The State of the Industry an Unsavoury truth!

[karl]

For any company in this business to remain viable, certain things must be considered;

 

If you have equipment it must be stored, maintained, replaced, upgraded

Enough crew must be provided to rig/derig without killing them (directly or indirectly)

To this end accommodation may be required

Vehicles, O licenses, Fuel, congestion charges, LEZ charges, Parking charges/tickets must be covered

Overheads must be covered

Insurances must be covered.

The job must be completed to a high & professional standard

 

A lot of these costs will vary with the scale of the operation:

 

Storage -

one man band = shed, spare room, garage

large company = dedicated warehouse(s) and office accommodation

 

Maintenance -

one man band = screw driver, gaffer tape

large company = team of trained and experienced maintenance staff

 

Crew -

one man band = one guy to drive, rig, engineer, derig

large company = team of 3+ staff

 

And so on.

 

Hire the one man band and all you pay for is his time and expenses.

Hire the large company and you're paying for the warehouse, offices, advertising, crew, warehouse/maintenance staff, receptionist, accountants, sales team, tea boy, department managers, fleet of vehicles (inc director's Jag), etc.

 

At the end of the day it's horses for courses - you want a cheap sound system for a talentless band playing in some dive you go for the cheapest option; you want a reliable, good quality service you pay more for a company with proper maintenance and support.

[Stuart91]

At the end of the day it's horses for courses - you want a cheap sound system for a talentless band playing in some dive you go for the cheapest option; you want a reliable, good quality service you pay more for a company with proper maintenance and support.

 

I wouldn't say that it's quite as cut and dried as that. I know of some very small concerns (i.e. one or two people) who manage to have well maintained gear and provide good service. And I've also seen larger companies send out gear in appalling condition. (Dimmers exploding, lanterns with live casing, etc.) I'd say that it's more down to the attitude and commitment of the people behind it. A good (small) company can sub out quite a bit of their maintenance work - you don't necessarily have to handle it all yourself.

[Dan Gruner]

The furniture company that gives 0% finance for 4 years....how many here would wait 4 years for payment?

Remember the furniture store gets it money from a Finanace company upfront The Finanace company in turn hope you default on payments and then they get thei fingers into you

 

Dare I say how we are into a credit crunch

 

A concurrent post has been automatically merged from this point on.

 

The thing that all ways fascinates me about this industry and reflective in many of the topics in the blue room, are the number of people who start of learning the trade and then want to set up their own Hire /events company.

 

I am Happy to say before going on " yes I have thrown those same bricks in a Glass House".

 

You see it in the questions such as I want to "Buy"some kit to light/PA the Local Band and then grow it into a business.

Then Questions about how to set up in Business.

 

I always wonder how many have the Insurance / test and repair facilities, Back up equipment for failures during a show , depreciation and re-investment

 

How many operate on a wing and a Prayer ad undercut main business

 

I always get a feeling that this Drives a Bottom end Culture ( ok PRICE) for events as opposed to Quality and Service along with a professional business case which would drive realistic busines pricing and not just ell cheapo with NO long Term Business Plan or ideas.

 

How many of these operations mention Pensions, and what they are going to do when they retire. If they started to look at a long term plan they might realise how much the should be charging and how much they need to earn to grow and sustain a business.

 

I always feel they will go bust after a year or so and in the mean time leave a legacy for the rest of the industry. Any way It just seems through this industry we spawn a lot of "one man COMPANIES" where as in IT we see lots of Freelances working for large recruitment agencies as the engineers do not actually want to own/run the company

 

Any way that is just one thought on a very wide ranging topic that can head off at many different angles However an interesting topic this.

 

Beautifully put and so true...

 

Dan

[karl]

At the end of the day it's horses for courses - you want a cheap sound system for a talentless band playing in some dive you go for the cheapest option; you want a reliable, good quality service you pay more for a company with proper maintenance and support.

 

I wouldn't say that it's quite as cut and dried as that. I know of some very small concerns (i.e. one or two people) who manage to have well maintained gear and provide good service. And I've also seen larger companies send out gear in appalling condition.

 

Yeah, I agree. I didn't mean to suggest a link between company size and quality of service. My main point was to link company size and overheads. If a company chooses to have plush offices, a big warehouse, large stock and loads of staff then they will not be able to match the lighter weight smaller companies. There seemed to be a suggestion that small firms who kept their overheads low were being unfair to companies who didn't - surely that's what you calling doing business.

