This article maps out key themes drawn from existing research and links in key technologies, evolving trends and market expectations for the year.
Geographic Recovery Winners and Losers
C-19 has severely impacted the Pro AV market putting immense pressure on the supply chain and seeing many businesses fail.
Globally we are seeing clear differences geographically, particularly with China recovering quickly, but underlying trends are clearly visible:
- Entertainment, leisure and retail have seen demand for AV technologies fall sharply.
- Demand for live events and subsequently rental has been the hardest hit, with numerous high profile production companies failing, smaller rental houses closing and manufactures supplying this space, particularly in the audio sector struggling.
Redefinition of the Classroom and Hybrid Teaching
In schools, C-19 has become the catalyst for the inevitability of increasing technology in classrooms. Most countries have increased spending on Ed Tech leading to record sales of Interactive Displays in 2020.
- Investments in document cameras, low end PTZ/Web cameras and lecture capture systems have also been a key feature of AV spends in the pandemic.
Acceleration of Collaboration and Unified Communications
Conversely, the pandemic has opened up a new world of hybrid working and learning environments which has driven an explosion in collaborative tools and UC solutions.
An expected short-term requirement for home working and equipping home offices with AV/IT technology has turned into a far more permanent trend with many expecting to maintain a hybrid pattern beyond the pandemic. This has driven strong demand for higher quality peripheral conferencing technologies and UC solutions.
- The prospect of changes in working patterns leads to excitement around return to work and repurposing office space to deliver a greater range of flexible, collaborative spaces.
- The shift to longer periods of home working provides huge opportunities with a large addressable market of users trading up from initial ‘make do’ purchasing at the beginning of the pandemic.
Collaborative technologies will mature but remain complex in the near term with a wide range of solution elements.
- It is likely that the supply chain will seek to integrate features into an all-in-one product. However, some ambiguity remains around if the conferencing CODEC, arguable the most important feature, will sit in the room or on an users PC.
Connectivity will become a more important topic, particularly with the introduction of 5G and Wi-Fi 6/7. In the short term, the use of wireless technologies and their integration into AV devices will see greater adoption and be pivotal in the enabling personalised experiences across a wide range of verticals.
The Next Big Wave in AV (AVoIP)
The movement toward networking AV (AVoIP), and the software/services that it will drive, will be the next big wave for AV. Whether it be through proprietary development, partnerships or M&A, leading players in the supply chain will increasingly focus on areas of asset management, content management, AV managed services, data analytics (and AI) and visualisation.
- These developments will enable another key future trend of AV as a Service (AVaaS) which will finally enable a true CAPEX model for AV investments.
Video Conferencing and End Users Demand for Video Quality
Video has become more and more pervasive in business workflows and daily lives. Conferencing technologies are the most visible element of this, but higher end broadcast and production technologies are now becoming important, drawing a new range of suppliers to the traditional Pro AV sector.
- Demand for higher quality audio is closely linked to this trend. Mounting fatigue around poor conferencing experiences and a general rise in the breadth of media consumed are key drivers.
Core Display Technologies Battle for Share
Competition between core display platforms (Projection, LCD and LED) intensifies. LED is clearly in the ascendancy with the prospect of mass production techniques and MicroLEDset to disrupt the entire display landscape.
- Creativity and innovation are richly rewarded across all display platforms, particularly in retail applications where C-19 has accelerated the shift from transactional to experiential.
- However, basic formats and form factors will continue to drive the volume end of the market and still will be important for future growth.
C-19, User Interfaces and Voice
C-19 has accelerated discussions around the user interface (UI) as the supply chain focuses on alternatives to touch.
- Voice control/assistant is a key growth technology, already with strong traction in consumer markets and growing in sophistication. Importantly, voice is not just a simple control UI but offers myriad additional features in professional environments.
- The use of QR codes as a UI has also been in important in a C-19 world with vendors in multiple Pro AV categories launching app-based solutions.
- Delivering AV services via a personal device to employees, shoppers, visitors, etc. will be a wider mid/long term trend for the industry.
Professional Audio Witnesses Many Challenges but Shows Signs of a Bright Future
The professional audio industry has been hit hard by the outbreak of COVID-19, however many areas demonstrated significant positivity towards the end of 2020.
- Installed audio, especially for commercial premises and conferencing, demonstrated remarkable levels of recovery in the second half of the year, with continued investment and delayed projects coming to fruition.
- The content creation market, including musicians, producers, podcasters, streamers, gamers and other influencers, showed record levels of growth, with some models in the market more than doubling in sales for 2020.
- The live performance and venue sector has been the worst impacted area, and likely won’t be back to pre-COVID levels for a number of years. However, events will return with more enthusiasm than ever, once we break free from the restrictions imposed by the pandemic. Climbing investment in installed venue audio and sound reinforcement demonstrates improving confidence in live audio and pre-empts the return of events and leisure activities.
- Many challenges still lay ahead for the industry, and there will be many structural changes, especially in the most affected areas. However, many of the markets pro audio serves are deep-rooted in our society and will continue to provide growth to the industry longer-term.
Digital Signage Industry Suffers but Will Rebound
In a pandemic world, digital signage investments in terms of screen deployments have been limited. Health message has been one bright spot but even in this case, displays are often redeployed (relocating to front of store etc) or are on short term rental leases. This will continue into 2021 following a similar pattern observed in other recessionary periods.
- Audience measurement platforms (AMP) have been available for many years but have arguably not fulfilled their obvious potential in delivering actionable metrics for network owners and investors. Perhaps because they offer too much transparency. However, C-19 has seen a rise in interest as digital signage is used to control and direct the flow of customers, employees, students, etc. Privacy issues will continue to be a barrier to mass adoption, but AMP will be increasingly important in coming years.
The outlook for 2021 differs geographically but largely remains uncertain. However, vaccination programs have pushed stock markets to a pandemic high and delivered much need optimism into the Pro AV market.
- The pulse of the AV industry is one of measured confidence for 2021.