Growth ticks up a notch as the context improves
2024 was a year full of uncertainties. We had predicted that 2024 would be a challenging time as interest rates remained the same until September, election cycles created unease, and companies hedged a bit on spending. About the only upside we forecasted was that supply challenges would mitigate and so growth would be more evenly felt across the channel. All of this seems to be true as we revised down the final annual growth percentage.
The good news is that this is poised to change in 2025, helping drive a bit more robust growth as companies renew projects they may have slow rolled over the past 12-18 months. A large amount of tech installed during the pandemic adaptive period is also set to be replaced, fuelling the next wave of investment.
Commoditisation will continue to undercut conferencing
Here’s the rub about the prediction above – a lot of the core conferencing and collaboration business has now shifted to a more volume story. Basically, enterprises are moving into a scaling mode, thanks in part to platform-based rooms, and so are seeking technologies that can easily and cost effectively be added to multi-use spaces in offices. This will likely continue into 2025 and beyond, creating a bifurcation in the market.
Larger integrators will be better equipped to handle this type of business, shifting the mid and smaller size into more custom projects. No doubt there is money to be made in both, but the better margin in many cases will be in the design and consulting side. Recurring revenue through managed services is another offset.
The pendulum for AV providers will shift towards events
One of the continuums in the AV business is between more integrated permanent solutions and pop-up temporary ones – think large auditoriums versus a corporate event. Some of the same technologies and skills are needed for both, though there are clear differences in the business model. Many firms straddle this continuum, shifting as the demand moves.
Given that integrated collaboration solutions are facing some margin challenges per the above, this makes the event business more appealing in many ways as companies build brand experiences that are separate from an office space, particularly in a time when offices are less used. In fact, some companies are beginning to treat all staff get togethers as an alternative to spending on office space. This pumps up the event side of things, as is already evidenced in the higher growth AVIXA predicts here. The trend has upside as we go forward.
Broadcast AV is a further extension of the events business
Part of standing up a good event in today’s video age is to treat it as valuable content creation opportunity. More and more enterprises understand this as they attempt to produce content to stay engaged with audiences of all kinds. While this started before the pandemic, it solidified its place as a long-term trend. Witness all the democratised sources of video content as proof points, TikTok just being one. This is creating a whole new take on pro AV, one as more of an ongoing events management and content production capability, leveraging the combination of AV and broadcast skills and technology.
The real question here is not whether it exists but which market to place it in as it borrows from so many. Creative AV houses, seeing the talent coming out of schools these days, are evolving to capitalise now, with 2025 being another wave of growth. Put another way, this trend is causing a shift in the conversations from what a company wants to do with its boardrooms to how they want to craft their digital identity, video first.
Enter AI’s short-term use case
I’ll end on the choir preaching topic – AI as a content creation tool. Those at the bleeding edge of the previous trend know that AI is a big part of producing content, whether for faster editing or outright raw generation. The year will further push the boundaries of this, further bolstering capability expansion for provider firms looking for a way to innovate. This isn’t set to happen starting in 2025, it is simply more likely that a growing chunk of revenues will be generated here.
I hold to the long-term view that this is still 3-5 years away from being a more mainstream force for AV solution revenues, but the innovator phase is worth calling out as an important part of the technology adoption curve. Keep an eye on managed services as the place this shows up. Already the fastest growing component of AV, it may receive a turbo boost from AI going forward. Let’s call 2025 the start of that acceleration.
For more insight on the pro AV market, visit www.avixa.org/market-intellignce.
