Good Old CAPEX Questions

I am fielding a lot of calls and emails from Rental-Stagers about capital purchasing strategies – something I have not seen a lot of the past couple of years. It’s great to be on this topic again. 

With most of my clients we discuss how much to spend, when, and how to finance it, but recently the questions have shifted to technology strategy such as settling disputes between the brand snobs and the limited budgets most companies have (see the second letter below). It’s a good sign that we are having these discussions. Here’s a sample of a couple of exchanges from the first week of December 2013.

“Tom, Do you know of a tech group that I can submit questions to about what brand or model gear folks are using for specific needs? We are looking for what Brand/model equipment folks are using to deliver HDCP Digital Video signal distances up to 300’. I have not found a specific group on Linkedin yet and thought I would reach out to you in case one jumps out at you.” – AV Rental GM

Ack HDCP! Have you looked into HDBaseT? Not everyone has technology experts on staff so most folks have to rely on their peer network to research new equipment. In fact some folks are so desperate that they even ask me hardware questions! It’s been a long time since my product information was relevant, but I do know how to find things out.

  • Start with your strategic alliance groups. Is your company part of AV Alliance, RSN, or ITRA?
  • Call your wholesale rental company of choice – see what they are using because as soon as you buy some you will run out. Best to stick with products that you can source more of.
  • Ask your manufacturer reps. They use this stuff with their products and know what works and doesn’t.
  • Check out the FB group like the Barco Folsom Group. There are a lot of smart people on this group all the time and you can find other groups where techies hang out.
  • Check out AV Industry Professionals on Linkedin. I see technical topics there with smart replies. There are several other groups that can help, and you will find references to them in your contacts’ posts and on their profiles. Check out my profile to see which groups I follow.
  • Ask your national freelancers. They get their hands on a wide variety of products and see what works and doesn’t.

“Tom, My company is finally looking at updating its audio inventory. I am tasked with doing the research and making recommendations. I want to get this right, but I am not sure I respect the choices I see other companies making. I really like a particular manufacturer, which is why we bought many of their products over the years, but I am not finding anyone else that stocks that line. I don’t want to compromise on my audio standards just because other people use a commonly found product. Can you help me sort out my thought process?” –Old Audio Guy

This is an age-old question. First of all, if you are the elite sound designer for a major act you can afford to be a bit snobbish about which rig you choose. If you are a national audio company, you will probably pick one or two product lines and focus on them and your manufacturers may even make changes in their products to meet your needs. The other 99% of us have to rely on easily sourced stock products. Most of my AV Rental audience support corporate AV gigs, and while fifteen years ago AV houses had to become custom sound companies in order to compete for corporate work, that is not the best route anymore.

You are in the business of making money and you need to choose products that are reliable, fairly priced, and easy to source in the sub-rental market. In the 1990’s audio companies listened to every rig and chose the sound they preferred. Today, everything is digital, which means you can probably make it sound the way you want regardless of whose product it is (Audio engineers, please don’t flame me for that one! I know that is not exactly true.) I think most folks agree, today’s sound systems ALL sound pretty darn good.

So step one in sorting out your thought process is to forget all the evaluations you did ten or more years ago. Just because you didn’t like a brand then doesn’t mean their extremely popular product line should be off your list now. Step two is to acknowledge the practical considerations of being a rental company. If you choose a product that costs twice as much as the ones your competitors are using, you won’t be able to charge twice as much. And step three is let go of your need to put your special mark on the rig. Gone are the days of customizing amp racks, designing your own DSP settings to override the manufacturer’s, or creating a new fly rig. You need stock rigs – and specifically ones that you can find more of, that your freelance pool is familiar with, and that don’t cost an arm and leg. Leave the customizing to the video guys. They are still five years from figuring out how to standardize solutions.

If you have more questions like these, just call me or email. I am happy to respond.  -Tom

Tom Stimson, MBA, CTS, is president of Stimson Group LLC, a Dallas-based management consulting firm specializing in strategy, process improvement, and market research for the Audiovisual Industry. Tom is a Past-President of InfoComm International and a current member of InfoComm’s Adjunct Faculty.

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