Brandt Krueger

TECHNICAL PRODUCER, EDUCATOR, SPEAKER, AND CONSULTANT FOR THE MEETING AND EVENTS INDUSTRY. GEEK DAD, HUSBAND

Consultant, Meeting and Event Technology
Owner, Event Technology Consulting
Instructor, Event Leadership Institute
Cohost, #EventIcons - Where the icons of the event industry meet

Filtering by Tag: 3rd Party AV

Audiovisual Megamergers: Expansion of Services or Potential Budget Buster?

(A heavily edited version of this article was published in MeetingMentor Magazine in Summer 2019. This is the original text of the article, and does not reflect the opinions of MeetingMentor Magazine or ConferenceDirect.)

It wasn’t a national emergency, or some other sad and tragic news event, but it’ll still be one of those moments I’ll always remember where I was when it happened: the moment PSAV announced their intention to purchase Encore Event Technologies. I was on the headset, calling the cues for a meeting in Nashville when the news broke. First I got a text from a technical director friend of mine, and before I could hit Reply, it came over the headset as the news spread backstage like wildfire. There were an awful lot of [expletive deleted]s on the headset for the next few minutes, I can tell you.

Within days, it hit the industry magazines and websites. The headlines were all fairly reserved, including “PSAV Acquires Encore Event Technologies: What It Could Mean for Event and Meeting Planners” and “Freeman to Sell Encore Event Technologies to PSAV”, but the articles themselves raised a significant number of questions and thinly-veiled versions of those same [expletive deleted] concerns.

So now it’s a few months later, and the dust has started to settle. While it’s too early to know how the merger is going to affect things like commission structure or audiovisual equipment prices, we can look to the past to see our possible futures.

BrandtKrueger@gmail.com

In-House vs 3rd party: an old debate

So let’s get one thing out of the way, and fast. This is not a hit piece on the in-house model of audiovisual providers. I’m not one of those, “All in-house providers suck and are overpriced” guys. Anyone that knows me knows that I’m a big proponent of using the provider that makes the most sense for your event. Some times that’s the in-house, sometimes it’s a third party AV company. Sure the in-house is often more (and sometimes quite a bit more) expensive, but you’re paying for convenience. You don’t have to buy the $8.00 tin of gummy bears in the minibar, but they’re right there and y’know, it’s been a long day and gosh darn it, I deserve those smiling little guys... but I digress.

Bigger, Better, MOre

Let’s face it: this isn’t PSAV’s first rodeo. Ever since they were acquired by Goldman Sachs, and then later by Blackstone, they’ve been buying up audiovisual and production companies at an accelerating rate. The press releases are basically boilerplate at this point, expressing how “excited” and “proud” they are to have acquired Company X, how doing so will be “expanding the breadth of its capabilities”, and what it will mean to PSAV “ and more importantly, our customers.” Swank, American AV, Hawthorn, Hargrove, Concise AV, FMAV, and now Encore - each one extending the scope and reach of the company into new markets.

What market dominance brings

BrandtKrueger@gmail.com

The advantages to PSAV are obvious. The newly-combined companies span markets across a wide geographic area, including most of North America and, thanks to Encore, Asia Pacific. If you have a national/international sales contact, they can help you work with your local offices, smoothing the often, um… inconsistent... pricing that can occur from property to property, and ensuring quality standards from location to location.

With each acquisition, PSAV’s local inventory grows by leaps and bounds, meaning less rental equipment and/or shipping of equipment over long distances. If a certain piece of gear is needed for a show, PSAV is more likely to have it close by, and easily move it from warehouse to warehouse, keeping it where it’s needed most. Any existing R&D experiments into things like projection mapping, closed “silent disco” audio systems, and advanced lighting techniques are automatically absorbed, potentially leapfrogging competition into the future of AV.