 

The point about horses for courses was a secondary one (although I failed to make that clear). You decide what quality of service you want and then find find the cheapest company that can deliver. No point spending thousands on top quality service if you can get away with less. If a company A can match company B's service for half the price (and stay profitable) then B has a problem.

[ristuuk]

on the talentless bands ......bands have to start some where...say an average unknown 4 piece band gets £100 for a pub/small club gig..and pays most of that out on equipment..nothing left for themselves...they cannot afford the top rates.

a venue that id do alot of visual work for, ive done theses local bands for next to nothing over the years...trying to think of a few of these talentless bands names now....oh yes...ash, snow patrol, oasis...list goes on.

you know where im comming from.....

[Derek Tallent]

One of the major factors that are driving hire prices down are that customers are increasingly more savvy as to what equipment costs to buy.

 

A large part of our business is in the exhibition market hiring plasma and LCD screens - customers know they can go online or into Currys or Comet and buy a 42" screen for around £500, so they question the justification in charging around £300 per week for a plasma on a Unicol stand.

 

Of course they forget that the Unicol stand will cost them £300-ish, a flightcase for the screen another £250-ish and the fact that they'll have to get the kit to and from the exhibition, but to a certain degree I can see their point.

 

I would expect hire rates in general to fall over the course of the next year, as the recession gets worse, and the number of hire companies appearing in the London Gazette getting larger.

 

There is still money to be made in this business, but we're all going to have to work a darn sight harder to earn it.

[Rob_Beech]

But that is charging essentially 30% of a units purchase cost to hire for a week. If we go on £1000 all in. We've already discussed here and elsewhere that in the AUDIO market we're looking at around 1-3% per week, and that's NOT taking flightcases, and maintenance into account. It's very different. Position in the country is very important too. I appreciate Lighsource is even further North than me and folks simply won't pay the same rate for anything as they will down South, but I think we're seeing both extremes here. £1200 to put a PA in to a small theatre for a band is nice work if you can get it, but unless they're a substantial name it won't happen. On the other side of things £200 is making 1 person a third or less as what they COULD make and is meaning everyone loses out in the long run.

 

Paying £125-£175 to hire 4 stacks of Aspect wide (with amps) for a day at a trade rate is something that you can do up here. You would be pushed to get 2 stacks for that in London, so I appreciate the divide, but 600% is silly.

[Derek Tallent]

But that is charging essentially 30% of a units purchase cost to hire for a week. If we go on £1000 all in. We've already discussed here and elsewhere that in the AUDIO market we're looking at around 1-3% per week, and that's NOT taking flightcases, and maintenance into account. It's very different. Position in the country is very important too. I appreciate Lighsource is even further North than me and folks simply won't pay the same rate for anything as they will down South, but I think we're seeing both extremes here. £1200 to put a PA in to a small theatre for a band is nice work if you can get it, but unless they're a substantial name it won't happen. On the other side of things £200 is making 1 person a third or less as what they COULD make and is meaning everyone loses out in the long run.

 

Paying £125-£175 to hire 4 stacks of Aspect wide (with amps) for a day at a trade rate is something that you can do up here. You would be pushed to get 2 stacks for that in London, so I appreciate the divide, but 600% is silly.

 

Ah, I've just re-read my posting; we don't charge £300 for a plasma for an exhibition, but that's the rate that most "official suppliers" charge (the likes of PSL, MCL, Aztec) etc. I think we're pretty good value for money at £170 + VAT including delivery to and collection from the customers' stand and installation, and that rate is the same whether it's the NEC or Earls Court.

 

A trade rate of £175 a day for four stacks of Aspect Wide is painfully low, really - the capital investment is what, £15K at trade on that level of kit and you're lucky to be getting 1% per day - ouch. When I started working in this industry, well over 20 years ago now, the general consensus on rates was 10 week/30 day return (10% per week) and that was on sound and AV. How can you make a decent return on 1-3% per week.

 

The trouble we have is that Mr. End User can look in the CPC catalogue and see a UHF radio mic for what, £150.00, and wonder why a company would charge anywhere between £50 and £150 per week to hire one. (even if the hired one was the top of the range Sennheiser costing £3K or £4K per channel.

[Rob_Beech]

And this is the issue.

 

I can go out and spend £3000 on a pair of speakers and try to charge £300 per week for them. no matter where I was in the country, they'd sit in the warehouse all year long. This is partially because the client can BUY a pair of speakers for less. It's clear to US that the quality will be very different but when it's price that matters quality gets left behind.

 

Of course, these are sub rates, list prices for hire hit the £200 mark and above.

