Skirmishes in the Corporate Theatre of Operations

"More action reported today along the border between the corporate installation domain and the home theatre installation state. It would appear that with the increased buildup and activity on both sides of the border, the exploratory incursions across the border are becoming more common. The seesaw trade of territory won and lost in these forays point towards escalation of the conflict. We have some high quality, big screen video images of the conflict at 11:00." It might not rival primetime news events in the real world, but the dividing line between these markets is eroding under the increasing traffic across the line. As part of that process, there are some interesting shifts in the roles of integration of services.

It isn't a great surprise that the contractors involved in the installed home theatre market and those involved in the corporate A/V install market look across the fence and see lucrative markets to expand into. There is a significant overlap of product and knowledge base for the two markets as large screen video projection and integrated control systems form the backbone of both systems. It is, however, the differences between the two markets that make this market transition interesting to look at. Along with the philosophical and technical differences in the markets, there are also different acoustical issues to integrate, and that's where the changes in roles are very interesting to observe.

The two markets are similar in one significant respect; much of the boardroom and home theatre markets are still driven by the vanity purchase. High-end home theatre and elaborate corporate boardroom systems share a certain 'gee-whiz' factor, and are as much a show piece for the home owner or CEO as they are a presentation system. They both carry the same "I have arrived" cachet that a luxury car does. Since high-end home theatre systems are generally purchased by people who have, in fact, "arrived", it is no surprise that the home owner and the CEO are often the same person. It is also not surprising that a business relationship that begins in one market will lead to an invitation into the other market.

Some of you are already saying, "why do you call it another market, when it is the same market, and it has always been the same market." The division of markets is largely artificial, and generally a concept held by the "arms suppliers" to the home theatre and corporate A/V installer battle. This approach enables the manufacturer to open what they see as niche dealers in the same market area, and in effect supply both sides of the conflict. The contractors that have been in the business for a number of years (since corporate A/V meant slide and film projectors), and have grown along with the technology, do not see a division in the market, as they have operated in both home and corporate from the birth of affordable video projection. The contractors who have entered the market later by specifically targeting either the corporate A/V, or home theatre, markets do see themselves as being on one side of the fence or the other. The apparent division of markets begins to break down at the weak link, which in most cases is the Yellow Pagesİ. New clients looking through the phone book are just as likely to call every number in a section featuring "Video Projection - Installers," and not pay a great deal of attention to the details of the ad indicating a specialty for corporate or home theatre.

This artificial market split can generate difficulties for the equipment manufacturers who have structured their product line to differentiate between corporate data-grade projection equipment versus straight composite video home theatre projection equipment. These manufacturers end up competing with other manufacturers who either haven't made that distinction, or whose product lines provide significant overlap in capability. Resourceful contractors do not stay locked out of a market long however, as there is always the option of changing product lines, and there are very few manufacturers that have such a dramatic lead in technology that they have no competitors.

The home theatre market is actually moving upscale faster than the corporate market. Most corporate boardrooms have topped out at a good quality data-grade projector, as very few boardrooms are in need of ultra-high resolution workstation displays, or light valve projector brightness. The home theatre markets are moving up from run-of-the-mill composite video projectors to high resolution component video data-capable projectors to provide the capability of using new generations of affordable scan doublers. That represents a much bigger jump in the technology investment than the corporate sector has made in recent years.

The home theatre market is also going to see an increase in interest in data grade projection driven by the growth in the home computer market. Why surf the net peering into your expensive 10.5" TFT notebook screen when you could be cruising the Web on a 100" screen. And Myst and the Flight Simulator are so much more fun on the big screen. With the growth rate of participation in the Internet culture it would be naive to believe that the home theatre room won't eventually see double duty as a comfy environment to use a computer in. It has all the right stuff, nice sound, comfortable seating, lighting control, just add a wireless mouse. As LCD type, and the new Texas Instruments Digital Mirror Device projection technology keeps pace with the SVGA and XVGA resolution demands, you could expect to see high resolution projector prices drop. You will likely see as many high-end Netsurfing theatres as high-end home theatres, after all, computer nerds are becoming the nouveau riche (I understand Armani is developing a line of pocket protectors). Now is the time to start forging the ties with the computer retailers (not the discount stores, but the full service computer retailers) who attact the kind of customer that says deliver it and make it work.

But I digress, we were discussing the apparent divsion in home and corporate markets. While the real division in equipment markets may be hard to find, there are true divisions in the market when you consider the background and expertise of the contractors, especially in the approach taken with clients (customers become clients when they spend more than $20,000). You could look at the two market segments as a river valley. At the bottom they share a substantial overlap of product and technology, and as you move away in either direction from the valley floor you climb an increasingly steep learning curve of the technology specialties of each market. For the home theatre contractor to cross the valley to the corporate hill, he passes quickly across the commmon ground in the middle, but has to climb through the bramble and rock associated with the voodoo of computer video interface, telephone interface, automatic microphone mixers, corporate structure and red tape, and boardroom acoustics. The corporate contractor also scampers across the bridge of common technology and expertise before climbing the rough and unforgiving terrain associated with surround sound formats, customer (or client) preference and prejudice in electronics selection, the wife factor in equipment selection and positioning, loudspeaker positioning for optimum performance, and home theatre/listening room acoustics. Both markets share the joys of working with interior designers who do not understand any of the requirements of either type of system, and who demand technically impossible accommodations of room layout and visual features (Windows, we want lots of windows, and do you have to place the speakers on that wall, I'd like to see windows there, just flanking the screen).

