The Stimson Report Jan 08

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News and Thoughts: 2008 R&S Growth Areas, Rising and Falling Prices
AV Rental & Staging growth areas for 2008: Part of growing a rental company is making purchases for rental inventory in the "If we own it we will rent it" category. Here are a couple of items I think are now part of that group but will soon be must-haves. Audience Response technology was once too specialized and complicated to fit easily into the larger live event arena. But now most of these products are inexpensive and easy to use - but they do require some pre-production. Consider this another service you can provide your customers that falls under the graphics/slides production category.

In the same class of once inaccessible, now mainstream meeting products are Conference Mic systems. This has been a convention AV mainstay for many years, but demands for better communication and recording are making these systems a basic AV requirement. I have the privilege of sitting on a several non-profit Boards and the opportunity to use these systems on a regular basis. Not only are they easy to use from a rental standpoint, they greatly improve the meetings where they are applied.

Possible Rental Price Increases
Folding Screen demand has finally turned the corner towards 16:9. This should be a great year to be a screen manufacturer. But considering how many screens a rental company has to own, you can expect rental price increases as buyers try to recoup the investment in 16:9. If you are not seeing the demand so far, then you can try to count on your friendly wholesaler to keep you stocked in the sizes that you occasionally require - but consider that everyone else will be asking them the same thing. Then consider that this demand and the cost of shipping will also keep wholesale prices at premium. It's time to place those purchase orders!

Lookout for Falling Prices: It should be of no great surprise that rental rates for Plasma and LCD displays will drop like a rock in the next year. (You only think the prices have fallen already!). The reasons are simple, why buy a $3000 pro unit when you can buy three consumer units for the same price? And considering that these inherently fragile and theft-attractive products have a one, maybe two year life - why spend more than you have to for durability? When the customer needs 10, 20, or more displays that all look the same - it has become almost impossible to find enough matching units to fill the order without going to a wholesaler. So rental companies head to Best Buy to stock up and then discount the rental rate on future jobs. It might make sense for two or three rental companies to joins forces and all buy the same make and model and have a better-than-wholesale rental agreement between those companies. This used to be a fairly common practice on things like CRT projectors and video cube walls. Too bad we didn't figure that one out on projection lenses!

CES News
CES in Las Vegas brought two very significant (I think) developments. First, we learned that Warner Bothers has ditched HD DVD for Blu-Ray. Just before Christmas we saw tons of HD DVD decks dumped onto the market at giveaway prices in hopes of encouraging the purchase of HD DVD movies. I think the net result was a lot of low income consumers buying the cheap players only to find out that an HD DVD movie costs forty bucks. This is not a sustainable market penetration plan. One format has to win and my money is (now) on Blu-Ray. Once consumer confusion is abated, the DVD market will take off again and prices should drop. It may not matter in the long run as digital storage and on-demand technologies may just make DVD's obsolete in a couple of years. Look at what Apple is doing to the download industry and now they are apparently moving into electronic rentals.

The second big development was the announcement that CES would be a carbon neutral event - the largest of its kind ever. http://www.newsweek.com/id/84563 I have touched on the significance of green meetings in our future and the CES move is a real harbinger of things to come. What makes an event carbon neutral is not the elimination of carbon emissions - it's a financial payment earmarked for carbon offsets ( http://en.wikipedia.org/wiki/Carbon_offset) that can be used for things like planting trees or building alternative energy generators. Don't be surprised that sometime in the next year you get a request to estimate your carbon emissions output as a supplier to a green meeting.

Check out this website http://www.greenmeetings.info/ to learn more what our industry can do.

This is an Show Engineer's (and producer's) worst nightmare! Check out this video of CES presentations disrupted by pranksters: http://gizmodo.com/343348/confessions-the-meanest-thing-gizmodo-did-at-ces What does this mean now that the cat's out of the bag? I am sure manufacturers are scrambling to add IR defeat switches to commercial displays. In the meantime, AV guys will just resort to electrical tape over the IT port.

Events: Let's Meet Each Other
The Orlando stop for the Rental & Staging Roadshow is Feb 20th. Mark your calendars now, because you know that this time of year can be busy and unpredictable. What attendees can expect is some great networking, thought-provoking presentations, and enthusiastic manufacturers. At the LA show we saw folks from as far away as Denver and Seattle. I am expecting to see Orlando draw a number of attendees from Atlanta, New Orleans, and Miami. Come on folks, it's a day trip!

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Welcome to The Stimson Report

Every week we all receive dozens of emails of press releases, manufacturer announcements, and public relations statements. I have often wished that someone would read them for me and let me know if there was anything important going on. If you have had the same wish, then this is one email you need to read. In addition we will occasionally profile some B2B companies targeting the rental & staging segment. There are a number of new wholesale rental companies vying for your business. And we will also let you know about useful products that come from outside our normal market channels. Just this month I discovered a cool $6 device that should help you keep up with wireless remotes. No space this month, but I will tell you more next time. If you want your company or product to be featured in future editions just let me know.