 

The trouble is, years ago between 5 ad 10% per week might not have been out of the question. Now, people will throw out entire systems and setup and engineer them for what you would once expect to charge to dry hire 8 boxes and some amps. Prices have to drop to at least keep the dry hire as an option to the client.

 

Quote a client in Worksop £400 for 4 stacks of Aspect wide and amps for a day even if you offer to deliver it and collect it at 3am, and you simply won't get the job. Nor will you get future phone calls as the bloke with the mackie rig will do the lot for £200 including engineering the show, and putting some lighting in.

 

It's not just me, D&B boxes sub out at £10 a box from various large established places.

[Derek Tallent]

Rob, I totally agree with you - and to a certain degree I'm part of the problem...

 

I would love to be using Turbosound or any other top end kit - in fact many years ago I was running Turbo rigs (think the TMS series and you'll see just how many years ago we're talking about!), but these days most of our work is the lower-end corporate stuff where customers aren't particularly interested in the quality; as long as when they gob into a microphone, sound comes out of the speakers, and the price is within their budget they're happy.

 

So with that rational, I made the decision some years ago to buy the most cost-effective kit we could find that gave us the best return, so we do stock things like JTS Radio Mics (which actually are very good), Behringer mixers and the like on which we can get in the region of a 10% return per day (based on trade purchase price). From a quality point of view, am I happy with this ? Not really. From a business point of view, making a return on our investment, meeting the customers' expectation and winning the repeat business, of course I'm happy.

 

The sad thing is, we're sending out kit on hire, none of which is made in the UK. Years ago we'd be sending out Micron Radio Mics, Alice and Soundcraft Mixing Desks, Rauch and C-Audio Power Amps and Turbosound cabinets; and that disappoints me. But in the current climate, it doesn't make economic sense to buy British.

 

To go off on a bit of a tangent, I'm surprised no-one's picked made a comment about the story on Etnow.com about Cadac going into adminstration on December 1st, and the story on Prosound News about Soundcraft laying off 71 staff by the end of the month and moving all production, including the big digital desks, to China. Now that's really scary...

[Rob_Beech]

In a light hearted way, alot of these manufacturers have shot themselves in the foot. Turbosound TMS and TSE boxes go out on hire for next to nothing around here all the time. They cost next to nothing to buy, so they can do this. They still sound spot on however. If they'd made the boxes to fall apart after 10 years instead of still be going strong in 25 they wouldn't have this problem. (Of course, I'm not being entirely serious here, though it does happen, it makes you think doesn't it).

 

PS, and 890H goes out at the same price per box as a 500. and a KT DN360 for £8 per day, and M7CL for £100 per day. Welcome to the north folks. None of this £70 per box per day lark up here.

[enbee]

To start with, I am going to say that I am not at the cheaper end of the market, but this is the point. I know that I am not servicing the entire industry. In order for my business to be financially viable, I have to find my area of the market and have a unique selling point. Different areas of the market care about different things.

 

(below are some generalisations, I am aware that there are exceptions but go with me for a minute)

 

In the disco/ pub gig/ am dram section of the market, the bottom line is usually that a fairly tight budget is in place.

 

The corporate section of the market is usually more concerned with how their company looks. They have the ability to throw more money at events and are concerned with the overall effect and atmosphere.

 

The Large scale music events and festivals have reasonably high budgets but also have riders etc to fulfil.

 

The reality is that in the first 2 categories, the actual make and model of the kit doesn't matter to the client what matters is the end result. In the last category the specifics of the equipment are more important. In budget controlled events, it comes down to the client having enough confidence in your business' abillity to deliver the desired result and the price you charge.

 

There are obviously, events that lie between 2 categories and I suspect these are the events that are causing unhappiness. If an event is being tendered for by 2 companies, one who is used to running at low costs and has purchased kit and controlled overheads with an eye to this, and one who is used to high budget events and has bought expensive kit and has larger overheads to cover, neither are pitching directly within their usual market. This means that one will be expensive and one will be cheaper. At this point, it is entirely down to your sales ability to convince the client to use you and to justify either your lower specced kit or your higher pricing.

 

I appreciate that this is a simplistic example but we all need to realise that the industry we work in is becoming more and more diverse. The range of people and buisinesses that are looking for supply is getting bigger, and I'm no longer sure that we can expect to supply the whole market at the same price.

