In the past couple of weeks I’ve had very similar conversations about the state of the economy and product development from two very well known manufacturers in the custom installation industry. One of these companies will be very conspicuous in its absence from next month’s CEDIA EXPO in Atlanta, while the other is using the word “bullish” in its attitude toward the market, in general, and its approach to CEDIA EXPO, in particular.
First, I’ll name names. The two companies are ELAN (and its sister brands, Sunfire, HomeLogic, and Aton) and Russound. Former made the very aggressive decision to support its road show of 50 cities in lieu of a one-time trade show in September, while the latter designed to take on more booth space at EXPO and rework its booth design to better reflect the breadth of its product lines.
What I found similar about my two conversations was the acknowledgement by both companies that times are really tough. Neither company denied this pretty obvious fact. The days of “spinning” negatives into positives have ended, at least for now. But instead of a wringing their hands and giving up, both companies seem to have reworked their plans in different ways, while pursuing the common goal of developing more new products, instead of pulling back.
Sadly for those of us in the publishing or trade show business, product development is now receiving the funds that were once shared with the marketing department. What were once viewed as short-term investments (magazine and web ads and trade show booths) have been replaced by long-term investments in new products and technology. The hope is that when the economy finally rebounds in six to nine months, a company like Russound or ELAN had better have lots of new products ready to sell.
What’s different about product development right now is there’s more time to slow down and really think about what needs to be designed and built and that makes for a lot of speculation and crystal ball viewing. It was fun, for example, to listen to Russound’s Michael Stein, who is one of the more visionary members of our industry, discuss his predictions for how our society is changing the way it thinks about audio and video content. Whereas most babyboomers were collectors of content (LPs, CDs, DVDs, etc.), the younger generation is less interested in collecting and more concerned with access and streaming. Russound’s Collage product will reflect this evolution.
During my conversation with ELAN’s Paul Starkey mentioned that despite the changing nature of our business and the world’s economic challenges, there is still a cultural “love affair” with technology, which can give those of us in this business some hope. Starkey said that the economy has forced companies like his to question the practices of the past and to become more nimble. He believes that the market will expand, instead of shrink. The key is to use this downturn as a learning experience. The more we learn, he said, the stronger we’re going to become.