The approach taken with the clients has many similarities, especially where the vanity purchase aspect is involved. The ego gratification of the purchaser is an important part of any significant vanity purchase (be it luxury cars, Armani suits and pocket protoectors, or A/V systems), and while there are subtle differences dictated by the corporate structure versus the high end consumer purchase, it is important that the client be made to feel good about the installation they are buying. The difference is often in the level of involvement the client takes in the decision process as it relates to equipment details. The corporate markets are full of people who can effectively delegate responsibility for details, and leave the decisions to the contractor. The high-end home theatre market is often driven by a real interest in the subtle audible and visual differences between the components of the systems, and the client may want to be actively involved in the selection of details. Often the same people who delegate responsibility at the office will immerse themselves in the details in their private life purchases. There are always exceptions to these rules of course, but for contractors who have worked one type of market and are looking at expanding the scope of their work, these are not trivial differences. The move from corporate to consumer markets can be extremely frustrating, as it can take a tremendous amount of time to move the project along at each decision stage.

I have the opportunity to see the interplay of forces in these market transitions from the lofty perch of consultancy. And it is from this position that the changing roles of the integrators is very visible. Our firm does corporate A/V design and acoustical consulting, and in recent years, more high-end home theatre work as well, primarily in room acoustics. We are increasingly being involved in the projects by the contractors, rather than the clients. We have worked with home theatre contractors in developing blank paper listening/theatre room designs, including the nitty-gritty details of modal analysis, control of reverberation, reflections and the provision of adequate diffusion. In addition, we will provide HVAC noise control and noise isolation guidelines. We also provide remedial treatment and renovation recommendations for existing rooms. These services are being offered to the home theatre buyer as part of the design/build package provided by the contractor. This approach helps the contractor cover all his bases by identifying potential problems that may result in complaints from the client, while simultaneously appealing to the vanity aspect of the purchase by providing an enhanced image of respectibility to the theatre room design (a.k.a. enhanced snob appeal). The fact that this opens up markets for resale of prefabricated acoustical treatment such as diffusers and absorbers is not lost on the forward thinking home theatre installer.

These same home theatre contractors are also beginning to call with projects involving boardrooms and meeting rooms, and the scope of design services requested is growing to include advice on computer video interface, automatic microphone mixing, sound reinforcement systems and teleconferencing interface. The home theatre contractors are starting to recruit people out of the A/V industry as their sales volume grows in these markets. The home theatre contractors are also forging similar arrangements with interior designers so that they can work with a designer that understands the specific requirements of home theatre systems. Home, condo and apartment developers are also ripe for this kind of partnership. This sort of investment is a lot easier to tack on to a mortgage than it is to buy once you're making mortgage payments. The new car dealers have understood this approach since cars have been sold with options.

On the other side of the market, we are seeing contractors who have worked in the corporate A/V sector moving into the home theatre market. They are involving the acoustical consultant to fix acoustical problems encountered in a home theatre setting. The focus of the listening and viewing experience is quite different in the home theatre market than it is in a corporate setting. The corporate experience is all about information delivery and content, whereas the home theatre experience is primarily related to the enjoyment of the event itself. The specific optimization of the listening and viewing "sweet spot" is often a new concept to the corporate A/V contractor. Acoustical treatment and the loudspeaker selection and positioning are more critical in a home theatre setting, becuase there is a critical listening component to the experience. Even the setup of surround sound processors can end up as part of the consultant's role in the project if the A/V contractor doesn't have the confidence in their own ears.

The other surprising integrator role is being played by the interior designers themselves. Typically the interior designers were hired by the client in parallel with the A/V or home theatre contractor and sometimes an acoustical consultant. Interior designers that specialize in the corporate or high-end home markets are increasingly taking the leadership role in the integration of acoustics, audio and video, as well as other high tech services. They are becoming more aware of the importance of handling acoustical and technical issues as part of the design package, rather than as an add-on that would have to accommodate the room design. The resolution of major conflicts early in the project reduces friction that the client would otherwise take notice of. With the advance coordination, the project goes smoother, and the results are better. Those are two issues that go a long way in developing a good word of mouth reputation for the designer and the installer.

For contractors making forays across the home or corporate market boundaries, the subcontracting, or partnering, with acoustical consulting and interior design firms can offer a broader and more comprehensive package to the customer (or client), and can help reduce the surprises out of taking on new markets. In many cases it can also help establish credibility as a pre-qualified contractor for an increased range of projects with the consultants as well. In a market where the competitive edge is always tough to maintain, every idea that keeps you a step ahead can be worth money in the bank.

United Entertainment Media Inc.
460 Park Avenue South, 9th Floor
New York, NY, 10016
Ph. 212-378-0400
FAX 212-378-2160
by e-mail