The upsides to the customers have not been so obvious, especially for smaller meetings and events. While the increase in R&D can translate into loosely defined concepts such as “innovation” and “experience”, I’ve yet to hear of any decreases in the costs to the consumer due to reduced shipping or equipment rentals. While having a national contact can help smooth price fluctuations from property to property, they can only go so far, and if your group isn’t particularly large, I’ve heard plenty of planners who have difficulty getting responses from their national sales contacts. Put simply, with a company this big, you better be a big fish if you want attention.

a shift in hotel priorities

Hotel representatives haven’t been shy over the last few years about where their priorities lie. I’ve heard well-respected senior management publicly declare, to a room full of planners, that they are no longer the top priority for venues. It’s the transient business (I hate that term, it sounds like they’re chasing after 1930’s hobos) that hotels are prioritizing these days. When a room block fills up, good luck getting more rooms. They’d rather sell them to last-minute business travelers.

Since hotels are perfectly happy not having your meeting and event business, thank you very much, there’s less incentive for them to bargain with you for that business. As a result, more and more planners are running into the phrase, “non-negotiable”, or worse, “Sorry, there’s nothing I can do about that. That’s just our policy.”

Nonetheless, having an in-house AV option is an important part of being a modern, meeting-and-event-oriented hotel. It’s kind of a given: if you’re going to have meeting space, you need to offer some kind of AV services.

our possible futures

So what happens when you combine market dominance of an in-house AV provider with hotels that aren’t inclined to negotiate? I’m not going to lie… there’s a lot of potential for budget-busting possibilities.

BrandtKrueger@gmail.com

The optimistic outcome is that as PSAV expands, customers reap all the benefits that go along with that expansion. Prices come down as the company is able to move assets easily from warehouse to warehouse, reducing costs and improving efficiency. The only problem is that, so far, those cost savings haven’t been passed on to the event organizers, and have only been realized in the form of profits.

The much-more-realistic outcome is that the trends of the last few years will continue. As hotels no longer feel the need to negotiate contracts, they’re much more likely to enforce “exclusivity” clauses with in-house AV. Basically, “If you come to our space, you’re using our crew.” And why not? In-house AV contracts include commissions returned back to the hotel, so it’s in the hotel’s interest to enforce these clauses. In the past, these could easily be negotiated away by experienced planners, but as we’ve already said, more and more often the answer is, “Sorry, nope.”

And so comes the worst case scenario: you have a hotel industry that doesn’t feel the need to negotiate, combined with an in-house AV provider that increasingly is the only option in most markets. Put simply there’s no incentive to negotiate. If you’re the required provider, and hotels don’t care to negotiate, why not raise your prices? And then raise them again? And again?

I’m not going to lie- I’m already starting to see some suspiciously large opening bids from “required” providers. Right now, they’re still willing to negotiate and come down on those prices, but for how long?

so what’s next?

Planners need to stand strong. If more and more hotels are requiring you to use the in-house provider, you need to be willing to walk away and find one that doesn’t. You should always have the option of bringing in your own AV company. If I want a snack, I shouldn’t be forced to grab those gummy bears from the minibar. If I want to take the time to leave the hotel, walk down the block to the local gas station and buy them there for a fraction of the cost, I should be allowed to. I would never stay at a hotel that refused me the ability to bring in any personal snacks or beverages, and planners shouldn’t put up with these “requirements” either.

There’s an old saying: Before the contract is signed, it’s called “negotiation.” Afterward, it’s “begging.” With the consolidation of in-house AV providers, and the prioritization of hotels of transient business, the contract negotiation process when it comes to AV is becoming a massively important part of budgets. I’ve always said that planners have more power than they realize. Now’s the time to make sure you use it!

Expect the Unexpected: Don’t Let Surprise AV Charges Blow Your Budget

(An edited version of this article was originally published in MeetingMentor Magazine in Spring 2019)

It’s happened to the best of us: Your event is winding down and you’re in the home stretch. Everything was flawless. The boss’ boss is happy as a clam and already talking about how you can take things to the next level. Just a few more folks to depart and you’re home free!

It’s at that moment that the representative from your AV company decides to approach you with what appears to be half-ream of paper and a pen with the venue logo on it. It’s the final bill. And it’s thousands of dollars more than the estimate.

Now, in what should be your moment of triumph, you’re figuring out if there’s anything left in the “popcorn balls” budget you can move around to cover the overage.

The good news is that the vast majority of budget-busting surprises can be avoided, with a little planning, a little negotiation, and a little common sense. Let’s take a look at some of the biggest offenders to keep an eye out for.

