as QSC's venture into powered speakers. Andy Farrow, U.S. sales manager for Celestion, which supplies some of QSC's speakers, says these new avenues of demand are proliferating. "We're coming across them on a weekly basis," he said on his return from what he described as a particularly robust NSCA show in March.
OEM speaker makers will find more opportunities like these in coming years. They'll have to, as the sector becomes more globally dynamic.