 

I think we all need to understand our area of the industry, our USP and realise that although we are all in the business, it is business and unless I am offerring something different to the next guy there is no reason for a client to use me over him. The idea of one price for the whole industry seems to me to take the responsibility for business success off the individual and place it on the soulders of this mystical thing called the industry

 

business to me is my ability to sell my services to a client at a cost that covers my overheads and desired profit at a cost that suits their budget and fulfils their requirements.

 

If I cannot do this, I don't have a financially viable business, I have a hobby

 

I've just realised how much I've written so I'll sumarise, If there are people out there who can supply their services to a client at a very low cost whilst still covering overheads and making a profit, fair play to them. If I cannot compete, its is either that I have set my business up in a way that doesn't target the same area or as specific an area of the industry as they have or it is a question of my sales ability.

[lightsource]

Position in the country is very important too. I appreciate Lighsource is even further North than me and folks simply won't pay the same rate for anything as they will down South, but I think we're seeing both extremes here. £1200 to put a PA in to a small theatre for a band is nice work if you can get it, but unless they're a substantial name it won't happen. On the other side of things £200 is making 1 person a third or less as what they COULD make and is meaning everyone loses out in the long run.

 

Paying £125-£175 to hire 4 stacks of Aspect wide (with amps) for a day at a trade rate is something that you can do up here. You would be pushed to get 2 stacks for that in London, so I appreciate the divide, but 600% is silly.

 

Very true, Rob's based about 120 miles south of us....(we call his locaton 'the midlands'). We are true north, and the north / south divide needs to be appreciated. It is real, and the hire prices, wages etc reflect this. What needs to be appreciated here, is that a lot of prices are fixed by location, and prices are very different depending where you're based.

 

 

And this is the issue.

 

I can go out and spend £3000 on a pair of speakers and try to charge £300 per week for them. no matter where I was in the country, they'd sit in the warehouse all year long. This is partially because the client can BUY a pair of speakers for less. It's clear to US that the quality will be very different but when it's price that matters quality gets left behind.

 

Up here, we're seeing a lot of venues buying their own PA systems, some of them good, some of them bad. The real problem in our area, is that most venues hire cheap 'sound engineers' to run their rig and most are really clueless, so, good rig / bad rig...most sound crap, because of the people behind them.

 

 

In a light hearted way, alot of these manufacturers have shot themselves in the foot. Turbosound TMS and TSE boxes go out on hire for next to nothing around here all the time. They cost next to nothing to buy, so they can do this. They still sound spot on however. If they'd made the boxes to fall apart after 10 years instead of still be going strong in 25 they wouldn't have this problem. (Of course, I'm not being entirely serious here, though it does happen, it makes you think doesn't it).

 

PS, and 890H goes out at the same price per box as a 500. and a KT DN360 for £8 per day, and M7CL for £100 per day. Welcome to the north folks. None of this £70 per box per day lark up here.

 

 

While I can appreciate what Rob has said here, it can be simplified even further.......

 

I'm in the market for another 4 subs. I already have 4 Mackie 1801's that I paid about £600 per cab for......since then, they've moved production to China, and are currently retailing at the £ 1000 mark..... I can buy RCF etc similar cabs for a lot less, and far better quality. So will I look at another 4 1801's......I don't think so!

 

What are Mackie actually trying to achieve? they've cut costs, by moving production to the far east, quality and reliability has nose-dived, yet overall, the prices have gone up......to the state where better quality products can be purchased cheaper.

[Rob_Beech]

I think the problem we've seen over the last few years is that as the manufacturing cost of everything goes up, so does the products suggested selling price. However, manufacturers have held off on this to a point to attract more sales. Eventually the time has come where by the manufacturers are not making enough and to avoid potential major problems they have to do something. Costs have to come down or prices go up. Or both. Exchange rates don't help this either. If something used to cost €500, if it now costs €550 due to the increase in cost and the dramatic alteration of the exchange rate it is now much more expensive in £.

 

Who remembers TA2400's at £186?

 

 

Rob

[Sound In Gloucestershire]

pretty much EVERY supplier has raised prices by around 10-15% in the last month or so, this is because they pay for the goods in china/taiwan etc in US dollars, the exchange rate is very poor for people with pound sterling, so hence why all prices have risen. The other reason why Mackie prices have risen is because everyone is forbidden to discount the prices. Just a few weeks ago we had the Mackie rep pay a special visit just to explain that any disocunt whatsoever is not allowed and for us to report any shops/websites that are doing so

 

So, I wouldnt give up on your 1801's, im pretty sure if you approach a few smaller retailers direct, they will do you some substantial discount, on the quiet of course