Audio people tend to be a nerdy bunch. Last month on March 14, we all celebrated “Pi Day.” In case you missed the hoopla, it’s that rare occurrence on the third month on the 14th day of the 15th year of a century at 9:26 am, or 3/14/15 9:26. This was as all nerdy types (myself included) took a few seconds away from Facebook to celebrate stardate 3.1415926 — equating to a mathematical constant we all learned in calculating the circumference (2π r) or area (π r2) of a circle. Easy enough.
Certainly more complex than Geometry 101 is making the hyperspace leap up to Albert Einstein’s classic E = mc2 equation, which defined the relationship of an object’s energy (E) as its mass (m) multiplied times the speed of light (c) squared. Now, don’t misunderstand me. There’s nothing inherently wrong with this 110-year-old formula and its ramifications of redefining much about the way the world (and universe) works today.
The Money Channel
The key part of this is another parameter: MONEY, as represented by the universal symbol $. Yet for hundreds of years, scientists such as Copernicus, Tycho Brahe, Galileo, Newton, Einstein, et al, all missed the point: Money makes the world go round.
But back to our E = mc2 model. The speed of light is a fixed value — an unchanging physical constant. However, if you need more work done (energy, or “E”), it will cost you more, unless you do it all yourself, which requires more time — which is a decidedly non-constant parameter. In audio production terms, the mass (m) part of the audio equation can simply be defined as gear. So getting anything done is a matter of labor, gear and money, and given adequate capital resources, nearly anything is possible.
Many industries — including pro audio manufacturing and production — have benefited from recent shifts in the capital continuum. Changes such as lowered oil (i.e., gas) prices have made a noticeable dent in all our lives, whether you are a commuter or simply someone who needs to transport personnel (energy or “E”) and gear (mass or “M”) to gigs. Even though gas prices have wandered upwards lately from the multi-year low of a couple months ago, they are way lower than in the $4 per gallon gas crunch era.
Where’s My Rebate?
This all represents a noticeable savings in a transport-intensive service industry like live audio production. Now if only we can get lower-gas-price rebates from airlines, UPS and FedEx — all of which are quick to pocket the savings — yet even quicker to slap on surcharges whenever there’s the slightest fuel cost increase in the market.
On the manufacturing side, prices of base commodities such as steel and copper are way down. The cost of rolled steel continues downward, while copper — currently at $2.72/pound — is significantly less than the $4.50/pound peak it hit in 2011. Maybe the copper droop is due to the fact that we’re using fewer 52-channel analog snakes and using powered line arrays rather than running hundreds of feet of copper speaker lines. We do our part, and the plumbing/new construction industry benefits! And with DSP plug-ins, the need for physical outboard gear is far lower, causing a dip in the worldwide steel market, so the audio biz is indirectly helping General Motors. Back to the money angle — where are the free cars we should get for doing our part?
The Money Go-Round
If you keep up with The Wall Street Journal or Financial Times, you may have heard about the Euro’s steady decline against the dollar over the past few years. In 2008, when the Euro peaked around $1.60, Europeans were swarming over to the States and partying like it was, well, 2008. This week, the Euro has been hovering around $1.08 — well below the $1.40 it was a year ago. So thanks to this exchange rate, American attendees at this month’s Musikmesse / ProLight+Sound show in Frankfurt will enjoy a 30 percent discount on hotel, dining, taxis, etc., over their 2014 costs.
Great news for Yankee jet setters, but on a larger scale, Euro rate fluctuations present a complex picture, especially for manufacturers. Gear made in the States suddenly costs nearly a third more to those in the European Union, so selling into those markets can be tough. U.S. manufacturers may face difficult decisions as to whether to decrease prices to compensate and retain market share or maintain the status quo. Of course, the opposite holds for our European counterparts. And with predictions of the Euro hitting the $1.00 mark by years-end, this situation won’t be going away soon.
If you thought quantum physics was complex, it pales in comparison to dealing with financial issues and ever-moving prices on commodities, fuel and exchange rates. One thing you can depend on, this will make for some good trade show conversations this month at Frankfurt or at NAB in Las Vegas. And that’s a sure bet.