WiFi

Let’s get this one out of the way first. More planners than ever are making sure to address this issue with the venue as part of the negotiation process, but there’s still just enough of you out there that aren’t to include it in the list. WiFi is infrastructure. Unlike water (which you don’t get charged more for depending on how much your attendees use), WiFi doesn’t cost the venue more or less whether or not you use it, so why not list it as a concession?

Many planners are requiring “top tier” wifi access for their attendees as part of their agreement to choose the venue, but if you’re not able to secure it in the contract, make sure you know exactly how much you’re being charged, and how it’s being calculated.

Power

Unlike Wifi, power is definitely something the venue gets charged for the more it uses, so any opportunity it has to shuffle that cost onto its customers, you can bet it’s going to take. This is another one of those items you want to be very sure exactly how much you’re going to be charged. Sometimes it’s a flat rate, others it depends on whether special equipment (extra circuits, power “distros” that AV companies can hook up their gear) is required.

Many cities and states have laws that prohibit the resale of public utilities (aka power and water) so some venues have gotten quite creative on charging for power. Some venues will actually charge you for the use of wall outlets, and even charge you per wall outlet if you use them, so beware. The average attendee looking to plug in their phone for a little extra juice could cost you hundreds of dollars!

Rigging Points

Here we go again with an infrastructure item being used as a source of revenue. Rigging points are permanent positions in the ceiling of a venue from which heavy items such as truss, lighting, speakers, and projectors can be hung. Once installed, these positions are permanent and do not require any unusual maintenance.

But here’s the deal- especially in older venues, these points might not actually exist. Mega-corporation in-house AV companies will approach the venue with an offer of installing them… in exchange for the exclusive right to charge for them. Venues, seeing it as a win-win, agree. “Point charges” can run as high as several hundred dollars, per point, per day.

3rd Party and In-House AV Fees

More often than not these things - WiFi, power, and point charges - are used as incentives to use the in-house AV. “As a benefit of using the in-house audiovisual services, we’re proud to offer your attendees complimentary WiFi, and waive the following fees and charges…” Nice! They might even throw in a 20% “discount” for using the in-house provider. Sweet!

That’s the carrot. If that doesn’t work, there’s the stick. Many venues will charge you a fee for bringing in a 3rd party vendor to handle your AV. If you’ve been reading my past articles, what I’m about to say should come as no surprise...

Always, always make sure to get a comparable bid from a 3rd party vendor (or two) to make sure your in-house bid is fair. Use this as a negotiation point, because much like a lot of the Black Friday sales this year, it’s not a 20% discount if they’ve marked up the price significantly beforehand. Plus, sometimes even with the fee, it can still be cheaper to use a 3rd party.

Supervisor Fee

In addition to the fee charged for bringing in a 3rd party vendor, some venues will require a “supervisor” to be on site when doing so. You, of course, are on the hook for paying for them. This supervisor is there to make sure, theoretically, that all rules and practices required by the venue are being followed to the letter, which usually entails making sure the right color tape is used on the floor.

The short answer to this (and frankly all of these charges) is to negotiate them away at the contact stage. If it’s too late for that, however, you should require that they be there, in the room, doing the job you’re theoretically paying them for - not in the AV office working on renderings for other clients. You’d be surprised how often this requirement goes away when the in-house AV realizes they have to have someone sit in your room doing nothing all day.

The Catch-All Clause

What’s the biggest way to avoid unexpected charges? Make sure everything, everything is laid out in advance. Many planners are starting to add clauses to their venue contracts that say, “if it’s not here, you can’t charge me for it.” I’m not a lawyer (and I don’t play one on TV), so I’ll leave it to the reader to research these types of clauses and what they cover. If you’re going to use one, make sure you read and understand everything in the contract. If you don’t, find a trusted AV partner to give it a once-over before you sign on the dotted line!

Pro Tips for Saving Money on your AV Bill

(An edited version of this article was originally published in MeetingMentor Magazine in Fall 2018. Updated February, 2019)

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If there’s one universal truth for all events, it’s that there’s no such thing as an unlimited budget. Even world-class sporting events and megalithic awards shows have their limits. Every planner, at one point or another, is faced with the limits of their own budget and is forced to find a way to save a few dollars.

