There was a time when setting up audiovisual (AV) products required a mixture of knowledge and dark, arcane magic rituals at which only AV specialists were adept.
At least, that's how it seemed a few years ago to people who attempted to install and set up boardroom projectors, whiteboards or simple videoconferencing systems. 'User-friendly' was not a term in the AV manual.
Much of that has changed now, particularly at the low end of the market where many products are now sold on their ease-of-use facilities.
Out-of-the-box projectors are now commonplace and, even better, sport price tags no longer guaranteed to give you a coronary. Without the complexity, the mysticism surrounding the use of these products has disappeared.
So has the need for, and the expense of, specialist help. Not in all cases, of course, but at the low end where sales are strongest.
Combine this with massive interest from SMEs and consumers in projectors, plasma and flat-screen LCDs, as well as plummeting prices, and you have a market that anyone can get into. Which is exactly what the IT channel has done, with a growing level of success.
Before going into the changing trends in the marketplace, it is important to look at the types of players involved.
The market used to be made up of distinct IT distributors and resellers, and AV distributors and resellers, whose paths rarely crossed - and that was the way they liked it.
AV was left to the AV guys and life was good. Then came a few IT distributors that were genuinely interested in selling AV solutions.
These firms, such as Midwich, made serious internal investment in terms of dedicated and well-trained staff, and today make a very healthy living out of selling both IT and AV solutions.
Last year saw Midwich win the AV industry's top gong - AV Distributor of the Year - the first distributor from an IT background to do so, highlighting the benefits of proper investment in AV skills.
Taking a broad approach
Then there are the broadline distributors that have, in most instances, stuck to doing what they are good at: selling a high volume of low-end products that do not need specialist AV staff to sell them, and doing so at a good price.
In the traditional AV camp, AV distributors have been all too aware of the interest in AV products from the IT channel. They also have been aware that there's not much they can do about it.
The smart ones have adapted well. They have become less dependent on the low end and have been proactive in attracting a growing number of IT resellers through training and support.
So where does that leave the dedicated AV reseller? Of all the groups, this is the one most under threat.
Many of their customers have a lot more IT equipment than AV kit. Customer pressure on their IT dealers to also supply AV kit, combined with the profit-smelling instincts of IT dealers, has meant that business that was once guaranteed to go through the AV reseller is now going through the IT reseller.
In recent years, additional pressure on both the traditional IT and AV channels has been coming from online suppliers, or e-tailers, where keen prices are the order of the day. For tech-savvy customers that know what they want, there is little reason for them to bother with traditional resellers.
Regardless of the route to market, the strong role played by the UK channel in supplying AV to businesses is unique in Europe.
"In the UK, the AV distributors still have the largest share of the market," said Colin Messenger, senior consultant at leading AV market-watcher Decision Tree Consulting (DTC).
"But the UK is different from the rest of Europe, where most of the AV goes through the IT channel and via manufacturers going direct.
"While AV distribution is much stronger in the UK, the IT distributors are now taking a bigger slice of the market, at the expense of the AV players."
It had been predicted by many research analysts that broadline IT distributors would have taken a greater share of the AV market by now, by sheer force of size, the fact they have the reseller customers and the price advantage that volume supply brings.
This has failed to materialise so far, highlighting the limitations of selling only low-end, price-sensitive products.
Ian Vickerage, managing director of Imago Micro, claims: "Broadliners don't sell anything. They are like supermarkets.
"You go to broadliners because you know what you want, and broadliners are very well equipped to deal with these kinds of customer.
"Where customers need more help, like advice, demonstrations or installations, they have to look elsewhere."
Darren Lewitt, business manager for AV at Midwich, said: "As soon as a broadline distributor gets involved in the market you can kiss goodbye to margins.
"They don't have the skills to be a real AV player because they are not proactive, and while good at what they do, they cannot move beyond the low-end AV arena. Manufacturers dealing with them can actually lose market share because of the impact on prices.
"The first time a dealer goes to a broadliner and gets the wrong thing, or fails to get the necessary answers, is also the last time they will go there."
Hand-holding has never been the strongest quality of broadliners, and they are the first to admit it. It is also becoming abundantly clear that many low-end products don't need anything more than an efficient sales representative, a good price and a pat on the back.
Broadliners don't offer finesse but they come to the marketplace as heavyweight champions of the commodity product.
David Watts, general manager of the PC and peripherals business unit at broadliner Computer 2000 (C2000), said: "Our strengths in the AV market stem not only from our substantial stock-holding capability, slick logistics and ability to provide credit for resellers, but from the very wide range of product lines we offer.
"We've had a small, dedicated AV team in place since the start of last year, and they provide resellers with that extra bit of support needed to deal with customer queries and to get product selection right."
A numbers game
Messenger added: "Broadliners may not have had the success in AV of IT distributors such as Midwich but they have still been reasonably successful.
"They don't have the large base of skills but they do have the contacts. A big IT distributor might have 2,000 to 3,000 customers, and if they are selling perhaps one or two units that still adds up to big numbers.
"For instance, Ingram in Germany has 6,000 resellers, and if each sells just one projector a year it has helped secure Ingram a few per cent of that marketplace."
Paul McKeever, channel marketing director at Sony, which has the bulk of its AV business with IT distributors C2000, Ingram and Micro Peripherals, said: "Big IT distributors are more suited to dealing with the straightforward products in volume sales and some tailored packages."
It also should be remembered that low-end projectors and flat-screen LCD monitors are big business, and getting bigger. Prices may be down but numbers are way up, and it's in these conditions that broadliners thrive.
That said, prices are still falling on these products and the numbers having to be shipped to retain margins are rocketing. Without any real AV investment, the low end is as far as the broadline IT distributors will get.
