The Biz

Harman International is a huge player in the live sound arena, with brands including JBL, Soundcraft, BSS and dbx, but in September it had more in common with the real estate market than it did with the music business. Harman’s high-flying stock soared to $124 per share last April when two private equity companies, Kohlberg Kravis Roberts & Co. (KKR) and Goldman Sachs Group Inc.’s private equity unit, stated that they wanted to take the company private, offering a premium over and above the stock’s stated value, for a total of $8 billion. However, the deal fell apart five months later, with KKR and Goldman Sachs backing out in the wake of the crash of the credit markets last summer, when bad mortgages rolled into repackaged securities began exploding like pipe bombs in portfolios all over the world.

By now most people are familiar with the concept of  “the long tail” — Wired magazine editor Chris Anderson’s digital-era economics theory that busi-nesses with significant distribution capability — like online businesses — can sell a greater number of items at small volumes than of popular items at large volumes. Anderson argues — and not many people have argued back — that products that are in low demand or have low sales volume can collec-tively make up a market share that rivals or exceeds that of the relatively few current bestsellers and blockbusters, if the store or distribution channel is large enough.

Trade show trends point the way to audio convergence.

Usually, right around the middle of day three of most trade shows, someone will bring up the idea of making such shows into virtual enter-prises, with products and services up on the Internet for all to see after attendees validate their online registrations. Day three often finds plenty of minds and feet receptive to the idea of going virtual — even the inevitable post-show soirées could be handled by creating a virtual Michael Todd Room at one of the MySpace-like social networking sites. The huge amounts of money saved on airfares, hotel rooms and booths could be put into R&D and salary increases. 

It’s time to choose sides in this fight for frequencies.

I’m no Al Gore, but the “white space” controversy could be shaping up to become the global-warming issue of the RF universe. Back in March, we discussed the likely chaos that could ensue with the switchover to digital broadcasting scheduled to take place in early 2009. The move will open key parts of the RF spectrum to a variety of unregulated applications, from cell phones to PDAs, which will compete for access with existing professional wireless users.

Trade shows, like everything else in the industry, are facing their next evolution.  

The “L” in trade show LDI’s name once stood for “lighting” (more recently it was changed to “live”). In the future, it might also stand for “Lots of other stuff, too, including audio.” At a time when much of the commercial landscape in the media technology world is moving toward a niche-based paradigm, some of the trade shows that have acted as hubs have sought to become more comprehensive. This is, in part, to address the effects of convergence — as more media technologies become digitally based, their operation and functions increasingly overlap, such as having both Final Cut Pro and Garageband on a single laptop, for example. Additionally, it is an attempt to stem losses from exhibitors that are increasingly taking their products out on “road shows” — demonstrating wares across the country unilaterally or in conjunction with complementary partners.

Two industry deals get worked out, but maybe not in the way planned …

The music industry has always had an ambiguous relationship with Clear Channel — you may have disliked their practices, but no one could deny their influence and ubiquity. The live sound community especially has had an intense link with what had once been the 600-pound gorilla of the concert production business. When Clear Channel tired of some of its entertainment holdings and spun off the concert production business in December 2005 in the form of Live Nation, a couple of interesting strings remained connected. One of those strings just got resolved — sort of — and it really underscores just how important the live music industry has become to the entertainment sector overall. 

Good Preparation Doesn’t Happen by Accident.

Eric Schilling, a Grammy-winning engineer, live mixer and record producer for artists including Gloria Estefan, Crosby, Stills & Nash, David Bowie, Frank Sinatra, Shakira and others, has also been the music mixer for the Grammy telecast for the past several years. It’s one of the jobs he’s most prized, and that gave him grounding in all three areas he enjoyed: working in recording studios, mixing live sound and mixing high-intensity broadcast events like the Grammys. But he almost didn’t make it for this year’s event. 

Imagine a typical Thursday night on the Las Vegas Strip. Forty hotels, each with one or two multimillion- dollar theatrical productions running during prime time. More than 250 channels of wireless in operation. And at a key moment in any of the shows a "toxic burst" creates a deafening noise glob throughout the P.A. system, or perhaps worse, produces the deafening silence of a drop-out.

This is the nightmare scenario that a number of interested parties in the RF wireless game have put to the FCC and certain members of Congress, in an effort to stave off the almost-certain chaos of conflicting wireless devices operating in the what the FCC calls the "white space" opened up by the legislated switch to digital television in 2009 that will open vast parts of that spectrum to a variety of unregulated applications.

North America comprises an estimated 50% of the world's market for professional sound systems; it's even a bigger piece of the pie if you include installed sound, which increasingly blurs the borderline with the also-expanding high-end residential audio sector. No wonder everyone wants in.

Three European speaker and system manufacturing companies have secured beachheads in the U.S. in the last couple of years, and each has their own strengths. Outline Audio, based in Brescia, Italy, brings with it products for all of the major market sectors, including three line array systems for touring sound, architectural and cinema series and an array of DSP, mixers and amplifiers that make it look a bit like Harman with a light dusting of Parmesan on top: a comprehensive, selfsupporting solutions set for a wide variety of applications.

"Sector overlap" is the somewhat clinical term for what happens when technology creates a convergence between areas of expertise. For instance, going back a few decades for a more dramatic instance, what happened when you converged a pilot and a physicist is you got an astronaut.

An area of nascent convergence at the moment is in the domains of live event audio and fixed installation media. The taxonomy would seem to place them on one side of the aisle or the other: live sound moves around a lot and installed sound doesn't. But definitions can be deceiving. In fact, the overlap between the skill sets, both technical and business, in live touring sound and installed sound have more in common now than a decade ago, and in the process have actually diverged from music recording.

You can tell you've got a growth sector when more people want to sell services and products around it. For instance, there's a business in iPod accoutrements that's almost as big as iPod sales themselves. If the education sector is any indication — and it is — then live sound is a bull market.

Several key college and universitylevel media technology operations have been ratcheting up their live sound offerings. Full Sail in Orlando has a training area about the size of an airplane hangar to support the show production and touring courses that they upgraded in 1998, from a component of the audio engineering path to its own 13-month degree program.