There’s plenty of big-ticket items on events: the venue, catering, transportation. Most of those costs are easily understood and can be adjusted based on the level of quality and service desired. If you want to save money on the evening dinner, you may need to change the menu or choose a lower cut of meat for your guests. If you want to save money on transportation, your folks are flyin’ coach!

When it comes to AV, however, far too many planners still just accept “the price is the price” on a bid full of equipment they don’t understand or collapse under pressure from the venue to “just use the in-house”, stacking on fees and charges as disincentives to bringing in your own AV company. There’s plenty of good reasons to use an in-house AV company, but let’s be honest- price isn’t usually one of them.

Let’s take a deeper look into that and a few other ways to save money on your AV bill!

Back to School: Learn More About AV

This one’s probably the more difficult, so let’s tackle it first. I’ve heard so many planners and other event folks say, “Oh, I’m just not techie, I could never learn that stuff.” But here’s the thing… You’ve probably never heard someone saying, “Oh, I’m not French, so I could never learn French.” AV is just a language, and if you just spend a little time learning the lingo, you’re able to enter into a more informed conversation with your AV providers.

If you’re still in school, make sure you find out if they offer an AV 101 class. More and more schools are providing these as part of their hospitality programs, thank goodness! If you’re out of school, take advantage of industry conferences and associations that provide education sessions. Keep an eye out for AV and other tech-related classes. Full disclosure: I teach an online technical meeting production course for planners, but that’s not why I include this point. Education really is one of the best ways to save money on your AV.

Why? Because most of the time when AV providers “bulk up” their order, it’s not because they want to cheat you, it’s because they want to cover their, umm… bases. The more you sound like you know what you’re talking about, the more likely they are to take you at your word that what you want is what you need. That helps make sure you only get the equipment you need, and nothing more thrown in, “just in case”. Your quotes are going to be more accurate, so you’ll truly be only paying for what you need.

House Party: In-house AV vs. 3rd Party

Most experience planners have at least a couple of horror stories when it comes to using in-house AV companies. I always try to remind folks that crew vary wildly from property to property and city to city just like any AV company, so it’s important to take these stories with a grain of salt. There is something that’s true more often than not, however, and that’s in-house AV companies tend to be more expensive. Why? Well, lots of reasons dealing with economics, real-estate, and market differences, but the easy one to understand is this: they’re convenient.

Much like the $8.00 can of soda in the hotel lobby store, you’re paying for convenience. The equipment is all on site in case you need something last minute, and at the end of the show, it all goes on the master bill. No muss, no fuss.

Unfortunately, many venues will discourage you from shopping around and trying to get a lower price. Many will have penalties in their contracts if you choose to bring in a 3rd party company or will revoke certain concessions like free wifi. But don’t let that stop you! No matter what, I always recommend people getting at least one 3rd party bid. They’re almost always less expensive, sometimes even with the penalties and discounts. I once saw a client save almost $10,000 by bringing in a 3rd party AV company, and that included paying the hotel a penalty!

Negotiate, Negotiate, Negotiate

Some people prefer to use the in-house because it’s so convenient, and that’s OK. But you should still get at least one bid from a third party. Why? Leverage. The biggest thing that getting educated and getting additional bids enables you to do is negotiate. An in-house company will more often than not come down in price if they know you’re seriously shopping around. Be tactful, be polite, but don’t be afraid- you don’t have to go all Godfather on them. You’d be surprised how often, “Look, guys. I want to use you, but this other crew is willing to do it for $10k less. Can you at least meet me halfway?” will work!

And if you’re worried about the quality of your crew, one final tip: don’t be afraid to ask for references. We do it all the time with 3rd party AV companies, so why not do it with the in-house? Ask the venue to be put in touch with the most recent clients to use the in-house AV. It shouldn’t be an issue, and it might even be a red flag if they’re unwilling to do so. That might give you more leverage if you’d rather use a 3rd party, as no respectable venue should force you to use a vendor that was getting bad reviews.

What are your favorite tips for saving money on your AV bill?