"If you go to the likes of C2000 you will find that their people are geared up to sell a box," maintained John Soden, account manager at Hitachi Interactive Solutions, which deals in whiteboards.
"If it's just a projector to connect to a notebook for professionals on the go, then they are well placed. But I can't see these distributors, unless they have particular expertise, having any real impact in markets like whiteboards.
"In fact, we were approached by a big IT distributor last year but had to say no because it did not have the skills needed to sell whiteboards."
Vickerage added: "At the low end, pre-sales training is tailing off, but there is still a requirement to do it for mid- and high-level products. Most businesses still want to look at LCDs and plasma screens before buying.
"Broadline people find it hard to sell higher-end kit because demonstrating is not their strong point. Also, with something like plasma, you need specialist transport.
"These are very large, heavy and fragile products, and breakages can occur in transit. It's just not worth it for them."
Into the mainstream
Even Watts concedes that the high-end AV sector is not a goal for C2000. "In the very high end of the market there is a place for AV specialists where in-depth knowledge is required," he explained. "That said, AV is very much in the mainstream now and most resellers are promoting and selling AV solutions."
Regardless of where you get your AV, there is little doubt that much of it is now passing through the IT channel. IT distributors might not account for the lion's share of the distribution, but IT resellers are accounting for a lot more of the sales.
"AV has moved right into the mainstream and the IT channel has been supplying mainstream technology for years," said McKeever.
"They have all the contacts and they see AV as a good way of expanding relationships with their own customers.
"They also have the advantage over AV resellers in that it's a lot easier to bolt on AV to your offering than being an AV reseller looking to get into IT."
The impact of the IT distributor and reseller in AV can be seen most readily at the low end of the market, and also for certain higher-value products that require only basic set-up and installation.
But it should be remembered that it is the low end of the market that is driving the bulk of new AV business, with projectors, flat-screen monitors and now LCD TVs sitting firmly in the mainstream.
Of course, becoming a commodity supplier has its own penalty. Price competition in the projector market, particularly at the entry level, has been savage.
Prices fell by an astonishing half between the end of 2002 and the end of 2003. Margins here, which were never much to write home about, are now virtually non-existent.
"The drop-off was so dramatic that it has taken some of the main players by surprise. You can now get one for £700, whereas at the end of 2002 they were still £1,200-£1,300," explained McKeever.
"The average price is around £800 for a good brand. There are a lot of players in this sector though. Four years ago we expected a lot of fall-out but there are still a lot of manufacturers competing for the same market space."
Lewitt added: "There were 40 or 50 brands in the marketplace at one stage. The arrival of DLP (Digital Light Processing) technology did not help because it meant that projectors could get a lot smaller, and it led to a lot of PC notebook builders and monitor makers getting into the market.
"There are still too many out there now, selling very similar products originally built by companies like Optima or Plus."
Apart from the attractive prices, projector technology has become a lot easier to set up and use, which has affected the market in many ways.
Gone, especially at the entry level, is the need for customers to have the product demonstrated, installed or set up.
Falling prices and ease of use have made demonstrating low-end offerings unprofitable, and fewer AV players will do it.
Considering how fast projector prices have fallen, some AV players were caught on the hop, having to radically restructure their business to target more profitable AV solutions.
But the fact low-end offerings don't need much in the way of add-on services does not apply to the rest of AV. There are also a large number of IT dealers new to the AV sector that appreciate the high level of support offered by many AV distributors.
The AV distributor camp has been quick to react to the threat from the IT channel. They have gone on the offensive, marketing themselves to the growing number of IT resellers interested in selling AV solutions.
Their proposition has proved attractive, especially since they offer support and training as part of the basic deal.
Last year, AV distributor Maverick said that 60 per cent of its business was now going to IT resellers - a big turnaround in just a few years.
"Many AV distributors have been concentrating on selling to IT resellers and into the education market, which has absolutely boomed and kept many of those AV distributors in business," said Messenger.
"Steljes and the Smart whiteboard has been a great relationship, selling over 1,000 whiteboards a month, mainly into education.
"They have been good at getting to IT dealers because they offer more support, and some will tell you now that more than half of their business is going to IT dealers."
Lewitt added: "We sell more to IT dealers. We have managed to gain the trust of some AV dealers but it's taken years. A lot of business is based on relationships."
He agreed that the services and support side of things has played a key role in remaining strong in the marketplace. "We still go out there to resellers to do training with them and even do product demonstrations for their customers," he said.
"We don't see the demo side being less important these days, we see a greater need to increase that kind of support.
"One large distributor took people off the road 18 months ago and then put them back on the road because they found they still needed them."
Vickerage said: "Thankfully, the term value-added distributor is not used too widely because most dealers equate it with 'expensive'.
"But it's not true since we help them cut costs by doing demos for them, offering free training and helping with marketing spend. We are not planning to change what we do."
Despite the changing make-up of those supplying AV, one thing is certain: AV through the channel will remain the key route into UK businesses for some time.
Messenger concluded: "Distribution of AV has increased slightly in recent times, which is good going since it was once said that this [sales channel] was dead.
"The UK channel has adapted well to the times. What will change, though, is that the IT guys will get stronger but distribution should still be strong.
"After all, it's a far cheaper alternative to manufacturers than trying to go direct and having to invest in big back-office teams, support, sales and marketing operations."
Computer 2000 (0870) 0603 344
Decision Tree Consulting (01438) 316 240
Imago Micro (01635) 294 300
Hitachi (020) 8902 1286
Maverick (0118) 988 6266
Midwich (01379) 649 200
Sony (08705) 111 999
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